EXHIBIT 4.3
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NAVISTAR INTERNATIONAL CORPORATION,
as Issuer
and
XXXXXX TRUST AND SAVINGS BANK,
as Trustee
_____________________
INDENTURE
Dated as of February 4, 1998
____________________
$250,000,000
8% Senior Subordinated Notes due 2008
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CROSS-REFERENCE TABLE
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TIA Indenture
Section Section
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(S)310(a)(1).......................................... 7.10
(a)(2)............................................. 7.10
(a)(3)............................................. N.A.
(a)(4)............................................. N.A.
(a)(5)............................................. N.A.
(b)................................................ 7.8; 7.10; 10.2
(c)................................................ N.A.
(S)311(a)............................................. 7.11
(b)................................................ 7.11
(c)................................................ N.A.
(S)312(a)............................................. 2.5
(b)................................................ 10.3
(c)................................................ 10.3
(S)313(a)............................................. 7.6
(b)(1)............................................. 7.6
(b)(2)............................................. 7.6
(c)................................................ 7.6; 10.2
(d)................................................ 7.6
(S)314(a)............................................. 4.6; 4.7; 10.2
(b)................................................ N.A.
(c)................................................ 10.4
(d)................................................ N.A.
(e)................................................ 10.5
(f)................................................ N.A.
(S)315(a)............................................. 7.1(b)
(b)................................................ 7.5; 10.2
(c)................................................ 7.1(a)
(d)................................................ 7.1(c)
(e)................................................ 6.11
(S)316(a)............................................. 9.3
(a)(1)(A).......................................... 6.5
(a)(1)(B).......................................... 6.4
(a)(2)............................................. N.A.
(b)................................................ 6.6, 6.7, 9.4
(c)................................................ 9.4
(S)317(a)(1).......................................... 6.8
(a)(2)............................................. 6.9
(b)................................................ 2.4
(S)318(a)............................................. 10.1
(c)................................................ 10.1
_______________
N.A. means Not Applicable.
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of this Indenture.
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions.................................................. 1
SECTION 1.2 Incorporation by Reference of Trust Indenture Act............ 27
SECTION 1.3 Rules of Construction........................................ 27
ARTICLE II
THE SECURITIES
SECTION 2.1 Form and Dating.............................................. 28
SECTION 2.2 Execution and Authentication................................. 30
SECTION 2.3 Registrar and Paying Agent................................... 30
SECTION 2.4 Paying Agent To Hold Money in Trust.......................... 31
SECTION 2.5 Securityholder Lists......................................... 31
SECTION 2.6 Transfer and Exchange........................................ 32
SECTION 2.7 Replacement Securities....................................... 42
SECTION 2.8 Temporary Securities......................................... 42
SECTION 2.9 Cancellation................................................. 43
SECTION 2.10 Defaulted Interest........................................... 43
SECTION 2.11 CUSIP or CINS Number......................................... 44
SECTION 2.12 Payments of Interest......................................... 44
ARTICLE III
REDEMPTION
SECTION 3.1 Notices to Trustee........................................... 45
SECTION 3.2 Selection of Securities To Be Redeemed....................... 46
SECTION 3.3 Notice of Redemption......................................... 46
SECTION 3.4 Effect of Notice of Redemption............................... 47
SECTION 3.5 Deposit of Redemption Price.................................. 47
SECTION 3.6 Securities Redeemed In Part.................................. 47
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ARTICLE IV
COVENANTS
SECTION 4.1 Payment of Securities........................................ 48
SECTION 4.2 Maintenance of Office or Agency.............................. 48
SECTION 4.3 Corporate Existence.......................................... 49
SECTION 4.4 Payment of Taxes and Other Claims............................ 49
SECTION 4.5 Maintenance of Properties; Insurance; Books and Records;
Compliance with Law........................................ 49
SECTION 4.6 Compliance Certificates...................................... 50
SECTION 4.7 Reports...................................................... 51
SECTION 4.8 [Reserved]................................................... 51
SECTION 4.9 Limitation on Incurrence of Indebtedness..................... 51
SECTION 4.10 Waiver of Stay, Extension or Usury Laws...................... 54
SECTION 4.11 Change of Control............................................ 55
SECTION 4.12 Limitation on Transactions with Affiliates................... 56
SECTION 4.13 Limitation on Liens.......................................... 58
SECTION 4.14 Limitation on Payment Restrictions Affecting Restricted
Subsidiaries............................................... 58
SECTION 4.15 Limitation on Guarantees by Restricted Subsidiaries.......... 59
SECTION 4.16 Limitation on Senior Subordinated Indebtedness............... 60
SECTION 4.17 Limitation on Preferred Stock of Restricted Subsidiaries..... 61
SECTION 4.18 Limitation on Restricted Payments............................ 61
SECTION 4.19 Limitation on Certain Asset Dispositions..................... 64
SECTION 4.20 Limitation on Sale/Leaseback Transactions.................... 65
ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1 Merger, Consolidation, Etc................................... 66
SECTION 5.2 Successor Entity Substituted................................. 68
ARTICLE VI
DEFAULT AND REMEDIES
SECTION 6.1 Events of Default............................................ 68
SECTION 6.2 Acceleration................................................. 70
SECTION 6.3 Other Remedies............................................... 70
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SECTION 6.4 Waiver of Past Default....................................... 71
SECTION 6.5 Control by Majority.......................................... 71
SECTION 6.6 Limitation on Suits.......................................... 71
SECTION 6.7 Rights of Holders To Receive Payment......................... 72
SECTION 6.8 Collection Suit by Trustee................................... 72
SECTION 6.9 Trustee May File Proofs of Claim............................. 72
SECTION 6.10 Priorities................................................... 73
SECTION 6.11 Undertaking for Costs........................................ 73
SECTION 6.12 Rights and Remedies Cumulative............................... 74
SECTION 6.13 Delay or Omission Not Waiver................................. 74
SECTION 6.14 Restoration of Rights and Remedies........................... 74
ARTICLE VII
TRUSTEE
SECTION 7.1 Duties of Trustee............................................ 74
SECTION 7.2 Rights of Trustee............................................ 76
SECTION 7.3 Individual Rights of Trustee................................. 77
SECTION 7.4 Trustee's Disclaimer......................................... 77
SECTION 7.5 Notice of Defaults........................................... 77
SECTION 7.6 Reports by Trustee to Holders................................ 78
SECTION 7.7 Compensation and Indemnity................................... 78
SECTION 7.8 Replacement of Trustee....................................... 79
SECTION 7.9 Successor Trustee by Merger, Etc............................. 80
SECTION 7.10 Eligibility; Disqualification................................ 80
SECTION 7.11 Preferential Collection of Claims Against Company............ 81
ARTICLE VIII
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 8.1 Termination of the Company's Obligations..................... 81
SECTION 8.2 Legal Defeasance and Covenant Defeasance..................... 82
SECTION 8.3 Application of Trust Money................................... 86
SECTION 8.4 Repayment to Company or Subsidiary Guarantors................ 87
SECTION 8.5 Reinstatement................................................ 87
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.1 Without Consent of Holders................................... 88
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SECTION 9.2 With Consent of Holders...................................... 88
SECTION 9.3 Compliance with Trust Indenture Act.......................... 90
SECTION 9.4 Revocation and Effect of Consents............................ 90
SECTION 9.5 Notation on or Exchange of Securities........................ 91
SECTION 9.6 Trustee To Sign Amendments, Etc.............................. 91
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Trust Indenture Act Controls................................. 91
SECTION 10.2 Notices...................................................... 92
SECTION 10.3 Communications by Holders with Other Holders................. 93
SECTION 10.4 Certificate and Opinion of Counsel as to Conditions Precedent. 93
SECTION 10.5 Statements Required in Certificate and Opinion of Counsel.... 93
SECTION 10.6 Rules by Trustee, Paying Agent, Registrar.................... 94
SECTION 10.7 Legal Holidays............................................... 94
SECTION 10.8 GOVERNING LAW................................................ 94
SECTION 10.9 No Recourse Against Others................................... 94
SECTION 10.10 Successors................................................... 95
SECTION 10.11 Counterparts................................................. 95
SECTION 10.12 Severability................................................. 95
SECTION 10.13 Table of Contents, Headings, Etc............................. 95
SECTION 10.14 No Adverse Interpretation of Other Agreements................ 95
SECTION 10.15 Benefits of Indenture........................................ 95
SECTION 10.16 Independence of Covenants.................................... 96
ARTICLE XI
SUBORDINATION OF SECURITIES
SECTION 11.1 Agreement to Subordinate..................................... 96
SECTION 11.2 Subrogation.................................................. 99
SECTION 11.3 Relative Rights.............................................. 100
SECTION 11.4 Trustee To Effectuate Subordination.......................... 100
SECTION 11.5 Trustee Not Fiduciary for Holders of Senior Indebtedness of
the Company................................................ 101
SECTION 11.6 Notice by Company............................................ 101
SECTION 11.7 Rights of Trustee............................................ 101
SECTION 11.8 Company May Not Impair Subordination......................... 101
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SECTION 11.9 Rights of Paying Agent....................................... 101
SIGNATURES................................................................. S-1
EXHIBIT A - Form of Security
EXHIBIT B - Terms of Subsidiary Guarantee
EXHIBIT C - Form of Subsidiary Guarantee
EXHIBIT D - Form of Certificate of Transfer
EXHIBIT E - Form of Certificate of Exchange
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INDENTURE dated as of February 4, 1998, between NAVISTAR INTERNATIONAL
CORPORATION, a Delaware corporation, as Issuer (the "Company"), and XXXXXX TRUST
AND SAVINGS BANK, an Illinois banking corporation, as Trustee (the "Trustee").
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance of the 8% Senior Subordinated Notes due
February 1, 2008 of the Company (the "Securities") to be issued as provided for
in this Indenture. All things necessary to make the Securities, when duly
issued and executed by the Company and authenticated and delivered hereunder,
the valid obligations of the Company, and to make this Indenture a valid,
binding agreement of the Company, in accordance with their respective terms,
have been done.
The parties hereto agree as follows for the benefit of each other and
for the equal and ratable benefit of the Holders:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions.
"Acquired Indebtedness" of any specified Person means Indebtedness of
any other Person and its Restricted Subsidiaries existing at the time such other
Person merged with or into or became a Restricted Subsidiary of such specified
Person or assumed by the specified Person in connection with the acquisition of
assets from such other Person and not incurred by the specified Person in
connection with or in anticipation of (a) such other Person and its Restricted
Subsidiaries being merged with or into or becoming a Restricted Subsidiary of
such specified Person or (b) such acquisition by the specified Person.
"Additional Interest" shall have the meaning set forth in the
Registration Rights Agreement.
"Affiliate" means, when used with reference to any Person, any other
Person directly or indirectly controlling, controlled by, or under direct or
indirect common control with, the referent Person, as the case may be. For the
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct or cause the direction of management or
policies of the referent Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative of the foregoing.
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"Agent" means any Registrar, Paying Agent or co-registrar. See
Section 2.3.
"Applicable Procedures" means with respect to any transfer or exchange
of interests in a Global Security, the rules and procedures of DTC, Euroclear or
Cedel that apply to such transfer or exchange.
"Asset Disposition" means any sale, transfer or other disposition
(including, without limitation, by merger, consolidation or sale-and-leaseback
transaction) of (i) shares of Capital Stock of a Restricted Subsidiary of the
Company (other than directors' qualifying shares) or (ii) property or assets of
the Company or any of its Restricted Subsidiaries; provided that an Asset
Disposition shall not include (a) any sale, transfer or other disposition of
shares of Capital Stock, property or assets by a Restricted Subsidiary of the
Company to the Company or to any Restricted Subsidiary of the Company, (b) any
sale, transfer or other disposition of defaulted receivables for collection or
any sale, transfer or other disposition of property or assets in the ordinary
course of business, (c) any isolated sale, transfer or other disposition that
does not (together with all related sales, transfers or dispositions) involve
aggregate consideration in excess of $5.0 million, (d) the grant in the ordinary
course of business of any license of patents, trademarks, registrations therefor
and other similar intellectual property, (e) the granting of any Lien (or
foreclosure thereon) securing Indebtedness to the extent that such Lien is
granted in compliance with Section 4.13, (f) any sale, transfer or other
disposition constituting a Permitted Investment or Restricted Payment permitted
by Section 4.18, (g) any disposition of assets or property in the ordinary
course of business to the extent such property or assets are obsolete, worn-out
or no longer useful in the Company's or any of its Subsidiaries' business, (h)
the sale, lease, conveyance or disposition or other transfer of all or
substantially all of the assets of the Company as permitted under Article V, (i)
sales of accounts receivable, equipment and related assets (including contract
rights) of the type specified in the definition of "Qualified Securitization
Transaction" to a Securitization Subsidiary for the fair market value thereof,
including cash in an amount at least equal to 90% of the fair market value
thereof as determined in accordance with GAAP, and (j) transfers of accounts
receivable, equipment and related assets (including contract rights) of the type
specified in the definition of "Qualified Securitization Transaction" (or a
fractional undivided interest therein) by a Securitization Subsidiary in a
Qualified Securitization Transaction.
"Asset Sale Offer Trigger Date" has the meaning set forth in Section
4.19.
An "Associate" of, or a Person "associated" with, any Person means (i)
any trust or other estate in which such Person has a substantial beneficial
interest or as to which such Person serves as trustee or in a similar fiduciary
capacity and (ii) any relative or
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spouse of such Person, or any relative of such spouse, who has the same home as
such Person.
"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 Senior Notes with respect to the Senior Note
Indenture and at the interest rate borne by the Senior Subordinated Notes with
respect to the Senior Subordinated Note Indenture, compounded annually) of the
total obligations of the lessee for rental payments during the remaining term of
the lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).
"Average Life" means, as of the date of determination, with respect to
any Indebtedness for borrowed money or Preferred Stock, the quotient obtained by
dividing (i) the sum of the products of the number of years from the date of
determination to the dates of each successive scheduled principal or liquidation
value payments of such Indebtedness or Preferred Stock, respectively, and the
amount of such principal or liquidation value payments, by (ii) the sum of all
such principal or liquidation value payments.
"Bankruptcy Law" means Title 11 of the U.S. Code or any similar
Federal or state law for the relief, reorganization, adjustment or recomposition
of debtors.
"Board of Directors" means with respect to any Person, the Board of
Directors of such Person or any committee of such Board of Directors authorized
to act for it hereunder.
"Business Day" means any day except a Saturday, a Sunday or any day on
which banking institutions in either New York City, New York or Chicago,
Illinois are required or authorized by law or other governmental action to be
closed.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations, rights in, or other equivalents (however designated
and whether voting or non-voting) of, such Person's capital stock, including
each class of Common or Preferred Stock of such Person, whether outstanding on
the Issue Date or issued after the Issue Date, and any and all rights, warrants
or options exchangeable for or convertible into such capital stock.
"Capitalized Lease Obligation" means obligations under a lease that
are required to be classified and accounted for as capital lease obligations
under GAAP and, for purposes of this Indenture, the amount of such obligations
at any date shall be the capitalized amount of such obligations at such date,
determined in accordance with GAAP. The Stated Maturity of such obligation
shall be the date of the last payment of rent or any other
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amount due under such lease prior to the first date upon which such lease may be
terminated by the lessee without penalty.
"Cedel" means Cedel Bank, societe anonyme.
"Change of Control" means the occurrence of one or more of the
following events: (i) any "person" or "group" (as such terms are used in
Section 13(d) and 14(d) of the Exchange Act), other than employee or retiree
benefit plans or trusts sponsored or established by the Company or
Transportation, is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing 35% or more of the combined voting power of the Company's then
outstanding Voting Stock; (ii) the following individuals cease for any reason to
constitute more than two-thirds of the number of directors then serving on the
Board of Directors of the Company: individuals who, on the Issue Date,
constitute the Board of Directors and any new director (other than a director
whose initial assumption of the office is in connection with an actual or
threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Company) whose
appointment or election by the Board of Directors or nomination for election by
the Company's stockholders was approved (A) by the vote of at least a majority
of the directors then still in office or whose appointment, election or
nomination was previously so approved or recommended or (B) with respect to
directors whose appointment of election to the Board of Directors was made by
the holders of the Company's nonconvertible junior preference stock, series A
and nonconvertible junior preference stock, series B, by the holders of such
preference stock; (iii) the shareholders of the Company shall approve any Plan
of Liquidation (whether or not otherwise in compliance with the provisions of
this Indenture); or (iv) the Company consolidates with or merges with or into
another Person, other than a merger or consolidation of the Company in which the
holders of the Common Stock of the Company outstanding immediately prior to the
consolidation or merger hold, directly or indirectly, at least a majority of the
Common Stock of the surviving corporation immediately after such consolidation
or merger; (v) the Company or any Restricted Subsidiary of the Company, directly
or indirectly, sells, assigns, conveys, transfers, leases or otherwise disposes
of, in one transaction or a series of related transactions, all or substantially
all of the property or assets of the Company and the Restricted Subsidiaries of
the Company (determined on a consolidated basis) to any Person (other than a
Permitted Joint Venture in a transaction entered into in compliance with Section
4.18); provided that neither (x) the merger of a Restricted Subsidiary of the
Company into the Company or into any Restricted Subsidiary of the Company nor
(y) a series of transactions involving the sale of Receivables or interests
therein in the ordinary course of business by a Securitization Subsidiary in
connection with a Qualified Securitization Transaction, shall be deemed to be a
Change of Control.
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For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more Restricted
Subsidiaries of the Company, the Capital Stock of which constitutes all or
substantially all of the properties and assets of the Company, shall be deemed
to be the transfer of all or substantially all of the properties and assets of
the Company.
"Change of Control Date" has the meaning provided in Section 4.11.
"Change of Control Offer" has the meaning provided in Section 4.11.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Common Stock" of any Person means any and all shares, interests or
other participations in, and other equivalents (however designated and whether
voting or non-voting) of such Person's common stock, whether outstanding on the
Issue Date or issued after the Issue Date, and includes, without limitation, all
series and classes of such common stock.
"Company" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and,
thereafter, means the successor.
"Consolidated Cash Flow Available For Fixed Charges" of any Person
means for any period the Consolidated Net Income of such Person for such period
increased (to the extent Consolidated Net Income for such period has been
reduced thereby) by the sum of (without duplication) (i) Consolidated Interest
Expense of such Person for such period, plus (ii) Consolidated Tax Expense of
such Person for such period, plus (iii) the consolidated depreciation and
amortization expense included in the income statement of such Person prepared in
accordance with GAAP for such period, plus (iv) any other non-cash charges to
the extent deducted from or reflected in Consolidated Net Income except for any
non-cash charges that represent accruals of, or reserves for, cash disbursements
to be made in any future accounting period, minus (1) any non-cash items
increasing Consolidated Net Income for such period and (2) all cash payments
during such period relating to non-cash charges that were added back in
determining Consolidated Cash Flow Available For Fixed Charges in any prior
period.
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"Consolidated Cash Flow Ratio" of any Person means for any period the
ratio of (i) Consolidated Cash Flow Available for Fixed Charges of such Person
for such period to (ii) Consolidated Fixed Charges for such period; provided,
however, that all incurrences and repayments of Indebtedness (including the
incurrence giving rise to such calculation and any repayments in connection
therewith) and all dispositions (including discontinued operations) or
acquisition of assets (other than in the ordinary course of business) made
during or after such period and on or prior to the date of determination shall
be given pro forma effect as if they occurred on the first day of such four-
quarter period. Calculations of pro forma amounts in accordance with this
definition shall be done in accordance with Article 11 of Regulation S-X under
the Securities Act or any successor provision.
"Consolidated Fixed Charges" means, with respect to any Person for any
period, the sum of, without duplication, the amounts for such period, taken as a
single accounting period, of (i) Consolidated Interest Expense; and (ii) the
product of (x) the amount of all dividend requirements (whether or not declared)
on Preferred Stock of such Person, whether in cash or otherwise (except
dividends payable in shares of Qualified Capital Stock) paid, accrued or
scheduled to be paid or accrued during such period times (y) a fraction, the
numerator of which is one and the denominator of which is one minus the then
current effective consolidated Federal, state, local and foreign tax rate
(expressed as a decimal number between 1 and 0) of such Person (as reflected in
the audited consolidated financial statements of such Person for the most
recently completed fiscal year). In calculating "Consolidated Fixed Charges"
for purposes of determining the denominator (but not the numerator) of this
"Consolidated Fixed Charge Coverage Ratio," (1) interest on Indebtedness
determined on a fluctuating basis as of the date of determination and which will
continue to be so determined thereafter shall be deemed to have accrued at a
fixed rate per annum equal to the rate of interest on such Indebtedness in
effect on the date of determination; (2) if interest on any Indebtedness
actually incurred on the date of determination may be optionally determined at
an interest rate based upon a factor of a prime or similar rate, a eurocurrency
interbank offered rate or other rates, then the interest rate in effect on the
date of determination will be deemed to have been in effect during the relevant
four-quarter period reference; and (3) notwithstanding the foregoing, interest
on Indebtedness determined on a fluctuating basis, to the extent such interest
is covered by agreements relating to interest swap agreements, shall be deemed
to accrue at the rate per annum resulting after giving effect to the operation
of such agreements.
"Consolidated Interest Expense" means, with respect to any Person for
any period, the aggregate of the interest expense (without deduction of interest
income) of such Person and its Consolidated Subsidiaries for such period, on a
consolidated basis, as determined in accordance with GAAP, including (a) all
amortization of original issue discount; (b) the interest component of
Capitalized Lease Obligations paid, accrued and/or scheduled
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to be paid or accrued by such Person during such period; (c) net cash costs
under all Interest Rate Protection Agreements (including amortization of fees);
(d) all capitalized interest; and (e) the interest portion of any deferred
payment obligations for such period.
"Consolidated Net Income" means, with respect to any Person for any
period, the consolidated net income (or deficit) of such Person and its
Consolidated Subsidiaries for such period, on a consolidated basis, as
determined in accordance with GAAP; provided that the net income of any other
Person (other than a Restricted Subsidiary) shall be included only to the extent
of the amount that has been actually received by the referent Person or a
Subsidiary of the referent Person in the form of cash dividends or other cash
distributions (other than payments in respect of debt obligations); and
provided, further, that there shall be excluded (i) the net income of any Person
acquired in a "pooling of interests" transaction accrued prior to the date it
became a Restricted Subsidiary of the referent Person or is merged into or
consolidated with the referent Person or any Restricted Subsidiary of the
referent Person; (ii) any restoration to income of any contingency reserve,
except to the extent that provision for such reserve was made out of
Consolidated Net Income accrued at any time following the Issue Date; (iii) any
gain or loss, together with any related provisions for taxes, realized upon the
sale or other disposition (including, without limitation, dispositions pursuant
to sale-leaseback transactions) of any property or assets which are not sold or
otherwise disposed of in the ordinary course of business (provided that sales of
Receivables or interests therein pursuant to Qualified Securitization
Transactions shall be deemed to be in the ordinary course of business) and upon
the sale or other disposition of any Capital Stock of any Subsidiary of the
referent Person; (iv) any extraordinary gain or extraordinary loss together with
any related provision for taxes and any one time gains or losses (including,
without limitation, those related to the adoption of new accounting standards)
realized by the referent Person or any of its Restricted Subsidiaries during the
period for which such determination is made; (v) income or loss attributable to
discontinued operations (including, without limitation, operations disposed of
during such period whether or not such operations were classified as
discontinued); (vi) in the case of a successor to the referent Person by
consolidation or merger or as a transferee of the referent Person's assets, any
earnings of the successor corporation prior to such consolidation, merger or
transfer of assets; and (vii) the net income of any Restricted Subsidiary of
such Person which is subject to restrictions which prevent or limit the payment
of dividends or the making of distributions to such Person to the extent of such
restrictions (regardless of any waiver thereof).
"Consolidated Stockholders' Equity" as of any date means with respect
to any Person the amount, determined in accordance with GAAP, by which the
assets of such Person and of its Restricted Subsidiaries on a consolidated basis
exceed the sum of (a) the total liabilities of such Person and of its Restricted
Subsidiaries on a consolidated basis, plus (b) any redeemable Preferred Stock of
such Person.
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"Consolidated Subsidiary" of any Person means a Restricted Subsidiary
which for financial reporting purposes is or, in accordance with GAAP, should
be, accounted for by such Person as a consolidated Subsidiary.
"Consolidated Tax Expense" means, with respect to any Person for any
period, the aggregate of the U.S. Federal, state and local tax expense
attributable to taxes based on income and foreign income tax expenses of such
Person and its Consolidated Subsidiaries for such period (net of any income tax
benefit) determined in accordance with GAAP other than taxes (either positive or
negative) attributable to extraordinary or unusual gains or losses or taxes
attributable to sales or dispositions of assets.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement designed to protect the
Company or any of its Restricted Subsidiaries against fluctuations in currency
values to or under which the Company or any of its Restricted Subsidiaries is a
party or a beneficiary on the date of this Indenture or becomes a party or a
beneficiary thereafter.
"Custodian" has the meaning provided in Section 6.1(b).
"Default" means any event that is, or after notice or passage of time
or both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 2.10.
"Designated Senior Indebtedness" means (i) so long as any Indebtedness
under the Senior Notes is outstanding, the Senior Notes, (ii) so long as any
Indebtedness under the Mexico Credit Agreement is outstanding, the guarantee of
the Company under the Mexico Credit Agreement and (iii) so long as outstanding,
any other Senior Indebtedness which has at the time of initial issuance an
aggregate outstanding principal amount in excess of $25.0 million which has been
so designated as Designated Senior Indebtedness by the Board of Directors of the
Company at the time of initial issuance in a resolution delivered to the
Trustee.
"Disqualified Capital Stock" means any Capital Stock that, other than
solely at the option of the issuer thereof, by its terms (or by the terms of any
security into which it is convertible or exchangeable) is, or upon the happening
of an event or the passage of time would be, required to be redeemed or
repurchased, in whole or in part, prior to the first anniversary of the Maturity
Date or has, or upon the happening of an event or the passage of time would
have, a redemption or similar payment due on or prior to the first anniversary
of the Maturity Date, or is convertible into or exchangeable for debt securities
at the option of the holder thereof at any time prior to the first anniversary
of the Maturity Date.
-9-
"DTC" means The Depository Trust Company or its successors.
"Euroclear" means Xxxxxx Guaranty Trust Company of New York (Brussels
Office) as operator of the Euroclear system.
"Event of Default" has the meaning provided in Section 6.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Registration Statement" shall have the meaning set forth in
the Registration Rights Agreement.
"Exchange Securities" has the meaning given such term in the
Registration Rights Agreement.
"Exchange Senior Notes" means the securities issuable by the Company
in exchange for the Senior Notes pursuant to the Senior Notes Registration
Rights Agreement.
"Fiscal Quarter" means any quarter in any Fiscal Year, the duration of
such quarter being defined in accordance with GAAP.
"Fiscal Year" means a fiscal year of the Company and its Subsidiaries.
On the date of this Indenture the fiscal year of the Company and its
Subsidiaries ends October 31 of each year.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect as of the Issue Date.
"Global Security" means the global security, without coupons,
representing all or a portion of the Securities deposited with DTC substantially
in the form of Exhibit A attached hereto.
"guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and, without limiting the generality of the foregoing, 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 keepwell, to purchase assets, goods, securities or serv-
-10-
ices, 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 that the term
"guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business. The term "guarantee" used as a verb has a
corresponding meaning.
"Guarantor Senior Indebtedness" means any guarantee incurred by a
Subsidiary Guarantor of Senior Indebtedness (including, without limitation, the
Senior Notes) of the Company incurred in accordance with this Indenture, whether
such Indebtedness is outstanding on the Issue Date or thereafter; provided that
Guarantor Senior Indebtedness expressly shall not include: (i) any Indebtedness
of such Subsidiary Guarantor whether outstanding on the Issue Date or thereafter
incurred that is, pursuant to its terms or the terms of any agreement relating
thereto, subordinated or junior to any other Indebtedness of such Subsidiary
Guarantor, (ii) any Indebtedness of such Subsidiary Guarantor whether
outstanding on the Issue Date or thereafter incurred that is, by its terms or
the terms of any agreement relating thereto, pari passu with or subordinated or
junior to such Subsidiary Guarantor's Subsidiary Guarantee; (iii) the Subsidiary
Guarantee of such Subsidiary Guarantor; (iv) any Indebtedness or any other
obligation of such Subsidiary Guarantor to any of such Subsidiary Guarantor's
Subsidiaries or to any of such Subsidiary Guarantor's Affiliates, or to any
joint venture in which such Subsidiary Guarantor has an interest; (v) to the
extent such may be deemed Indebtedness of such Subsidiary Guarantor, any
liability for Federal, state, local, foreign or other taxes owed or owing by
such Subsidiary Guarantor or by any of its Restricted Subsidiaries (including
pursuant to the Tax Allocation Agreement); (vi) to the extent such may be deemed
Indebtedness of such Subsidiary Guarantor, obligations of such Subsidiary
Guarantor incurred in connection with the purchase of goods, assets, materials
or services in the ordinary course of business or representing amounts recorded
as accounts payable, trade payables or other current liabilities of such
Subsidiary Guarantor on the books of such Subsidiary Guarantor (other than the
current portion of any long-term Indebtedness of such Subsidiary Guarantor that
but for this clause (vi) would constitute Guarantor Senior Indebtedness of such
Subsidiary Guarantor); (vii) to the extent such may be deemed Indebtedness of
such Subsidiary Guarantor, any amount owed by such Subsidiary Guarantor to
employees for services rendered to such Subsidiary Guarantor or to any of its
Restricted Subsidiaries; and (viii) that portion of any Indebtedness which at
the time of incurrence was incurred in violation of this Indenture.
"Holder" or "Securityholder" means the Person in whose name a Security
is registered on the Registrar's books.
"incur" means, with respect to any Indebtedness or other obligation of
any Person, to create, issue, incur (by conversion, exchange or otherwise),
assume, guarantee
-11-
or otherwise become liable in respect of such Indebtedness or other obligation
or the recording, as required pursuant to GAAP or otherwise, of any such
Indebtedness or other obligation on the balance sheet of such Person (and
"incurrence," "incurred," "incurrable" and "incurring" shall have meanings
correlative to the foregoing); provided that the accrual of interest (whether
such interest is payable in cash or in kind) and the accretion of original issue
discount shall not be deemed an incurrence of Indebtedness; provided, further,
that (A) any Indebtedness or Capital Stock of a Person existing at the time such
Person becomes (after the Issue Date) a Restricted Subsidiary (whether by
merger, consolidation, acquisition or otherwise) of the Company shall be deemed
to be incurred or issued, as the case may be, by such Restricted Subsidiary at
the time it becomes a Restricted Subsidiary of the Company and (B) any
amendment, modification or waiver of any document pursuant to which Indebtedness
was previously incurred shall not be deemed to be an incurrence of Indebtedness
unless and then only to the extent such amendment, modification or waiver
increases the principal or premium thereof or interest rate thereon (including
by way of original issue discount).
"Indebtedness" means, with respect to any Person, at any date, any of
the following, without duplication, (i) any liability, contingent or otherwise,
of such Person (A) for borrowed money (whether or not the recourse of the lender
is to the whole of the assets of such Person or only to a portion thereof), (B)
evidenced by a note, bond, debenture or similar instrument or letters of credit
(including a purchase money obligation) or (C) for the payment of money relating
to a Capitalized Lease Obligation or other obligation (whether issued or
assumed) relating to the deferred purchase price of property, but excluding
trade accounts payable of such Person arising in the ordinary course of
business; (ii) all conditional sale obligations and all obligations under any
title retention agreement (even if the rights and remedies of the seller under
such agreement in the event of default are limited to repossession or sale of
such property), but excluding trade accounts payable of such Person arising in
the ordinary course of business; (iii) all obligations for the reimbursement of
any obligor on any letter of credit, banker's acceptance or similar credit
transaction entered into in the ordinary course of business; (iv) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien
(other than in connection with property subject to a Qualified Securitization
Transaction) on any asset or property (including, without limitation, leasehold
interests and any other tangible or intangible property) of such Person, whether
or not such Indebtedness is assumed by such Person or is not otherwise such
Person's legal liability; provided that if the obligations so secured have not
been assumed by such Person or are otherwise not such Person's legal liability,
the amount of such Indebtedness for the purposes of this definition shall be
limited to the lesser of the amount of such Indebtedness secured by such Lien or
the fair market value of the assets or property securing such Lien; (v) all
Indebtedness of others (including all dividends of other Persons the payment of
which is) guaranteed, di-
-12-
rectly or indirectly, by such Person or that is otherwise its legal liability or
which such Person has agreed to purchase or repurchase or in respect of which
such Person has agreed continently to supply or advance funds; (vi) all
Disqualified Capital Stock issued by such Person with the amount of Indebtedness
represented by such Disqualified Capital Stock being equal to the greater of its
voluntary or involuntary liquidation preference and its maximum fixed repurchase
price, but excluding accrued dividends if any; (vii) all obligations under
Currency Agreements and Interest Rate Protection Agreements and (viii) all
Attributable Indebtedness in respect of Sale/Leaseback Transactions entered into
by such person. For purposes hereof, the "maximum fixed repurchase price" of any
Disqualified Capital Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Disqualified Capital Stock as if
such Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to the Indenture, and if such price
is based upon, or measured by, the fair market value of such Disqualified
Capital Stock, such fair market value shall be determined reasonably and in good
faith by the Board of Directors of the issuer of such Disqualified Capital
Stock. The amount of Indebtedness of any Person at any date shall be the
outstanding balance without duplication 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 time of any Indebtedness
issued with original issue discount is the full amount of such Indebtedness less
the remaining unamortized portion of the original issue discount of such
Indebtedness at such time as determined in accordance with GAAP.
"Indenture" means this Indenture as amended or supplemented from time
to time pursuant to the terms hereof.
"Initial Global Securities" means the Regulation S Global Security and
the 144A Global Security, each of which contains a Securities Act Legend.
"Initial Notes" means the Securities containing a Securities Act
Legend.
"interest," when used with respect to any Security, means the amount
of all interest accruing on such Security, including all interest accruing
subsequent to the occurrence of any events specified in Sections 6.1(a)(vii) and
(viii) or which would have accrued but for any such event.
"Interest Payment Date," when used with respect to any Security, means
the stated maturity of an installment of interest specified in such Security.
-13-
"Interest Rate," when used with respect to any Security, means the
rate per annum specified in such Security as the rate of interest accruing on
the principal amount of such Security.
"Interest Rate Protection Agreement" means 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 designed to protect a Person or any Restricted Subsidiary against
fluctuations in interest rates to or under which such Person or any Restricted
Subsidiary of such Person is a party or a beneficiary on the Issue Date or
becomes a party or a beneficiary thereafter.
"Investment" by any Person means any direct or indirect (i) loan,
advance or other extension of credit (other than a guarantee) or capital
contribution (by means of transfers of cash or other property (valued at the
fair market value thereof as of the date of transfer) to others or payments for
property or services for the account or use of others, or otherwise other than
in the ordinary course of business); (ii) purchase or acquisition of Capital
Stock, bonds, notes, debentures or other securities or evidences of Indebtedness
issued by any other Person (whether by merger, consolidation, amalgamation or
otherwise and whether or not purchased directly from the issuer of such
securities or evidences of Indebtedness); (iii) assumption of the Indebtedness
of any other Person; and (iv) all other items that would be classified as
investments (including, without limitation, purchases of assets outside the
ordinary course of business) on a balance sheet of such Person prepared in
accordance with GAAP. Investments shall exclude (a) transactions between the
Navistar Financial Corporation and Navistar International Transportation Corp.
pursuant to the Master Intercompany Agreement and (b) extensions of loans, trade
credit and advances to customers and suppliers to the extent made in the
ordinary course of business.
For purposes of the definition of "Unrestricted Subsidiary" and
Section 4.18, (i) "Investment" shall include the portion (proportionate to the
Company's equity interest in such Subsidiary) of the fair market value of the
net assets of any Subsidiary of the Company at the time that such Subsidiary is
designated an Unrestricted Subsidiary; provided that if such designation is made
in connection with the acquisition of such Subsidiary or the assets owned by
such Subsidiary, the "Investment" in such Subsidiary shall be deemed to be the
consideration paid in connection with such acquisition; provided, further, that
upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Company
shall 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 of such
redesignation and (ii) any property transferred to or from an Unrestricted
Subsidiary shall
-14-
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.
"Investment Grade" means (i) with respect to S&P any of the rating
categories from and including AAA to and including BBB-and (ii) with respect to
Moody's any of the rating categories from and including Aaa to and including
Baa3.
"Issue Date" means the date on which the Securities are originally
issued under this Indenture.
"Legal Holiday" means any day other than a Business Day.
"Lien" means, with respect to any Person, any mortgage, pledge, lien,
encumbrance, easement, restriction, covenant, right-of-way, charge or adverse
claim affecting title or resulting in an encumbrance against real or personal
property of such Person, or a security interest of any kind (including any
conditional sale or other title retention agreement, any lease in the nature
thereof, any option, right of first refusal or other similar agreement to sell,
in each case securing obligations of such Person and any filing of or agreement
to give any financing statement under the Uniform Commercial Code (or equivalent
statute or statutes) of any jurisdiction but excluding any such filing or
agreement which reflects ownership by a third party of (i) property leased to
the referent Person or any of its Restricted Subsidiaries under a lease that is
not in the nature of a conditional sale or title retention agreement or (ii)
accounts, general intangibles or chattel paper sold to the referent Person).
"Master Intercompany Agreement" means the Master Intercompany
Agreement dated as of April 26, 1993 and as amended on September 30, 1996,
between Navistar Financial Corporation and Transportation as it may be amended,
modified, supplemented or restated from time to time in accordance with the
terms of this Indenture.
"Material Subsidiary" means, at any date of determination, any
Subsidiary of the Company that, together with its Subsidiaries, (i) for the most
recent Fiscal Year of the Company accounted for more than 5% of the consolidated
revenues of the Company or (ii) as of the end of such Fiscal Year, was the owner
of more than 5% of the consolidated assets of the Company, all as set forth on
the most recently available consolidated financial statements of the Company and
its Consolidated Subsidiaries for such Fiscal Year prepared in conformity with
GAAP.
"Maturity Date" means February 1, 2008.
-15-
"Mexico Credit Agreement" means the credit agreement dated November
26, 1997 among Navistar International Corporation Mexico, S.A. de C.V., the
Company and the agents and lenders named therein as amended or supplemented.
"Moody's" means Xxxxx'x Investors Service, Inc. and its successors.
"Net Available Proceeds" from any Asset Disposition by any Person
means cash or readily marketable cash equivalents received (including by way of
sale or discounting of a note, installment receivable or other receivable, but
excluding any other consideration received in the form of assumption by the
acquirer of Indebtedness or other obligations relating to such properties or
assets or received in any other non-cash form) therefrom by such Person,
including any cash received by way of deferred payment or upon the monetization
or other disposition of any non-cash consideration (including notes or other
securities) received in connection with such Asset Disposition, net of (i) all
legal, title and recording tax expenses, commissions and other fees and expenses
incurred (including, without limitation, fees and expenses of accountants,
brokers, printers and other similar entities) and all federal, state, foreign
and local taxes required to be accrued as a liability as a consequence of such
Asset Disposition, (ii) all payments made by such Person or its Restricted
Subsidiaries on any Indebtedness which is secured by such assets in accordance
with the terms of any Lien upon or with respect to such assets or which must by
the terms of such Lien, 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 payments made with respect to liabilities associated with
the assets which are the subject of the Asset Disposition, including, without
limitation, trade payables and other accrued liabilities, (iv) appropriate
amounts to be provided by such Person or any Restricted Subsidiary thereof, as
the case may be, as a reserve in accordance with GAAP against any liabilities
associated with such assets and retained by such Person or any Restricted
Subsidiary thereof, as the case may be, after such Asset Disposition, including,
without limitation, liabilities under any indemnification obligations and
severance and other employee termination costs associated with such Asset
Disposition, until such time as such amounts are no longer reserved or such
reserve is no longer necessary (at which time any remaining amounts will become
Net Available Proceeds to be allocated in accordance with the provisions of
clause (iii) of Section 4.19) and (v) all distributions and other payments, made
to minority interest holders, if any, in Restricted Subsidiaries of such Person
or joint ventures as a result of such Asset Disposition.
"Offer to Purchase" means a written offer (the "Offer") sent by the
Company by first class mail, postage prepaid, to each Holder at its address
appearing in the register for the Securities on the date of the Offer, offering
to purchase up to the principal amount of Securities in such Offer at the
purchase price specified in such Offer (as determined pursuant to the relevant
Indenture). Unless otherwise required by applicable law, the Offer
-16-
shall specify an expiration date (the "Expiration Date") of the Offer to
Purchase which shall be not less than 30 days nor more than 60 days after the
date of such Offer and a settlement date (the "Purchase Date") for purchase of
such Securities within five Business Days after the Expiration Date. The Company
shall notify the Trustee at least 15 Business Days (or such shorter period as is
acceptable to the Trustee) prior to the mailing of the Offer of the Company's
obligation to make an Offer to Purchase, and the Offer shall be mailed by the
Company or, at the Company's request, by the Trustee in the name and at the
expense of the Company. The Offer shall contain all the information required by
applicable law to be included therein. The Offer shall contain all instructions
and materials necessary to enable such Holders to tender such Securities
pursuant to the Offer to Purchase. The Offer shall also state:
(i) the Section of the Indenture pursuant to which the Offer to
Purchase is being made;
(ii) the Expiration Date and the Purchase Date;
(iii) the aggregate principal amount of the outstanding Securities
offered to be purchased by the Company pursuant to the Offer to Purchase
(including, if less than 100%, the manner by which such amount has been
determined pursuant to the Section of this Indenture requiring the Offer to
Purchase) (the "Purchase Amount");
(iv) the purchase price to be paid by the Company for each $1,000
aggregate principal amount of Securities accepted for payment (as specified
pursuant to this Indenture) (the "Purchase Price");
(v) that the Holder may tender all or any portion of the Notes
registered in the name of such Holder and that any portion of a Security
tendered must be tendered in an integral multiple of $1,000 principal
amount;
(vi) the place or places where Securities are to be surrendered for
tender pursuant to the Offer to Purchase;
(vii) that interest on any Security not tendered or tendered but not
purchased by the Company pursuant to the Offer to Purchase will continue to
accrue;
(viii) that on the Purchase Date the Purchase Price will become due
and payable upon each Security being accepted for payment pursuant to the
Offer to Purchase and that interest thereon shall cease to accrue on and
after the Purchase Date;
-17-
(ix) that each Holder electing to tender all or any portion of a
Security pursuant to the Offer to Purchase will be required to surrender
such Security at the place or places specified in the Offer prior to the
close of business on the Expiration Date (such Security being, if the
Company or the Trustee so requires, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by the Holder thereof or his attorney duly authorized
in writing);
(x) that Holders will be entitled to withdraw all or any portion of
Securities tendered if the Company (or its Paying Agent) receives, not
later than the close of business on the fifth Business Day next preceding
the Expiration Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Note the
Holder tendered, the certificate number of the Security the Holder tendered
and a statement that such Holder is withdrawing all or a portion of his
tender;
(xi) that (a) if Notes in an aggregate principal amount less than or
equal to the Purchase Amount are duly tendered and not withdrawn pursuant
to the Offer to Purchase, the Company shall purchase all such Notes and (b)
if Notes in an aggregate principal amount in excess of the Purchase Amount
are tendered and not withdrawn pursuant to the Offer to Purchase, the
Company shall purchase Notes having an aggregate principal amount equal to
the Purchase Amount on a pro rata basis (with such adjustments as may be
deemed appropriate so that only Notes in denominations of $1,000 or
integral multiples thereof shall be purchased); and
(xii) that in the case of any Holder whose Note is purchased only in
part, the Company shall execute, and the Trustee shall authenticate and
deliver to the Holder of such Note without service charge, a new Note or
Notes, of any authorized denomination as requested by such Holder, in an
aggregate principal amount equal to and in exchange for the unpurchased
portion of the Note or Notes so tendered.
An Offer to Purchase shall be governed by and effected in accordance
with the provisions above pertaining to any Offer.
"Officer" means the Chairman, the President, any Vice President, the
Chief Financial Officer, the Treasurer, the Secretary or the Controller of the
Company.
"Officers' Certificate" means a certificate signed by two Officers or
by an Officer and an Assistant Treasurer or Assistant Secretary of the Company
and otherwise complying with the requirements of Section 10.4 and Section 10.5
as they relate to the making of an Officers' Certificate.
-18-
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee, which may include counsel to the Company
complying with the requirements of Section 10.4 and Section 10.5 as they relate
to the giving of an Opinion of Counsel.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company.
"Permitted Investments" means (i) Investments in marketable, direct
obligations issued or guaranteed by the United States of America, or any
governmental entity or agency or political subdivision thereof (provided that
the good faith and credit of the United States of America is pledged in support
thereof), maturing within one year of the date of purchase; (ii) Investments in
commercial paper issued by corporations or financial institutions maturing
within 180 days from the date of the original issue thereof, and rated "P-1" or
better by Xxxxx'x or "A-1" or better by S&P or an equivalent rating or better by
any other nationally recognized securities rating agency; (iii) Investments in
certificates of deposit issued or acceptances accepted by or guaranteed by any
bank or trust company organized under the laws of the United States of America
or any state thereof or the District of Columbia, in each case having capital,
surplus and undivided profits totaling more than $500,000,000, maturing within
one year of the date of purchase; (iv) deposits, including interest-bearing
deposits, maintained in the ordinary course of business in banks; (v) any
acquisition of the Capital Stock of any Person; provided that after giving
effect to any such acquisition such Person shall become a Restricted Subsidiary
of the Company; (vi) trade receivables and prepaid expenses, in each case
arising in the ordinary course of business; provided that such receivables and
prepaid expenses would be recorded as assets of such Person in accordance with
GAAP; (vii) endorsements for collection or deposit in the ordinary course of
business by such Person of bank drafts and similar negotiable instruments of
such other Person received as payment for ordinary course of business trade
receivables; (viii) any interest swap or hedging obligation with an unaffiliated
Person otherwise permitted by this Indenture (including, without limitation, any
Currency Agreement and any Interest Rate Protection Agreement otherwise
permitted by this Indenture); (ix) Investments received as consideration for an
Asset Disposition in compliance with the provisions of Section 4.19; (x)
Investments for which the sole consideration provided is Qualified Capital Stock
of the Company; provided that the issuance of such Qualified Capital Stock is
not included in the calculation set forth in clause (3) of the first paragraph
of Section 4.18; (xi) loans and advances to employees made in the ordinary
course of business in an aggregate amount not to exceed $10.0 million at any one
time outstanding; (xii) Investments outstanding on the Issue Date; (xiii)
Investments in the Company or a Wholly Owned Subsidiary; (xiv) Investments in
securities of trade creditors, suppliers or customers received pursuant to any
plan of reorganization or similar arrangement upon bankruptcy or insolvency
-19-
of such trade creditor, supplier or customer; (xv) Investments in any Person
after the Issue Date in an aggregate amount not in excess of $20.0 million at
any one time outstanding; and (xvi) Investments in publicly traded equity or
publicly traded Investment Grade debt obligations issued by a corporation (other
than the Company or an affiliate of the Company) organized under the laws of any
State of the United States of America and subject to the reporting requirements
of Section 13 or 15(d) of the Exchange Act in an aggregate amount not in excess
of $50.0 million at any one time outstanding.
"Permitted Joint Venture" means any Person which is, directly or
indirectly, through its subsidiaries or otherwise, engaged principally in any
business in which the Company is engaged, or a reasonably related business, and
the Capital Stock of which is owned by the Company and one or more Persons other
than the Company or any affiliate of the Company.
"Permitted Junior Securities" means (i) Qualified Stock, (ii)
securities of the Company or any other corporation authorized by an order or
decree giving effect, and stating in such order or decree that effect is given,
to the subordination of such securities to the Senior Indebtedness, and made by
a court of competent jurisdiction in a reorganization proceeding under any
applicable bankruptcy, insolvency or other similar law, or (iii) any securities
of the Company provided for a plan of reorganization or readjustment that are
subordinated in right of payment to all Senior Indebtedness that may at the time
be outstanding to substantially the same extent as, or to a greater extent than,
the Securities are subordinated as provided in this Indenture.
"Permitted Liens" means (a) Liens for taxes, assessments and
governmental charges (other than any Lien imposed by the Employee Retirement
Income Security Act of 1974, as amended) that are not yet delinquent or are
being contested in good faith by appropriate proceedings promptly instituted and
diligently conducted and for which adequate reserves have been established or
other provisions have been made in accordance with generally accepted accounting
principles; (b) statutory mechanics', workmen's, materialmen's, operators' or
similar Liens imposed by law and arising in the ordinary course of business for
sums which are not yet due or are being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted and for which adequate
reserves have been established or other provisions have been made in accordance
with generally accepted accounting principles; (c) minor imperfections of, or
encumbrances on, title that do not impair the value of property for its intended
use; (d) Liens (other than any Lien under the Employee Retirement Income
Security Act of 1974, as amended) incurred or deposits made in the ordinary
course of business in connection with workers' compensation, unemployment
insurance and other types of social security; (e) Liens incurred or deposits
made to secure the performance of tenders, bids, leases, statutory or regulatory
obligations, bankers' acceptances, surety and appeal bonds, government
contracts, performance and return of
-20-
money bonds and other obligations of a similar nature incurred in the ordinary
course of business (exclusive of obligations for the payment of borrowed money);
(f) easements, rights-of-way, municipal and zoning ordinances and similar
charges, encumbrances, title defects or other irregularities that do not
materially interfere with the ordinary course of business of the Company or of
any of its Restricted Subsidiaries; (g) Liens (including extensions and renewals
thereof) upon real or tangible personal property acquired after the Issue Date;
provided that (I) such Lien is created solely for the purpose of securing
Indebtedness that is incurred in accordance with this Indenture to finance the
cost (including the cost of improvement or construction) of the item of property
or assets subject thereto and such Lien is created prior to, at the time of or
within 180 days after the later of the acquisition, the completion of
construction or the commencement of full operation of such property, (II) the
principal amount of the Indebtedness secured by such Lien does not exceed 100%
of such cost and (III) any such Lien shall not extend to or cover any property
or assets of the Company or of any Restricted Subsidiary of the Company other
than such item of property or assets and any improvements on such item; (h)
leases or subleases granted to others that do not materially interfere with the
ordinary course of business of the Company or of any Restricted Subsidiary of
the Company; (i) any interest or title of a lessor in the property subject to
any Capitalized Lease Obligation, provided that any transaction related thereto
otherwise complies with this Indenture; (j) Liens arising from filing Uniform
Commercial Code financing statements regarding leases; (k) Liens arising from
the rendering of a final judgment or order against the Company or any Restricted
Subsidiary of the Company that does not give rise to an Event of Default; (l)
Liens securing reimbursement obligations with respect to letters of credit
incurred in accordance with this Indenture that encumber documents and other
property relating to such letters of credit and the products and proceeds
thereof; (m) Liens in favor of the Trustee arising under this Indenture; (n) any
lien existing on property, shares of stock or Indebtedness of a Person at the
time such Person becomes a Restricted Subsidiary of the Company or is merged
with or consolidated into the Company or a Restricted Subsidiary of the Company
or at the time of sale, lease or other disposition of the properties of any
Person as an entirety or substantially as an entirety to the Company or any
Restricted Subsidiary of the Company; (o) Liens on property of any Subsidiary of
the Company to secure Indebtedness for borrowed money owed to the Company or to
another Restricted Subsidiary of the Company; (p) Liens in favor of the Company;
(q) Liens existing on the Issue Date; (r) Liens in favor of custom and revenue
authorities arising as a matter of law to secure payment of nondelinquent
customs duties in connection with the importation of goods; (s) Liens
encumbering customary initial deposits and margin deposits, and other Liens
incurred in the ordinary course of business that are within the general
parameters customary in the industry, in each case securing Indebtedness under
Interest Rate Protection Agreement; (t) Liens encumbering deposits made in the
ordinary course of business to secure nondelinquent obligations arising from
statutory, regulatory, contractual or warranty requirements of the Company or
its Restricted Subsidiaries for
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which a reserve or other appropriate provision, if any, as shall be required by
GAAP shall have been made; and (u) Liens arising out of consignment or similar
arrangements for the sale of goods entered into by the Company or any Restricted
Subsidiary in the ordinary course of business in accordance with industry
practice.
"Person" means any individual, corporation, partnership, joint
venture, trust, estate, unincorporated organization or government or any agency
or political subdivision thereof.
"Plan of Liquidation" means, with respect to any Person, a plan
(including by operation of law) that provides for, contemplates or the
effectuation of which is preceded or accompanied by (whether or not
substantially contemporaneously) (i) the sale, lease, conveyance or other
disposition of all or substantially all of the assets of the referent Person and
(ii) the distribution of all or substantially all of the proceeds of such sale,
lease, conveyance or other disposition and all or substantially all of the
remaining assets of the referent Person to holders of Capital Stock of the
referent Person.
"principal" of a debt security means the principal amount of the
security plus, when appropriate, the premium, if any, on the security.
"Preferred Stock" means, as applied to the Capital Stock of any
Person, the Capital Stock of such Person (other than the Common Stock of such
Person) of any class or classes (however designated) that ranks prior, as to the
payment of dividends or as to the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding-up of such Person, to shares of
Capital Stock of any other class of such Person.
"Private Exchange Securities" shall have the meaning set forth in the
Registration Rights Agreement.
"Qualified Capital Stock" means, with respect to any Person, any
Capital Stock of such Person that is not Disqualified Capital Stock or
convertible into or exchangeable or exercisable for Disqualified Capital Stock.
"Qualified Securitization Transaction" means any transaction or series
of transactions that have been or may be entered into by any of the Restricted
Subsidiaries of the Company in connection with or reasonably related to a
transaction or series of transactions in which any of the Restricted
Subsidiaries of the Company may sell, convey or otherwise transfer to (i) a
Securitization Subsidiary or (ii) any other Person, or may grant a security
interest in, any Receivables or interests therein secured by the merchandise or
services financed thereby (whether such Receivables are then existing or arising
in the future) of any of the Restricted Subsidiaries of the Company, and any
assets related thereto
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including, without limitation, all security or ownership interests in
merchandise or services financed thereby, the proceeds of such Receivables, and
other assets which are customarily sold or in respect of which security
interests are customarily granted in connection with securitization transactions
involving such assets.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Rating Agency" means each of (i) S&P and (ii) Xxxxx'x.
"Receivables" means any right of payment from or on behalf of any
obligor, whether constituting an account, chattel paper, instrument, general
intangible or otherwise, arising from the financing by any Restricted Subsidiary
of the Company of merchandise or services, and monies due thereunder, security
or ownership interests in the merchandise and services financed thereby, records
related thereto, and the right to payment of any interest or finance charges and
other obligations with respect thereto, proceeds from claims on insurance
policies related thereto, any other proceeds related thereto, and any other
related rights.
"Registrar" has the meaning provided in Section 2.3.
"Registration Rights Agreement" means the Registration Rights
Agreement dated the date hereof among the Company, X.X. Xxxxxx Securities Inc.,
Credit Suisse First Boston Corporation, Chase Securities Inc., BancAmerica
Xxxxxxxxx Xxxxxxxx and NationsBanc Xxxxxxxxxx Securities LLC.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the May 15 or November 15 (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date.
"Regulation S" means Regulation S promulgated under the Securities Act
(including any successor registration thereto) as it may be amended from time to
time.
"Restricted Physical Security" means a Physical Security containing a
Securities Act Legend.
"Restricted Subsidiary" means any Subsidiary of the Company that is
not an Unrestricted Subsidiary.
"Rule 144" shall have the meaning set forth in the Registration Rights
Agreement.
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"Rule 144A" shall have the meaning set forth in the Registration
Rights Agreement.
"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 Restricted Subsidiary
leases it from such Person.
"SEC" means the Securities and Exchange Commission.
"Securities" means any series of the 8% Senior Subordinated Notes due
2008 issued, authenticated and delivered under this Indenture, as amended or
supplemented from time to time pursuant to the terms of this Indenture,
including the Exchange Securities and Private Exchange Securities.
"Securities Act" means the Securities Act of 1933, as amended.
"Securitization Subsidiary" means a Subsidiary of the Company which
engages in no activities other than those reasonably related to or in connection
with the entering into of securitization transactions and which is designated by
the Board of Directors of the Company (as provided below) as a Securitization
Subsidiary (a) no portion of the Indebtedness or any other obligations
(contingent or otherwise) of which (i) is guaranteed by the Company or any
Restricted Subsidiary of the Company, (ii) is recourse to or obligates the
Company or any Restricted Subsidiary of the Company in any way other than
pursuant to representations, warranties and covenants (including those related
to servicing) entered into in the ordinary course of business in connection with
a Qualified Securitization Transaction or (iii) subjects any property or asset
of the Company or any Restricted Subsidiary of the Company, directly or
indirectly, continently or otherwise, to any Lien or to the satisfaction
thereof, other than pursuant to representations, warranties and covenants
(including those related to servicing) entered into in the ordinary course of
business in connection with a Qualified Securitization Transaction, (b) with
which neither the Company nor any Restricted Subsidiary of the Company (i)
provides any credit support or (ii) has any contract, agreement, arrangement or
understanding other than on terms that are fair and reasonable and that are no
less favorable to the Company or such Restricted Subsidiary than could be
obtained from an unrelated Person (other than, in the case of subclauses (i) and
(ii) of this clause (b), representations, warranties and covenants (including
those relating to servicing) entered into in the ordinary course of business in
connection with a Qualified Securitization Transaction and intercompany notes
relating to the sale of Receivables to such Securitization Subsidiary) and (c)
with which neither the Company nor any Restricted Subsidiary of the Company has
any obligation to maintain or preserve such Subsidiary's financial condition or
to cause such Subsidiary to achieve certain levels of operating results. Any
such
-24-
designation by the Board of Directors of the Company shall be evidenced to the
Trustee by filing with the Trustee a certified copy of the resolutions of the
Board of Directors of the Company giving effect to such designation.
"Senior Indebtedness of the Company" means (a) the Senior Notes,
including principal, premium, if any, and interest on the Senior Notes and all
other amounts due on or in connection with the Senior Notes, and (b) any other
Indebtedness (including principal, premium, if any, and interest on such
Indebtedness) incurred by the Company in accordance with this Indenture, whether
such Indebtedness is outstanding on the Issue Date or thereafter, provided that
Senior Indebtedness of the Company expressly shall not include: (i) any
Indebtedness of the Company (whether outstanding on the Issue Date or thereafter
incurred) that is, pursuant to its terms or the terms of any agreement relating
thereto, subordinated or junior to any other Indebtedness of the Company; (ii)
any Indebtedness of the Company (whether outstanding on the Issue Date or
thereafter incurred) that is, by its terms or the terms of any agreement
relating thereto, pari passu with or subordinated or junior to the Securities;
(iii) the Securities; (iv) any Indebtedness or any other obligation of the
Company to any of the Company's Restricted Subsidiaries or to any of the
Company's Affiliates, or to any joint venture in which the Company has an
interest; (v) to the extent such may be deemed Indebtedness of the Company, any
liability for Federal, state, local, foreign or other taxes owed or owing by the
Company or by any of its Restricted Subsidiaries (including pursuant to the Tax
Allocation Agreement); (vi) to the extent such may be deemed Indebtedness of the
Company, obligations of the Company incurred in connection with the purchase of
goods, assets, materials or services in the ordinary course of business or
representing amounts recorded as accounts payable, trade payables, or other
current liabilities of the Company on the books of the Company (other than the
current portion of any long-term Indebtedness of the Company that but for this
clause (vi) would constitute Senior Indebtedness of the Company); (vii) to the
extent such may be deemed Indebtedness of the Company, any amount owed by the
Company to employees for services rendered to the Company or to any of its
Restricted Subsidiaries; and (viii) that portion of any Indebtedness which at
the time of incurrence is incurred in violation of this Indenture.
"Senior Note Indenture" means the Senior Note Indenture, dated
February 4, 1998, relating to the Senior Notes.
"Senior Notes" means the 7% Senior Notes due 2003 issued,
authenticated and delivered under the Senior Note Indenture, as amended or
supplemented from time to time pursuant to its terms.
"Senior Notes Registration Rights Agreement" means the Registration
Rights Agreement dated February 4, 1998 with respect to the Senior Notes among
the Company and the parties named therein.
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"Shelf Registration Statement" shall have the meaning set forth in the
Registration Rights Agreement.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 2.10.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., and its successors.
"Stated Maturity" means, with respect to any security or Indebtedness
of a Person, the date specified therein as the fixed date on which any principal
of such security or Indebtedness is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase thereof at the option of the holder thereof).
"Subsidiary" of any Person means (a) a corporation a majority of whose
Voting Stock is at the time, directly or indirectly, owned by such Person, by
one or more Restricted Subsidiaries of such Person or by such Person and one or
more Restricted Subsidiaries of such Person or (b) any other Person (other than
a trust formed in connection with a Qualified Securitization Transaction) in
which such Person, a Restricted Subsidiary of such Person or such Person and one
or more Restricted Subsidiaries of such Person, directly or indirectly, at the
date of determination thereof, have at least a majority ownership interest.
"Subsidiary Guarantee" means each Subsidiary Guarantee of the
Securities issued pursuant to Section 4.15.
"Subsidiary Guarantor" means each Restricted Subsidiary of the Company
that becomes a guarantor of the Securities pursuant to Section 4.15.
"Supply Agreement" means the Amended and Restated Parent's Side
Agreement dated as of November 8, 1994 between the Company and Transportation.
"Tax Allocation Agreement" means the Tax Allocation Agreement among
the Company and its subsidiaries, effective as of October 1, 1981, as it has
been and may be amended and/or supplemented from time to time.
"Transportation" means Navistar International Transportation Corp., a
Delaware corporation and a subsidiary of the Company.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code (S)(S)
77aaa-77bbbb) as in effect on the date of this Indenture.
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"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"Trust Officer" means an officer or administrator of the Trustee
assigned to the Corporate Trust Administration Department or similar department
performing corporate trust work, or any successor to such department or, in the
case of a successor trustee, an officer assigned to the department, division or
group performing the corporate trust work of such successor.
"Unrestricted Global Securities" means one or more Global Securities
that do not and are not required to bear the Securities Act Legend.
"Unrestricted Physical Securities" means one or more Physical
Securities that do not and are not required to bear the Securities Act Legend.
"Unrestricted Securities" means the Securities that do not and are not
required to bear the Securities Act Legend.
"Unrestricted Subsidiary" means (i) each of Navistar Financial
Corporation, Arrendadora Financiera Navistar S.A. de C.V., Servicios Financieros
Navistar S.A. de C.V., Servicios Financieros NFC, S.A. de C.V., Harbour
Assurance Company of Bermuda Limited, Navistar Acceptance Corporation Limited,
the DealCor Subsidiaries of Transportation that are treated on an equity basis
by the Company on the Issue Date, and their respective Subsidiaries until such
time as it is designated a Restricted Subsidiary pursuant to the second
succeeding sentence, (ii) 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 (iii) 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) to be an
Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns
any Capital Stock of, or holds any Lien on any property of, the Company or any
other Restricted Subsidiary of the Company; provided that either (A) the
Subsidiary to be so designated has total assets of $1,000 or less or (B) if such
Subsidiary has assets greater than $1,000, such designation would be permitted
under Section 4.18. The Board of Directors may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided that immediately after giving
effect to such designation (x) if such Unrestricted Subsidiary at such time has
Indebtedness, the Company could incur $1.00 of additional Indebtedness under
clause (i) of Section 4.9 and (y) no Default shall have occurred and be
continuing. Any such designation by the Board of Directors shall be evidenced
by the Company to the Trustee by promptly filing with the Trustee a copy of the
board resolu-
-27-
tion giving effect to such designation and an officers' certificate certifying
that such designation complied with the foregoing provisions.
"Voting Stock" means, with respect to any Person, securities of any
class or classes of Capital Stock in such Person entitling the holders thereof
(whether at all times or only so long as no senior class of stock has voting
power by reason of any contingency) to vote in the election of members of the
Board of Directors or other governing body of such Person.
"Wholly Owned Subsidiary" means, with respect to any Person, any
Restricted Subsidiary of such Person all of the outstanding shares of Capital
Stock (other than directors' qualifying shares, if applicable) of which are
owned directly by such Person or another Wholly Owned Subsidiary of such Person.
SECTION 1.2 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision shall be deemed incorporated by reference in and made a part of this
Indenture. The following TIA terms used in this Indenture have the following
meanings:
(a) "Commission" means the SEC;
(b) "indenture securities" means the Securities;
(c) "indenture security holder" means a Securityholder;
(d) "indenture to be qualified" means this Indenture;
(e) "indenture trustee" or "institutional trustee" means the Trustee;
and
(f) "obligor" on the indenture securities means the Company or any
other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by the Securities
Act or the Exchange Act and not otherwise defined herein have the meanings so
assigned to them therein.
SECTION 1.3 Rules of Construction.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
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(b) "or" is not exclusive;
(c) words in the singular include the plural, and words in the
plural include the singular;
(d) provisions apply to successive events and transactions;
(e) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other Subdivision; and
(f) unless otherwise specified herein, all accounting terms used
herein shall be interpreted, all accounting determinations hereunder shall
be made, and all financial statements required to be delivered hereunder
shall be prepared in accordance with generally accepted accounting
principles as in effect from time to time, applied on a basis consistent
with the most recent audited consolidated financial statements of the
Company.
ARTICLE II
THE SECURITIES
SECTION 2.1 Form and Dating.
(a) Global Securities. Securities offered and sold to QIBs in
reliance on Rule 144A shall be issued initially substantially in the form of
Exhibit A hereto in the name of Cede & Co. as nominee of DTC, duly executed by
the Company and authenticated by the Trustee as hereinafter provided. Any such
Security shall be referred to herein as the "144A Global Security." Securities
offered and sold in reliance on Regulation S shall be issued initially
substantially in the form of Exhibit A hereto in the name of Cede & Co. as
nominee of DTC, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. Any such Security shall be referred to herein as the
"Regulation S Global Security." Unrestricted Global Securities shall be issued
initially in accordance with Sections 2.6(b)(iv), 2.6(c)(ii) and 2.6(e) in the
name of Cede & Co. as nominee of DTC, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The aggregate principal
amount of each of the Global Security may from time to time be increased or
decreased by adjustments made on the records of the Trustee as hereinafter
provided.
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Each Global Security shall represent such of the outstanding
Securities as shall be specified therein and each shall provide that it shall
represent the aggregate principal amount of outstanding Securities from time to
time endorsed thereon and that the aggregate principal amount of outstanding
Securities represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges, redemptions and transfers of interests
therein in accordance with the terms of this Indenture. Any change in the
aggregate principal amount of a Global Security to reflect the amount of any
increase or decrease in the principal amount of outstanding Notes represented
thereby shall be made by the Trustee in accordance with reasonable instructions
given by the Holder thereof as required by Section 2.6 hereof and shall be
conclusively reflected on the books and records of the Trustee.
Upon the issuance of the Global Security to DTC, DTC shall credit, on
its internal book-entry registration and transfer system, its Participant's
accounts with the respective interests owned by such Participants. Interests in
the Global Securities shall be limited to Participants, including Euroclear and
Cedel, and indirect Participants.
The Participants shall not have any rights either under this
Indenture or under any Global Security with respect to such Global Security held
on their behalf by DTC, and DTC 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 the purpose of receiving payment of or on account of the principal
of and, subject to the provisions of this Indenture, interest and Additional
Interest, if any, on the Global Securities and for all other purposes.
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 DTC or impair,
as between DTC and its Participants, the operation of customary practices of DTC
governing the exercise of the rights of an owner of a beneficial interest in any
Global Security.
The provisions of the "Operating Procedures of the Euroclear System"
and "Terms and Conditions Governing Use of Euroclear" and the "General Terms and
Conditions of Cedel Bank" and "Customer Handbook" of Cedel, as in effect from
time to time, shall be applicable to interests in the Regulation S Global
Security that are held by the Participants through Euroclear or Cedel.
(b) Physical Securities. Securities issued substantially in the form
of Exhibit A hereto, in certificated form and in the names of the purchasers
thereof (or their nominees), duly executed by the Company and authenticated by
the Trustee as hereinafter provided shall be referred to herein as the "Physical
Securities." Except as provided in Section 2.6(a) owners of beneficial
interests in the Global Securities will not be entitled to receive Physical
Securities.
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(c) Securities. The provisions of the form of Securities contained in
Exhibit A hereto are incorporated herein by reference. The Securities and the
Trustee's Certificates of Authentication shall be substantially in the form of
Exhibit A hereto. The Securities may have notations, legends or endorsements
required by law, stock exchange rule or usage and provided to the Trustee in
writing by the Company. The Company shall approve the form of the Securities
and any notation, legend or endorsement on them. If required, the Securities
may bear the appropriate legend regarding original issue discount for federal
income tax purposes. Each Security shall be dated the date of its
authentication. The terms and provisions contained in the Securities shall
constitute, and are hereby expressly made, a part of this Indenture.
SECTION 2.2 Execution and Authentication.
Two Officers of the Company 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 officer of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate (i) Initial Securities for issue on the
Issue Date in the aggregate principal amount of $250,000,000, (ii) Private
Exchange Securities from time to time only in exchange for a like principal
amount of Initial Securities and (iii) Unrestricted Securities from time to time
only in exchange for a like principal amount of Initial Securities, in each case
upon a written order signed by an Officer of the Company. The order shall be
based upon a Board Resolution of the Company and shall specify the amount of
Securities to be authenticated and the date on which the original issue of
Securities is to be authenticated. The order shall also provide instructions
concerning registration, legends, if any, pursuant to Section 2.6(f), amounts
for each Holder and delivery. The aggregate principal amount of Securities
outstanding at any time may not exceed $250,000,000 except as provided in
Section 2.7. The Securities shall be issued only in registered form, without
coupons and only in denominations of $1,000 and any integral multiple thereof.
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 ("Registrar") and an
office or agency
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where Securities may be presented for payment ("Paying Agent"). The Company may
have 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
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent and shall, if required,
incorporate the provisions of the TIA. The Company shall notify the Trustee in
writing of the name and address of any such Agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation in accordance with the provisions of
Section 7.7.
The Company initially appoints the Trustee as Registrar and Paying
Agent. The Company shall give written notice to the Trustee in the event that
the Company decides to act as Registrar.
SECTION 2.4 Paying Agent To Hold Money in Trust.
The Company shall require each Paying Agent to agree in writing to
hold in trust for the benefit of Securityholders or the Trustee all money held
by the Paying Agent for the payment of principal of or interest on the
Securities (whether such money has been paid to it by the Company or any other
obligor on the Securities), and the Company and the Paying Agent shall each
notify the Trustee of any default by the Company (or any other obligor on the
Securities) in making any such payment. The Company at any time may require a
Paying Agent to pay all money held by it to the Trustee and account for any
funds disbursed and the Trustee may at any time during the continuance of any
payment default, upon written request to a Paying Agent, require such Paying
Agent to pay all money held by it to the Trustee and to account for any funds
disbursed. Upon making such payment the Paying Agent shall have no further
liability for the money delivered to the Trustee.
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, the Company shall furnish
to the Trustee at least five 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.
-32-
SECTION 2.6 Transfer and Exchange.
(a) Transfer and Exchange of Global Securities. Transfer of the
Global Securities shall be by delivery. Global Securities may not be
transferred as or exchanged for Physical Securities except (i) if DTC notifies
the Company that it is unwilling or unable to continue to act as depositary with
respect to the Global Securities or ceases to be a clearing agency registered
under the Exchange Act and, in either case, a successor depositary registered as
a clearing agency under the Exchange Act is not appointed by the Company within
120 days, (ii) at any time if the Company in its sole discretion determines that
the Global Securities (in whole but not in part) should be exchanged for
Physical Securities or (iii) if the owner of an interest in the Global
Securities requests such Physical Securities, following an Event of Default
under this Indenture, in a writing delivered through DTC to the Trustee.
Upon the occurrence of any of the events specified in the previous
paragraph, Physical Securities shall be issued in such names as DTC shall
instruct the Trustee and the Trustee shall cause the aggregate principal amount
of the applicable Global Security to be reduced accordingly and direct DTC to
make a corresponding reduction in its book-entry system. The Company shall
execute and the Trustee shall authenticate and deliver to the Person designated
in such instructions a Physical Security in the appropriate principal amount.
The Trustee shall deliver such Physical Securities to the Persons in whose names
such Securities are so registered. Physical Securities issued in exchange for
an Initial Global Security pursuant to this Section 2.6 (a) shall bear the
Securities Act Legend and shall be subject to all restrictions on transfer
contained therein. Global Securities may also be exchanged or replaced, in
whole or in part, as provided in Sections 2.7 and 2.8. Every Security
authenticated and delivered in exchange for, or in lieu of, a Global Security or
any portion thereof, pursuant to Section 2.7 or 2.8, shall be authenticated and
delivered in the form of, and shall be, a Global Security. A Global Security
may not be exchanged for another Security other than as provided in this Section
2.6(a).
(b) Transfer and Exchange of Interests in Global Securities. The
transfer and exchange of interests in Global Securities shall be effected
through DTC, in accordance with this Indenture and the procedures of DTC
therefor. Interests in Initial Global Securities shall be subject to
restrictions on transfer comparable to those set forth herein to the extent
required by the Securities Act. The Trustee shall have no obligation to
ascertain DTC's compliance with any such restrictions on transfer. Transfers of
interests in Global Securities shall also require compliance with subparagraph
(i) below, as well as one or more of the other following subparagraphs as
applicable:
(i) All Transfers and Exchanges of Interests in Global
Securities. In connection with all transfers and exchanges of interests in
Global Securities (other
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than transfers of interests in a Global Security to Persons who take
delivery thereof in the form of an interest in the same Global Security),
the transferor of such interest must deliver to the Registrar (1)
instructions given in accordance with the Applicable Procedures from a
Participant or an indirect Participant directing DTC to credit or cause to
be credited an interest in the specified Global Security in an amount equal
to the interest to be transferred or exchanged, (2) a written order given
in accordance with the Applicable Procedures containing information
regarding the Participant account to be credited with such increase and (3)
instructions given by the Holder of the Global Security to effect the
transfer referred to in (1) and (2) above.
(ii) Transfer of Interests in the Same Initial Global Security.
Interests in any Initial Global Security may be transferred to Persons who
take delivery thereof in the form of an interest in the same Initial Global
Security in accordance with the transfer restrictions set forth in Section
2.6(f) hereof. It shall be the sole responsibility of the selling
beneficial owner to deliver these transfer documents, if any are required,
to the Company and the Trustee shall have no responsibility or duty to
collect the transfer documentation set forth in Section 2.6(f).
(iii) Transfer of Interests to Another Initial Global Security.
Interests in any Initial Global Security may be transferred to Persons who
take delivery thereof in the form of an interest in another Initial Global
Security if the Registrar receives the following:
(A) if the transferee will take delivery in the form of an
interest in the 144A Global Security, then the transferor must
deliver a certificate in the form of Exhibit D hereto, including
the certifications in item 1 thereof; or
(B) if the transferee will take delivery in the form of an
interest in the Regulation S Global Security, then the transferor
must deliver a certificate in the form of Exhibit D hereto,
including the certifications in item 2 thereof.
(iv) Transfer and Exchange of Interests in Initial Global Security
for Interests in an Unrestricted Global Security. Interests in any Initial
Global Security may be exchanged by the holder thereof for an interest in
the Unrestricted Global Security or transferred to a Person who takes
delivery thereof in the form of an interest in the Unrestricted Global
Security if:
(A) such exchange or transfer is effected pursuant to the
Exchange Registration Statement in accordance with the Registration
Rights Agreement
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and the Company delivers an Officers' Certificate to the Trustee
stating that such Exchange Registration Statement has become effective
and directing the Trustee to effect the exchange or transfer on the
terms set forth therein;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement and the Company delivers an Officers' Certificate to the
Trustee stating that such Shelf Registration Statement has become
effective and directing the Trustee to effect the exchange or transfer
on the terms set forth therein; or
(C) the Registrar receives the following:
(1) if the holder of such an interest in an Initial
Global Security proposes to exchange it for an interest in
the Unrestricted Global Security, a certificate from such
Holder in the form of Exhibit E hereto, including the
certifications in item 1(a) thereof;
(2) if the holder of such an interest in an Initial
Global Security proposes to transfer it to a Person who shall
take delivery thereof in the form of an interest in an
Unrestricted Global Security, a certificate in the form of
Exhibit D hereto, including the certification in item 4
thereof; and
(3) in each such case set forth in this paragraph (C), an
Opinion of Counsel in form reasonably acceptable to the
Company and the Trustee, to the effect that such exchange or
transfer is in compliance with the Securities Act and, that
the restrictions on transfer contained herein and in Section
2.6(f) hereof are not required in order to maintain
compliance with the Securities Act.
If any such transfer is effected pursuant to paragraph (B) above at a time
when an Unrestricted Global Security has not yet been issued, the Company
shall issue and, upon receipt of an authentication order in accordance with
Section 2.2, the Trustee shall authenticate one or more Unrestricted Global
Securities in an aggregate principal amount equal to the principal amount
of interests in the Initial Global Security transferred pursuant to
paragraph (B) above, provided the Company has made appropriate arrangements
with DTC prior to delivery of such an authentication order to the Trustee.
(v) Notation by the Trustee of Transfer of Interests Among Global
Securities. Upon satisfaction of the requirements for transfer of interests
in Global Secu
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rities pursuant to clauses (iii) or (iv) above, the Trustee shall reduce or
cause to be reduced the aggregate principal amount of the relevant Global
Security from which the interests are being transferred, and increase or
cause to be increased the aggregate principal amount of the Global Security
to which the interests are being transferred, in each case, by the
principal amount so transferred and shall direct DTC to make corresponding
adjustments in its book-entry system. No transfer of interests of a Global
Security shall be effected until, and any transferee pursuant thereto shall
succeed to the rights of a holder of such interests only when, the
Registrar has made appropriate adjustments to the applicable Global
Security in accordance with this paragraph.
(c) Transfer or Exchange of Physical Securities for Interests in
a Global Security.
(i) If any Holder of Physical Securities required to contain the
Securities Act Legend proposes to exchange such Securities for an interest
in a Global Security or to transfer such Physical Securities to a Person
who takes delivery thereof in the form of an interest in a Global Security,
then, upon receipt by the Registrar of the following documentation (all of
which may initially be submitted by facsimile, provided arrangements
satisfactory to the Trustee are made for delivery of the originals):
(A) if the Holder of such Physical Registered Securities
proposes to exchange such Securities for an interest in an Initial
Global Security, a certificate from such Holder in the form of
Exhibit E hereto, including the certifications in item 2 thereof;
(B) if such Physical Securities are being transferred to a
QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit D hereto, including
the certifications in item 1 thereof; or
(C) if such Physical Securities are being transferred to a
Non-U.S. Person (as defined in Regulation S) in an offshore
transaction in accordance with Rule 904 under the Securities Act, a
certificate to the effect set forth in Exhibit D hereto, including
the certifications in item 2 thereof;
the Trustee shall cancel the Physical Securities, increase or cause to be
increased the aggregate principal amount of, in the case of clause (B)
above, the 144A Global Security, in the case of clause (C) above, the
Regulation S Global Security, and direct DTC to make a corresponding
increase in its book-entry system.
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(ii) A Holder of Physical Securities required to contain the
Securities Act Legend may exchange such Securities for an interest in the
Unrestricted Global Security or transfer such Restricted Physical
Securities to a Person who takes delivery thereof in the form of an
interest in the Unrestricted Global Security only:
(A) if such exchange or transfer is effected pursuant to the
Exchange Registration Statement in accordance with the Registration
Rights Agreement and the Company delivers an Officers' Certificate
to the Trustee stating that such Exchange Registration Statement
has become effective and directing the Trustee to effect the
exchange or transfer on the terms set forth therein;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement and the Company delivers an Officers' Certificate to the
Trustee stating that such Shelf Registration Statement has become
effective and directing the Trustee to effect the exchange or
transfer on the terms set forth therein;
(C) upon receipt by the Registrar of the following
documentation (all of which may be submitted by facsimile):
(1) if the Holder of such Physical Securities proposes to
exchange such Securities for an interest in the Unrestricted
Global Security, a certificate from such Holder in the form
of Exhibit E hereto, including the certifications in item
1(b) thereof;
(2) the Holder of such Registered Securities proposes to
transfer such Securities to a Person who shall take delivery
thereof in the form of an interest in the Unrestricted Global
Security, a certificate in the form of Exhibit D hereto,
including the certifications in item 4 thereof; and
(3) in each such case set forth in this paragraph (C), an
Opinion of Counsel in form reasonably acceptable to the
Company, to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions
on transfer contained herein and in Section 2.6(f) hereof are
not required in order to maintain compliance with the
Securities Act.
If any such transfer is effected pursuant to paragraph (B) above at a time
when an Unrestricted Global Security has not yet been issued, the Company
shall issue and,
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upon receipt of an authentication order in accordance with Section 2.2, the
Trustee shall authenticate (i) one or more Unrestricted Global Securities
in an aggregate principal amount equal to the principal amount of Physical
Securities transferred pursuant to paragraph (B) above.
(d) Transfer and Exchange of Physical Securities.
(i) Transfer of a Physical Security to Another Physical Security.
Following the occurrence of one or more of the events specified in Section
2.6(a), a Physical Security may be transferred to Persons who take delivery
thereof in the form of another Physical Security if the Registrar receives
the following:
(A) if the transfer is being effected pursuant to and in
accordance with Rule 144A, then the transferor must deliver a
certificate in the form of Exhibit D hereto, including the
certifications in item 3(a) thereof; or
(B) if the transfer is being effected pursuant to and in
accordance with Regulation S, then the transferor must deliver a
certificate in the form of Exhibit D hereto, including the
certifications in item 3(b) thereof.
(ii) Transfer and Exchange of Restricted Physical Security for
Physical Security Which Does Not Bear the Securities Act Legend. Following
the occurrence of one or more of the events specified in Section 2.6(a) and
the receipt by the Trustee of an Officers' Certificate stating that such
events have occurred, a Restricted Physical Security may be exchanged by
the Holder thereof for a Physical Security or transferred to a Person who
takes delivery thereof in the form of a Physical Security which does not
bear the Securities Act Legend if:
(A) such exchange or transfer is effected pursuant to the
Exchange Registration Statement in accordance with the Registration
Rights Agreement and the receipt by the Trustee of an Officers'
Certificate stating that such events have occurred;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement and the receipt by the Trustee of an Officers'
Certificate stating that such events have occurred; or
(C) the Registrar receives a certificate from such Holder in
the form of Exhibit E hereto, including the certifications in item
1(c) thereof and an Opinion of Counsel in form reasonably
acceptable to the Company, to the
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effect that such exchange or transfer is in compliance with the
Securities Act and, that the restrictions on transfer contained
herein and in Section 2.6(f) hereof are not required in order to
maintain compliance with the Securities Act.
(iii) Exchange of Physical Securities. When Physical Securities
are presented by a Holder to the Registrar with a request to register the
exchange of such Physical Securities for an equal principal amount of
Physical Securities of other authorized denominations, the Registrar shall
make the exchange as requested only if the Physical Securities are endorsed
or accompanied by a written instrument of transfer in form satisfactory to
the Registrar duly executed by such Holder or by his attorney duly
authorized in writing and shall be issued only in the name of such Holder
or its nominee and the transfer documentation required in Section
2.6(d)(ii). The Physical Securities issued in exchange for Physical
Securities shall bear the Securities Act Legend and shall be subject to all
restrictions on transfer contained herein in each case to the same extent
as the Physical Securities so exchanged.
(iv) Return of Physical Securities. In the event of a transfer
pursuant to clauses (i) or (ii) above and the Holder thereof as delivered
certificates representing an aggregate principal amount of Securities in
excess of that to be transferred, the Company shall execute and the Trustee
shall authenticate and deliver to the Holder of such Security without
service charge, a new Physical Security or Securities of any authorized
denomination requested by the Holder, in an aggregate principal amount
equal to the portion of the Security not so transferred.
(e) Exchange Offer. Upon the occurrence of the Exchange Offer (as
defined in the Registration Rights Agreement) in accordance with the
Registration Rights Agreement, the Company shall issue and, upon receipt of an
Officers' Certificate stating that the Exchange Registration Statement has
become effective and that the Exchange Offer has occurred and an authentication
order in accordance with Section 2.2, the Trustee shall authenticate one or more
Unrestricted Global Securities in an aggregate principal amount equal to the
principal amount of the interests in the Initial Global Securities and
Restricted Physical Securities tendered for acceptance by persons participating
therein. Concurrently with the issuance of such Securities, the Trustee shall
cause the aggregate principal amount of the applicable Initial Global Securities
to be reduced accordingly and direct DTC to make a corresponding reduction in
its book-entry system. The Trustee shall cancel any Restricted Physical
Certificates in accordance with Section 2.9 hereof.
In the case that one or more of the events specified in Section 2.6(a)
have occurred, upon the occurrence of such Exchange Offer, the Company shall
issue and, upon receipt of an authentication order in accordance with Section
2.2, the Trustee shall authent-
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icate Unrestricted Physical Securities in an aggregate principal amount equal to
the principal amount of the Restricted Physical Securities tendered for
acceptance by persons participating therein.
(f) Legends.
Each Initial Global Security and each Restricted Physical Security
shall bear the legend (the "Securities Act Legend") in substantially the
---------------------
following form:
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THIS NOTE MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS
NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY
THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) INSIDE THE UNITED STATES TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE
THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT IN EACH OF CASES
(I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL,
AND EACH SUBSEQUENT HOLDER IS REQUIRED TO NOTIFY ANY PURCHASER OF
THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A)
ABOVE.
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(g) Global Security Legend. Each Global Security shall bear a legend
in substantially the following form:
"UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION ("DTC") TO A NOMINEE OF DTC, OR BY ANY SUCH
NOMINEE OF DTC, OR BY DTC TO A SUCCESSOR DEPOSITARY OR A NOMINEE
OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON 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 CEDE & CO. OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF
PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.6
OF THE INDENTURE."
(h) Cancellation and/or Adjustment of Global Securities. At such time
as all interests in the Global Securities have been exchanged for Physical
Securities, all Global Securities shall be returned to or retained and canceled
by the Trustee in accordance with Section 2.9 hereof. At any time prior to such
cancellation, if any interest in a Global Security is exchanged for an interest
in another Global Security or for Physical Securities, the principal amount of
Securities represented by such Global Security shall be reduced accordingly and
all such changes to such Global Security shall be reflected on the books and
records of the Trustee, by the Trustee to reflect such reduction.
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(i) General Provisions Relating to All Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Global Securities
and Physical Securities upon a written order signed by an Officer of the
Company or at the 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 stamp or transfer tax or similar
governmental charge payable in connection therewith (other than any such
stamp or transfer taxes or similar governmental charge payable upon
exchange or transfer pursuant to Sections 2.8 and 4.11 hereof).
(iii) All Global Securities and Physical Securities issued upon
any registration of transfer or exchange of Global Securities or Physical
Securities shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the
Global Securities or Physical Securities surrendered upon such registration
of transfer or exchange.
(iv) The Company shall not be required (A) to issue, to register
the transfer of or to exchange Securities during a period beginning at the
opening of business 15 days before the day of any selection of Securities
for redemption and ending at the close of business on the day of selection,
(B) to register the transfer of or to exchange any Security so selected for
redemption in whole or in part, except the unredeemed portion of any
Security being redeemed in part or (C) to register the transfer of or to
exchange a Security between a record date and the next succeeding Interest
Payment Date.
(v) Prior to due presentment for the registration of a transfer
of any Security, the Trustee, any Agent and the Company may deem and treat
the Person in whose name any Security is registered as the absolute owner
of such Security for the purpose of receiving payment of principal of and
interest on such Securities and for all other purposes, and none of the
Trustee, any Agent or the Company shall be affected by notice to the
contrary.
Notwithstanding anything herein to the contrary, as to any
certification or certificate delivered to the Registrar pursuant to this Section
2.6, the Registrar's duties shall be limited to confirming that any such
certification or certificate delivered to it is in the form of Exhibit D or E
attached hereto. The Registrar shall not be responsible for confirming the
truth or accuracy of any representations made in any such certification or
certificate.
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SECTION 2.7 Replacement Securities.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be reasonably required by them to
save each of them and any agent of either of them harmless, then, in the absence
of notice to the Company or the Trustee that such Security has been acquired by
a bona fide purchaser, the Company shall execute and upon its request the
Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or
stolen Security, a new Security of like tenor and principal amount, having
endorsed thereon and bearing a number not contemporaneously outstanding.
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) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the 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.
SECTION 2.8 Temporary Securities.
Pending the preparation of definitive Securities, the Company may
execute and, upon Company Order, the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued, and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.
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If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. 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 of the Company designated pursuant to Section 10.2, 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
deliver in exchange therefor a like principal amount of definitive Securities of
authorized denominations and like tenor. Until so exchanged the temporary
Securities shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities.
SECTION 2.9 Cancellation.
All Securities surrendered for payment, redemption or registration of
transfer or exchange shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee and shall be promptly canceled by it. The Company
may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Securities so delivered shall be
promptly canceled by the Trustee. No Securities shall be authenticated in lieu
of or in exchange for any Securities canceled as provided in this Section,
except as expressly permitted by this Indenture. All canceled Securities held
by the Trustee shall be destroyed by the Trustee and upon the Company's written
request, the Trustee shall deliver a certificate of destruction to the Company.
SECTION 2.10 Defaulted Interest.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in clause (1) or (2) below:
(1) 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 date
for the payment of such Defaulted Interest (herein called a "Special Record
Date"), 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 of the proposed payment, 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
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to be held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this clause provided. Thereupon the Company shall
fix a Special Record Date for the payment of such Defaulted Interest which
shall be not more than 15 days prior to the date of the proposed payment.
The Company shall promptly notify the Trustee of such Special Record Date
and, in the name and at the expense of the Company, the Trustee shall cause
notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor to be mailed, first-class postage prepaid, to each
Holder at his address as it appears in the Security Register, not less than
five Business Days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor having been so mailed, such Defaulted Interest shall be paid not
later than the fifteenth day after such Special Record 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.
(2) 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 the proposed payment pursuant to this clause,
such manner of payments shall be deemed practicable by the Trustee.
SECTION 2.11 CUSIP or CINS Number.
The Company in issuing the Securities may use a "CUSIP" or "CINS"
number, and if so, such CUSIP or CINS number shall be included in notices of
redemption or exchange as a convenience to Holders; provided that any such
notice may state that no representation is made as to the correctness or
accuracy of the CUSIP or CINS number printed in the notice or on the Securities,
and that reliance may be placed only on the other identification numbers printed
on the Securities. The Company will promptly notify the Trustee of any change
in the CUSIP or CINS number.
SECTION 2.12 Payments of Interest.
(a) The Holder of a Physical Security at the close of business on the
Regular Record Date with respect to any Interest Payment Date shall be entitled
to receive the interest and Additional Interest, if any, payable on such
Interest Payment Date notwithstanding any transfer or exchange of such Physical
Security subsequent to the regular record date and prior to such Interest
Payment Date, except if and to the extent the Company shall default in the
payment of the interest or Additional Interest due on such Interest Payment
Date, in which case such Defaulted Interest and Additional Interest, if any,
shall be
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paid in accordance with Section 2.10; provided that, in the event of an exchange
of a Physical Security for a beneficial interest in any Global Security
subsequent to a regular record date or any special record date and prior to or
on the related Interest Payment Date or other payment date under Section 2.10,
any payment of the interest and Additional Interest payable on such payment date
with respect to any such Physical Security shall be made to the Person in whose
name such Physical Security was registered on such record date. Payments of
interest on the Global Securities will be made to the Holder of the Global
Security on each Interest Payment Date; provided that, in the event of an
exchange of all or a portion of a Global Security for Physical Security
subsequent to the regular record date or any special record date and prior to or
on the related Interest Payment Date or other payment date under Section 2.10
any payment of interest or Additional Interest payable on such Interest Payment
Date or other payment date with respect to the Physical Security shall be made
to the Holder of the Global Security.
(b) The Trustee shall pay interest and Additional Interest, if any,
to DTC, with respect to any Global Security held by DTC, on the applicable
Interest Payment Date in accordance with instructions received from the Company
at least five Business Days before the applicable Interest Payment Date. The
Company shall deliver such instructions in the form of an Officers' Certificate
setting forth Additional Interest in the aggregate and per $1,000 principal
amount of Securities to be paid on such Interest Payment Date.
ARTICLE III
REDEMPTION
SECTION 3.1 Notices to Trustee.
If the Company elects to redeem Securities pursuant to paragraph 5 of
the Securities, they shall notify the Trustee in writing of the redemption date,
the principal amount of Securities to be redeemed and the paragraph of the
Securities pursuant to which the redemption will occur. The Company shall give
each notice to the Trustee provided for in this Section not less than 20 not
more than 60 days before the redemption date unless the Trustee consents to a
shorter period. Such notice shall be accompanied by an Officers' Certificate
from the Company to the effect that such redemption will comply with the
provisions herein.
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SECTION 3.2 Selection of Securities To Be Redeemed.
If fewer than all the Securities are to be redeemed, the Trustee shall
select the Securities to be redeemed pro rata or by lot or by a method that
complies with applicable legal and securities exchange requirements, if any, and
that the Trustee considers fair and appropriate and in accordance with methods
generally used at the time of selection by fiduciaries in similar circumstances.
The Trustee shall make the selection from outstanding Securities not previously
called for redemption. The Trustee may select for redemption portions of the
principal of Securities that have denominations larger than $1,000. Securities
and portions of them the Trustee selects shall be in amounts of $1,000 or a
whole multiple of $1,000. Provisions of this Indenture that apply to Securities
called for redemption also apply to portions of Securities called for
redemption. The Trustee shall notify the Company promptly of the Securities or
portions of Securities to be redeemed. In the event the Company is required to
make an offer to repurchase Securities pursuant to Sections or and the
amount available for such offer is not evenly divisible by $1,000, the Trustee
shall promptly refund to the Company any remaining funds, which in no event will
exceed $1,000.
SECTION 3.3 Notice of Redemption.
At least 20 days but not more than 60 days before a date for
redemption of Securities, the Company shall mail a notice of redemption by
first-class mail to the registered address appearing in the Security Register of
each Holder of Securities to be redeemed. The notice shall identify the
Securities (including CUSIP numbers, if any) to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be
redeemed, the identification and principal amounts of the particular
Securities to be redeemed;
(6) that, unless the Company defaults in making such redemption
payment, interest on Securities (or portion thereof) called for redemption
ceases to accrue on and after the redemption date;
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(7) the paragraph of the Securities pursuant to which the
Securities called for redemption are being redeemed;
(8) the CUSIP number, if any, printed on the Securities being
redeemed; and
(9) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on
the Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section.
SECTION 3.4 Effect of Notice of Redemption.
Once notice of redemption is mailed, Securities called for redemption
become due and payable on the redemption date and at the redemption price stated
in the notice. Upon surrender to the Paying Agent, such Securities shall be
paid at the redemption price stated in the notice, plus accrued interest to the
redemption date. Such notice if mailed in the manner herein provided shall be
conclusively presumed to have been given, whether or not the Holder receives
such notice. Failure to give notice or any defect in the notice to any Holder
shall not affect the validity of the notice to any other Holder. On and after
the redemption date, interest will cease to accrue on Securities or portions
thereof called for redemption.
SECTION 3.5 Deposit of Redemption Price.
Prior to 11:00 a.m. (New York City time) on the redemption date, the
Company shall deposit with the Trustee or Paying Agent (or, if the Company or a
Subsidiary is the Paying Agent, shall segregate and hold in trust) money
sufficient to pay the redemption price of and accrued interest (if any) on all
Securities or portions thereof to be redeemed on that date other than Securities
or portions of Securities called for redemption which have been delivered by the
Company to the Trustee for cancellation.
SECTION 3.6 Securities Redeemed In Part.
Upon surrender of a Security that is redeemed in part (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 his attorney duly authorized in writing), the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder of
such Security without service charge, a new Security or Securities of any
authorized denomination as requested by such Holder, in aggregate
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principal amount equal to and in exchange for the unredeemed portion of the
principal of the Security so surrendered.
ARTICLE IV
COVENANTS
SECTION 4.1 Payment of Securities.
The Company shall pay the principal of and interest on the Securities
on the dates and in the manner provided in the Securities and this Indenture.
An installment of principal or interest shall be considered paid on
the date due if the Trustee or Paying Agent (other than the Company or any
Subsidiary of the Company or any Affiliate of any thereof) holds on such date by
12:00 noon, New York City time, immediately available funds designated for and
sufficient to pay such installment.
The Company shall pay interest on overdue principal and on overdue
installments of interest, in each case at the rate per annum specified in the
--- -----
Securities, to the extent lawful.
SECTION 4.2 Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, the City of
New York, an office or agency, where Securities may be surrendered for
registration of transfer or exchange or for presentation for payment and where
notices and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company 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
address of the Trustee set forth in Section 10.2.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York, for such purposes. The Company will give
prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.
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The Company hereby initially designates the offices of the Trustee as
set forth in Section 10.2 as an agency of the Company in accordance with Section
2.3.
SECTION 4.3 Corporate Existence.
Subject to Article V hereof, the Company shall do or cause to be done,
at its own cost and expense, all things necessary to and will cause each of its
Subsidiaries to, preserve and keep in full force and effect the corporate
existence and rights (charter and statutory), licenses and/or franchises of the
Company and each of its Subsidiaries; provided that the Company shall not be
required to preserve any such right, license or franchise, or the corporate
existence of any of its Subsidiaries, if in the reasonable and good faith
judgment of the Board of Directors of the Company (i) such preservation or
existence is not desirable in the conduct of business of the Company or such
Subsidiary and (ii) the loss of such right, license or franchise or the
dissolution of such Subsidiary is not adverse in any material respect to the
Holders or to the Company or the ability of the Company to satisfy its
obligations hereunder.
SECTION 4.4 Payment of Taxes and Other Claims.
The Company shall and shall cause each of its Subsidiaries to pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (a) all material taxes, assessments and governmental charges levied
or imposed upon its or its Subsidiaries' income, profits or property and (b) all
material lawful claims for labor, materials and supplies which, if unpaid, might
by law become a Lien upon its property or the property of any of its
Subsidiaries; provided 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 negotiations or proceedings promptly instituted and diligently
conducted and for which disputed amounts adequate reserves (in the reasonable
and good faith judgment of the Board of Directors of the Company) have been
made.
SECTION 4.5 Maintenance of Properties; Insurance; Books and Records;
Compliance with Law.
(a) The Company shall, and shall cause each of its Subsidiaries to,
at all times cause all properties used or useful in the conduct of its business
to be maintained and kept in good condition, repair and working order
(reasonable wear and tear excepted) and supplied with all necessary equipment,
and shall cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereto; provided that nothing in this Section 4.5
shall prevent the Company or any Subsidiary from discontinuing the operation or
maintenance of any of such properties, or disposing of any of them, if such
discontinu-
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ance or disposal is (i) in the ordinary course of business, (ii) in the
reasonable and good faith judgment of the Board of Directors of the Company or
the Subsidiary concerned, as the case may be, desirable in the conduct of the
business of the Company or such Subsidiary, as the case may be, or (iii)
otherwise permitted by this Indenture.
(b) The Company shall, and shall cause each of its Subsidiaries to
maintain with financially sound and reputable insurers such insurance (including
appropriate self insurance) as may be required by law and such other insurance,
to such extent and against such hazards and liabilities consistent with practice
on the Issue Date, as the Company in its reasonable and good faith judgment
determines is required, taking into account its business and financial
condition.
(c) The Company shall, and shall cause each of its Subsidiaries to,
keep proper books of record and account, in which full and correct entries shall
be made of all business and financial transactions of the Company and each
Subsidiary of the Company and reflect on its financial statements adequate
accruals and appropriations to reserves, all in accordance with generally
accepted accounting principles consistently applied to the Company and its
Subsidiaries taken as a whole.
(d) The Company shall and shall cause each of its Subsidiaries to
comply with all statutes, laws, ordinances, or government rules and regulations
to which it is subject, non-compliance with which would materially adversely
affect the business, earnings, properties, assets or financial condition of the
Company and its Subsidiaries taken as a whole.
SECTION 4.6 Compliance Certificates.
(a) The Company shall deliver to the Trustee, within 120 days after
the end of its Fiscal Year, Officers' Certificates of the Company signed by the
Officers specified under TIA (S)314(a)(4) stating (i) that a review of the
activities of the Company during the preceding Fiscal Year has been made under
the supervision of the signing Officers with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under this
Indenture and the Securities, and (ii) that, to the knowledge of such Officer,
no Default or Event of Default has occurred (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of Default
of which such Officer may have knowledge, their status and what action the
Company is taking or proposes to take with respect thereto). The first
certificate to be delivered pursuant to this Section 4.6(a) shall be for the
first Fiscal Year of the Company ending after the Issue Date.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the Company shall cause
its independ-
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ent public accountants to deliver to the Trustee within 120 days after the end
of each Fiscal Year a written statement by such accountants stating (A) that
their audit examination has included a review of the relevant provisions of this
Indenture and the Securities as they relate to accounting matters, and (B)
whether, in connection with their audit examination, any Default or Event of
Default has come to their attention and if such a Default or Event of Default
has come to their attention, specifying the nature and period of existence
thereof; provided that, without any restriction as to the scope of the audit
examination, such independent certified public accountants shall not be liable
by reason of any failure to obtain knowledge of any such Default or Event of
Default that would not be disclosed in the course of an audit examination
conducted in accordance with generally accepted auditing standards.
(c) The Company will, so long as any of the Securities are
outstanding, deliver to the Trustee, promptly after any Officer becoming aware
of (i) any Default, Event of Default or default in the performance of any
covenant, agreement or condition contained in the Securities or this Indenture
or (ii) any event of default under any other Indebtedness referred to in Section
6.1(a)(v), an Officers' Certificate specifying such Default, Event of Default,
default or event of default and what action the Company is taking or proposes to
take with respect thereto.
SECTION 4.7 Reports.
So long as any Security is outstanding, the Company will file with the
Commission and, within 15 days after it files them with the Commission, file
with the Trustees and mail or cause the Trustees to mail to the Holders at their
addresses as set forth in the register of the Securities, copies of the annual
reports and of the information, documents and other reports which the Company is
required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act or which the Company would be required to file with the Commission
if the Company then had a class of securities registered under the Exchange Act.
In addition, the Company shall cause its annual report to stockholders and any
quarterly or other financial reports furnished to its stockholders generally to
be filed with the Trustee and mailed, no later than the date such materials are
mailed or made available to the Company's stockholders, to the Holders at their
addresses as set forth in the register of Securities.
SECTION 4.8 [RESERVED].
SECTION 4.9 Limitation on Incurrence of Indebtedness.
The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to incur, directly or indirectly, any Indebtedness,
except:
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(i) Indebtedness of the Company, if immediately after giving effect
to the incurrence of such Indebtedness and the receipt and application of
the net proceeds thereof, the Consolidated Cash Flow Ratio of the Company
for the four full fiscal quarters for which quarterly or annual financial
statements are available next preceding the incurrence of such Indebtedness
would be greater than 2.25 to 1.00;
(ii) Indebtedness outstanding on the Issue Date;
(iii) Indebtedness incurred pursuant to the $125.0 million Credit
Agreement dated as of November 26, 1997 among Navistar International
Corporation Mexico, S.A. de C.V., the Company and the lenders listed
therein, as such agreement, in whole or in part, may be amended, renewed,
extended, increased (but only so long as such increase as is permitted
under the terms of this Indenture), substituted, refinanced, restructured,
replaced (including, without limitation, any successive renewals,
extensions, increases, substitutions, refinancings, restructurings,
replacements, supplements, or other modifications of the foregoing);
(iv) Indebtedness owed by the Company to any Wholly-Owned
Subsidiary of the Company or Indebtedness owed by a Subsidiary of the
Company to the Company or a Wholly-Owned Subsidiary of the Company;
provided, that, upon either (I) the transfer or other disposition by such
Wholly-Owned Subsidiary or the Company of any Indebtedness so permitted
under this clause (iv) to a Person other than the Company or another
Wholly-Owned Subsidiary of the Company or (II) the issuance (other than
directors' qualifying shares), sale, transfer or other disposition of
shares of Capital Stock or other ownership interests (including by
consolidation or merger) of such Wholly-Owned Subsidiary to a Person other
than the Company or another such Wholly-Owned Subsidiary of the Company,
the provisions of this clause (iv) shall no longer be applicable to such
Indebtedness and such Indebtedness shall be deemed to have been incurred at
the time of any such issuance, sale, transfer or other disposition, as the
case may be;
(v) Indebtedness of the Company or its Restricted Subsidiaries
under any Interest Rate Protection Agreement or Currency Agreement to the
extent entered into to hedge any other Indebtedness permitted under this
Indenture;
(vi) Acquired Indebtedness to the extent the Company could have
incurred such Indebtedness in accordance with clause (i) above on the date
such Indebtedness became Acquired Indebtedness;
(vii) Indebtedness incurred by the Company or any of its Restricted
Subsidiaries constituting reimbursement obligations with respect to letters
of credit is-
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sued in the ordinary course of business, including, without limitation,
letters of credit in response to worker's compensation claims or self-
insurance;
(viii) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary of the Company providing for indemnification,
adjustment of purchase price, earn-out or other similar obligations, in
each case, incurred or assumed in connection with the disposition of any
business, assets or a Subsidiary of the Company;
(ix) Obligations in respect of performance and surety bonds and
completion guarantees provided by the Company or any Restricted Subsidiary
of the Company in the ordinary course of business;
(x) Indebtedness consisting of notes issued to employees, officers
or directors in connection with the redemption or repurchase of Capital
Stock held by such Persons in an aggregate amount not in excess of $10.0
million at any time outstanding;
(xi) Indebtedness consisting of take-or-pay obligations contained
in supply agreements entered into by the Company or its Restricted
Subsidiaries in the ordinary course;
(xii) Guarantees by the Company or any of its Restricted
Subsidiaries of Indebtedness of the Company or any Restricted Subsidiary
permitted to be incurred under another provision of the covenant; provided,
that such Guarantee is incurred at the same time as such other
Indebtedness;
(xiii) Indebtedness incurred to renew, extend, refinance or refund
(collectively for purposes of this clause (xiii) to "refund") any
Indebtedness incurred pursuant to clauses (i) or (ii) above; provided that
(I) such Indebtedness does not exceed the principal amount (or accreted
amount, if less) of Indebtedness so refunded plus the amount of any premium
required to be paid in connection with such refunding pursuant to the terms
of the Indebtedness refunded or the amount of any premium reasonably
determined by the Company as necessary to accomplish such refunding by
means of a tender offer, exchange offer, or privately negotiated
repurchase, plus the expenses of the Company or such Restricted Subsidiary
incurred in connection therewith and (II)(A) in the case of any refunding
of Indebtedness that is pari passuwith the Securities, such refunding
Indebtedness is made pari passu with or subordinate in right of payment to
such Securities and, in the case of any refunding of Indebtedness that is
subordinate in right of payment to the Securities, such refunding
Indebtedness is subordinate in right of payment to such Securities, on
terms
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no less favorable to the Holders than those contained in the Indebtedness
being refunded, (B) in either case, the refunding Indebtedness by its
terms, or by the terms of any agreement or instrument pursuant to which
such Indebtedness is issued does not have an Average Life that is less than
the remaining Average Life of the Indebtedness being refunded and does not
permit redemption or other retirement (including pursuant to any required
offer to purchase to be made by the Company or any of its Restricted
Subsidiaries) of such Indebtedness at the option of the holder thereof
prior to the final stated maturity of the Indebtedness being refunded,
other than a redemption or other retirement at the option of the holder of
such Indebtedness (including pursuant to a required offer to purchase made
by the Company or any of its Restricted Subsidiaries) which is conditioned
upon a change of control of the Company pursuant to provisions
substantially similar to those contained in Section 4.11 and (C)
Indebtedness of a Restricted Subsidiary may not be incurred to refund any
Indebtedness of the Company;
(xiv) Indebtedness of the Company under the Securities and the
Senior Notes and the Exchange Notes;
(xv) the consummation of any Qualified Securitization Transaction;
(xvi) Attributable Indebtedness relating to any Sale/Leaseback
Transaction with respect to the purchase of tooling and related
manufacturing equipment in the ordinary course of business consistent with
past practices; and
(xvii) Indebtedness of the Company or its Restricted Subsidiaries,
not otherwise permitted to be incurred pursuant to clauses (i) through
(xvi) above, which, together with any other outstanding Indebtedness
incurred pursuant to this clause (xvii), has an aggregate principal amount
not in excess of $100.0 million at any time outstanding.
SECTION 4.10 Waiver of Stay, Extension or Usury Laws.
The Company and each Subsidiary Guarantor covenants (to the extent
that it may lawfully do so) that it will not at any time insist upon, plead, or
in any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law that would prohibit or forgive the
Company or such Subsidiary Guarantor from paying all or any portion of the
principal of or interest on the Securities as contemplated herein or in the
Securities, wherever enacted, now or at any time hereafter in force, or that may
affect the covenants or the performance of this Indenture; and (to the extent
that it may lawfully do so) the Company and each Subsidiary Guarantor hereby
expressly waives all
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benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
SECTION 4.11 Change of Control.
Upon the occurrence of a Change of Control (the date of each such
occurrence being the "Change of Control Date"), the Company will notify the
Holders in writing of such occurrence and will commence an Offer to Purchase
(the "Change of Control Offer") all Securities at a purchase price equal to 101%
of the principal amount thereof, plus accrued and unpaid interest, if any, to
the Purchase Date.
Notice of a Change of Control shall be mailed by the Company to the
Holders not more than 30 days after any Change of Control Date at their last
registered addresses with a copy to the Trustee and the Paying Agent. The
Change of Control Offer shall remain open from the time of mailing for at least
20 Business Days and until 4:00 p.m., New York City time, on the Purchase Date.
The notice, which shall govern the terms of the Change of Control Offer, shall
include such disclosures as are required by law and shall state:
(a) that the Change of Control Offer is being made pursuant to this
Section 4.11 and that all Securities will be accepted for payment;
(b) the purchase price (including the amount of accrued interest, if
any) for each Security and the Purchase Date;
(c) that any Security not tendered for payment will continue to accrue
interest in accordance with the terms thereof;
(d) that any Security accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest after the Purchase Date unless
the Company shall default in the payment thereof;
(e) that Holders electing to have Securities purchased pursuant to a
Change of Control Offer will be required to surrender their Securities to
the Paying Agent at the address specified in the notice prior to 4:00 p.m.,
New York City time, on the Purchase Date and must complete any form letter
of transmittal proposed by the Company and acceptable to the Trustee and
the Paying Agent;
(f) that Holders of Securities will be entitled to withdraw their
election if the Paying Agent receives, not later than 4:00 p.m., New York
City time, on the Purchase Date, a facsimile transmission (confirmed by
overnight delivery of the
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original thereof) or letter setting forth the name of the Holder, the
principal amount of Securities the Holder delivered for purchase, the
Security certificate number (if any) and a statement that such Holder is
withdrawing his election to have such Securities purchased;
(g) that Holders whose Securities are purchased only in part will be
issued Securities equal in principal amount to the unpurchased portion of
the Securities surrendered;
(h) the instructions that Holders must follow in order to tender their
Securities; and
(i) the circumstances and relevant facts known to the Company
regarding such Change of Control.
On the Purchase Date, the Company shall (i) accept for payment
Securities or portions thereof tendered pursuant to the Change of Control Offer,
(ii) deposit with the Paying Agent money sufficient to pay the purchase price of
all Securities or portions thereof so tendered and accepted and (iii) deliver to
the Trustee the Securities so accepted together with an Officers' Certificate
setting forth the Securities or portions thereof tendered to and accepted for
payment by the Company. The Paying Agent shall promptly mail or deliver to the
Holders of Securities so accepted payment in an amount equal to the purchase
price, and the Trustee shall promptly authenticate and mail or deliver to such
Holders a new Security equal in principal amount to any unpurchased portion of
the Security surrendered. Any Securities not so accepted shall be promptly
mailed or delivered by the Company to the Holder thereof. The Company will
publicly announce the results of the Change of Control Offer not later than the
third Business Day following the Purchase Date.
The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) under the Exchange Act, and any other securities
laws or regulations in connection with the purchase of Securities pursuant to a
Change of Control Offer. To the extent that the provisions of any securities
laws or regulations conflict with provisions of this Section 4.11, the Company
shall comply with the applicable securities laws and regulations and shall not
be deemed to have breached its obligations under this Section 4.11 by virtue
thereof.
SECTION 4.12 Limitation on Transactions with Affiliates.
The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to (a) sell, lease, transfer or otherwise dispose of any
of its property or assets to, (b) purchase any property or assets from, (c) make
any Investment in, or (d) enter into
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or amend or extend any contract, agreement or understanding with or for the
benefit of, any Affiliate of the Company or of any Subsidiary (an "Affiliate
Transaction"), other than Affiliate Transactions that are on terms that are fair
and reasonable to the Company or such Restricted Subsidiary of the Company and
that are no less favorable to the Company or such Restricted Subsidiary of the
Company than those that could be obtained in a comparable arm's length
transaction by the Company or such Restricted Subsidiary of the Company from an
unaffiliated party; provided that if the Company or any Restricted Subsidiary of
the Company enters into an Affiliate Transaction or series of Affiliate
Transactions involving or having an aggregate value of more than $20.0 million,
a majority of the disinterested members of the Board of Directors of the Company
or a committee thereof shall, prior to the consummation of such Affiliate
Transaction, have determined (as evidenced by a resolution thereof) that such
Affiliate Transaction meets the foregoing standard. The foregoing restrictions
shall not apply to (a) any transaction between Restricted Subsidiaries of the
Company, or between the Company and any Restricted Subsidiary of the Company if
such transaction is not otherwise prohibited by the terms of this Indenture, (b)
transactions entered into pursuant to the terms of the Master Intercompany
Agreement and the Tax Allocation Agreement, (c) transactions entered into in the
ordinary course of business, (d) Qualified Securitization Transactions, (e)
reasonable fees and compensation paid to and advances of expenses to and
indemnity provided on behalf of officers, directors, employees or consultants of
the Company or any Subsidiary as determined in good faith by the Company's Board
of Directors or senior management; (f) any agreement as in effect as of the
Issue Date or any amendment thereto or any transaction contemplated thereby
(including pursuant to any amendment thereto) or in any replacement agreement
thereto so long as any such management or replacement agreement is not more
disadvantageous to the Holders in any material respect than the original
agreement as in effect on the Issue Date; (g) Restricted Payments permitted by
this Indenture; (h) loans or advances to employees or consultants in the
ordinary course of business and consistent with past practices in an aggregate
amount outstanding at any time not to exceed $10.0 million; (i) joint venture
partners or purchasers or sellers of goods or services, in each case in the
ordinary course of business (including, without limitation, pursuant to joint
venture agreements) and otherwise in compliance with the terms of this Indenture
which are fair to the Company or its Restricted Subsidiaries, in the reasonable
determination of the senior management of the Company, or are on terms at least
as favorable as might reasonably have been obtained at such time from an
unaffiliated party; and (j) any employment or compensation arrangement entered
into by the Company or any of its Restricted Subsidiaries in the ordinary course
of business that is not otherwise prohibited by this Indenture.
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SECTION 4.13 Limitation on Liens.
The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, create, incur, assume or suffer to exist any Liens
upon any of their respective properties or assets (including, without
limitation, any asset in the form of the right to receive payments, fees or
other consideration or benefits) whether owned on the Issue Date or acquired
after the Issue Date, other than (i) Liens granted by the Company on property or
assets of the Company securing Senior Indebtedness of the Company that is
permitted by this Indenture; (ii) Liens granted by the Company on property or
assets of the Company securing Indebtedness of the Company that is permitted by
this Indenture and that is pari passu with the Securities; provided that the
Securities are secured on an equal and ratable basis with such Liens; (iii)
Liens granted by the Company on property or assets of the Company securing
Indebtedness of the Company that is permitted by this Indenture and that is
subordinated to the Securities; provided that the Securities are secured by
Liens ranking prior to such Liens; (iv) Permitted Liens; (v) Liens in respect of
Acquired Indebtedness permitted by this Indenture, provided, that the Liens in
respect of such Acquired Indebtedness secured such Acquired Indebtedness at the
time of the incurrence of such Acquired Indebtedness by the Company and such
Liens and the Acquired Indebtedness were not incurred by the Company or by the
Person being acquired or from whom the assets were acquired in connection with,
or in anticipation of, the incurrence of such Acquired Indebtedness by the
Company and provided, further that such Liens in respect of such Acquired
Indebtedness do not extend to or cover any property or assets of the Company or
of any Subsidiary of the Company other than the property or assets that secured
the Acquired Indebtedness prior to the time such Indebtedness became Acquired
Indebtedness of the Company; (vi) Liens granted in connection with any Qualified
Securitization Transaction; and (vii) Liens arising from claims of holders of
Indebtedness against funds held in a defeasance trust for the benefit of such
holders.
SECTION 4.14 Limitation on Payment Restrictions Affecting Restricted
Subsidiaries.
The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create or suffer to exist or
allow to become effective any consensual encumbrance or restriction of any kind
on the ability of any such Restricted Subsidiary to (i) pay dividends, in cash
or otherwise, or make other payments or distributions on its Capital Stock or
any other equity interest or participation in, or measured by, its profits,
owned by the Company or by any Restricted Subsidiary of the Company, or make
payments on any Indebtedness owed to the Company or to any Restricted Subsidiary
of the Company; (ii) make loans or advances to the Company or to any Restricted
Subsidiary of the Company; or (iii) transfer any of their respective property or
assets to the Company or to any Restricted Subsidiary of the Company, except for
such encumbrances or restrictions
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existing under or by reason of (A) applicable law or regulations; (B) customary
provisions restricting subletting or assignment of any lease governing a
leasehold interest of any Restricted Subsidiary of the Company; (C) Indebtedness
or any other contractual requirements (including pursuant to any corporate
governance documents in the nature of a charter or by-laws) of a Securitization
Subsidiary arising in connection with a Qualified Securitization Transaction;
provided that any such encumbrances and restrictions apply only to such
Securitization Subsidiary; (D) any agreement in effect on the Issue Date as any
such agreement is in effect on such date; (E) any agreement relating to any
Indebtedness incurred by such Restricted Subsidiary prior to the date on which
such Restricted Subsidiary became a Subsidiary of the Company and outstanding on
such date and not incurred in anticipation or contemplation of becoming a
Subsidiary of the Company; provided such encumbrance or restriction shall not
apply to any assets of the Company or its Restricted Subsidiaries other than
such Restricted Subsidiary; and (F) this Indenture.
SECTION 4.15 Limitation on Guarantees by Restricted Subsidiaries.
The Company shall not cause or permit any of its Restricted
Subsidiaries, directly or indirectly, to guarantee the payment of any
Indebtedness of the Company unless such Restricted Subsidiary of the Company
simultaneously executes and delivers a supplemental indenture (the substantive
provisions of which are in Exhibit B hereto) to this Indenture providing for the
guarantee of payment of the Securities (a "Subsidiary Guarantee") by such
Restricted Subsidiary of the Company (a "Subsidiary Guarantor"); provided any
guarantee by a Subsidiary Guarantor of such other Indebtedness (A) (1) (X) is
unsecured or (Y) is secured and (I) in the case of any such guarantee of Senior
Indebtedness of the Company, the Subsidiary Guarantee is secured equally and
ratably with any Liens securing such guarantee, subject to the provisions of
Article XI, (II) in the case of any such guarantee of Indebtedness of the
Company ranking pari passu with the Securities, the Subsidiary Guarantee is
secured equally and ratably with any Liens securing such guarantee, and (III) in
the case of any such guarantee of Indebtedness of the Company subordinated to
the Securities, the Subsidiary Guarantee is secured on a basis ranking prior to
the Liens securing such guarantee and (2) (X) in the case of any such guarantee
of Indebtedness of the Company subordinated or junior to the Securities (whether
pursuant to its terms or by operation of law), such guarantee is subordinated
pursuant to a written agreement to the Subsidiary Guarantee at least to the same
extent and in the same manner as such other Indebtedness is subordinated to the
Securities, or (Y) (I) in the case of any such guarantee of Senior Indebtedness
of the Company incurred in accordance with this Indenture, the Subsidiary
Guarantee is subordinated to Guarantor Senior Indebtedness of such Subsidiary
Guarantor to the same extent and in the same manner as the Securities are
subordinated to Senior Indebtedness of the Company or (II) the Subsidiary
Guarantee is not subordinated or junior to any
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Indebtedness of such Subsidiary Guarantor; and (B) such Subsidiary Guarantor
waives, and agrees it will not in any manner whatsoever claim or take the
benefit or advantage of, any rights of reimbursement, indemnity or subrogation
or any other rights against the Company or any other Subsidiary of the Company
as a result of any payment by it under such Subsidiary Guarantees.
Notwithstanding the foregoing, any Subsidiary Guarantee shall provide by its
terms that it shall be automatically and unconditionally released and discharged
upon either (A) the unconditional release or discharge of such Subsidiary
Guarantor's guarantees of all other Indebtedness of the Company (other than a
release resulting from payment under such Subsidiary Guarantor's guarantees) or
(B) any sale, exchange or transfer, to any Person not an Affiliate of the
Company, of all (but not less than all) of the Capital Stock of such Subsidiary
Guarantor, or all or substantially all of the assets of such Subsidiary
Guarantor, pursuant to a transaction which is in compliance with all of the
terms of the relevant Indenture.
The supplemental indenture shall supplement this Indenture by, among
other things, creating an additional Article XII applicable to such Subsidiary
Guarantor and any other Subsidiary Guarantors in the form set forth in Exhibit B
hereto and, in connection with the execution and delivery of the supplemental
indenture, such Subsidiary Guarantor shall execute and deliver a Guarantee
substantially in the form of Exhibit C hereto. Such Article XII shall not
become effective until the provisions of Section 12.2 have been complied with.
Notwithstanding the foregoing, any Subsidiary Guarantee will be
subject to release under the conditions described in Section 12.4 of Exhibit B
hereto.
SECTION 4.16 Limitation on Senior Subordinated Indebtedness.
The Company will not directly or indirectly, in any event incur any
(a) Indebtedness that purports to be by its terms (or by the terms of any
agreement governing such Indebtedness) both subordinate to any other
Indebtedness of the Company and senior or superior in any right of payment or
interest to the Securities or (b) Indebtedness which by its terms (or by the
terms of any agreement governing such Indebtedness) is subordinated to any other
Indebtedness of the Company (other than Indebtedness of the Company that is
subordinated solely to Senior Indebtedness of the Company) unless such
Indebtedness is also by its terms (or by the terms of any agreement governing
such Indebtedness) made expressly subordinate to the Securities to the same
extent and in the same manner as such Indebtedness is subordinated pursuant to
subordination provisions that are most favorable to the holders of any other
Indebtedness of the Company.
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SECTION 4.17 Limitation on Preferred Stock of Restricted
Subsidiaries.
The Company will not cause or permit any of its Restricted
Subsidiaries to issue any Preferred Stock other than to the Company or to
another Restricted Subsidiary.
SECTION 4.18 Limitation on Restricted Payments.
The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, (i) declare or pay any
dividend, or make any distribution of any kind or character (whether in cash,
property or securities), in respect of any class of its Capital Stock or to the
holders thereof in their capacity as stockholders, excluding any (x) dividend or
distributions payable solely in shares of its Qualified Capital Stock or in
options, warrants or other rights to acquire its Qualified Capital Stock or (y)
in the case of any Restricted Subsidiary of the Company, dividends or
distributions payable to the Company or a Restricted Subsidiary of the Company;
(ii) purchase, redeem, or otherwise acquire or retire for value shares of
Capital Stock of the Company or a Restricted Subsidiary of the Company, any
securities convertible or exchangeable into shares of Capital Stock of the
Company or a Restricted Subsidiary of the Company or any options, warrants or
rights to purchase or acquire shares of Capital Stock of the Company or a
Restricted Subsidiary of the Company, excluding any such shares of Capital
Stock, options, warrants, rights or securities which are owned by the Company or
a Restricted Subsidiary of the Company; (iii) make any Investment (other than a
Permitted Investment) in, or payment on a guarantee of any obligation of, any
Person; or (iv) redeem, defease, repurchase, retire or otherwise acquire or
retire for value, prior to any scheduled maturity, repayment or sinking fund
payment, Indebtedness which is subordinate in right of payment to the Securities
(each of the transactions described in clauses (i) through (iv) (other than any
exception to any such clause) being a "Restricted Payment") if at the time
thereof:
(1) an Event of Default, or an event that with the passing of time
or giving of notice, or both, would constitute an Event of Default, shall
have occurred and be continuing, or
(2) upon giving effect to such Restricted Payment, the Company
could not incur at least $1.00 of additional Indebtedness pursuant to the
terms of this Indenture described in clause (i) of Section 4.9, or
(3) upon giving effect to such Restricted Payment, the aggregate of
all Restricted Payments made on or after the Issue Date exceeds the sum
(without duplication) of: (a) 50% of cumulative Consolidated Net Income of
the Company (or, in the case cumulative Consolidated Net Income of the
Company shall be negative,
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less 100% of such deficit) for the period (treated as an accounting period)
from the Issue Date through the last day of the Company's most recently
ended fiscal quarter for which financial statements are available, plus (b)
100% of the aggregate net cash proceeds received after the Issue Date,
including the fair market value of readily marketable securities from the
issuance of Qualified Capital Stock of the Company and warrants, rights or
options on Qualified Capital Stock of the Company (other than in respect of
any such issuance to a Subsidiary of the Company) and the principal amount
of Indebtedness of the Company or a Subsidiary of the Company that has been
converted into or exchanged for Qualified Capital Stock of the Company
which Indebtedness was incurred after the Issue Date; plus (c) in the case
of the disposition or repayment of any Investment constituting a Restricted
Payment made after the Issue Date, an amount equal to the lesser of the
return of capital with respect to such Investment and the cost of such
Investment, in either case, less the cost of the disposition of such
Investment; provided that at the time any such Investment is made the
Company delivers to the Trustee a resolution of the Board of Directors of
the Company to the effect that, for purposes of this Section 4.18 covenant,
such Investment constitutes a Restricted Payment made after the Issue Date;
plus (d) an amount equal to the sum of (i) the net reduction in Investments
in Unrestricted Subsidiaries resulting from the receipt of dividends,
repayments of loans or advances or other transfers of assets or proceeds
from the disposition of Capital Stock or other distributions or payments,
in each case to the Company or any Restricted Subsidiary from, or with
respect to, interests in Unrestricted Subsidiaries, and (ii) the portion
(proportionate to the Company's equity interest in such Subsidiary) of the
fair market value of the net assets of an Unrestricted Subsidiary at the
time such Unrestricted Subsidiary is designated a Restricted Subsidiary;
provided that the foregoing sum shall not exceed, in the case of any
Unrestricted Subsidiary, the amount of Investments previously made (and
treated as a Restricted Payment) by the Company or any Restricted
Subsidiary in such Unrestricted Subsidiary subsequent to the Issue Date;
plus (e) $25.0 million. For purposes of determining the amount expended for
Restricted Payments under this clause (3), property other than cash shall
be valued at its fair market value.
Notwithstanding the foregoing, the provisions set forth in the
immediately preceding paragraph will not prohibit (i) any dividend on any class
of Capital Stock of the Company or any of its Restricted Subsidiaries paid
within 60 days after the declaration thereof if, on the date when the dividend
was declared, the Company or any of its Restricted Subsidiaries, as the case may
be, could have paid such dividend in accordance with the provisions of this
Indenture, (ii) the renewal, extension, refunding or refinancing of any
Indebtedness otherwise permitted pursuant to the terms of this Indenture
described in clause (xiii) of Section 4.9, (iii) the exchange or conversion of
any Indebtedness of the Company
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or any of its Restricted Subsidiaries for or into Qualified Capital Stock of the
Company, (iv) any Restricted Payments, including loans or other advances made
pursuant to any employee benefit plans (including plans for the benefit of
directors) or employment agreements or other compensation arrangements, in each
case as approved by the Board of Directors of the Company in its good faith
judgment, (v) so long as no Default or Event of Default has occurred and is
continuing, any Investment made with the proceeds of a substantially concurrent
sale of Qualified Capital Stock of the Company; provided that the proceeds of
such sale of Qualified Capital Stock shall not be (and have not been) included
in clause (3) of the preceding paragraph, (vi) the redemption, repurchase,
retirement or other acquisition of any Capital Stock of the Company in exchange
for or out of the net cash proceeds of the substantially concurrent sale (other
than to a Restricted Subsidiary of the Company) of Qualified Capital Stock of
the Company; provided that the proceeds of such sale of Capital Stock shall not
be (and have not been) included in clause (3) of the preceding paragraph, (vii)
so long as no Event of Default has occurred and is continuing, the redemption,
repurchase, retirement or other acquisition of any Subordinated Indebtedness of
the Company in exchange for or out of the net cash proceeds of the substantially
concurrent sale (other than to a Subsidiary of the Company) of Qualified Capital
Stock of the Company; provided that the proceeds of such sale of Qualified
Capital Stock shall not be (and have not been) included in clause (3) of the
preceding paragraph, (viii) the redemption, retirement or repurchase of the
Company's outstanding Series G Convertible Preferred Stock out of the net
proceeds of the Offerings, (ix) Investments in Navistar Financial Corporation
made pursuant to the Support Agreement to the extent required by the Support
Agreement, (x) the declaration and payment of dividends to holders of any class
of Preferred Stock issued after the Issue Date; provided that at the time of the
issuance of such Preferred Stock, the Company, after giving pro forma effect to
such issuance, would have been able to incur at least $1.00 of additional
Indebtedness pursuant to the terms of this Indenture described in clause (i) of
Section 4.9; (xi) so long as no Event of Default has occurred and is continuing,
any purchase or redemption or other retirement for value of Capital Stock of the
Company required pursuant to any shareholders agreement, management agreement or
employee stock option agreement in accordance with the provisions of any such
arrangement in an amount not to exceed $10.0 million in the aggregate; (xii)
repurchases of Capital Stock deemed to occur upon the exercise of stock options
if such Capital Stock represents a portion of the exercise price thereof; (xiii)
payments not to exceed $500,000 per annum in the aggregate to enable the Company
to make payments to holders of its Capital Stock in lieu of issuance of
fractional shares of its Capital Stock; (xiv) so long as no Event of Default has
occurred and is continuing, the repurchase of any shares of Class B Common Stock
or Common Stock held by the Supplemental Trust; (xv) so long as no Event of
Default has occurred and is continuing, the redemption of any stock purchase
rights under a rights plan in an aggregate amount not to exceed $1.0 million;
and (xvi) so long as no Event of Default has occurred and is continuing,
Investments in Permitted Joint Ventures and designations of Restricted
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Subsidiaries as Unrestricted Subsidiaries; provided that, after giving pro forma
effect to such Investment, the Company could incur at least $1.00 of additional
Indebtedness pursuant to the terms of this Indenture described in clause (i) of
Section 4.9. Each Restricted Payment described in clauses (i), (iv), (ix),
(xiii) and (xiv) of the previous sentence shall be taken into account (and the
Restricted Payments described in the remaining clauses shall not be taken into
account) for purposes of computing the aggregate amount of all Restricted
Payments made pursuant to clause (3) of the preceding paragraph.
SECTION 4.19 Limitation on Certain Asset Dispositions.
The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, make one or more Asset
Dispositions unless: (i) the Company or the Restricted Subsidiary, as the case
may be, receives consideration for such Asset Disposition at least equal to the
fair market value of the assets sold or disposed of (as determined in good faith
by the Company); (ii) not less than 75% of the consideration for the disposition
consists of cash or readily marketable cash equivalents or the assumption of
Indebtedness (other than non-recourse Indebtedness or any Indebtedness
subordinated to the Securities) of the Company or such Restricted Subsidiary or
other obligations relating to such assets (and release of the Company or such
Restricted Subsidiary from all liability on the Indebtedness or other
obligations assumed); and (iii) all Net Available Proceeds, less any amounts
invested or committed to be invested within 360 days of such Asset Disposition
in assets related to the business of the Company (including capital expenditures
or the Capital Stock of another Person (other than the Company or any Person
that is a Restricted Subsidiary of the Company immediately prior to such
investment); provided that immediately after giving effect to any such
investment (and not prior thereto) such Person shall be a Restricted Subsidiary
of the Company), are applied, on or prior to the 360th day after such Asset
Disposition (unless and to the extent that the Company shall determine to make
an Offer to Purchase), either to (A) the permanent reduction and prepayment of
any Indebtedness of the Company (other than Indebtedness which is expressly
subordinate to the applicable issue of Notes) then outstanding (including a
permanent reduction of commitments in respect thereof) or (B) the permanent
reduction and repayment of any Indebtedness of any Restricted Subsidiary of the
Company then outstanding (including a permanent reduction of commitments in
respect thereof). The 361st day after such Asset Disposition shall be deemed to
be the "Asset Sale Offer Trigger Date," and the amount of Net Available Proceeds
from Asset Dispositions otherwise subject to the preceding provisions not so
applied or as to which the Company has determined not to so apply shall be
referred to as the "Unutilized Net Available Proceeds." Within fifteen days
after the Asset Sale Offer Trigger Date, the Company shall make an Offer to
Purchase the outstanding applicable issue of Securities at a purchase price in
cash equal to 100% of their principal amount plus any accrued and unpaid
interest thereon to the Purchase Date. Notwithstanding the foregoing, the
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Company may defer making any Offer to Purchase outstanding Securities until
there are aggregate Unutilized Net Available Proceeds equal to or in excess of
$25.0 million (at which time, the entire Unutilized Net Available Proceeds, and
not just the amount in excess of $25.0 million, shall be applied as required
pursuant to this paragraph). Pending application of the Unutilized Net
Available Proceeds pursuant to this covenant, such Unutilized Net Available
Proceeds shall be invested in Permitted Investments of the types described in
clauses (i), (ii) and (iii) of the definition of "Permitted Investments."
If any Indebtedness of the Company or any of its Restricted
Subsidiaries ranking pari passu with the Securities requires that prepayment of,
or an offer to prepay, such Indebtedness be made with any Net Available
Proceeds, the Company may apply such Net Available Proceeds pro rata (based on
the aggregate principal amount of the Securities then outstanding and the
aggregate principal amount (or accreted value, if less) of all such other
Indebtedness then outstanding) to the making of an Offer to Purchase the
Securities in accordance with the foregoing provisions and the prepayment or the
offer to prepay such pari passu Indebtedness. Any remaining Net Available
Proceeds following the completion of the required Offer to Purchase may be used
by the Company for any other purpose (subject to the other provisions of this
Indenture) and the amount of Net Available Proceeds then required to be
otherwise applied in accordance with this covenant shall be reset to zero,
subject to any subsequent Asset Disposition. These provisions will not apply to
a transaction consummated in compliance with Article V.
Notwithstanding the foregoing, the provisions of this covenant shall
not apply to any Sale/Leaseback Transaction with respect to the purchase of
tooling and related manufacturing equipment in the ordinary course of business
consistent with past practices.
In the event that the Company makes an Offer to Purchase the
Securities, the Company shall comply with any applicable securities laws and
regulations, including any applicable requirements of Section 14(e) of, and Rule
14e-1 under, the Exchange Act and any violation of the provisions of this
Indenture relating to such Offer to Purchase occurring as a result of such
compliance shall not be deemed an Event of Default or an event that with the
passing of time or giving of notice, or both, would constitute an Event of
Default.
SECTION 4.20 Limitation on Sale/Leaseback Transactions.
The Company shall not, and shall not cause or permit any Restricted
Subsidiary to, enter into any Sale/Leaseback Transaction with respect to any
property unless (i) the Company or such Restricted Subsidiary would be entitled
to (A) incur Indebtedness in an amount equal to the Attributable Indebtedness
with respect to such Sale/Leaseback Transaction pursuant to clause (i) of
Section 4.9 and (B) create a Lien on such property securing such Attributable
Indebtedness without securing the Securities pursuant to Section
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4.13, (ii) the net proceeds received by the Company or any Restricted Subsidiary
in connection with such Sale/Leaseback Transaction are at least equal to the
fair value (as determined by the Board of Directors) of such property and (iii)
the Company applies the proceeds of such transaction in compliance with Section
4.19. Notwithstanding the foregoing, the provisions of this covenant shall not
prohibit the Company or any Restricted Subsidiary from entering into any
Sale/Leaseback Transaction with respect to the purchase of tooling and related
manufacturing equipment in the ordinary course of business consistent with past
practices.
ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1 Merger, Consolidation, Etc.
The Company will not, in a single transaction or series of related
transactions, consolidate or merge with or into, or sell, assign, transfer,
lease, convey or otherwise dispose of (and the Company will not cause or permit
any of its Restricted Subsidiaries to sell, assign, transfer, lease, convey or
otherwise dispose of) all or substantially all of the Company's and its
Restricted Subsidiaries' assets (determined on a consolidated basis for the
Company and its Restricted Subsidiaries) to any Person or adopt a Plan of
Liquidation unless: (i) either (1) the Company shall be the surviving or
continuing corporation or (2) the Person (if other than the Company) formed by
such consolidation or into which the Company is merged or the Person which
acquires by conveyance, transfer or lease the properties and assets of the
Company and its Restricted Subsidiaries substantially as an entirety or in the
case of a Plan of Liquidation, or Person to which assets of the Company and its
Restricted Subsidiaries have been transferred (x) shall be a corporation,
limited liability company or partnership organized and validly existing under
the laws of the United States or any State thereof or the District of Columbia
and (y) shall expressly assume, by supplemental indenture (in form and substance
satisfactory to the Trustee), executed and delivered to the Trustee, the due and
punctual payment of the principal of, and premium, if any, and interest on all
of the Securities and the performance of every covenant of the Securities and
this Indenture on the part of the Company to be performed or observed; (ii)
immediately after giving effect to such transaction and the assumption
contemplated by clause (i)(2)(y) above (including giving effect to any
Indebtedness and Acquired Indebtedness incurred or anticipated to be incurred in
connection with or in respect of such transaction), the Company (in the case of
clause (1) of the foregoing clause (i)) or such Person (in the case of clause
(2) thereof) could incur at least $1.00 of additional Indebtedness pursuant to
clause (i) of Section 4.9; (iii) immediately before and after giving effect to
such transaction and the
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assumption contemplated by clause (i)(2)(y) above (including giving effect to
any Indebtedness and Acquired Indebtedness incurred or anticipated to be
incurred in connection with or in respect of the transaction) no Default and no
Event of Default shall have occurred or be continuing; and (iv) the Company or
such Person shall have delivered to the Trustee (A) an Officers' Certificate and
an Opinion of Counsel, each stating that such consolidation, merger, conveyance,
transfer or lease or Plan of Liquidation and, if a supplemental indenture is
required in connection with such transaction, such supplemental indenture,
comply with this provision and that all conditions precedent under this
Indenture relating to such transaction have been satisfied and (B) a certificate
from the Company's independent certified public accountants stating that the
Company has made the calculations required by clause (ii) above in accordance
with the terms of this Indenture. Notwithstanding the foregoing, (x) a
Restricted Subsidiary of the Company may consolidate with, or merge with or
into, or sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its assets to, the Company or another Restricted Subsidiary
of the Company without complying with clause (ii) of the above, (y) a series of
transactions involving the sale of Receivables or interests therein by a
Securitization Subsidiary in connection with a Qualified Securitization
Transaction shall not be deemed to be the sale of all or substantially all of
the Company's assets to the extent such transactions are consummated in the
ordinary course of business and (z) the provisions of clause (i) above shall not
prohibit the Company or any Restricted Subsidiary from selling, assigning,
transferring, leasing, conveying or otherwise disposing of all or substantially
all of its assets to a Permitted Joint Venture in a transaction entered into in
compliance with Section 4.18.
For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more Restricted
Subsidiaries of the Company, the Capital Stock of which constitutes all or
substantially all of the properties and assets of the Company, shall be deemed
to be the transfer of all or substantially all of the properties and assets of
the Company.
Upon any such consolidation, merger, conveyance, lease or transfer in
accordance with the foregoing, the successor Person formed by such consolidation
or into which the Company is merged or to which such conveyance, lease or
transfer is made will succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture with the same effect as if
such successor had been named as the Company therein, and thereafter (except in
the case of a sale, assignment, transfer, lease, conveyance or other
disposition) the predecessor corporation will be relieved of all further
obligations and covenants under this Indenture and the Securities.
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SECTION 5.2 Successor Entity Substituted.
Upon any consolidation or merger, or any conveyance, lease or transfer
of all or substantially all of the assets of the Company in accordance with
Section 5.1, the successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, lease or transfer is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein; and thereafter (except in the case
of a sale, assignment, transfer, conveyance, lease or other disposition) the
Company shall be discharged from all obligations and covenants under this
Indenture and the Securities.
ARTICLE VI
DEFAULT AND REMEDIES
SECTION 6.1 Events of Default.
(a) The following are "Events of Default" under this Indenture:
(i) default in the payment of principal of, or premium, if any,
on the Securities when due at maturity, upon repurchase, upon acceleration
or otherwise, including, without limitation, failure of the Company to
repurchase the Securities on the date required following a Change of
Control, whether or not any such payment is prohibited by the provisions of
Article XI; or
(ii) default in the payment of any installment of interest on the
Securities when due and continuance of such Default for 30 days or more,
whether or not such payment is prohibited by the provisions of Article XI;
or
(iii) failure to observe, perform or comply with any of the
provisions described in Section 5.1; or
(iv) default (other than a default set forth in clauses (i), (ii)
and (iii) above) in the performance of, or breach of, any other covenant or
warranty of the Company or of any Restricted Subsidiary in this Indenture
or in the Securities and failure to remedy such default or breach within a
period of 30 days after written notice from the Trustee or the Holders of
at least 25% in aggregate principal amount of the then outstanding
Securities; or
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(v) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any Subsidiary of the
Company (or the payment of which is guaranteed by the Company or any
Restricted Subsidiary of the Company), which default results in the
acceleration of such Indebtedness prior to its express maturity and the
principal amount of any such Indebtedness, together with the principal
amount of any other such Indebtedness the maturity of which has been so
accelerated, aggregates $20.0 million or more and such acceleration has not
been rescinded or annulled or such Indebtedness discharged in full within
30 days; or
(vi) the entry by a court of competent jurisdiction of one or more
judgments, orders or decrees against the Company or any Subsidiary of the
Company or any of their respective property or assets in an aggregate
amount in excess of $20.0 million, which judgments, orders or decrees have
not been vacated, discharged, satisfied or stayed pending appeal within 30
days from the entry thereof and with respect to which legal enforcement
proceedings have been commenced; or
(vii) the Company or any Material Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(A) commences a voluntary case or proceeding, or
(B) consents to the entry of an order for relief against it
in an involuntary case or proceeding, or
(C) consents to the appointment of a Custodian of it or for
all or substantially all of its property, or
(D) makes a general assignment for the benefit of its
creditors, or
(E) files an answer or consent seeking reorganization or
relief, or
(F) shall admit in writing its inability to pay its debts
generally; or
(viii)a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any of its Material
Subsidiaries in an involuntary case or proceeding, or
(B) appoints a Custodian of the Company or any of its
Material Subsidiaries for all or substantially all of its properties,
or
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(C) orders the liquidation of the Company or any of its
Material Subsidiaries, and in each case the order or decree remains
unstayed and in effect for 60 days.
(b) For purposes of this Section 6.1, the term "Custodian" means any
receiver, trustee, assignee, liquidator, sequestrator or similar official
charged with maintaining possession or control over property for one or more
creditors.
SECTION 6.2 Acceleration.
If an Event of Default (other than an Event of Default specified in
clauses (vii) and (viii) of Section 6.1(a) involving the Company) occurs and is
continuing, then and in every such case the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Securities then outstanding may,
and the Trustee shall upon the request of Holders of not less than 25% in
aggregate principal amount of the Securities then outstanding, declare the
unpaid principal of, premium, if any, and accrued and unpaid interest on all the
Securities then outstanding to be due and payable, by a notice in writing to the
Company (and to the Trustee, if given by Holders) and upon such declaration such
principal amount, premium, if any, and accrued and unpaid interest will become
immediately due and payable, notwithstanding anything contained in this
Indenture or the Securities to the contrary, but subject to the provisions
limiting payment described in Article XI. If an Event of Default specified in
clauses (vii) and (viii) of Section 6.1(a) involving the Company occurs, all
unpaid principal of, and premium, if any, and accrued and unpaid interest on the
Senior Notes and the Securities then outstanding will ipso facto become due and
payable, subject to the prior payment in full of all Senior Indebtedness of the
Company, without any declaration or other act on the part of the Trustee or any
Holder.
SECTION 6.3 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity 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.
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, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Securities in respect of which such judgment has been
recovered.
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SECTION 6.4 Waiver of Past Default.
Subject to Sections 6.7 and 9.2, the Holders of, in the aggregate, at
least a majority in principal amount of the then outstanding Securities by
notice to the Trustee may waive an existing Default or Event of Default and its
consequences, except a Default or Event of Default specified in Section
6.1(a)(i) or (ii) or a Default or Event of Default in respect of any provision
hereof which cannot be modified or amended without the consent of the Holder so
affected pursuant to Section 9.2. When a Default or Event of Default is so
waived, it shall be deemed cured and cease to exist; but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereto.
SECTION 6.5 Control by Majority.
The Holders of a majority in principal amount of the then outstanding
Securities may (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it, including, without limitation, any remedies provided for
in Section 6.3, and (ii) direct the Trustee to notify each trustee under any
instrument governing the rights of holders of Indebtedness subordinated in right
of payment to the Securities for the purpose of effecting the payment blockage
provisions thereunder. The Trustee may refuse, however, to follow any direction
that conflicts with law, the Securities or this Indenture, or that the Trustee
determines may be unduly prejudicial to the rights of another Securityholder
(provided, however, that subject to Section 7.1, the Trustee shall have no duty
or obligation to ascertain whether or not such direction is unduly prejudicial
to such Securityholder), that may involve the Trustee in personal liability or
if the Trustee determines that it does not have adequate indemnification against
any loss or expense; provided that the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with such direction.
SECTION 6.6 Limitation on Suits.
A Securityholder may not pursue any remedy with respect to this
Indenture or the Securities unless:
(a) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Securities make a written request to the Trustee to pursue a
remedy;
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(c) such Holder or Holders offer and, if requested, provide to the
Trustee indemnity reasonably satisfactory to the Trustee against any loss,
liability or expense;
(d) the Trustee does not comply with the request within 30 days after
receipt of the request; and
(e) during such 30-day period the Holders of at least a majority in
principal amount of the then outstanding Securities do not give the Trustee
a direction which is inconsistent with the request.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over such other
Securityholder.
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 and interest on a Security, on or
after the respective due dates expressed in the Security, or to bring suit for
the enforcement of any such payment on or after such respective dates, is
absolute and unconditional and 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(a)(i) or (ii) occurs
and is continuing, the Trustee may recover judgment in its own name and as
trustee of an express trust against the Company or any other obligor on the
Securities for the whole amount of principal and accrued interest remaining
unpaid, together with interest overdue on principal and, to the extent that
payment of such interest is lawful, interest on overdue installments of
interest, in each case at the Interest Rate and such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
SECTION 6.9 Trustee May File Proofs of Claim.
The Trustee shall be entitled and empowered to file such proofs of
claim and other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel) and the Securityholders allowed in any judicial proceedings
relative to the Company or any of its Subsidiaries (or any other obligor upon
the Securities), its creditors or its property and shall be entitled and
empowered to collect and receive any monies or other property payable or
deliverable on any such claims
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and to distribute the same, and any Custodian in any such judicial proceedings
is hereby authorized by each Securityholder to make such payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments
directly to the Securityholders, to pay to the Trustee any amount due to it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agent and counsel, and any other amounts due the Trustee under
Section 7.7. Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Securityholder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Securityholder in any such proceeding.
SECTION 6.10 Priorities.
If the Trustee collects any money pursuant to this Article VI, it
shall, subject to the provisions of Article XI hereof, pay out such money in the
following order:
First: to the Trustee for all costs and expenses of collection and for all
other amounts due under Section 7.7;
Second: subject to Article XI, to Holders for interest accrued on the
Securities, ratably, without preference or priority of any kind, according
to the amounts due and payable on the Securities for interest; and
Third: subject to Article XI, to Holders for principal amounts owing under
the Securities, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities for principal.
The Trustee, upon prior written notice to the Company, may fix a
record date and payment date for any payment to Securityholders pursuant to this
Section 6.10.
SECTION 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.7, or a suit by any Holder, or group of Holders, holding
in the aggregate more than 10% in principal amount of the outstanding
Securities.
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SECTION 6.12 Rights and Remedies Cumulative.
No right or remedy herein conferred upon or reserved to the Trustee or
to the Holders is intended to be exclusive of any other right or remedy, and
every remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 6.13 Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article 6 or by
law to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
SECTION 6.14 Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
ARTICLE VII
TRUSTEE
SECTION 7.1 Duties of Trustee.
(a) If an Event of Default known to the Trustee has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in their exercise
as a prudent person would exercise or use under the circumstances in the conduct
of his own affairs.
(b) Except during the continuance of an Event of Default:
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(i) The Trustee need perform only those duties as are
specifically set forth in this Indenture or the TIA and no others and no
implied covenants or obligations shall be read into this Indenture against
the Trustee.
(ii) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
in the case of any such certificate or opinions which by any provision
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.
(c) Notwithstanding anything to the contrary herein contained, the
Trustee may not be relieved from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) This paragraph does not limit the effect of paragraph (b) of
this Section 7.1.
(ii) The Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(iii) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Sections 6.2, 6.4 and 6.5.
(d) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.1.
(f) 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. Money held
in trust by the Trustee need not be segregated from other funds except to the
extent required by law.
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SECTION 7.2 Rights of Trustee.
Subject to Section 7.1:
(a) The Trustee may rely and shall be protected in acting or
refraining from acting upon any document reasonably believed by it to be
genuine and to have been signed or presented by the proper Person. The
Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document,
but the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled during normal business hours and upon reasonable advance
notice to the Company to examine the books, records and premises of the
Company, personally or by agent or attorney.
(b) Before the Trustee acts or refrains from acting with respect to
any matter contemplated by this Indenture, it may require an Officers'
Certificate or an Opinion of Counsel, which shall conform to the provisions
of Section 10.5. The Trustee shall not be liable for any action it takes
or omits to take in good faith in reliance on such certificate or opinion.
(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent (other than
the negligence or willful misconduct of an agent who is an employee of the
Trustee) appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith and without negligence which it reasonably believes
to be authorized or within its rights or powers conferred upon it by this
Indenture or the TIA.
(e) Before the Trustee acts or refrains from acting, it may consult
with counsel and the advice or opinion of such counsel as to matters of law
shall be full and complete authorization and protection from liability in
respect of any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.
(f) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
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(g) The permissive rights of the Trustee to do things enumerated in
this Indenture shall not be construed as a duty.
(h) 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 Securityholders unless such Securityholders shall have
offered to the Trustee security or indemnity reasonable to it against the
costs, expenses and liabilities that might be incurred by it in compliance
with such request or direction.
(i) Except for (i) default under Section 6.1(a)(i) or (ii) hereof, or
(ii) any other event of which the Trustee has "actual knowledge" and which
event, with the giving of notice or the passage of time or both, would
constitute an Event of Default under this Indenture, the Trustee shall not
be deemed to have notice of any default or Event of Default unless
specifically notified in writing of such event by the Company or the
Holders of not less than 25% in aggregate principal amount of the
Securities then outstanding; as used herein, the term "actual knowledge"
means the actual fact or statement of knowing, without any duty to make any
investigation with regard thereto.
SECTION 7.3 Individual Rights of Trustee.
The Trustee in its individual capacity or any other capacity may
become the owner or pledgee of Securities and may otherwise deal with the
Company, or its Subsidiaries and Affiliates with the same rights it would have
if it were not Trustee. Any Agent may do the same with like rights. However,
the Trustee is subject to 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, and it shall
not be accountable for the Company's use of the proceeds from the Securities or
for the use or application of any money received by any Paying Agent other than
the Trustee, and it shall not be responsible for any statement of the Company in
this Indenture or any other document in connection with the sale of the
Securities, or any statement in the Securities other than the Trustee's
certificate of authentication.
SECTION 7.5 Notice of Defaults.
If a Default or an Event of Default with respect to the Securities
occurs and is continuing and the Trustee receives written notice of such Default
or Event of Default, the Trustee shall mail to each Securityholder notice of the
Default or Event of Default
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within 60 days after the occurrence thereof in accordance with TIA (S)313(c).
Except in the case of a Default or an Event of Default in payment of principal
of or interest on any Security, including on acceleration, and the failure to
make payment when required by Section 4.11, and except in the case of a failure
to comply with Article V hereof, the Trustee may withhold the notice to the
Securityholders for a period not to exceed 60 days if and so long as a committee
of its Trust Officers in good faith determines that withholding the notice is in
the interest of Securityholders.
SECTION 7.6 Reports by Trustee to Holders.
To the extent required by TIA (S)313(a), within 45 days after June 1
of each year commencing with 1998 and for as long as there are Securities
outstanding hereunder, the Trustee shall mail to each Securityholder the
Company's brief report dated as of such date that complies with TIA (S)313(a).
The Trustee also shall comply with TIA (S)313(b) and TIA (S)313(c) and (d). A
copy of such report at the time of its mailing to Securityholders shall be filed
with the SEC, if required, and each stock exchange, if any, on which the
Securities are listed.
The Company shall promptly notify the Trustee if the Securities become
listed on any stock exchange and the Trustee shall comply with TIA (S)313(d).
SECTION 7.7 Compensation and Indemnity.
The Company shall pay to the Trustee, the Paying Agent and the
Registrar from time to time reasonable compensation for their respective
services rendered hereunder. The Trustee's, the Paying Agent's and the
Registrar's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee, the
Paying Agent and the Registrar upon request for all reasonable out-of-pocket
disbursements, expenses and advances (including reasonable fees and expenses of
counsel) incurred or made by each of them in connection with entering into this
Indenture the performance of its duties under this Indenture in addition to the
compensation for their respective services under this Indenture. Such expenses
shall include the reasonable compensation, out-of-pocket disbursements and
expenses of the Trustee's, the Paying Agent's and the Registrar's agents and
counsel.
The Company shall indemnify the Trustee, the Paying Agent and the
Registrar for, and hold each of them harmless against, any claim, demand,
expense (including but not limited to attorneys' fees and expenses), loss or
liability incurred by each of them arising out of or in connection with the
administration of this Indenture and their respective duties hereunder. Each of
the Trustee, the Paying Agent and the Registrar shall notify the Company
promptly of any claim asserted against it for which it may seek indemnity.
How-
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ever, failure by the Trustee, the Paying Agent or the Registrar to so notify the
Company shall not relieve the Company of its obligations hereunder. The Company
need not reimburse any expense or indemnify against any loss or liability
incurred by the Trustee, the Paying Agent or the Registrar through the
Trustee's, the Paying Agent's or the Registrar's, as the case may be, own
willful misconduct or negligence.
To secure the Company's payment obligations in this Section 7.7, each
of the Trustee, the Paying Agent and the Registrar shall have a lien prior to
the Securities on all money or property held or collected by it, in its capacity
as Trustee, Paying Agent or Registrar, as the case may be, except money or
property held in trust to pay principal of or interest on particular Securities.
Such lien shall survive the satisfaction and discharge of this Indenture.
When any of the Trustee, the Paying Agent and the Registrar incurs
expenses or renders services after an Event of Default specified in Section
6.1(a)(vii) or (viii) occurs, the expenses and the compensation for the services
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 in
writing, such resignation to be effective upon the appointment of a successor
Trustee. The Holders of a majority in principal amount of the outstanding
Securities may remove the Trustee by so notifying the Trustee in writing and may
appoint a successor Trustee with the Company's consent which consent shall not
be unreasonably withheld. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent;
(c) a receiver or other public officer takes charge of the Trustee or
its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of 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. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the Securities may appoint a successor
Trustee to replace the successor Trustee appointed by the Company.
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A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee (subject to the lien provided in Section 7.7), the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Securityholder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 25% in principal amount of then outstanding Securities may
petition 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 replacement of the Trustee pursuant to this Section
7.8, the Company's obligations under Section 7.7 shall continue for the benefit
of the retiring Trustee.
SECTION 7.9 Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation or national banking association, the resulting, surviving or
transferee corporation or national banking association without any further act
shall be the successor Trustee; provided such corporation or national banking
association shall be otherwise qualified and eligible under this Article VII.
SECTION 7.10 Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA (S)310(a)(1) and (2). The Trustee shall have a combined
capital and surplus of at least $200,000,000 as set forth in its most recent
published annual report of condition. The Trustee shall comply with TIA
(S)310(b); provided that there shall be excluded from the operation of TIA
(S)310(b)(1) any indenture or indentures under which other securities, or
certificates of interest or participation in other securities, of the Company
are outstanding if the requirements for such exclusion set forth in TIA
(S)310(b)(1) are met. The provisions of TIA (S)310 shall apply to the Company,
as obligor of the Securities.
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SECTION 7.11 Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA (S)311(a), excluding any creditor
relationship listed in TIA (S)311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S)311(a) to the extent indicated therein. The
provisions of TIA (S)311 shall apply to the Company as obligor on the
Securities.
ARTICLE VIII
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 8.1 Termination of the Company's Obligations.
The Company's obligations under the Securities and this Indenture
shall terminate, and the obligations of any Subsidiary Guarantor shall
terminate, except those obligations referred to in the penultimate paragraph of
this Section 8.1, if all Securities previously authenticated and delivered
(other than destroyed, lost or stolen Securities which have been replaced or
paid or Securities for whose payment money has theretofore been deposited with
the Trustee or the Paying Agent in trust or segregated and held in trust by the
Company and thereafter repaid to the Company, as provided in Section 8.4) have
been delivered to the Trustee for cancellation and the Company has paid all sums
payable by it hereunder, or if:
(a) all Securities have otherwise become due and payable hereunder;
(b) the Company shall have irrevocably deposited or caused to be
deposited with the Trustee or a trustee satisfactory to the Trustee, under
the terms of an irrevocable trust agreement in form and substance
satisfactory to the Trustee, as trust funds in trust solely for the benefit
of the Holders for that purpose, cash or cash equivalents in such amount as
is sufficient without consideration of reinvestment of such interest, to
pay principal of, premium, if any, and interest on the outstanding
Securities to maturity or redemption; provided that the Trustee shall have
been irrevocably instructed to apply such cash or cash equivalents to the
payment of said principal, premium, if any, and interest with respect to
the Securities, and; provided, further, that from and after the time of
deposit, the money deposited shall not be subject to the rights of holders
of Senior Indebtedness of the Company or Guarantor Senior Indebtedness
pursuant to the provisions of Article XI or Article XII;
(c) no Default or Event of Default with respect to this Indenture or
the Securities shall have occurred and be continuing on the date of such
deposit or shall
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occur as a result of such deposit and such deposit will not result in a
breach or violation of, or constitute a default under, any other instrument
to which the Company is a party or by which it is bound;
(d) the Company shall have paid all other sums payable by it
hereunder;
(e) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent providing for the termination of the Company's and each
Subsidiary Guarantor's obligation under the Securities and this Indenture
have been complied with. Such Opinion of Counsel shall also state that such
satisfaction and discharge does not result in a default under any Senior
Indebtedness of the Company (if then in effect) or any other agreement or
instrument then known to such counsel that binds or affects the Company.
Notwithstanding the foregoing paragraph, the Company's obligations in
Sections 2.5, 2.6, 2.7, 2.8, 4.1, 4.2 and 7.7 and any Subsidiary Guarantor's
obligations in respect thereof shall survive until the Securities are no longer
outstanding. After the Securities are no longer outstanding, the Company's
obligations in Sections 7.7, 8.4 and 8.5 and any Subsidiary Guarantor's
obligations in respect thereof shall survive.
After such delivery or irrevocable deposit the Trustee upon request
shall acknowledge in writing the discharge of the Company's and any Subsidiary
Guarantor's obligations under the Securities and this Indenture except for those
surviving obligations specified above.
SECTION 8.2 Legal Defeasance and Covenant Defeasance.
(a) The Company may, at its option and at any time, with respect to
the Securities, elect to have either paragraph (b) or paragraph (c) below be
applied to the outstanding Securities upon compliance with the conditions set
forth in paragraph (d).
(b) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (b), the Company and any Subsidiary Guarantor shall
be deemed to have been released and discharged from its obligations with respect
to the outstanding Securities on the date the conditions set forth below are
satisfied (hereinafter, "legal defeasance"). For this purpose, such legal
defeasance means that the Company shall be deemed to have paid and discharged
the entire indebtedness represented by the outstanding Securities, which shall
thereafter be deemed to be "outstanding" only for the purposes of paragraph (c)
below and the other Sections of and matters under this Indenture referred to in
(i) and (ii) below, and to have satisfied all its other obligations under such
Securities and this
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Indenture insofar as such Securities are concerned (and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging the
same), and Holders of the Securities and the Subsidiary Guarantees and any
amounts deposited under paragraph (d) below shall cease to be subject to any
obligations to, or the rights of, any holder of Senior Indebtedness of the
Company or Guarantor Senior Indebtedness under Article XI, Article XII or
otherwise, except for the following which shall survive until otherwise
terminated or discharged hereunder: (i) the rights of Holders of outstanding
Securities to receive solely from the trust fund described in paragraph (d)
below and as more fully set forth in such paragraph, payments in respect of the
principal of, premium, if any, and interest on such Securities when such
payments are due, (ii) the Company's obligations with respect to such Securities
under Sections 2.6, 2.7 and 4.2, and, with respect to the Trustee, under Section
7.7 and any Subsidiary Guarantor's obligations in respect thereof, (iii) the
rights, powers, trusts, duties and immunities of the Trustee hereunder and (iv)
this Section 8.2 and Section 8.5. Subject to compliance with this Section 8.2,
the Company may exercise its option under this paragraph (b) notwithstanding the
prior exercise of its option under paragraph (c) below with respect to the
Securities.
(c) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (c), the Company shall be released and discharged
from its obligations under any covenant contained in Article V and Article XI
and in Sections 4.5 through 4.9, 4.11 through 4.20 and Section 5.1 with respect
to the outstanding Securities on and after the date the conditions set forth
below are satisfied (hereinafter, "covenant defeasance"), and the Securities
shall thereafter be deemed to be not "outstanding" for the purpose of any
direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder and Holders
of the Securities and the Subsidiary Guarantees and any amounts deposited under
paragraph (d) below shall cease to be subject to any obligations to, or the
rights of, any holder of Senior Indebtedness of the Company or Guarantor Senior
Indebtedness under Article XI, Article XII or otherwise. For this purpose, such
covenant defeasance means that, with respect to the outstanding Securities, the
Company and any Subsidiary Guarantor may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section
6.1(a)(iv), but, except as specified above, the remainder of this Indenture and
such Securities shall be unaffected thereby.
(d) The following shall be the conditions to application of either
paragraph (b) or paragraph (c) above to the outstanding Securities:
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(i) the Company shall irrevocably have deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Securities, (x)
money in an amount or (y) direct non-callable obligations of, or non-
callable obligations guaranteed by, the United States of America for the
payment of which guarantee or obligation the full faith and credit of the
United States is pledged ("U.S. Government Obligations") maturing as to
principal, premium, if any, and interest in such amounts of money and at
such times as are sufficient without consideration of any reinvestment of
such interest, to pay principal of and interest on the outstanding
Securities not later than one day before the due date of any payment, or
(z) a combination thereof, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and discharge and
which shall be applied by the Trustee (or other qualifying trustee) to pay
and discharge principal of, premium, if any, and interest on the
outstanding Securities on the Maturity Date or otherwise in accordance with
the terms of this Indenture and of such Securities; provided that the
Trustee (or other qualifying trustee) shall have received an irrevocable
written order from the Company instructing the Trustee (or other qualifying
trustee) to apply such money or the proceeds of such U.S. Government
Obligations to said payments with respect to the Securities;
(ii) no Default or Event of Default with respect to the
Securities or this Indenture shall have occurred and be continuing
immediately after giving effect to such deposit (or, insofar as Section
6.1(a)(vii) or (viii) is concerned, at any time during the period ending on
the 91st day after the date of such deposit (it being understood that this
condition shall not be deemed satisfied until the expiration of such
period); provided, however, that actions taken by the Company in connection
with the creation of the trust fund into which funds for the purpose of
defeasance of the Securities are deposited that are not in compliance with
Sections 4.9, 4.13 and 4.14, in each case, shall not be deemed a Default or
Event of Default under this Indenture);
(iii) such legal defeasance or covenant defeasance shall not cause
the Trustee to have a conflicting interest with respect to any Securities
of the Company or any Subsidiary Guarantor;
(iv) such legal defeasance or covenant defeasance shall not
result in a breach or violation of, or constitute a Default or Event of
Default under any agreement or instrument to which the Company or any
Subsidiary Guarantor is a party or by which it is bound;
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(v) in the case of an election under paragraph (b) above, the
Company shall have delivered to the Trustee an Opinion of Counsel stating
that (x) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (y) since the date of this Indenture,
there has been a change in the applicable Federal income tax law, in either
case to the effect that, and based thereon such opinion shall confirm that,
the Holders of the outstanding Securities will not recognize income, gain
or loss for Federal income tax purposes as a result of such legal
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;
(vi) in the case of an election under paragraph (c) above, the
Company shall have delivered to the Trustee an Opinion of Counsel to the
effect that the Holders of the outstanding Securities 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;
(vii) in the case of an election under either paragraph (b) or (c)
above, an Opinion of Counsel to the effect that, (x) the trust funds will
not be subject to any rights of any holders of other Indebtedness,
including, without limitation, Senior Indebtedness of the Company, and (y)
after the 91st day following the deposit, the trust funds will not be
subject to the effect of any applicable Bankruptcy Law; provided that if a
court were to rule under any such law in any case or proceeding that the
trust funds remained property of the Company, no opinion needs to be given
as to the effect of such laws on the trust funds except the following: (A)
assuming such trust funds remained in the Trustee's possession prior to
such court ruling to the extent not paid to Holders of Securities, the
Trustee will hold, for the benefit of the Holders of Securities, a valid
and enforceable security interest in such trust funds that is not avoidable
in bankruptcy or otherwise, subject only to principles of equitable
subordination, (B) the Holders of Securities will be entitled to receive
adequate protection of their interests in such trust funds if such trust
funds are used, and (C) no property, rights in property or other interests
granted to the Trustee or the Holders of Securities in exchange for or with
respect to any of such funds will be subject to any prior rights of any
other person, subject only to prior Liens granted under Section 364 of
Title 11 of the U.S. Bankruptcy Code (or any section of any other
Bankruptcy Law having the same effect), but still subject to the foregoing
clause (B); and
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(viii) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that (x) all
conditions precedent provided for relating to either the legal defeasance
under paragraph (b) above or the covenant defeasance under paragraph (c)
above, as the case may be, have been complied with and (y) if any other
Indebtedness of the Company shall then be outstanding or committed, such
legal defeasance or covenant defeasance will not violate the provisions of
the agreements or instruments evidencing such Indebtedness.
(e) All money and U.S. Government Obligations (including the
proceeds thereof) deposited with the Trustee pursuant to paragraph (d) above in
respect of the outstanding Securities shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any Paying Agent (other
than the Company or any Affiliate of the Company) as the Trustee may determine,
to the Holders of such Securities of all sums due and to become due thereon in
respect of principal, premium and interest, but such money need not be
segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to paragraph (d) above or the principal, premium, if any, and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding
Securities.
Anything in this Section 8.2 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request,
in writing, by the Company any money or U.S. Government Obligations held by it
as provided in paragraph (d) above which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, are in excess of the amount
thereof which would then be required to be deposited to effect an equivalent
legal defeasance or covenant defeasance.
SECTION 8.3 Application of Trust Money.
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Sections 8.1 and 8.2, and shall apply the
deposited money and the money from U.S. Government Obligations in accordance
with this Indenture to the payment of principal of, premium, if any, and
interest on the Securities.
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SECTION 8.4 Repayment to Company or Subsidiary Guarantors.
Subject to Sections 7.7, 8.1 and 8.2, the Trustee shall promptly pay
to the Company, or if deposited with the Trustee by any Subsidiary Guarantor, to
such Subsidiary Guarantor, upon receipt by the Trustee of an Officers'
Certificate, any excess money, determined in accordance with Section 8.2, held
by it at any time. The Trustee and the Paying Agent shall pay to the Company or
any Subsidiary Guarantor, as the case may be, upon receipt by the Trustee or the
Paying Agent, as the case may be, of an Officers' Certificate, any money held by
it for the payment of principal, premium, if any, or interest that remains
unclaimed for two years after payment to the Holders is required (unless
otherwise provided under operation of law); provided that the Trustee and the
Paying Agent before being required to make any payment may, but need not, at the
expense of the Company cause to be published once in a newspaper of general
circulation in The City of New York or mail to each Holder entitled to such
money notice that such money remains unclaimed and that after a date specified
therein, which shall be at least 30 days from the date of such publication or
mailing, any unclaimed balance of such money then remaining will be repaid to
the Company. After payment to the Company or any Subsidiary Guarantor, as the
case may be, Securityholders entitled to money must look solely to the Company
for payment as general creditors unless an applicable abandoned property law
designates another person, and all liability of the Trustee or Paying Agent with
respect to such money shall thereupon cease.
SECTION 8.5 Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with this Indenture by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then
and only then the Company's and each Subsidiary Guarantor's, if any, obligations
under this Indenture and the Securities shall be revived and reinstated as
though no deposit had been made pursuant to this Indenture until such time as
the Trustee is permitted to apply all such money or U.S. Government Obligations
in accordance with this Indenture; provided that if the Company or the
Subsidiary Guarantors, as the case may be, has made any payment of principal of,
premium, if any, or interest on any Securities because of the reinstatement of
its obligations, the Company or the Subsidiary Guarantors, as the case may be,
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, SUPPLEMENTS AND WAIVERS
SECTION 9.1 Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by
resolutions of its Board of Directors (copies of which shall be delivered to the
Trustee) and the Trustee may amend, waive or supplement this Indenture or the
Securities without notice to or consent of any Holder for any of the following
purposes:
(a) to cure any ambiguity, defect or inconsistency; provided that such
amendment or supplement does not adversely affect the rights of any Holder;
(b) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(c) to comply with any requirements of the SEC under the TIA;
(d) to evidence the succession in accordance with Article V hereof of
another Person to the Company and the assumption by any such successor of
the covenants of the Company herein and in the Securities;
(e) to add any Subsidiary of the Company as a Subsidiary Guarantor
pursuant to the terms of Section 4.15 and Article XII;
(f) to evidence and provide for the acceptance of appointment
hereunder by a separate or successor Trustee with respect to the
Securities; or
(g) to make any other change that does not adversely affect the rights
of any Holder;
provided, however, that in making such change, the Trustee may rely upon an
Opinion of Counsel stating that such change does not adversely affect the rights
of any Holder.
SECTION 9.2 With Consent of Holders.
Subject to Section 6.7 and the provisions of this Section 9.2, the
Company, when authorized by resolution of its Board of Directors (copies of
which shall be delivered to the Trustee) and the Trustee may amend or supplement
this Indenture, the Securities or any Subsidiary Guarantee with the written
consent of the Holders of at least a majority in
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principal amount of the Securities then outstanding. Subject to Section 6.7 and
the provisions of this Section 9.2, the Holders of, in the aggregate, at least a
majority in principal amount of the then outstanding Securities affected may
waive compliance by the Company and any Subsidiary Guarantor with any provision
of this Indenture, the Securities or any Subsidiary Guarantee without notice to
any other Securityholder. However, without the consent of each Securityholder
affected, an amendment, supplement or waiver, including a waiver pursuant to
Section 6.4, may not:
(a) reduce the aggregate principal amount of Securities the Holders
of which must consent to an amendment, supplement or waiver of any
provision of or with respect to this Indenture, the Securities or any
Subsidiary Guarantee; or
(b) reduce the rate of, change the method of calculation of, or extend
the time for, payment of interest, including default interest, on any
Security; or
(c) reduce the principal of or premium on or change the Stated
Maturity of any Security or alter the repurchase provisions with respect
thereto; or
(d) make the principal of, or interest on, any Security payable in
money other than as provided herein, or
(e) make any change in provisions relating to waivers of defaults, the
ability of Holders to enforce their rights under this Indenture or in the
matters discussed in clauses (a) through (h); or
(f) waive a default in the payment of the principal of, interest on,
or repurchase payment required hereunder with respect to, any Security,
including, without limitation, a default to make a payment when required
upon a Change of Control; or
(g) adversely affect the ranking of the Securities or any Subsidiary
Guarantee or release any Subsidiary Guarantor from any of its obligations
under its Subsidiary Guarantee in this Indenture other than in compliance
with Section 12.4 of Exhibit B hereto;
(h) after the Company's obligation to purchase Securities arises
thereunder, amend, modify or change the obligation of the Company to make
and consummate a Change of Control Offer in the event of a Change of
Control or waive any default in the performance thereof or modify any of
the provisions or definitions with respect to such offers.
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It shall not be necessary for the consent of the Holders under this
Section 9.2 to approve the particular form of any proposed amendment, supplement
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.2
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture.
Notwithstanding the foregoing, no amendment shall modify any provision of this
Indenture so as to affect adversely the rights of any holder of Senior
Indebtedness of the Company or Guarantor Senior Indebtedness to the benefits of
the subordination provisions under this Indenture without the consent of such
holder.
SECTION 9.3 Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the Securities
shall be set forth in a supplemental indenture that complies with the TIA as
then in effect.
SECTION 9.4 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of that Security or portion of that Security that evidences the same debt
as the consenting Holder's Security, even if notation of the consent is not made
on any Security. However, any such Holder or subsequent Holder may revoke the
consent as to his Security or portion of a Security. Such revocation shall be
effective only if the Trustee receives the notice of revocation before the date
the amendment, supplement or waiver becomes effective. Notwithstanding the
above, nothing in this paragraph shall impair the right of any Securityholder
under (S)316(b) of the TIA.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver which record date shall be at least 10 days prior to the
first solicitation of such consent. If a record date is fixed, then
notwithstanding the second and third sentences of the immediately preceding
paragraph, those Persons who were Holders at such record date (or their duly
designated proxies), and only those Persons, shall be entitled to consent to
such amendment, supplement or waiver or to revoke any consent previously given,
whether or not such Persons continue to be Holders after such record date. Such
consent shall be effective only for actions taken within 90 days after such
record date.
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After an amendment, supplement or waiver becomes effective, it shall
bind every Securityholder unless it makes a change described in any of clauses
(a) through (h) of Section 9.2. In that case the amendment, supplement or
waiver shall bind each Holder of a Security who has consented to it.
SECTION 9.5 Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a Security,
the Trustee shall (in accordance with the specific written direction of the
Company) request the Holder of the Security to deliver it to the Trustee. The
Trustee shall (in accordance with the specific direction of the Company) place
an appropriate notation on the Security about 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 issue a new Security shall not affect the validity
and effect of such amendment, supplement or waiver.
SECTION 9.6 Trustee To Sign Amendments, Etc.
The Trustee shall sign any amendment, supplement or waiver authorized
pursuant to this Article IX if the amendment, supplement or waiver does not
adversely affect the rights, duties or immunities of the Trustee. If it does,
the Trustee may, but need not, sign it. In signing any amendment, supplement or
waiver, the Trustee shall be entitled to receive, if requested, an indemnity
reasonably satisfactory to it and to receive, and shall be fully protected in
relying upon, an Officers' Certificate and an Opinion of Counsel stating that
the execution of any amendment, supplement or waiver authorized pursuant to this
Article IX is authorized or permitted by this Indenture and that it constitutes
the legal, valid and binding obligation of the Company and, if applicable, the
Subsidiary Guarantors, subject to the customary exceptions.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Trust Indenture Act Controls.
The provisions of TIA (S)(S)310 through 317 that impose duties on any
person (including the provisions automatically deemed included unless expressly
excluded by this Indenture) are a part of and govern this Indenture, whether or
not physically contained herein.
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If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by the above paragraph, the imposed duties shall control.
SECTION 10.2 Notices.
Any notice or communication shall be sufficiently given if in writing
and delivered in person or mailed by first-class mail or by telecopier, followed
by first-class mail, or by overnight service guaranteeing next-day delivery,
addressed as follows:
(a) if to the Company:
Navistar International Corporation
000 Xxxxx Xxxxxxxxx Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Telecopier Number: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxxx
000 X. Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Telecopier Number: (000) 000-0000
(b) if to the Trustee:
Xxxxxx Trust and Savings Bank
000 Xxxx Xxxxxx, 00xx Xx.
Xxxxxxx, Xxxxxxxx 00000
Attention: Indenture Trust Division/X.X. Xxxxxxx
Telecopier Number: (000) 000-0000
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
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Any notice or communication mailed to a Securityholder, including any
notice delivered in connection with TIA (S)310(b), TIA (S)313(c), TIA (S)314(a)
and TIA (S)315(b), shall be mailed to such Holder, first-class postage prepaid,
at his address as it appears on the registration books of the Registrar and
shall be sufficiently given to such Holder 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. Except for a notice to the Trustee, which is deemed given only
when received by an officer in the corporate trust administration department of
the Trustee, if a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 10.3 Communications 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 Company, the Trustee, the Registrar and any other Person shall
have the protection of TIA (S)312(c).
SECTION 10.4 Certificate and Opinion of Counsel as to Conditions
Precedent.
Upon any request or application by the Company or any Subsidiary
Guarantor to the Trustee to take any action under this Indenture, the Company or
any Subsidiary Guarantor shall furnish to the Trustee at the request of the
Trustee (a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers, all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with (which officer signing such certificate
may rely, as to matters of law, on an Opinion of Counsel), (b) an Opinion of
Counsel in form and substance reasonably satisfactory to the Trustee stating
that, in the opinion of counsel, all such conditions have been complied with
(which counsel, as to factual matters, may rely on an Officers' Certificate) and
(c) where applicable, a certificate or opinion by an independent certified
public accountant satisfactory to the Trustee that complies with TIA (S)314(c).
SECTION 10.5 Statements Required in Certificate and Opinion of
Counsel.
Each certificate and Opinion of Counsel with respect to compliance
with a condition or covenant provided for in this Indenture shall include:
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(a) a statement that the Person making such certificate or rendering
such Opinion of Counsel has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or Opinion of Counsel are based;
(c) a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been complied with.
SECTION 10.6 Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules in accordance with the Trustee's
customary practices for action by or at a meeting of Securityholders. The
Paying Agent or Registrar may make reasonable rules for its functions.
SECTION 10.7 Legal Holidays.
If a payment date is a Legal Holiday at a place of payment, payment
may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
SECTION 10.8 GOVERNING LAW.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS INDENTURE, THE
SECURITIES AND THE SUBSIDIARY GUARANTEES WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. THE COMPANY AND EACH SUBSIDIARY GUARANTOR AGREES TO SUBMIT TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE SECURITIES AND THE
SUBSIDIARY GUARANTEES.
SECTION 10.9 No Recourse Against Others.
A trustee, director, officer, employee, stockholder or beneficiary, as
such, of the Company or any Subsidiary Guarantor shall not have any liability
for any obligations of the Company or any Subsidiary Guarantor under the
Securities or this Indenture or for any
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claim based on, in respect of or by reason of such obligations or their
creation. Each Security holder by accepting a Security waives and releases all
such liability.
SECTION 10.10 Successors.
All agreements of the Company or any Subsidiary Guarantor in this
Indenture and the Securities shall bind its successor. All agreements of the
Trustee in this Indenture shall bind its successor.
SECTION 10.11 Counterparts.
The parties may sign any number of counterparts of this Indenture.
Each such counterpart shall be an original, but all of them together represent
the same agreement.
SECTION 10.12 Severability.
In case any provision in this Indenture, the Securities or in any
Subsidiary Guarantee shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby, and a Holder shall have no claim therefor against
any party hereto.
SECTION 10.13 Table of Contents, Headings, Etc.
The table of contents, cross-reference sheet and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, and are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
SECTION 10.14 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or of any Subsidiary Guarantor or any of their
respective Subsidiaries. Any such indenture, loan or debt agreement may not be
used to interpret this Indenture.
SECTION 10.15 Benefits of Indenture.
Nothing in this Indenture, in the Securities or in any Subsidiary
Guarantee, express or implied, shall give to any person, other than the parties
hereto and their successors hereunder and the Holders, any benefit or any legal
or equitable right, remedy or claim under this Indenture, the Securities or in
any Subsidiary Guarantee.
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SECTION 10.16 Independence of Covenants.
All covenants and agreements in this Indenture, the Securities and the
Subsidiary Guarantees shall be given independent effect so that if any
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or otherwise be within the
limitations of, another covenant shall not avoid the occurrence of a Default or
an Event of Default if such action is taken or condition exists.
ARTICLE XI
SUBORDINATION OF SECURITIES
SECTION 11.1 Agreement to Subordinate.
The Company covenants and agrees, and each Holder of Securities, by
his acceptance thereof, likewise covenants and agrees, that the indebtedness
represented by the Securities and the payment of the principal of and interest
on each and all of the Securities is hereby expressly subordinated, to the
extent and in the manner hereinafter set forth, in right of payment to the prior
payment in full of Senior Indebtedness of the Company.
Anything in the Securities or in this Indenture to the contrary
notwithstanding, the indebtedness evidenced by the Securities shall be
subordinate and junior in right of payment, in all respects, to all Senior
Indebtedness of the Company, whether outstanding at the Issue Date or incurred
after the Issue Date.
In the event of (i) any insolvency or bankruptcy case or proceeding,
(ii) any receivership, liquidation, dissolution or other winding up of the
Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy or (iii) any assignment for the benefit of the
creditors or any other marshaling of assets and liabilities of the Company, then
and in any such event specified in (i), (ii) or (iii) above, the holders of
Senior Indebtedness shall be entitled to receive payment in full in cash of all
amounts due or to become due on or in respect of all Senior Indebtedness before
the Holders of the Securities are entitled to receive any Note Payment (as
defined below), and in any such event any Note Payment to which the Holders of
the Securities or the Trustee on their behalf would be entitled, but for the
subordination provisions of this Indenture, shall be made by the Company or by
any receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, directly to the holders of the Senior
Indebtedness (pro rata to such holders on the basis of the respective amounts of
Senior Indebtedness held by such holders) or their respective trustee, agent or
other representative under any
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agreement or indenture pursuant to which any such Senior Indebtedness may have
been issued, as their respective interests may appear, to the extent necessary
to pay all such Senior Indebtedness in full, in cash, after giving effect to any
concurrent payment, distribution or provision therefor to or for the holders of
such Senior Indebtedness.
In the event that, notwithstanding the foregoing provision prohibiting
such Note Payment, any Note Payment shall be received by the Trustee or any
Holder of Securities at a time when such Note Payment is prohibited as described
in the preceding paragraph and before all obligations in respect of Senior
Indebtedness are paid in full in cash, such Note Payment shall be received and
held in trust for the benefit of, and shall be paid over or delivered to, the
holders of Senior Indebtedness (pro rata to such holders on the basis of the
respective amounts of Senior Indebtedness held by such holders) or their
respective trustee, agent or other representative under any agreement or
indenture pursuant to which any of such Senior Indebtedness may have been
issued, as their respective interests may appear, for application to the payment
of Senior Indebtedness remaining unpaid until all such Senior Indebtedness has
been paid in full in cash after giving effect to any concurrent payment,
distribution or provision therefor to or for the account of the holders of such
Senior Indebtedness.
No direct or indirect payment, deposit or distribution of any kind or
character, whether in cash, property or securities (including any payment made
to Holders of the Securities under the terms of Indebtedness subordinated to the
Securities, but excluding any payment or distribution of Permitted Junior
Securities) by or on behalf of the Company of principal of, premium, if any, or
interest on, or any other obligation in respect of, the Securities whether
pursuant to the terms of the Securities, upon acceleration, by way of
repurchase, redemption, defeasance or otherwise (all such payments, deposits or
distributions being referred to herein, individually and collectively, as a
"Note Payment"), shall be made if, at the time of such Note Payment, there
exists a default (a "Payment Default") in the payment when due of all or any
portion of the obligations under or in respect of any Designated Senior
Indebtedness, whether at maturity, on account of mandatory redemption or
prepayment, acceleration or otherwise, and such Payment Default shall not have
been cured or waived. In addition, during the continuance of any default or
event of default (other than a Payment Default) with respect to any Designated
Senior Indebtedness pursuant to which the maturity thereof may be accelerated
immediately without the giving of any notice (except such notice as may be
required to effect such acceleration) or the expiration of any applicable grace
periods, no Note Payment may be made by or on behalf of the Company for a period
(a "Payment Blockage Period") commencing upon the receipt by the Company and the
Trustee of written notice of such default or event of default from the holder or
holders of such Designated Senior Indebtedness or any trustee, agent or other
representative acting on behalf of the holder or holders of such Designated
Senior Indebtedness specifying
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an election to effect a Payment Blockage Period (a "Payment Blockage Notice")
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 holder
or holders of such Designated Senior Indebtedness or any trustee, agent or other
representative acting on behalf of the holder or holders of such Designated
Senior Indebtedness, (ii) by discharge or repayment in full in cash of such
Designated Senior Indebtedness or (iii) because the default or event of default
giving rise to such Payment Blockage Notice has been cured, waived or ceased to
exist). Subject to the provisions of the first sentence of this paragraph, the
Company may resume payments on the Securities after such Payment Blockage
Period.
Not more than one Payment Blockage Period may be commenced with
respect to the Securities during any period of 360 consecutive days, unless at
least 180 consecutive days shall have elapsed during which time no payment
blockage was in effect. No default or event of default that existed or was
continuing on the date of commencement of any Payment Blockage Period with
respect to the Designated Senior Indebtedness initiating such Payment Blockage
Period may be, or be made, the basis for the commencement of any other Payment
Blockage Period by the holder or holders of such Designated Senior Indebtedness
or any trustee, agent or other representative acting on behalf of the holder or
holders of such Designated Senior Indebtedness, whether or not within a period
of 360 consecutive days, unless such default or event of default has been cured
or waived for a period of not less than 90 consecutive days.
In the event that, notwithstanding the foregoing, any Note Payment
shall be received by the Trustee or any Holder when such Note Payment is
prohibited by the second preceding paragraph, such payment shall be held in
trust for the benefit of, and shall be paid over or delivered to, the holders of
Designated Senior Indebtedness or any trustee, agent or other representative
under any agreement or indenture pursuant to which any such Designated Senior
Indebtedness may have been issued, as their respective interests may appear, but
only to the extent that, upon notice from the Trustee to the holders of
Designated Senior Indebtedness that such prohibited Note Payment has been made,
the holders of the Designated Senior Indebtedness (or their trustee, agent or
other representative) notify the Trustee in writing of the amounts then due and
owing on the Designated Senior Indebtedness, if any, and only the amount
specified in such notice to the Trustee shall be paid to or for the account of
the holders of Designated Senior Indebtedness.
The failure to make any payment or distribution for or on account of
the Securities by reason of the provisions of this Indenture described under
this section will not be construed as preventing the occurrence of an Event of
Default described in clause (i), (ii) or (iii) of Section 6.1(a).
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If the Company fails to make any payment on the Securities when due or
within any applicable grace period, whether or not such failure is on account of
the subordination provisions referred to above, such failure would constitute an
Event of Default under this Indenture and would enable the Holders to accelerate
the maturity of the Securities. See Section 6.1.
By reason of such subordination, in the event of liquidation or
insolvency, creditors of the Company who are not holders of Senior Indebtedness
of the Company (other than the Holders of the Securities or other equally
subordinated obligations) may recover less, ratably, than the holders of Senior
Indebtedness of the Company and may recover more, ratably, than the Holders of
the Securities.
The Notes are effectively subordinated to all existing and future
liabilities (including liabilities owed to trade creditors) of the Subsidiaries
of the Company to the extent of the assets of each Subsidiary of the Company.
Any right of the Company to participate in any distribution of the assets of its
Subsidiaries upon the liquidation, reorganization or insolvency thereof (and the
consequent right of the Holders to benefit from those assets) will be subject to
the claims of creditors (including trade creditors) of such Subsidiary, except
to the extent that claims of the Company itself as a creditor of such Subsidiary
may be recognized, in which case the claims of the Company would still be
subordinate to any security interest in the assets of such Subsidiary and any
Indebtedness of such Subsidiary senior to that held by the Company.
SECTION 11.2 Subrogation.
Subject to the payment in full of all Senior Indebtedness of the
Company, Holders of the Securities shall be subrogated to the rights of the
holders of Senior Indebtedness of the Company to receive payments or
distributions of cash, property or securities of the Company applicable to the
Senior Indebtedness of the Company until all amounts owing on the Securities
shall be paid in full, and as between the Company, its creditors other than
holders of such Senior Indebtedness, and Holders of the Securities, no such
payment or distribution made to the holders of such Senior Indebtedness by
virtue of this Article XI which otherwise would have been made to the
Securityholders shall be deemed to be a payment by the Company on account of
such Senior Indebtedness, it being understood that the provisions of this
Article XI are and are intended solely for the purpose of defining the relative
rights of the Holders of the Securities, on the one hand, and the holders of
Senior Indebtedness of the Company, on the other hand.
-100-
SECTION 11.3 Relative Rights.
Nothing contained in this Article XI or elsewhere in this Indenture or
in the Securities is intended to or shall impair, as between the Company, its
creditors other than the holders of its Senior Indebtedness, and the Holders of
Securities, the obligation of the Company, which is absolute and unconditional,
to pay to the holders of the Securities the principal of and interest on the
Securities as and when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative rights of the
Holders of the Securities and creditors of the Company other than the holders of
its Senior Indebtedness, nor shall anything herein or therein prevent the
Trustee or the Holder of any Security from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article XI of the holders of Senior Indebtedness of
the Company to receive cash, property or securities otherwise payable or
deliverable to the Securityholders.
Upon payment or distribution of assets of the Company referred to in
this Article XI, the Trustee and the Holders of the Securities shall be entitled
to rely upon any order or decree made by any court of competent jurisdiction in
which any such dissolution, winding up, liquidation or reorganization proceeding
affecting the affairs of the Company is pending or upon a certificate of the
trustee in bankruptcy, receiver, assignee for the benefit of creditors,
liquidating trustee, or agent or other person making any payment or
distribution, to the Trustee or to the Holders of the Securities for the purpose
of ascertaining the persons entitled to participate in such payment or
distribution, the holders of the Senior Indebtedness of the Company and other
indebtedness of the Company, the amount thereof or payable thereon, the amount
paid or distributed thereon and all other facts pertinent thereto or to this
Article XI.
Nothing contained in this Article or elsewhere in this Indenture, or
in any of the Securities, shall affect the obligations of the Company to make,
or prevent the Company from making, payment of the principal of or interest on
the Securities in accordance with the provisions hereof and thereof, except as
otherwise provided in this Article XI.
SECTION 11.4 Trustee To Effectuate Subordination.
Each holder of Securities, by his acceptance thereof, authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article XI and
appoints the Trustee his attorney-in-fact for any and all such purposes.
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SECTION 11.5 Trustee Not Fiduciary for Holders
of Senior Indebtedness of the Company.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness of the Company and 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 moneys or assets to which any holders of Senior
Indebtedness of the Company shall be entitled by virtue of this Article XI or
otherwise.
SECTION 11.6 Notice by Company.
The Company shall give prompt written notice to the Trustee of any
fact known to the Company that would prohibit the making of any payment of
moneys to or by the Trustee pursuant to this Article. Subject to the provisions
of Sections 7.1 and 7.5 but notwithstanding any other provisions of this
Indenture, the Trustee and any Paying Agent shall not be charged with knowledge
of the existence of any facts that would prohibit the making of any payment of
moneys to or by the Trustee or such Paying Agent, or the taking of any other
action by the Trustee or such Paying Agent, unless and until the Trustee or such
Paying Agent shall have received written notice thereof from the Company at
least three Business Days prior to the making of any such payment, the
Securityholders, the holders of any Senior Indebtedness of the Company or the
representative of any such holders.
SECTION 11.7 Rights of Trustee.
The Trustee shall be entitled to all the rights set forth in this
Article XI with respect to any Senior Indebtedness of the Company by the time
held by the Trustee, to the same extent as any other holder of Senior
Indebtedness.
SECTION 11.8 Company May Not Impair Subordination.
No right of any present or future holder of any Senior Indebtedness of
the Company to enforce the subordination herein shall at any time or in any way
be prejudiced or impaired by any act or failure to act on the part of the
Company or by any noncompliance by the Company with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof any such holder
may have or be otherwise charged with.
SECTION 11.9 Rights of Paying Agent.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context shall require
otherwise) be construed as ex-
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tending to and including such Paying Agent within its meaning as fully for all
intents and purposes as if such Paying Agent were named in this Article XI in
addition to or in place of the Trustee; provided that Sections 11.6 and 11.7
shall not apply to the Company if it acts as Paying Agent.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
S-1
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
NAVISTAR INTERNATIONAL CORPORATION
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President & Treasurer
XXXXXX TRUST AND SAVINGS BANKS,
as Trustee
By: /s/ X. Xxxxxxxxx
-----------------------------------------------
Name: X. Xxxxxxxxx
Title: Vice President
Exhibit A
(FORM OF FACE OF SECURITY)
No. [_] $ [_]
CUSIP No.
8% SENIOR SUBORDINATED NOTE DUE 2008
NAVISTAR INTERNATIONAL CORPORATION promises to pay
to [ ] or registered assigns the
principal sum of[ ] Dollars on
February 1, 2008.
Interest Payment Dates: February 1, August 1 and at maturity
Record Dates: January 15, July 15 and 15 days prior to maturity
By:____________________________
Authorized Signature
By:____________________________
Authorized Signature
Dated: February 4, 1998
Certificate of Authentication
This is one of the 8% Senior Subordinated Notes due 2008 referred to
in the within-mentioned indenture.
XXXXXX TRUST AND SAVINGS BANK,
as Trustee
By:____________________________
Authorized Signatory
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(FORM OF REVERSE OF SECURITY)
8% SENIOR SUBORDINATED NOTE DUE 2008
1. Interest. NAVISTAR INTERNATIONAL CORPORATION, a Delaware
--------
corporation (the "Company," which definition shall include any successor thereto
in accordance with the Indenture (as defined below)), promises to pay, until the
principal hereof is paid or made available for payment, interest on the
principal amount set forth on the reverse side hereof at a rate of 8% per annum.
Interest on the Securities will accrue from and including the most recent date
to which interest has been paid or, if no interest has been paid, from and
including February 4, 1998 through but excluding the date on which interest is
paid. Interest shall be payable in arrears on February 1, August 1 and at the
stated maturity (each an "Interest Payment Date"), commencing August 1, 1998.
Interest will be computed on the basis of a 360-day year of twelve full 30-day
months and, for periods of less than one month, the actual number of days
elapsed. Interest on overdue principal and (to the extent permitted by law) on
overdue installments of interest will accrue at a rate equal to 8% per annum.
2. Method of Payment. The Company will pay interest on the
-----------------
Securities (except defaulted interest) to the Persons who are registered Holders
of Securities at the close of business on the January 15 or July 15 next
preceding the relevant Interest Payment Date. Holders must surrender Securities
to the Paying Agent to collect principal payments. The Company will pay
principal, premium, if any, and interest in money of the United States that at
the time of payment is legal tender for payment of public and private debts. At
the Company's option, interest may be paid by check mailed to the registered
address of the Holder of this Security.
3. Paying Agent and Registrar. Initially, XXXXXX TRUST AND SAVINGS
--------------------------
BANK (the "Trustee") will act as Paying Agent and Registrar. The Company may
change any Paying Agent, Registrar or co-Registrar without notice. Neither the
Company nor any of its Subsidiaries may act as Paying Agent, Registrar or co-
Registrar.
4. Indenture. The Company issued the Securities under an Indenture
---------
dated as of February 4, 1998 (the "Indenture") between the Company and the
Trustee. This Security is one of an issue of Securities of the Company issued
under the Indenture. 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. Code (S)(S) 77aaa-77bbbb) as amended from time to
time. The Securities are subject to all such terms, and Securityholders are
referred to the Indenture and such Act for a statement of them. Capitalized
terms used herein and not otherwise defined have the meanings set forth in the
Indenture. The Securities are general unsecured obligations of the Company
limited in aggregate principal
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amount to $250,000,000. The Indenture limits, among other things, the incurrence
of certain Indebtedness by the Company and its Restricted Subsidiaries;
transactions by the Company and its Restricted Subsidiaries with certain
Affiliates; the granting of Liens by the Company or any of its Restricted
Subsidiaries; certain guarantees issued by Restricted Subsidiaries of the
Company and the ability of the Company and the Subsidiary Guarantors to merge
with or into another entity. The limitations are subject to a number of
important qualifications and exceptions. The Company must report to the Trustee
annually whether it is in compliance with the limitations contained in the
Indenture.
5. Optional Redemption. Except as set forth in the next paragraph,
-------------------
the Securities may not be redeemed prior to February 1, 2003. On or after
February 1, 2003, the Securities may be redeemed at any time, in whole or in
part, at the option of the Company, on not less than 20 days' nor more than 60
days' notice, at the redemption prices (expressed as percentages of the
principal amount) set forth below, if redeemed during the 12 month period
beginning February 1 of the year indicated below, in each case together with
interest accrued to the redemption date:
YEAR PERCENTAGE
2003...................................... 104.000%
2004...................................... 102.670%
2005...................................... 101.333%
2006 and thereafter....................... 100.000%
In addition, prior to February 1, 2001, the Company may, at its option
redeem up to 35% of the principal amount of the Securities originally issued
with the net cash proceeds received by the Company from one or more public
offerings of Common Stock of the Company made after the Issue Date, at a
redemption price (expressed as a percentage of the principal amount) of 108% of
the principal amount thereof, plus accrued and unpaid interest to the date fixed
for redemption; provided that at least $162.5 million in aggregate principal
amount of the Securities remains outstanding immediately after any such
redemption (excluding any Notes owned by the Company or any of its Affiliates).
Notice of redemption pursuant to this paragraph must be mailed to Holders of
Senior Subordinated Notes not later than 60 days following the consummation of
such public offering.
Selection of Securities for any redemption shall be made by the
Trustee under the Indenture in accordance with the rules of any national
securities exchange on which the Securities may be listed or if the Securities
are not so listed, pro rata or by lot or in such other manner as the Trustee
shall deem appropriate and fair.
On and after the redemption date, interest will cease to accrue on
Securities or portions thereof called for redemption.
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6. Notice of Redemption. Notice of redemption will be mailed by
--------------------
first-class mail at least 20 days but not more than 60 days before the
redemption date to each Holder of Securities to be redeemed at his registered
address. Securities in denominations larger than $1,000 may be redeemed in part
but only in whole multiples of $1,000. If money sufficient to pay the
redemption price of and accrued interest on all Securities (or portions thereof)
to be redeemed on the redemption date is deposited with the Paying Agent on or
before the redemption date and certain other conditions are satisfied, on and
after such date interest ceases to accrue on such Securities (or such portions
thereof) called for redemption. If a notice or communication is sent in the
manner provided in the Indenture, it is duly given, whether or not the addressee
receives it. Failure to send a notice or communication to a Securityholder or
any defect in it shall not affect its sufficiency with respect to other
Securityholders.
7. Offers to Purchase. Sections 4.11 and 4.19 of the Indenture
------------------
provide upon the occurrence of a Change of Control and after certain Asset
Dispositions, and subject to further limitations contained therein, the Company
shall make an offer to purchase certain amounts of the Securities in accordance
with the procedures set forth in the Indenture.
8. Denominations, Transfer, Exchange. The Securities are in
---------------------------------
registered form without coupons in denominations of $1,000 and integral
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 and transfer documents and to pay to it any
taxes and fees required by law or permitted by the Indenture. The Registrar
need not transfer or exchange any Security or portion of a Security selected for
redemption, or transfer or exchange any Securities for a period of 15 days
before a selection of Securities to be redeemed.
9. Persons Deemed Owners. The registered holder of a 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 will pay
the money back to the Company at its request. After that, Holders entitled to
the money must look to the Company for payment as general creditors unless an
"abandoned property" law designates another Person.
11. Amendment, Supplement, Waiver. The Company and the Trustee may,
-----------------------------
without the consent of the holders of any outstanding Securities, amend, waive
or supplement the Indenture, the Securities or Subsidiary Guarantee for certain
specified purposes, including, among other things, curing ambiguities, defects
or inconsistencies, maintaining the qualification of the Indenture under the
Trust Indenture Act of 1939 or making any
A-4
other change that does not adversely affect the rights of any Holder. Other
amendments and modifications of the Indenture, the Securities or any Subsidiary
Guarantee may be made by the Company and the Trustee with the consent of the
Holders of not less than a majority of the aggregate principal amount of the
outstanding Securities, subject to certain exceptions requiring the consent of
the Holders of the particular Securities to be affected.
12. Guarantees. This Security may after the date hereof be entitled
----------
to certain Subsidiary Guarantees made for the benefit of the Holders. Reference
is hereby made to Section 4.15 of the Indenture and to Exhibit B to the
Indenture for the terms of any Subsidiary Guarantee (including any terms of
subordination of such Subsidiary Guarantee that may apply).
13. Successor Corporation. When a successor corporation assumes all
---------------------
the obligations of its predecessor under the Securities and the Indenture and
the transaction complies with the terms of Article V of the Indenture, the
predecessor corporation, subject to certain exceptions, will be released from
those obligations.
14. Defaults and Remedies. Events of Default are set forth in the
---------------------
Indenture. Subject to certain limitations in the Indenture, if an Event of
Default (other than an Event of Default specified in Section 6.1(a)(vii) or
(viii) of the Indenture with respect to the Company) occurs and is continuing,
then the holders of not less than 25% in aggregate principal amount of the
outstanding Securities may, or the Trustee may, declare the principal of,
premium, if any, plus accrued interest, if any, to be due and payable
immediately. If an Event of Default specified in Section 6.1(a)(vii) or (viii)
of the Indenture with respect to the Company occurs and is continuing, the
principal of, premium, if any, and accrued interest on all of the Securities
shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder.
Securityholders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may require indemnity reasonably
satisfactory to it before it enforces the Indenture or the Securities. Subject
to certain limitations, Holders of a majority in principal amount of the then
outstanding Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Securityholders notice of any continuing
default (except a default in payment of principal or interest or a failure to
comply with Article V of the Indenture) if it determines that withholding notice
is in their interests. The Company must furnish an annual compliance
certificate to the Trustee.
15. Trustee Dealings with Company. The Trustee, in its individual or
-----------------------------
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not Trustee.
A-5
16. No Recourse Against Others. A Trustee, director, officer,
--------------------------
employee, stockholder or beneficiary, as such, of the Company or any Subsidiary
Guarantor shall not have any liability for any obligations of the Company or any
Subsidiary Guarantor under the Securities, the Indenture or any Subsidiary
Guarantee or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Securityholder by accepting a Security
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
17. Defeasance. The Indenture contains provisions (which provisions
----------
apply to this Security) for defeasance at any time of (a) the entire
indebtedness of the Company and any Subsidiary Guarantor or this Security and
(b) certain restrictive covenants and related Defaults and Events of Default, in
each case upon compliance by the Company with certain conditions set forth
therein.
18. Authentication. This Security shall not be valid until the
--------------
Trustee signs the certificate of authentication on the other side of this
Security.
19. Abbreviations. Customary abbreviations may be used in the name
-------------
of a Securityholder or an assignee, such as: TEN COM (= tenants in common),
TENANT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
20. Subordination. The Company's payment of principal of, premium,
-------------
if any, and interest on the Securities is subordinated in right of payment, to
the extent and in the manner provided in Article XI of the Indenture, to the
prior payment in full of the Senior Indebtedness of the Company. Each Holder of
the Securities, by his acceptance hereof, covenants and agrees that all payments
of the principal of, premium, if any, and interest on the Securities by the
Company shall be subordinated in accordance with the provisions of Article XI of
the Indenture, and each Holder accepts and agrees to be bound by such
provisions.
21. GOVERNING LAW. THE INDENTURE, THIS SECURITY AND EACH SUBSIDIARY
-------------
GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
The Company will furnish to any Securityholder upon written request
and without charge a copy of the Indenture. Requests may be made to:
A-6
Navistar International Corporation
000 Xxxxx Xxxxxxxxx Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: General Counsel
A-7
ASSIGNMENT FORM
If you the holder want to assign this Security, fill in the form below and have
your signature guaranteed:
I or we assign and transfer this Security to
____________________________________________________________________
(Insert assignee's social security or tax ID number)________
____________________________________________________________________
____________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code) 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:_____________________________
(Sign exactly as your name appears
on the other side of this Security)
Signature Guarantee:___________________________________________
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Company pursuant to
Section 4.11 or 4.19 of the Indenture, check the appropriate Box:
[_] Section 4.11 [_] Section 4.19
If you wish to have a portion of this Security purchased by the
Company pursuant to Section 4.11 or 4.19 of the Indenture, state the amount:
$________
Date:__________ Your Signature:__________________
(Sign exactly as your name appears on the other side of this Security)
Signature Guarantee:_______________________
EXHIBIT B
ARTICLE XII
GUARANTEE OF SECURITIES
SECTION 12.1 Subsidiary Guarantee.
--------------------
Subject to the provisions of this Article XII, each Subsidiary
Guarantor hereby jointly and severally unconditionally guarantees to each Holder
of a Security authenticated and delivered by the Trustee and to the Trustee and
its successors and assigns, irrespective of the validity and enforceability of
this Indenture, the Securities or the obligations of the Company or any other
Subsidiary Guarantors to the Holders or the Trustee hereunder or thereunder,
that: (a) the principal of, premium, if any, and interest on the Securities
will be duly and punctually paid in full when due, whether at maturity, by
acceleration or otherwise, and interest on the overdue principal and (to the
extent permitted by law) interest, if any, on the Securities and all other
obligations of the Company or the Subsidiary Guarantors to the Holders or the
Trustee hereunder or thereunder (including fees or expenses) and all other
obligations with respect to the Securities and this Indenture will be promptly
paid in full or performed, all in accordance with the terms hereof and thereof;
and (b) in case of any extension of time of payment or renewal of any
Securities, 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. Failing payment when due of any amount
so guaranteed, or failing performance of any other obligation of the Company to
the Holders, for whatever reason, each Subsidiary Guarantor will be obligated to
pay, or to perform or cause the performance of, the same immediately. An Event
of Default under this Indenture or the Securities shall constitute an event of
default under this Subsidiary Guarantee, and shall entitle the Holders of
Securities to accelerate the obligations of the Subsidiary Guarantors hereunder
in the same manner and to the same extent as the obligations of the Company.
Each of the Subsidiary Guarantors hereby agrees that its obligations
hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the Securities or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any holder of the Securities with
respect to any provisions hereof or thereof, any release of any other Subsidiary
Guarantor, the recovery of any judgment against the Company, any action to
enforce the same, whether or not a Subsidiary Guarantee is affixed to any
particular Security, or any other circumstance which might otherwise constitute
a legal or equitable discharge or defense of a guarantor. Each of the
Subsidiary Guarantors hereby waives the benefit of diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest, notice and all demands whatsoever and cove-
B-1
nants that its Subsidiary Guarantee will not be discharged except by complete
performance of the obligations contained in the Securities, this Indenture and
this Subsidiary Guarantee. If any Holder or the Trustee is required by any court
or otherwise to return to the Company or to any Subsidiary Guarantor, or any
custodian, trustee, liquidator or other similar official acting in relation to
the Company or such Subsidiary Guarantor, any amount paid by the Company or such
Subsidiary Guarantor to the Trustee or such Holder, this Subsidiary Guarantee,
to the extent theretofore discharged, shall be reinstated in full force and
effect. Each Subsidiary Guarantor further agrees that, as between it, on the one
hand, and the Holders of Securities and the Trustee, on the other hand, (a)
subject to this Article XII, the maturity of the obligations guaranteed hereby
may be accelerated as provided in Article VI hereof for the purposes of this
Subsidiary Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the obligations guaranteed hereby,
and (b) in the event of any acceleration of such obligations as provided in
Article VI hereof, such obligations (whether or not due and payable) shall
forthwith become due and payable by the Subsidiary Guarantors for the purpose of
this Subsidiary Guarantee.
This Subsidiary Guarantee shall remain in full force and effect and
continue to be effective should any petition be filed by or against the Company
for liquidation or reorganization, should the Company become insolvent or make
an assignment for the benefit of creditors or should a receiver or trustee be
appointed for all or any significant part of the Company's assets, and shall, to
the fullest extent permitted by law, continue to be effective or be reinstated,
as the case may be, if at any time payment and performance of the Securities
are, pursuant to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by any obligee on the Securities, whether as a
"voidable preference," "fraudulent transfer" or otherwise, all as though such
payment or performance had not been made. In the event that any payment, or any
part thereof, is rescinded, reduced, restored or returned, the Securities shall,
to the fullest extent permitted by law, be reinstated and deemed reduced only by
such amount paid and not so rescinded, reduced, restored or returned.
No stockholder, officer, director, employer or incorporator, past,
present or future, or any Subsidiary Guarantor, as such, shall have any personal
liability under this Subsidiary Guarantee by reason of his, her or its status as
such stockholder, officer, director, employer or incorporator.
The Subsidiary Guarantors shall have the right to seek contribution
from any non-paying Subsidiary Guarantor so long as the exercise of such right
does not impair the rights of the Holders under this Subsidiary Guarantee.
Each Subsidiary Guarantor, and by its acceptance hereof each Holder,
hereby confirms that it is the intention of all such parties that the guarantee
by each Subsidiary Guarantor pursuant to its Subsidiary Guarantee not constitute
a fraudulent transfer
B-2
or conveyance for purposes of the Bankruptcy Law, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar Federal or
state law. To effectuate the foregoing intention, the Holders and each
Subsidiary Guarantor hereby irrevocably agrees that the obligations of each
Subsidiary Guarantor under the Subsidiary Guarantees shall be limited to the
maximum amount as will, after giving effect to all other contingent and fixed
liabilities of each Subsidiary Guarantor (including, but not limited to, the
Guarantor Senior Indebtedness of each Subsidiary Guarantor) result in the
obligations of each Subsidiary Guarantor under the Subsidiary Guarantees not
constituting such fraudulent transfer or conveyance.
SECTION 12.2 Execution and Delivery of Subsidiary Guarantee.
----------
To further evidence the Subsidiary Guarantee set forth in Section
12.1, each Subsidiary Guarantor hereby agrees that a notation of such Subsidiary
Guarantee, substantially in the form included in Exhibit C hereto, shall be
endorsed on each Security authenticated and delivered by the Trustee after such
Subsidiary Guarantee is executed and executed by either manual or facsimile
signature of an Officer of each Subsidiary Guarantor. The validity and
enforceability of any Subsidiary Guarantee shall not be affected by the fact
that it is not affixed to any particular Security.
Each of the Subsidiary Guarantors hereby agrees that its Subsidiary
Guarantee set forth in Section 12.1 shall remain in full force and effect
notwithstanding any failure to endorse on each Security a notation of such
Subsidiary Guarantee.
If an Officer of a Subsidiary Guarantor whose signature is on this
Indenture or a Security no longer holds that office at the time the Trustee
authenticates such Security or at any time thereafter, such Subsidiary
Guarantor's Subsidiary Guarantee of such Security shall be valid nevertheless.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of any Subsidiary Guarantee set
forth in this Indenture on behalf of the Subsidiary Guarantor.
SECTION 12.3 Additional Subsidiary Guarantors.
--------------------------------
Any person may become a Subsidiary Guarantor by executing and
delivering to the Trustee (a) a supplemental indenture in form and substance
satisfactory to the Trustee, which subjects such person to the provisions of
this Indenture as a Subsidiary Guarantor, and (b) an Opinion of Counsel to the
effect that such supplemental indenture has been duly authorized and executed by
such person and constitutes the legal, valid, binding and enforceable obligation
of such person (subject to such customary exceptions concerning fraudulent
conveyance laws, creditors' rights and equitable principles as may be acceptable
to the Trustee in its discretion).
B-3
SECTION 12.4 Release of a Subsidiary Guarantor.
---------------------------------
(a) In the event that each other holder of Indebtedness of the
Company or of any of the Company's Subsidiaries of which a Subsidiary Guarantor
has guaranteed the payment thereof unconditionally releases a Subsidiary
Guarantor of all of its obligations under such guarantee pursuant to a written
agreement in form and substance satisfactory to the Trustee (other than a
release resulting from payment under such guarantee) such Subsidiary Guarantor
shall be automatically and unconditionally released from all obligations under
its Subsidiary Guarantee; provided that a release of a Subsidiary Guarantor may
only be obtained under the circumstances described in this sentence if an
Officers' Certificate to that effect has been delivered to the Trustee.
(b) In addition, except in the case where the prohibition on transfer
in Section 5.1 is applicable, upon the sale or disposition of all (but not less
than all) of the Capital Stock of a Subsidiary Guarantor by the Company or a
Subsidiary of the Company, or upon the consolidation or merger of a Subsidiary
Guarantor with or into any Person (in each case, other than to the Company or an
Affiliate of the Company), such Subsidiary Guarantor shall be deemed
automatically and unconditionally released and discharged from all obligations
under this Article XII without any further action required on the part of the
Trustee or any Holder; provided that each such Subsidiary Guarantor is sold or
disposed of in accordance with Article V.
(c) The Trustee shall deliver an appropriate instrument evidencing the
release of a Subsidiary Guarantor upon receipt of a request of the Company
accompanied by an Officers' Certificate certifying as to the compliance with
this Section 12.4. Any Subsidiary Guarantor not so released or the entity
surviving such Subsidiary Guarantor, as applicable, will remain or be liable
under its Subsidiary Guarantee as provided in this Article XII.
The Trustee shall execute any documents reasonably requested by the
Company or a Subsidiary Guarantor in order to evidence the release of such
Subsidiary Guarantor from its obligations under its Subsidiary Guarantee
endorsed on the Securities and under this Article XII.
Except as set forth in Articles IV and V and this Section 12.4,
nothing contained in this Indenture or in any of the Securities shall prevent
any consolidation or merger of a Subsidiary Guarantor with or into the Company
or another Subsidiary Guarantor or shall prevent any sale or conveyance of the
property of a Subsidiary Guarantor as an entirety or substantially as an
entirety to the Company or another Subsidiary Guarantor.
B-4
SECTION 12.5 Waiver of Subrogation.
---------------------
Each Guarantor hereby irrevocably waives any claim or other rights
which it may now or hereafter acquire against the Company or any of its
Subsidiaries that arise from the existence, payment, performance or enforcement
of such Subsidiary Guarantor's obligations under this Subsidiary Guarantee and
this Indenture, including, without limitation, any right of subrogation,
reimbursement, exoneration, indemnification, and any right to participate in any
claim or remedy of any Holder of Securities against the Company or any of its
Subsidiaries, whether or not such claim, remedy or right arises in equity, or
under contract, statute or common law, including, without limitation, the right
to take or receive from the Company or any of its Subsidiaries, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim or other rights. If any amount
shall be paid to any Subsidiary Guarantor in violation of the preceding sentence
and the Securities shall not have been paid in full, such amount shall have been
deemed to have been paid to such Subsidiary Guarantor for the benefit of, and
held in trust for the benefit of, the Holders of the Securities, and shall,
subject to the subordination provisions of this Article and to Article XI,
forthwith be paid to the Trustee for the benefit of such Holders to be credited
and applied upon the Securities, whether matured or unmatured, in accordance
with the terms of this Indenture. Each Subsidiary Guarantor acknowledges that
it will receive direct and indirect benefits from the financing arrangements
contemplated by this Indenture and that the waiver set forth in this Section
12.5 is knowingly made in contemplation of such benefits.
SECTION 12.6 Agreement to Subordinate.
------------------------
Each Subsidiary Guarantor covenants and agrees, and each Holder of
Securities, by his acceptance thereof, likewise covenants and agrees, that the
indebtedness represented by such Subsidiary Guarantor's Subsidiary Guarantee and
the payment of the principal of and interest on each and all of the Securities
pursuant to such Subsidiary Guarantor's Subsidiary Guarantee is hereby expressly
subordinated, to the extent and in the manner hereinafter set forth, in right of
payment to the prior payment in full of Guarantor Senior Indebtedness.
Anything in the Subsidiary Guarantee, the Securities or in this
Indenture to the contrary notwithstanding, the indebtedness evidenced by such
Subsidiary Guarantor's Subsidiary Guarantee shall be subordinate and junior in
right of payment, in all respects, to all Guarantor Senior Indebtedness of such
Subsidiary Guarantor, whether outstanding at the Issue Date or incurred after
the Issue Date. Without limiting the effect of the foregoing, "subordinate" and
"junior" as used herein shall include within their meanings the following:
(i) in the event of any insolvency or bankruptcy proceedings, and
any receivership, liquidation, reorganization or other similar proceedings
in connection therewith, relative to the Subsidiary Guarantor or its
creditors or its property, and in
B-5
the event of any proceedings for voluntary liquidation, dissolution or
other winding up of the Subsidiary Guarantor, whether or not involving
insolvency or bankruptcy proceedings, then (A) all Guarantor Senior
Indebtedness of such Subsidiary Guarantor shall first be paid in full, or
such payment be provided for, before any payment on account of principal or
interest is made upon the Indebtedness evidenced by the Subsidiary
Guarantee of such Subsidiary Guarantor, and (B) in any such proceedings any
payment or distribution of any kind or character (including without
limitation any distribution realized from or attributable to any security
interest of the Holders of the Securities in property or assets of such
Subsidiary Guarantor), whether in cash or property or securities which may
be payable or deliverable in respect of the Subsidiary Guarantee of such
Subsidiary Guarantor, shall be paid or delivered directly to the holders of
such Guarantor Senior Indebtedness of such Subsidiary Guarantor (or the
representative or representatives of such holders or the trustee or
trustees under any indenture under which any instruments evidencing any of
such Guarantor Senior Indebtedness of such Subsidiary Guarantor shall have
been issued) for application in payment thereof, unless and until such
Guarantor Senior Indebtedness of such Subsidiary Guarantor shall have been
paid in full or such payment shall have been provided for; provided that
(1) in the event that payment or delivery of such cash, property or
securities to the Holders of the Securities is authorized by an order or
decree giving effect, and stating in such order or decree that effect is
given, to the subordination of the Subsidiary Guarantee of such Subsidiary
Guarantor to Guarantor Senior Indebtedness of such Subsidiary Guarantor,
and made by a court of competent jurisdiction in a reorganization
proceeding under any applicable law, no payment or delivery of such cash,
property or securities payable or deliverable with respect to the
Securities need be made to the holders of Guarantor Senior Indebtedness of
such Subsidiary Guarantor, (2) no such delivery need be made of securities
which are issued pursuant to voluntary reorganization, dissolution, or
liquidation proceedings by such Subsidiary Guarantor or by such Subsidiary
Guarantor as reorganized, if such securities are subordinate and junior to
the payment of all Guarantor Senior Indebtedness of such Subsidiary
Guarantor then outstanding to the same extent as the Subsidiary Guarantee
of such Subsidiary Guarantor and (3) if, pursuant to the foregoing, a
payment or delivery of cash, property or securities is to be made to the
holders of Guarantor Senior Indebtedness of such Subsidiary Guarantor (or
their representative or representatives or the trustee or trustees under
any indenture under which any instruments evidencing any such Guarantor
Senior Indebtedness of such Subsidiary Guarantor shall have been issued)
from a distribution realized from or attributable to any security interest
of the Holders of the Securities in property or assets of such Subsidiary
Guarantor, such payment or delivery shall be made (x) first, to the holders
of any Guarantor Senior Indebtedness of such Subsidiary Guarantor (or their
representative or representatives) secured equally and ratably with the
Holders of the Securities with respect to such property or assets or to the
trustee or trustees under any indenture under which any
B-6
instruments evidencing any of such Guarantor Senior Indebtedness of such
Subsidiary Guarantor shall have been issued, ratably according to the
aggregate amounts remaining unpaid on account of such Guarantor Senior
Indebtedness of such Subsidiary Guarantor held or represented by each,
until such Guarantor Senior Indebtedness of such Subsidiary Guarantor shall
have been paid in full or such payment shall have been provided for and (y)
then, to the extent such payment or delivery shall not be required to pay
the Guarantor Senior Indebtedness of such Subsidiary Guarantor referred to
in the foregoing clause (x), to the other holders of Guarantor Senior
Indebtedness of such Subsidiary Guarantor (or their representative or
representatives or the trustee or trustees under any indenture under which
any instruments evidencing any of such Guarantor Senior Indebtedness of
such Subsidiary Guarantor shall have been issued), ratably according to the
aggregate amounts remaining unpaid on account of such Guarantor Senior
Indebtedness of such Subsidiary Guarantor held or represented by each,
until such Guarantor Senior Indebtedness of such Subsidiary Guarantor shall
have been paid in full or such payment shall have been provided for;
(ii) no payment or prepayment of any principal, premium (if any)
or interest on account of and no repurchase, redemption or other retirement
(whether at the option of the Holder or otherwise) of the Securities shall
be made, if at the time of such payment, prepayment, repurchase, redemption
or retirement, or immediately after giving effect thereto, there shall
exist a default in the payment or prepayment of any Guarantor Senior
Indebtedness of such Subsidiary Guarantor;
(iii) in the event that any Security is declared due and payable
because of the occurrence of an Event of Default (under circumstances when
the provisions of the foregoing clause (i) shall not be applicable), the
Holders of the Securities shall be entitled to payment only after there
shall first have been paid in full the Guarantor Senior Indebtedness of
such Subsidiary Guarantor outstanding at the time such Security so becomes
due and payable because of such Event of Default, or provision for such
payment shall have been made; and
(iv) in the event that (A) any of the events described in clauses
(i), (ii) and (iii) occurs and (B) notwithstanding the provisions therein,
any payment or distribution of assets of such Subsidiary Guarantor of any
kind or character (including any distribution realized from or attributable
to any security interest of the Holders of the Securities in property or
assets of such Subsidiary Guarantor), whether in cash, property or
securities, shall be received by the Holders of the Securities (or their
representative or representatives or the Trustee under this Indenture)
before all Guarantor Senior Indebtedness of such Subsidiary Guarantor shall
have been paid in full, or provision made for such payment in accordance
with the terms of the Guarantor Senior Indebtedness of such Subsidiary
Guarantor, except as provided in sub-
B-7
clauses (1) and (2) of the proviso to clause (i) above, such payment or
distribution shall be held in trust for the benefit of, and shall be paid
over or delivered to, the holders of such Guarantor Senior Indebtedness of
such Subsidiary Guarantor (or their representative or representatives or to
the trustee or trustees under any indenture pursuant to which any
instruments evidencing any of such Guarantor Senior Indebtedness of such
Subsidiary Guarantor shall have been issued), as their respective interests
may appear under said clauses (i), (ii) and (iii), for application to the
payment of all such Guarantor Senior Indebtedness of such Subsidiary
Guarantor remaining unpaid to the extent necessary to pay such Guarantor
Senior Indebtedness of such Subsidiary Guarantor in full in accordance with
its terms, after giving effect to any concurrent payment or distribution to
the holders of such Guarantor Senior Indebtedness of such Subsidiary
Guarantor.
SECTION 12.7 Subrogation.
-----------
Subject to the payment in full of all Guarantor Senior Indebtedness,
holders of a Subsidiary Guarantee shall be subrogated to the rights of the
holders of Guarantor Senior Indebtedness of such Subsidiary Guarantor to receive
payments or distributions of cash, property or securities of such Subsidiary
Guarantor applicable to Guarantor Senior Indebtedness of such Subsidiary
Guarantor until all amounts owing on the Securities pursuant to such Subsidiary
Guarantor's Subsidiary Guarantee shall be paid in full, and as between such
Subsidiary Guarantor, its creditors other than holders of such Guarantor Senior
Indebtedness, and holders of such Subsidiary Guarantee, no such payment or
distribution made to the holders of such Guarantor Senior Indebtedness by virtue
of this Article XII which otherwise would have been made to such holders shall
be deemed to be a payment by such Subsidiary Guarantor on account of such
Guarantor Senior Indebtedness, it being understood that the provisions of this
Article XII are and are intended solely for the purpose of defining the relative
rights of the holders of such Subsidiary Guarantee, on the one hand, and the
holders of Guarantor Senior Indebtedness, on the other hand.
SECTION 12.8 Relative Rights.
---------------
Nothing contained in this Article XII or elsewhere in this Indenture
or in the Securities or this Subsidiary Guarantee is intended to or shall
impair, as between the Subsidiary Guarantor, its creditors other than the
holders of its Guarantor Senior Indebtedness, and the holders of its Subsidiary
Guarantee, the obligation of such Subsidiary Guarantor, which is absolute and
unconditional, to pay to the holders of the Securities pursuant to its
Subsidiary Guarantee the principal of and interest on the Securities as and when
the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the holders of its Subsidiary
Guarantee and creditors of such Subsidiary Guarantor other than the holders of
its Guarantor Senior Indebtedness, nor shall anything herein or therein prevent
the Trustee or any holder of its Subsidiary Guarantee
B-8
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article XII of
the holders of Guarantor Senior Indebtedness to receive cash, property or
securities otherwise payable or deliverable to the Securityholders.
Upon payment or distribution of assets of such Subsidiary Guarantor
referred to in this Article XII, the Trustee and the holders of the Securities
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which any such dissolution, winding up, liquidation or
reorganization proceeding affecting the affairs of such Subsidiary Guarantor is
pending or upon a certificate of the trustee in bankruptcy, receiver, assignee
for the benefit of creditors, liquidating trustee, or agent or other person
making any payment or distribution, to the Trustee or to the holders of its
Subsidiary Guarantee for the purpose of ascertaining the persons entitled to
participate in such payment or distribution, the holders of its Guarantor Senior
Indebtedness and other indebtedness of such Subsidiary Guarantor, the amount
thereof or payable thereon, the amount paid or distributed thereon and all other
facts pertinent thereto or to this Article XII.
Nothing contained in this Article or elsewhere in this Indenture, or
in any of the Securities or this Subsidiary Guarantee, shall affect the
obligations of such Subsidiary Guarantor to make, or prevent such Subsidiary
Guarantor from making, payment of the principal of or interest on the Securities
pursuant to its Subsidiary Guarantee in accordance with the provisions hereof
and thereof, except as otherwise provided in this Article XII.
SECTION 12.9 Trustee to Effectuate Subordination.
-----------------------------------
Each holder of a Subsidiary Guarantee, by his acceptance thereof,
authorizes and directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article XII and appoints the Trustee his attorney-in-fact for any and all such
purposes.
SECTION 12.10 Trustee Not Fiduciary for Holders
of Guarantor Senior Indebtedness.
---------------------------------
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Guarantor Senior Indebtedness and shall not be liable to any such
holders if it shall mistakenly pay over or distribute to holders of a Subsidiary
Guarantee or any Subsidiary Guarantor or any other person moneys or assets to
which any holders of Guarantor Senior Indebtedness shall be entitled by virtue
of this Article XII or otherwise.
SECTION 12.11 Notice By Subsidiary Guarantor.
------------------------------
The Subsidiary Guarantor shall give prompt written notice to the
Trustee of any fact known to such Subsidiary Guarantor that would prohibit the
making of any pay-
B-9
ment of moneys to or by the Trustee pursuant to this Article. Subject to the
provisions of Sections 7.1 and 7.5 but notwithstanding any other provisions of
this Indenture, the Trustee and any Paying Agent shall not be charged with
knowledge of the existence of any facts that would prohibit the making of any
payment of moneys to or by the Trustee or such Paying Agent, or the taking of
any other action by the Trustee or such Paying Agent, unless and until the
Trustee or such Paying Agent shall have received written notice thereof from
such Subsidiary Guarantor at least three Business Days prior to the making of
any such payment, the Securityholders, the holders of any Guarantor Senior
Indebtedness or the representative of any such holders.
SECTION 12.12 Rights of Trustee.
-----------------
The Trustee shall be entitled to all the rights set forth in this
Article XII with respect to any Guarantor Senior Indebtedness of such Subsidiary
Guarantor by the time held by the Trustee, to the same extent as any other
holder of Guarantor Senior Indebtedness.
SECTION 12.13 Subsidiary Guarantor May Not
Impair Subordination.
---------------------
No right of any present or future holder of any Guarantor Senior
Indebtedness of such Subsidiary Guarantor to enforce the subordination herein
shall at any time or in any way be prejudiced or impaired by any act or failure
to act on the part of such Subsidiary Guarantor or by any noncompliance by such
Subsidiary Guarantor with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof any such holder may have or be otherwise
charged with.
SECTION 12.14 Rights of Paying Agent.
----------------------
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context shall require
otherwise) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article XII in addition to or in place of the Trustee; provided
that Sections 12.11 and 12.12 shall not apply to such Subsidiary Guarantor if it
acts as Paying Agent.
B-10
EXHIBIT C
GUARANTEE
---------
For value received, the undersigned hereby unconditionally guarantees
to the Holder of this Security the payments of principal of, premium, if any,
and interest on this Security in the amounts and at the time when due and
interest on the overdue principal, premium, if any, and interest, if any, of
this Security, if lawful, and the payment or performance of all other
obligations of the Company under the Indenture or the Securities, to the Holder
of this Security and the Trustee, all in accordance with and subject to the
terms and limitations of this Security, Article XI of the Indenture and this
Subsidiary Guarantee. This Subsidiary Guarantee will become effective in
accordance with Article XI of the Indenture and its terms shall be evidenced
therein. The validity and enforceability of any Subsidiary Guarantee shall not
be affected by the fact that it is not affixed to any particular Security.
The obligations of the undersigned to the Holders of Securities and to
the Trustee pursuant to the Subsidiary 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 Subsidiary Guarantee and all of the other
provisions of the Indenture to which this Subsidiary Guarantee relates. The
Indebtedness evidenced by this Subsidiary Guarantee is, to the extent and in the
manner provided in the Indenture, subordinate and subject in right of payment to
the prior payment in full in cash or cash equivalents of all Guarantor Senior
Indebtedness as defined in the Indenture, and this Subsidiary Guarantee is
issued subject to such provisions. Each Holder of a Security, 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 to 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 that such subordination provisions shall cease to affect
amounts deposited in accordance with the defeasance provisions of the Indenture
upon the terms and conditions set forth therein.
This Subsidiary Guarantee is subject to release upon the terms set
forth in the Indenture.
[NAME OF GUARANTOR]
By:______________________
Name:
Title:
EXHIBIT D
FORM OF CERTIFICATE OF TRANSFER
Navistar International Corporation
000 Xxxxx Xxxxxxxxx Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention:
[Name and Address of Registrar]
Re: 8% Senior Subordinated Notes due 2008
Reference is hereby made to the Indenture, dated as of February 4,
1998 (the "Indenture"), between Navistar International Corporation (the
"Issuer") and Xxxxxx Trust and Savings Bank, as trustee. Capitalized terms used
but not defined herein shall have the meanings given to them in the Indenture.
________________, (the "Transferor") owns and proposes to transfer the
Security[s] specified in Annex A hereto in the principal amount of $___ in such
Security[s] (the "Transfer"), to ________ (the "Transferee"), as further
specified in Annex A hereto. In the event that Transferor holds Physical
Securities, this Certificate is accompanied by one or more certificates
aggregating at least the principal amount of Securities proposed to be
Transferred. In connection with the Transfer, the Transferor hereby certifies
that:
1. [_] CHECK IF TRANSFEREE WILL TAKE AN INTEREST IN THE 144A GLOBAL SECURITY.
---------------------------------------------------------------------
The Transfer is being effected pursuant to and in accordance with Rule 144A
under the United States Securities Act of 1933, as amended (the "Securities
Act"), and, accordingly, the Transferor hereby further certifies that the
Securities are being transferred to a Person that the Transferor reasonably
believes is purchasing the Securities for its own account, or for one or more
accounts with respect to which such Person exercises sole investment discretion,
and such Person and each such account is a "qualified institutional buyer"
within the meaning of Rule 144A in a transaction meeting the requirements of
Rule 144A and such Transfer is in compliance with any applicable blue sky
securities laws of any state of the United States. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the transferred
Security will be subject to the restrictions on transfer enumerated in the
Securities Act Legend and in the Indenture and the Securities Act.
2. [_] CHECK IF TRANSFEREE WILL TAKE AN INTEREST IN THE REGULATION S GLOBAL
--------------------------------------------------------------------
SECURITY PURSUANT TO REGULATION S. The Transfer is being effected pursuant to
---------------------------------
and in accordance with Rule 904 under the Securities Act and, accordingly, the
Transferor hereby fur-
D-1
ther certifies that (i) the Transfer is not being made to a person in the United
States and (x) at the time the buy order was originated, the Transferee was
outside the United States or such Transferor and any Person acting on its behalf
reasonably believed and believes that the Transferee was outside the United
States or (y) the transaction was executed in, on or through the facilities of a
designated offshore securities market and neither such Transferor nor any Person
acting on its behalf knows that the transaction was prearranged with a buyer in
the United States, (ii) no directed selling efforts have been made in
contravention of the requirements of Rule 904(b) of Regulation S under the
Securities Act and (iii) the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities Act. Upon consummation of
the proposed transfer in accordance with the terms of the Indenture, the
Security will be subject to the restrictions on Transfer enumerated in the
Securities Act Legend printed on the Regulation S Global Security and in the
Indenture and the Securities Act.
3. [_] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A RESTRICTED
-------------------------------------------------------------------
PHYSICAL SECURITY PURSUANT TO RULE 144A OR REGULATION S. One or more of the
-------------------------------------------------------
events specified in Section 2.6(a) of the Indenture have occurred and the
Transfer is being effected in compliance with the transfer restrictions
applicable to Securities bearing the Securities Act Legend and pursuant to and
in accordance with the Securities Act, and accordingly the Transferor hereby
further certifies that (check one):
(a) [_] such Transfer is being effected pursuant to and in accordance
with Rule 144A under the Securities Act and the Transferor certifies to the
effect set forth in paragraph 1 above; or
(b) [_] such Transfer is being effected pursuant to and in accordance
with Rule 904 under the Securities Act and the Transferor certifies to the
effect set forth in paragraph 2 above.
4. [_] CHECK IF TRANSFEREE WILL TAKE AN INTEREST IN THE UNRESTRICTED GLOBAL
--------------------------------------------------------------------
SECURITY. The Transfer is being effected pursuant to and in accordance with
--------
Rule 144 under the Securities Act and in compliance with the transfer
restrictions contained in the Indenture, and the restrictions on transfer
contained in the Indenture and the Securities Act Legend are not required in
order to maintain compliance with the Securities Act. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the transfer
Securities will no longer be subject to the restrictions on transfer enumerated
in the Securities Act Legend and in the Indenture and the Securities Act.
5. [_] CHECK IF TRANSFEREE WILL TAKE AN INTEREST IN THE PHYSICAL SECURITY
------------------------------------------------------------------
THAT DOES NOT BEAR THE SECURITIES ACT LEGEND One or more of the events
--------------------------------------------
specified in Section 2.6(a) of the Indenture have occurred and the Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer re-
D-2
strictions contained in the Indenture, and the restrictions on transfer
contained in the Indenture and the Securities Act Legend are not required in
order to maintain compliance with the Securities Act. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the transferred
Securities will no longer be subject to the restrictions on transfer enumerated
in the Securities Act Legend and in the Indenture and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Guarantors.
_________________________________________
[Insert Name of Transferor]
By:______________________________________
Name:_________________________________
Title:________________________________
Dated:____________
D-3
FORM OF ANNEX A TO CERTIFICATE
OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [_] Interest in the
(i) [_] 144A Global Security (CUSIP _____), or
(ii) [_] Regulation S Global Security (CINS _____).
(b) [_] Physical Security.
2. That the Transferee will hold:
[CHECK ONE]
(a) [_] Interests in the:
(i) [_] 144A Global Security (CUSIP _____), or
(ii) [_] Regulation S Global Security (CINS _____), or
(iii) [_] Unrestricted Global Security (CUSIP _____); or
(b) [_] Physical Securities that bear the Securities Act
Legend;
(c) [_] Physical Securities that do not bear the
Securities Act Legend;
in accordance with the terms of the Indenture.
D-4
EXHIBIT E
FORM OF CERTIFICATE OF EXCHANGE
Navistar International Corporation
000 Xxxxx Xxxxxxxxx Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention:
[Name and Address of Registrar]
Re: 8% Senior Subordinated Notes due 2008
(CUSIP _______________)
Reference is hereby made to the Indenture, dated as of February 4,
1998 (the "Indenture"), between Navistar International Corporation (the
"Issuer") and Xxxxxx Trust and Savings Bank, as trustee. Capitalized terms used
but not defined herein shall have the meanings given to them in the Indenture.
__________, (the "Holder") owns and proposes to exchange the
Security[s] specified herein, in the principal amount of $___ in such
Security[s] (the "Exchange"). In the event Holder holds Physical Securities,
this Certificate is accompanied by one or more certificates aggregating at least
the principal amount of Securities proposed to be Exchanged. In connection with
the Exchange, the Holder hereby certifies that:
1. EXCHANGE OF RESTRICTED PHYSICAL SECURITIES OR INTERESTS IN THE INITIAL
GLOBAL SECURITY FOR PHYSICAL SECURITIES THAT DO NOT BEAR THE SECURITIES ACT
LEGEND OR UNRESTRICTED GLOBAL SECURITIES
(a) [ ] CHECK IF EXCHANGE IS FROM INITIAL GLOBAL SECURITIES TO THE
----------------------------------------------------------
UNRESTRICTED GLOBAL SECURITY. In connection with the Exchange of the Holder's
----------------------------
Initial Global Security to the Unrestricted Global Security in an equal
principal amount, the Holder hereby certifies (i) the Unrestricted Global
Securities are being acquired for the Holder's own account without transfer,
(ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to the Initial Global Securities and pursuant to and in
accordance with the Securities Act of 1933, as amended (the "Securities Act")
and (iii) the restrictions on transfer contained in the Indenture and the
Securities Act Legend are not required in order to maintain compliance with the
Securities Act.
(B) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED PHYSICAL SECURITIES TO AN
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INTEREST IN THE UNRESTRICTED GLOBAL SECURITY. In connection with the Holder's
--------------------------------------------
Exchange of
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Restricted Physical Securities for Interest in the Unrestricted Global Security,
(i) the Interest in the Unrestricted Global Security are being acquired for the
Holder's own account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to Restricted Physical
Securities and pursuant to and in accordance with the Securities Act and (iii)
the restrictions on transfer contained in the Indenture and the Securities Act
Legend are not required in order to maintain compliance with the Securities Act.
(C) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED PHYSICAL SECURITIES TO
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PHYSICAL SECURITIES THAT DO NOT BEAR THE SECURITIES ACT LEGEND. In connection
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with the Holder's Exchange of a Restricted Physical Security for Physical
Securities that do not bear the Securities Act Legend, the Holder hereby
certifies (i) the Physical Securities that do not bear the Securities Act Legend
are being acquired for the Holder's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Physical Securities and pursuant to and in accordance
with the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Securities Act Legend are not required in order to maintain
compliance with the Securities Act and (iv) one or more of the events specified
in Section 2.6(a) of the Indenture have occurred.
2. [ ] CHECK IF EXCHANGE IS FROM RESTRICTED PHYSICAL SECURITIES TO INTERESTS
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IN AN INITIAL GLOBAL SECURITY. In connection with the Exchange of the Holder's
-----------------------------
Restricted Physical Security for interests in the Initial Global Security in the
[CHECK ONE] o 144A Global Security, o Regulation S Global Security, with an
equal principal amount, (i) the interests in the Initial Global Security are
being acquired for the Holder's own account without transfer and (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Physical Security and pursuant to and in accordance
with the Securities Act. Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the Initial Global Security issued
will be subject to the restrictions on transfer enumerated in the Securities Act
Legend printed on the Initial Global Securities and in the Indenture and the
Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Guarantors.
__________________________________________
[Insert Name of Holder]
By: ______________________________________
Name:
Title:
Dated:___________________
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