Exhibit 4.1
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SCIENTIFIC GAMES CORPORATION
as Issuer
THE SUBSIDIARY GUARANTORS PARTY HERETO
as Guarantors
and
XXXXX FARGO BANK, NATIONAL ASSOCIATION
as Trustee
6 1/4% Senior Subordinated Notes due 2012
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INDENTURE
Dated as of December 23, 2004
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CROSS-REFERENCE TABLE
TIA Indenture
Section Section
------- -------
310(a)(1) .............................. 7.10
(a)(2) .............................. 7.10
(a)(3) .............................. N.A.
(a)(4) .............................. N.A.
(a)(5) .............................. 7.08; 7.10
(b) .............................. 7.08; 7.10; 13.02
(c) .............................. N.A.
311(a) .............................. 7.11
(b) .............................. 7.11
(c) .............................. N.A.
312(a) .............................. 2.05
(b) .............................. 13.03
(c) .............................. 13.03
313(a) .............................. 7.06
(b)(1) .............................. N.A.
(b)(2) .............................. 7.06
(c) .............................. 7.06; 13.02
(d) .............................. 7.06
314(a) .............................. 4.08; 4.10; 13.02
(b) .............................. N.A.
(c)(1) .............................. 7.02; 13.04
(c)(2) .............................. 7.02; 13.04
(c)(3) .............................. N.A.
(d) .............................. N.A.
(e) .............................. 13.05
(f) .............................. N.A.
315(a) .............................. 7.01(b)
(b) .............................. 7.05; 13.02
(c) .............................. 7.01(a)
(d) .............................. 7.01(c)
(e) .............................. 6.11
316(a)(last .............................. 2.09
sentence)
(a)(1)(A) .............................. 6.05
(a)(1)(B) .............................. 6.04
(a)(2) .............................. N.A.
(b) .............................. 6.07
(c) .............................. 9.04
317(a)(1) .............................. 6.08
(a)(2) .............................. 6.09
(b) .............................. 2.04
318(a) .............................. 13.01
(c) .............................. 13.01
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N.A. means Not Applicable.
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
Table of Contents
Page
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ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions...................................................1
SECTION 1.02. Incorporation by Reference of TIA............................25
SECTION 1.03. Rules of Construction........................................25
ARTICLE 2
The Securities
SECTION 2.01. Form and Dating..............................................26
SECTION 2.02. Execution and Authentication.................................26
SECTION 2.03. Registrar and Paying Agent...................................27
SECTION 2.04. Paying Agent to Hold Assets in Trust.........................27
SECTION 2.05. Securityholder Lists.........................................27
SECTION 2.06. Transfer and Exchange........................................28
SECTION 2.07. Replacement Securities.......................................28
SECTION 2.08. Outstanding Securities.......................................28
SECTION 2.09. Treasury Securities..........................................28
SECTION 2.10. Temporary Securities.........................................29
SECTION 2.11. Cancellation.................................................29
SECTION 2.12. Defaulted Interest...........................................29
SECTION 2.13. CUSIP Number.................................................30
SECTION 2.14. Deposit of Moneys............................................30
SECTION 2.15. Issuance of Additional Securities............................30
ARTICLE 3
Redemption
SECTION 3.01. Notices to Trustee...........................................31
SECTION 3.02. Selection of Securities to be Redeemed.......................31
SECTION 3.03. Notice of Optional Redemption................................31
SECTION 3.04. Effect of Notice of Redemption...............................32
SECTION 3.05. Deposit of Redemption Price..................................32
SECTION 3.06. Securities Redeemed in Part..................................33
i
ARTICLE 4
Covenants
SECTION 4.01. Payment of Securities........................................33
SECTION 4.02. Maintenance of Office or Agency..............................33
SECTION 4.03. Limitation on Restricted Payments............................33
SECTION 4.04. Limitation on Incurrence of Additional Indebtedness..........37
SECTION 4.05. Corporate Existence..........................................37
SECTION 4.06. Payment of Taxes and Other Claims............................37
SECTION 4.07. Maintenance of Properties and Insurance......................37
SECTION 4.08. Compliance Certificate; Notice of Default....................38
SECTION 4.09. Compliance with Laws.........................................39
SECTION 4.10. Commission Reports...........................................39
SECTION 4.11. Waiver of Stay, Extension or Usury Laws......................39
SECTION 4.12. Limitations on Transactions with Affiliates..................40
SECTION 4.13. Limitation on Dividend and Other Payment
Restrictions Affecting Subsidiaries..........................41
SECTION 4.14. Limitation on Liens..........................................43
SECTION 4.15. Change of Control............................................43
SECTION 4.16. Limitation on Asset Sales....................................45
SECTION 4.17. Limitation on Preferred Stock of Restricted Subsidiaries.....48
SECTION 4.18. Limitation on Sale and Leaseback Transactions................49
SECTION 4.19. Limitation of Guarantees by Restricted Subsidiaries..........49
ARTICLE 5
Successor Corporation
SECTION 5.01. Merger, Consolidation and Sale of Assets.....................50
SECTION 5.02. Successor Substituted........................................52
ARTICLE 6
Default and Remedies
SECTION 6.01. Events of Default............................................52
SECTION 6.02. Acceleration.................................................54
SECTION 6.03. Other Remedies...............................................54
SECTION 6.04. Waiver of Past Defaults......................................54
SECTION 6.05. Control by Majority..........................................55
SECTION 6.06. Limitation on Suits..........................................55
SECTION 6.07. Rights of Holders to Receive Payment.........................55
SECTION 6.08. Collection Suit by Trustee...................................56
SECTION 6.09. Trustee May File Proofs of Claim.............................56
SECTION 6.10. Priorities...................................................56
SECTION 6.11. Undertaking for Costs........................................57
SECTION 6.12. Restoration of Rights and Remedies...........................57
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ARTICLE 7
Trustee
SECTION 7.01. Duties of Trustee............................................57
SECTION 7.02. Rights of Trustee............................................58
SECTION 7.03. Individual Rights of Trustee.................................60
SECTION 7.04. Trustee's Disclaimer.........................................60
SECTION 7.05. Notice of Default............................................60
SECTION 7.06. Reports by Trustee to Holders................................60
SECTION 7.07. Compensation and Indemnity...................................60
SECTION 7.08. Replacement of Trustee.......................................61
SECTION 7.09. Successor Trustee by Merger, etc.............................62
SECTION 7.10. Eligibility; Disqualification................................63
SECTION 7.11. Preferential Collection of Claims Against Company............63
ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.01. Termination of the Company's Obligations.....................63
SECTION 8.02. Legal Defeasance and Covenant Defeasance.....................64
SECTION 8.03. Conditions to Legal Defeasance or Covenant Defeasance........65
SECTION 8.04. Application of Trust Money...................................66
SECTION 8.05. Repayment to the Company.....................................67
SECTION 8.06. Reinstatement................................................67
ARTICLE 9
Amendments, Supplements and Waivers
SECTION 9.01. Without Consent of Holders...................................67
SECTION 9.02. With Consent of Holders......................................68
SECTION 9.03. Compliance with TIA..........................................69
SECTION 9.04. Revocation and Effect of Consents............................69
SECTION 9.05. Notation on or Exchange of Securities........................69
SECTION 9.06. Trustee to Sign Amendments, etc..............................70
iii
ARTICLE 10
Subordination of Securities
SECTION 10.01. Securities Subordinated to Senior Debt.......................70
SECTION 10.02. No Payment on Securities in Certain Circumstances............70
SECTION 10.03. Payment Over of Proceeds upon Dissolution, etc...............71
SECTION 10.04. Subrogation..................................................72
SECTION 10.05. Obligations of Company Unconditional.........................73
SECTION 10.06. Notice to Trustee............................................73
SECTION 10.07. Reliance on Judicial Order or Certificate of
Liquidating Agent............................................74
SECTION 10.08. Trustee's Relation to Senior Debt............................74
SECTION 10.09. Subordination Rights Not Impaired by Acts or
Omissions of the Company or Holders of Senior Debt...........75
SECTION 10.10. Securityholders Authorize Trustee to Effectuate
Subordination of Securities..................................75
SECTION 10.11. This Article Not to Prevent Events of Default................75
SECTION 10.12. Trustee's Compensation Not Prejudiced........................75
SECTION 10.13. No Waiver of Subordination Provisions........................75
SECTION 10.14. Subordination Provisions Not Applicable to Assets
Held in Trust for Securityholders; Payments May be
Paid Prior to Dissolution....................................75
SECTION 10.15. Acceleration of Securities...................................76
ARTICLE 11
Guarantee of Securities
SECTION 11.01. Unconditional Guarantee......................................76
SECTION 11.02. Limitations on Guarantees....................................77
SECTION 11.03. Execution and Delivery.......................................77
SECTION 11.04. Release of a Guarantor.......................................78
SECTION 11.05. Waiver of Subrogation........................................79
SECTION 11.06. Obligations Continuing.......................................79
SECTION 11.07. Obligations Reinstated.......................................79
SECTION 11.08. Waiver.......................................................79
SECTION 11.09. No Obligation to Take Action Against the Company.............80
SECTION 11.10. Default and Enforcement......................................80
SECTION 11.11. Amendment, Etc...............................................80
SECTION 11.12. Acknowledgment...............................................80
SECTION 11.13. Costs and Expenses...........................................80
SECTION 11.14. No Waiver; Cumulative Remedies...............................80
SECTION 11.15. Successors and Assigns.......................................80
SECTION 11.16. Contribution.................................................80
SECTION 11.17. Future Guarantors............................................81
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ARTICLE 12
Subordination of Guarantee
SECTION 12.01. Guarantee Obligations Subordinated to Guarantor
Senior Debt..................................................81
SECTION 12.02. No Payment on Guarantee in Certain Circumstances.............81
SECTION 12.03. Payment Over of Proceeds upon Dissolution, etc...............82
SECTION 12.04. Subrogation..................................................83
SECTION 12.05. Obligations of Guarantor Unconditional.......................84
SECTION 12.06. Notice to Trustee............................................84
SECTION 12.07. Reliance on Judicial Order or Certificate of
Liquidating Agent............................................85
SECTION 12.08. Trustee's Relation to Guarantor Senior Debt..................85
SECTION 12.09. Subordination Rights Not Impaired by Acts or
Omissions of the Guarantors or Holders of
Guarantor Senior Debt........................................86
SECTION 12.10. Securityholders Authorize Trustee to Effectuate
Subordination of Guarantees..................................86
SECTION 12.11. This Article Not to Prevent Events of Default................86
SECTION 12.12. Trustee's Compensation Not Prejudiced........................86
SECTION 12.13. No Waiver of Guarantee Subordination Provisions..............86
SECTION 12.14. Payments May be Paid Prior to Dissolution....................87
ARTICLE 13
Miscellaneous
SECTION 13.01. TIA Controls.................................................87
SECTION 13.02. Notices......................................................87
SECTION 13.03. Communications by Holders with Other Holders.................88
SECTION 13.04. Certificate and Opinion as to Conditions Precedent...........88
SECTION 13.05. Statements Required in Certificate or Opinion................89
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar....................89
SECTION 13.07. Legal Holidays...............................................89
SECTION 13.08. Governing Law................................................89
SECTION 13.09. No Adverse Interpretation of Other Agreements................90
SECTION 13.10. No Recourse Against Others...................................90
SECTION 13.11. Successors...................................................90
SECTION 13.12. Duplicate Originals..........................................90
SECTION 13.13. Severability.................................................90
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APPENDIX A Provisions Relating to Initial Securities,
Additional Securities,
and Exchange Securities.....................................A-1
EXHIBIT 1 Form of Initial Security....................................B-1
EXHIBIT 2 Form of Exchange Security...................................C-1
EXHIBIT 3 Form of Transferee Letter of Representation.................D-1
Note: This Table of Contents shall not, for any purpose, be deemed to be part of
the Indenture.
vi
INDENTURE, dated as of December 23, 2004, among
Scientific Games Corporation, a Delaware corporation (the
"Company"), the Guarantors from time to time party hereto and
Xxxxx Fargo Bank, National Association, as Trustee (the
"Trustee").
Each party agrees as follows for the benefit of the other parties
and for the equal and ratable benefit of the Holders of the Company's Initial
Securities and Exchange Securities (each as defined in Appendix A hereto, and
collectively, the "Securities").
ARTICLE 1
Definitions and Incorporation by Reference
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SECTION 1.01. Definitions.
"Acquired Indebtedness" means Indebtedness of a Person or any of its
Restricted Subsidiaries existing at the time such Person becomes a Restricted
Subsidiary of the Company or at the time it merges or consolidates with the
Company or any of its Subsidiaries or is assumed in connection with the
acquisition of assets from such Person and not incurred by such Person in
connection with, or in anticipation or contemplation of, such Person becoming a
Restricted Subsidiary of the Company or such acquisition, merger or
consolidation.
"Additional Securities" means Securities issued under this Indenture
after the Issue Date and in compliance with Sections 2.15 and 4.04, it being
understood that any Securities issued in exchange for or replacement of any
Initial Security issued on the Issue Date shall not be an Additional Security,
including any such Securities issued pursuant to a Registration Rights
Agreement.
"Affiliate" means, with respect to any Person, any Person who
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such Person; provided, however,
that with respect to the Company the term Affiliate shall not include the
Company or any Subsidiary of the Company so long as no Affiliate of the Company
has any direct or indirect interest therein, except through the Company or its
Subsidiaries. The term "control" means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities, by contract or
otherwise.
"Affiliate Transaction" has the meaning set forth in Section 4.12.
"Agent" means the Registrar or any Paying Agent.
"Asset Acquisition" means
(a) an Investment by the Company or any Restricted Subsidiary of the
Company in any other Person pursuant to which such Person shall become a
Restricted Subsidiary of the Company or any Restricted Subsidiary of the
Company,
or shall be merged with or into the Company or any Restricted Subsidiary
of the Company; or
(b) the acquisition by the Company or any Restricted Subsidiary of
the Company of the assets of any Person which constitute all or
substantially all of the assets of such Person, any division or line of
business of such Person or any other properties or assets of such Person
other than in the ordinary course of business.
"Asset Sale" means any direct or indirect sale, conveyance,
transfer, lease (other than operating leases entered into in the ordinary course
of business), assignment or other transfer for value by the Company or any of
its Restricted Subsidiaries, including any Sale and Leaseback Transaction that
does not give rise to a Capitalized Lease Obligation, to any Person other than
the Company or a Restricted Subsidiary of the Company of
(a) any Capital Stock of any Restricted Subsidiary of the Company;
or
(b) any other property or assets, other than cash or Cash
Equivalents, of the Company or any Restricted Subsidiary of the Company
other than in the ordinary course of business;
provided, however, that Asset Sales shall not include
(1) a transaction or series of related transactions for which the
Company or its Restricted Subsidiaries receive aggregate consideration,
exclusive of indemnities, of less than $2.5 million;
(2) the sale of accounts receivable;
(3) the sale, lease, conveyance, disposition or other transfer of
assets in the ordinary course of business;
(4) the sale, lease, conveyance, disposition or other transfer of
all or substantially all of the assets of the Company and its Restricted
Subsidiaries or any Guarantor as permitted under Section 5.01;
(5) sales, transfers or other dispositions of assets resulting from
the creation, incurrence or assumption of (but not any foreclosure with
respect to) any Lien not prohibited by Section 4.14;
(6) sales, transfers or other dispositions of assets in a
transaction constituting a Permitted Investment or a Restricted Payment
permitted by Section 4.03; and
(7) the grant of licenses to third parties in respect of
intellectual property in the ordinary course of business of the Company or
any of its Restricted Subsidiaries.
"Attributable Debt" in respect of a Sale and Leaseback Transaction
consummated subsequent to the Issue Date means, at the time of determination,
the present value, discounted at the rate of interest implicit in such
transaction, determined in accordance
2
with GAAP, of the obligation of the lessee for net rental payments during the
remaining term of the lease included in such Sale and Leaseback Transaction,
including any period for which such lease has been extended or may, at the
option of the lessor, be extended.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal,
state or foreign law for the relief of debtors.
"Board of Directors" means, as to any Person, the board of directors
of such Person (or in the case of a limited liability company, the managing
member or members of any controlling committee or the managing members or board
of directors thereof, or in the case of a partnership, the board of directors of
the general partner of the partnership) or any duly authorized committee
thereof.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means any day other than a Saturday, Sunday or any
other day on which banking institutions in The City of New York or the city in
which the Corporate Trust Office is located are required or authorized by law or
other governmental action to be closed.
"Capital Stock" means (1) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents,
however designated, of corporate stock, including each class of common stock and
Preferred Stock of such Person and (2) with respect to any Person that is not a
corporation, any and all partnership or other equity interests of such other
Person.
"Capitalized Lease Obligations" means, as to any Person, the
obligations of such Person under a lease that are required to be classified and
accounted for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with GAAP.
"Cash Equivalents" means
(1) marketable direct obligations issued by, or unconditionally
guaranteed by, the United States Government or issued by any agency
thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof;
(2) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any
public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either S&P or Moody's;
3
(3) commercial paper maturing no more than one year from the date of
creation thereof and, at the time of acquisition, having a rating of at
least A-1 from S&P or at least P-1 from Moody's;
(4) certificates of deposit or bankers' acceptances (or, with
respect to foreign banks, similar instruments) maturing within one year
from the date of acquisition thereof issued by any bank organized under
the laws of the United States of America or any state thereof or the
District of Columbia or any U.S. branch of a foreign bank having at the
date of acquisition thereof combined capital and surplus of not less than
$250.0 million;
(5) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clause (1) above
entered into with any bank meeting the qualifications specified in clause
(4) above; and
(6) investments in money market funds which invest substantially all
their assets in securities of the types described in clauses (1) through
(5) above.
"Change of Control" means the occurrence of one or more of the
following events:
(1) any sale, lease, exchange or other transfer, in one transaction
or a series of related transactions, of all or substantially all of the
assets of the Company to any Person or group of related Persons for
purposes of Section 13(d) of the Exchange Act (a "Group") (whether or not
otherwise in compliance with the provisions of this Indenture);
(2) the approval by the holders of Capital Stock of the Company of
any plan for the liquidation or dissolution of the Company (whether or not
otherwise in compliance with the provisions of this Indenture);
(3) any Person or Group shall become the owner, directly or
indirectly, beneficially, of shares representing more than 50% of the
aggregate voting power represented by the issued and outstanding Capital
Stock of the Company entitled under ordinary circumstances to elect a
majority of the directors of the Company; or
(4) the replacement of a majority of the Board of Directors of the
Company over a two-year period from the directors who constituted the
Board of Directors at the beginning of such period (other than individuals
designated to serve from time to time on the Board of Directors of the
Company pursuant to the Stockholders' Agreement, dated as of September 6,
2000, as amended or supplemented as of the Issue Date, among the Company
and certain of its stockholders), and such replacement shall not have been
approved by a vote of at least a majority of the Board of Directors then
still in office who either were members of the Board of Directors at the
beginning of such period or whose election as a member of the Board of
Directors was previously so approved.
4
"Change of Control Offer" has the meaning set forth in Section
4.15(c).
"Change of Control Payment Date" has the meaning set forth in
Section 4.15(c).
"Commission" means the Securities and Exchange Commission, or any
successor agency thereto with respect to the regulation or registration of
securities.
"Company" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture.
"Consolidated EBITDA" means, with respect to any Person, for any
period, the sum (without duplication) of
(1) Consolidated Net Income;
(2) to the extent Consolidated Net Income has been reduced thereby,
all losses from Asset Sales or abandonments or reserves relating thereto,
all items classified as extraordinary losses and all income taxes of such
Person and its Restricted Subsidiaries paid or accrued in accordance with
GAAP for such period (other than income taxes attributable to
extraordinary gains or losses);
(3) Consolidated Interest Expense; and
(4) Consolidated Non-Cash Charges.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to
any Person, the ratio of Consolidated EBITDA of such Person during the four full
fiscal quarters (the "Four Quarter Period") ending on or prior to the date of
the transaction giving rise to the need to calculate the Consolidated Fixed
Charge Coverage Ratio (the "Transaction Date") to Consolidated Fixed Charges of
such Person for the Four Quarter Period. In addition to and without limitation
of the foregoing, for purposes of this definition, "Consolidated EBITDA" and
"Consolidated Fixed Charges" shall be calculated after giving effect on a pro
forma basis for the period of such calculation to
(1) the incurrence or repayment of any Indebtedness of such Person
or any of its Restricted Subsidiaries (and the application of the proceeds
thereof) giving rise to the need to make such calculation and any
incurrence or repayment or retirement of other Indebtedness (and the
application of the proceeds thereof) at any time subsequent to the last
day of the Four Quarter Period and on or prior to the Transaction Date
(other than the incurrence or repayment of Indebtedness in the ordinary
course of business for working capital purposes pursuant to working
capital facilities), as if such incurrence or repayment, as the case may
be (and the application of the proceeds thereof), occurred on the first
day of the Four Quarter Period; and
(2) any Asset Sales or Asset Acquisitions (including, without
limitation, any Asset Acquisition giving rise to the need to make such
calculation as a result of such Person or one of its Restricted
Subsidiaries (including any Person who becomes a
5
Restricted Subsidiary as a result of the Asset Acquisition) incurring,
assuming or otherwise being liable for Acquired Indebtedness and also
including any Consolidated EBITDA (including any pro forma expense and
cost reductions calculated on a basis consistent with Regulation S-X under
the Securities Act) attributable to the assets which are the subject of
the Asset Acquisition or Asset Sale during the Four Quarter Period)
occurring during the Four Quarter Period or at any time subsequent to the
last day of the Four Quarter Period and on or prior to the Transaction
Date, as if such Asset Sale or Asset Acquisition (including the
incurrence, assumption or liability for any such Indebtedness or Acquired
Indebtedness) occurred on the first day of the Four Quarter Period.
If such Person or any of its Restricted Subsidiaries directly or
indirectly guarantees Indebtedness of a third Person, the preceding sentence
shall give effect to the incurrence of such guaranteed Indebtedness as if such
Person or any Restricted Subsidiary of such Person had directly incurred or
otherwise assumed such guaranteed Indebtedness. Furthermore, 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 outstanding Indebtedness determined on a fluctuating
basis as of the Transaction Date and which will continue to be so
determined thereafter shall be deemed to have accrued at a fixed rate per
annum equal to the rate of interest on such Indebtedness in effect on the
Transaction Date;
(2) if interest on any Indebtedness actually incurred on the
Transaction Date may optionally be determined at an interest rate based
upon a factor of a prime or similar rate, a eurocurrency interbank offered
rate, or other rates, then the interest rate in effect on the Transaction
Date will be deemed to have been in effect during the Four Quarter Period;
and
(3) notwithstanding clause (1) above, interest on Indebtedness
determined on a fluctuating basis, to the extent such interest is covered
by agreements relating to Interest Swap Obligations, shall be deemed to
accrue at the rate per annum resulting after giving effect to the
operation of such agreements.
"Consolidated Fixed Charges" means, with respect to any Person for
any period, the sum, without duplication, of
(1) Consolidated Interest Expense; plus
(2) the product of
(x) the amount of all dividend payments on any series of
Preferred Stock of such Person (other than dividends paid in
Qualified Capital Stock) paid, accrued or scheduled to be paid or
accrued during such period times
6
(y) a fraction, the numerator of which is one and the
denominator of which is one minus the then current effective
consolidated federal, state and local tax rate of such Person
expressed as a decimal.
"Consolidated Interest Expense" means, with respect to any Person
for any period, the sum of, without duplication,
(1) the aggregate of all cash and non-cash interest expense with
respect to all outstanding Indebtedness of such Person and its Restricted
Subsidiaries, including the net costs associated with Interest Swap
Obligations, capitalized interest, and imputed interest with respect to
Attributable Debt (but excluding (a) the write-off of deferred financing
costs and (b) the amortization of deferred financing charges), for such
period determined on a consolidated basis in conformity with GAAP; and
(2) the interest component of Capitalized Lease Obligations paid,
accrued and/or scheduled to be paid or accrued by such Person and its
Restricted Subsidiaries during such period as determined on a consolidated
basis in accordance with GAAP.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate net income (or loss) of such Person and its Restricted
Subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP; provided, however, that there shall be excluded therefrom
(a) after tax gains or losses from Asset Sales (without regard to
the $2.5 million threshold in clause (1) of the definition of Asset Sales)
or abandonments or reserves relating thereto;
(b) items classified as extraordinary gains or losses, and the
related tax effects according to GAAP;
(c) the net income (or loss) of any Person acquired in a pooling of
interests or similar transaction accrued prior to the date it becomes a
Subsidiary of such first Person or is merged or consolidated with it or
any Subsidiary;
(d) the net income of any Restricted Subsidiary to the extent that
the declaration of dividends or similar distributions by that Subsidiary
of that income is restricted by contract, operation of law or otherwise;
(e) the net loss of any Person, other than a Restricted Subsidiary
of the Company;
(f) the net income of any Person, other than a Restricted
Subsidiary, in which such Person has an interest, except to the extent of
cash dividends or distributions paid to such Person or a Restricted
Subsidiary of such Person;
(g) gains from retirement of debt; and
7
(h) amounts attributable to dividends paid in respect of Qualified
Capital Stock to the extent such dividends are paid in shares of Qualified
Capital Stock.
"Consolidated Non-Cash Charges" means, with respect to any Person
for any period, the aggregate depreciation, amortization and other non-cash
expenses of such Person and its Restricted Subsidiaries reducing Consolidated
Net Income of such Person and its Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP (excluding any such
charges constituting an extraordinary item or loss or any such charge which
requires an accrual of or a reserve for cash charges for any future period).
"Convertible Debentures" means the convertible debentures to be
issued by the Company on or about the Issue Date in an aggregate principal
amount of up to $275.0 million.
"Convertible Debentures Hedge and Warrant Option Transactions" means
the transactions in connection with the issuance of the Convertible Debentures
contemplated by (i) the letter agreements dated as of December 1, 2004, between
the Company and each of X.X. Xxxxxx Securities Inc., as agent for JPMorgan Chase
Bank, N.A., London Branch, and Bear, Xxxxxxx International Limited; (ii) the
ISDA confirmations entered into on or about the Issue Date between the Company
and each of X.X. Xxxxxx Securities Inc., as agent for JPMorgan Chase Bank, N.A.,
London Branch, and Bear, Xxxxxxx International Limited and the related deemed
2002 ISDA Master Agreements thereunder; and (iii) any other documents relating
to the matters referenced in clauses (i) or (ii), in the case of each of clauses
(i), (ii) and (iii), on the terms contemplated thereby as of the Issue Date, and
giving effect to any amendments or modifications thereto or substitutions or
replacements thereof on terms no less favorable to the Holders than the terms
contemplated on the Issue Date.
"Corporate Trust Office" means the principal office of the Trustee
where it conducts its corporate trust administrative functions, which office is
currently located at 000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, XX 00000, or such
other address as the Trustee may designate from time to time by notice to the
Holders and the Company.
"Covenant Defeasance" has the meaning set forth in Section 8.02(c).
"Currency Agreement" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement designed to protect the
Company or any Restricted Subsidiary against fluctuations in currency values.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means an event or condition the occurrence of which is, or
with the lapse of time or the giving of notice or both would be, an Event of
Default.
"Designated Guarantor Senior Debt" means, with respect to any
Guarantor, (1) any Indebtedness outstanding under the New Credit Agreement to
the extent guaranteed or otherwise incurred by such Guarantor and (2) any other
Guarantor Senior Debt permitted
8
under this Indenture the principal amount of which is $25.0 million or more and
that has been designated by the Company or such Guarantor as Designated
Guarantor Senior Debt in the instrument creating such Indebtedness.
"Designated Non-Cash Consideration" means the fair market value of
non-cash consideration received by the Company or one of its Restricted
Subsidiaries in connection with an Asset Sale that is so designated as
Designated Non-Cash Consideration pursuant to an Officers' Certificate executed
by the principal executive officer and the principal financial officer of the
Company or such Restricted Subsidiary.
"Designated Senior Debt" means (1) any Indebtedness outstanding
under the New Credit Agreement and (2) any other Senior Debt permitted under
this Indenture the principal amount of which is $25.0 million or more and that
has been designated by the Company as Designated Senior Debt in the instrument
creating such Indebtedness.
"Disqualified Capital Stock" means any Capital Stock which, by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable), or upon the happening of any event (other than an event
which would constitute a Change of Control), matures (excluding any maturity as
the result of an optional redemption by the issuer thereof) or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the sole option of the holder thereof (except, in each case, upon the
occurrence of a Change of Control), in whole or in part, on or prior to the
Final Maturity Date.
"Equity Offering" means any private or public offering of Qualified
Capital Stock of the Company.
"Event of Default" has the meaning set forth in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor statute or statutes thereto.
"Existing Credit Agreement" means the Amended and Restated Credit
Agreement, dated as of November 6, 2003, among the Company, the lenders party
thereto and The Bank of New York, as administrative agent.
"fair market value" or "fair value" means, with respect to any asset
or property, the price which could be negotiated in an arm's-length free market
transaction, for cash, between a willing seller and a willing buyer, neither of
whom is under pressure or compulsion to complete the transaction. Fair market
value shall be determined by the Board of Directors of the Company acting
reasonably and in good faith and shall be evidenced by a Board Resolution
delivered to the Trustee.
"Final Maturity Date" means December 15, 2012.
9
"Foreign Subsidiary" means any Restricted Subsidiary of the Company
that is not organized under the laws of the United States of America or any
State thereof or the District of Columbia.
"Funding Guarantor" has the meaning set forth in Section 11.16.
"GAAP" is defined to mean generally accepted accounting principles
in the United States of America as in effect as of the Issue Date, including,
without limitation, those set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as approved by
a significant segment of the accounting profession.
"Guarantee" has the meaning set forth in Section 11.01.
"Guarantor" means (i) each of Scientific Games Management
Corporation, Scientific Games Holdings Corp., Scientific Games (Greece),
Inc., Scientific Games Acquisition, Inc., Scientific Games Finance
Corporation, Scientific Games International, Inc., MDI Entertainment, LLC,
Scientific Games Royalty Corporation, Scientific Games Racing, LLC, Autotote
International, Inc., SG Racing, Inc., Autotote Enterprises, Inc., Autotote
Keno Corporation, Autotote Gaming, Inc., Autotote Dominicana Inc., Autotote
Interactive, Inc. and Scientific Games Online Entertainment Systems, Inc. and
(ii) each of the Company's Restricted Subsidiaries that in the future
executes a supplemental indenture pursuant to Section 11.17 in which such
Restricted Subsidiary agrees to be bound by the terms of this Indenture as a
Guarantor; provided that any Person constituting a Guarantor as described
above shall cease to constitute a Guarantor when its respective Guarantee is
released in accordance with the terms of this Indenture.
"Guarantor Payment Blockage Notice" has the meaning set forth in
Section 12.02.
"Guarantor Payment Blockage Period" has the meaning set forth in
Section 12.02.
"Guarantor Senior Debt" means the principal of and interest
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable law) on any
Indebtedness of any Guarantor of the Securities, whether outstanding on the
Issue Date or thereafter created, incurred or assumed, unless, in the case of
any particular Indebtedness, the instrument creating or evidencing the same or
pursuant to which the same is outstanding expressly provides that such
Indebtedness shall not be senior in right of payment to the Guarantee of the
Securities. Without limiting the generality of the foregoing, "Guarantor Senior
Debt" shall also include the principal of, interest (including any interest
accruing subsequent to the filing of a petition of bankruptcy at the rate
provided for in the documentation with respect thereto, whether or not such
interest is an allowed claim under applicable law) on, and all other amounts
owing in respect of, all monetary obligations (including guarantees thereof) of
every nature of any Guarantor of the Securities under the
10
New Credit Agreement, including, without limitation, obligations to pay
principal and interest, reimbursement obligations under letters of credit, fees,
expenses and indemnities. "Guarantor Senior Debt" shall not include
(1) Indebtedness evidenced by a Guarantee of the Securities;
(2) any Indebtedness of such Guarantor of the Securities owing to
the Company or to a Subsidiary of the Company;
(3) Indebtedness to, or guaranteed on behalf of, any director,
officer or employee of the Company or any Subsidiary of the Company or
Affiliate of the Company (including, without limitation, amounts owed for
compensation);
(4) trade payables and other current liabilities arising in the
ordinary course of business in connection with obtaining goods, materials
or services;
(5) Indebtedness represented by Disqualified Capital Stock;
(6) any liability for federal, state, local or other taxes owed or
owing by such Guarantor of the Securities;
(7) that portion of any Indebtedness incurred in violation of this
Indenture;
(8) any Indebtedness which is, by its express terms, subordinated in
right of payment or junior to any other Indebtedness of such Guarantor of
the Securities; and
(9) any Indebtedness which, when incurred and without respect to any
other election under Section 1111(b) of Xxxxx 00, Xxxxxx Xxxxxx Code, is
without recourse to such Guarantor of the Securities.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered on the Registrar's books.
"Incur" or "incur" means, with respect to any Indebtedness, to,
directly or indirectly, create, incur, assume, guarantee, acquire, become
liable, contingently or otherwise with respect to, or otherwise become
responsible for payment of such Indebtedness.
"Indebtedness" means with respect to any Person, without
duplication,
(1) the principal amount of all obligations of such Person for
borrowed money;
(2) the principal amount of all obligations of such Person evidenced
by bonds, debentures, notes or other similar instruments;
(3) all Capitalized Lease Obligations of such Person;
11
(4) all obligations of such Person to pay the deferred purchase
price of property, all conditional sale obligations and all obligations
under any title retention agreement (but excluding accounts payable and
other current liabilities arising in the ordinary course of business);
(5) all obligations of such Person for the reimbursement of any
obligor on any letter of credit or banker's acceptance;
(6) guarantees and other contingent obligations of such Person in
respect of Indebtedness referred to in clauses (1) through (5) above and
clause (8) below;
(7) all Indebtedness of any other Person of the type referred to in
clauses (1) through (6) above which are secured by any Lien on any
property or asset of such Person, the amount of such obligation being
deemed to be the lesser of the fair market value at such date of any asset
subject to any Lien securing the Indebtedness of others and the amount of
the Indebtedness secured;
(8) all obligations under Currency Agreements and Interest Swap
Obligations of such Person; and
(9) 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.
For purposes hereof, (1) 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 this 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, and (2) accrual of interest, accretion or amortization of original issue
discount, the payment of interest on any Indebtedness in the form of additional
Indebtedness with the same terms, and the payment of dividends on Disqualified
Capital Stock in the form of additional shares of the same class of Disqualified
Capital Stock will not be deemed to be an incurrence of Indebtedness or an
issuance of Disqualified Capital Stock for purposes of Section 4.04. The amount
of Indebtedness of any Person at any date shall be the amount of all
unconditional obligations described above, as such amount would be reflected on
a balance sheet prepared in accordance with GAAP, and the maximum liability at
such date of such Person for any contingent obligations described above.
"Indenture" means this Indenture, as amended or supplemented from
time to time in accordance with the terms hereof.
"Interest Payment Date" means the stated due date of an installment
of interest on the Securities.
12
"Interest Swap Obligations" means the obligations of any Person,
pursuant to any arrangement with any other Person, whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such other
Person calculated by applying a fixed or a floating rate of interest on the same
notional amount.
"Investment" means, with respect to any Person, any direct or
indirect loan or other extension of credit (including, without limitation, a
guarantee) or capital contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for the account or
use of others), or any purchase or acquisition by such Person of any Capital
Stock, bonds, notes, debentures or other securities or evidences of Indebtedness
issued by, any Person. "Investment" shall exclude extensions of trade credit by
the Company and its Subsidiaries on commercially reasonable terms. For the
purposes of Section 4.03,
(1) "Investment" shall include and be valued at the fair market
value of the net assets of any Restricted Subsidiary at the time that such
Restricted Subsidiary is designated an Unrestricted Subsidiary; and
(2) the amount of any Investment shall be the original cost of such
Investment plus the cost of all additional Investments by the Company or
any of its Restricted Subsidiaries, without any adjustments for increases
or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment, reduced by the payment of dividends or
distributions (including tax sharing payments) in connection with such
Investment or any other amounts received in respect of such Investment.
If the Company or any Restricted Subsidiary sells or otherwise
disposes of any Capital Stock of any Restricted Subsidiary such that, after
giving effect to any such sale or disposition, such Person is no longer a
Restricted Subsidiary, the Company shall be deemed to have made an Investment on
the date of any such sale or disposition equal to the fair market value of the
Capital Stock of such Subsidiary not sold or disposed.
"Issue Date" means December 23, 2004.
"Joint Venture" means any Person (other than a Subsidiary of the
Company) engaged in a Related Business with respect to which at least 35% of
such Person's outstanding Capital Stock is owned directly or indirectly by the
Company.
"Legal Defeasance" has the meaning set forth in Section 8.02(b).
"Lien" means any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof and any
agreement to give any security interest).
"Moody's" means Xxxxx'x Investor Service, Inc. and its successors.
13
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds in the form of cash or Cash Equivalents including payments in respect
of deferred payment obligations when received in the form of cash or Cash
Equivalents (other than the portion of any such deferred payment constituting
interest) received by the Company or any of its Restricted Subsidiaries from
such Asset Sale net of
(a) all out-of-pocket expenses and fees relating to such Asset Sale
(including, without limitation, legal, accounting and investment banking
fees and sales commissions);
(b) taxes paid or payable after taking into account any reduction in
consolidated tax liability due to available tax credits or deductions and
any tax sharing arrangements;
(c) the amounts of
(x) any repayments of debt secured, directly or indirectly, by
Liens on the assets which are the subject of such Asset Sale; and
(y) any repayments of debt associated with such assets which
is due by reason of such Asset Sale (i.e., such disposition is
permitted by the terms of the instruments evidencing or applicable
to such debt, or by the terms of a consent granted thereunder, on
the condition the proceeds (or portion thereof) of such disposition
be applied to such debt), and other fees, expenses and other
expenditures, in each case, reasonably incurred as a consequence of
such repayment of debt (whether or not such fees, expenses or
expenditures are then due and payable or made, as the case may be);
(d) any portion of cash proceeds which the Company determines in
good faith should be reserved for post-closing adjustments, it being
understood and agreed that on the day that all such post-closing
adjustments have been determined, the amount (if any) by which the
reserved amount in respect of such Asset Sale exceeds the actual
post-closing adjustments payable by the Company or any of its Restricted
Subsidiaries shall constitute Net Cash Proceeds on such date;
(e) all amounts deemed appropriate by the Company (as evidenced by a
signed certificate of the principal financial officer of the Company
delivered to the Trustee) to be provided as a reserve, in accordance with
GAAP ("GAAP Reserves"), against any liabilities associated with such
assets which are the subject of such Asset Sale;
(f) all foreign, federal, state and local taxes payable (including
taxes reasonably estimated to be payable) in connection with or as a
result of such Asset Sale; and
14
(g) with respect to Asset Sales by Restricted Subsidiaries of the
Company, the portion of such cash payments attributable to Persons holding
a minority interest in such Restricted Subsidiary.
Notwithstanding the foregoing, Net Cash Proceeds shall not include
proceeds received in a foreign jurisdiction from an Asset Sale of an asset
located outside the United States to the extent
(1) such proceeds cannot under applicable law be transferred to the
United States; or
(2) such transfer would result (in the good faith determination of
the Board of Directors of the Company set forth in a Board Resolution) in
a foreign tax liability that would be materially greater than if such
Asset Sale occurred in the United States;
provided that if, as, and to the extent that any of such proceeds may lawfully
be in the case of clause (1) or are in the case of clause (2) transferred to the
United States, such proceeds shall be deemed to be cash payments that are
subject to the terms of this definition of Net Cash Proceeds.
"Net Proceeds Offer" has the meaning set forth in Section 4.16.
"Net Proceeds Offer Amount" has the meaning set forth in Section
4.16.
"Net Proceeds Offer Payment Date" has the meaning set forth in
Section 4.16.
"Net Proceeds Offer Trigger Date" has the meaning set forth in
Section 4.16.
"New Credit Agreement" means the Credit Agreement to be dated on or
about the Issue Date between the Company and the lenders party thereto,
including all related notes, collateral documents and guarantees in each case as
such agreements may be amended (including any amendment and restatement
thereof), supplemented or otherwise modified from time to time, including any
agreement extending the maturity of, increasing the total commitment under,
refinancing, replacing or otherwise restructuring (including adding Subsidiaries
of the Company as additional borrowers or guarantors thereunder) all or any
portion of the Indebtedness under such agreement or any successor or replacement
agreement and whether by the same or any other agent, lender or group of
lenders.
"Obligations" means, with respect to any Indebtedness, all
principal, interest, penalties, fees, indemnities, expenses (including legal
fees and expenses), reimbursement obligations and other liabilities payable to
the holder of such Indebtedness under the documentation governing such
Indebtedness.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Vice Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Chief Financial Officer, the Controller, the
Treasurer, the Secretary or any Assistant Vice President or Assistant Secretary
of such Person.
15
"Officers' Certificate" means a certificate signed by two Officers
of the Company.
"Old Notes" means the Company's 12.5% Senior Subordinated Notes
due 2010.
"Opinion of Counsel" means a written opinion from legal counsel
which opinion is reasonably acceptable to the Trustee and which counsel may be
counsel to or an employee of the Company or counsel to the Trustee.
"Pari Passu Indebtedness" means any Indebtedness of the Company or a
Guarantor of the Securities ranking pari passu with the Securities or a
Guarantee of the Securities, as the case may be, that the obligor thereon is
required to offer to repurchase or repay on a permanent basis in connection with
an Asset Sale.
"Paying Agent" has the meaning set forth in Section 2.03.
"Payment Blockage Notice" has the meaning set forth in Section
10.02.
"Payment Blockage Period" has the meaning set forth in Section
10.02.
"Permitted Indebtedness" means, without duplication,
(1) the Securities (other than Additional Securities) and the
Guarantees thereof;
(2) Indebtedness incurred pursuant to the New Credit Agreement in an
aggregate principal amount at any time outstanding not to exceed $500.0
million reduced by any required permanent repayments (which are
accompanied by a corresponding permanent commitment reduction) thereunder
(excluding any such required permanent repayment and corresponding
permanent commitment reduction to the extent refinanced at the time of
payment under a replaced New Credit Agreement) and less the amount of any
prepayment made with the proceeds of an Asset Sale in accordance with and
in satisfaction of Section 4.16;
(3) other Indebtedness of the Company and its Subsidiaries
outstanding on the Issue Date;
(4) Interest Swap Obligations of the Company or any of its
Subsidiaries covering Indebtedness of the Company or any of its
Subsidiaries; provided, however, that any Indebtedness to which any such
Interest Swap Obligations correspond is otherwise permitted to be incurred
under this Indenture; provided, further, that such Interest Swap
Obligations are entered into, in the judgment of the Company, to protect
the Company or any of its Subsidiaries from fluctuation in interest rates
on their respective outstanding Indebtedness;
(5) Indebtedness under Currency Agreements;
16
(6) intercompany Indebtedness owed by the Company to any Restricted
Subsidiary of the Company or by any Restricted Subsidiary of the Company
to the Company or any Restricted Subsidiary of the Company for so long as
such Indebtedness is held by the Company or a Restricted Subsidiary of the
Company in each case subject to no Lien held by a Person other than the
Company or a Restricted Subsidiary of the Company; provided, however, that
if as of any date any Person other than the Company or a Restricted
Subsidiary of the Company owns or holds any such Indebtedness or holds a
Lien in respect of such Indebtedness, such date shall be deemed the
incurrence of Indebtedness not constituting Permitted Indebtedness by the
issuer of such Indebtedness under this clause (6);
(7) Acquired Indebtedness to the extent the Company could have
incurred such Indebtedness in accordance with Section 4.04 on the date
such Indebtedness became Acquired Indebtedness;
(8) (A) guarantees by Restricted Subsidiaries pursuant to Section
4.19 or guarantees by Restricted Subsidiaries of Indebtedness of other
Restricted Subsidiaries to the extent that such Indebtedness is otherwise
permitted under this Indenture and (B) guarantees by the Company of its
Wholly Owned Restricted Subsidiaries' Indebtedness; provided that such
Indebtedness is permitted to be incurred under this Indenture;
(9) Indebtedness incurred by the Company or any Restricted
Subsidiary in connection with the purchase or improvement of property
(real or personal) or equipment or other capital expenditures in the
ordinary course of business, in aggregate not to exceed $25.0 million in
any fiscal year of the Company;
(10) Indebtedness of the Company or any Restricted Subsidiary
evidenced by Capitalized Lease Obligations not to exceed $25.0 million
principal amount at any one time outstanding;
(11) guarantees, letters of credit and indemnity agreements relating
to performance and surety bonds incurred in the ordinary course of
business;
(12) any refinancing, modification, replacement, renewal,
restatement, refunding, deferral, extension, substitution, supplement,
reissuance or resale of existing or future Indebtedness incurred in
accordance with Section 4.04 (other than pursuant to clause (2), (6), (9),
(10), (11), (13), (14), (15) or (17) of this definition), including any
additional Indebtedness incurred to pay premiums required by the
instruments governing such existing or future Indebtedness as in effect at
the time of issuance thereof ("Required Premiums") and fees in connection
therewith; provided, however, that any such event shall not (1) result in
an increase in the aggregate principal amount of Permitted Indebtedness
(except to the extent such increase is a result of a simultaneous
incurrence of additional Indebtedness (A) to pay Required Premiums and
related fees or (B) otherwise permitted to be incurred under this
Indenture) of the Company and its Subsidiaries and (2) create Indebtedness
with a Weighted Average Life to Maturity at the time such Indebtedness is
incurred that is
17
less than the Weighted Average Life to Maturity at such time of the
Indebtedness being refinanced, modified, replaced, renewed, restated,
refunded, deferred, extended, substituted, supplemented, reissued or
resold;
(13) additional Indebtedness of the Company or any Restricted
Subsidiary in an aggregate principal amount not to exceed $50.0 million at
any one time outstanding (which amount may, but need not, be incurred in
whole or in part under the New Credit Agreement);
(14) Indebtedness of the Company or any Restricted Subsidiary in
respect of the contingent deferred purchase price of any acquired property
(including Capital Stock) not to exceed $15.0 million in aggregate
principal amount at any one time outstanding;
(15) the guarantee of Indebtedness of Joint Ventures to the extent
permitted by clause (12) of the definition of Permitted Investments;
(16) Indebtedness of Foreign Subsidiaries in an aggregate principal
amount which, when taken together with all other Indebtedness of Foreign
Subsidiaries Incurred pursuant to this clause (16) and outstanding on the
date of such Incurrence does not exceed $25.0 million; and
(17) the issuance of the Convertible Debentures and the guarantees
thereof.
"Permitted Investments" means
(1) Investments by the Company or any Restricted Subsidiary of the
Company in, or for the benefit of, any Restricted Subsidiary of the
Company (whether existing on the Issue Date or created thereafter and
including Investments in any Person, if after giving effect to such
Investment, such Person would be a Restricted Subsidiary of the Company or
such Person is merged, consolidated or amalgamated with or into, or
transfers or conveys all or substantially all of its assets to, or is
liquidated into, the Company or a Restricted Subsidiary of the Company)
and Investments in, or for the benefit of, the Company by any Restricted
Subsidiary of the Company;
(2) cash and Cash Equivalents;
(3) Investments existing on the Issue Date;
(4) Investments in securities of trade creditors or customers
received pursuant to any plan of reorganization or similar arrangement
upon the bankruptcy or insolvency of such trade creditors or customers or
in settlement of or other resolution of claims or disputes, and in each
case, extensions, modifications and amendments thereof;
(5) so long as no Default or Event of Default has occurred and is
continuing, loans and advances in the ordinary course of business by the
Company and its
18
Restricted Subsidiaries to their respective employees not to exceed $2.5
million at any one time outstanding;
(6) so long as no Default or Event of Default has occurred and is
continuing, additional Investments in a Person or Persons principally
engaged in a Related Business not to exceed $100.0 million at any one time
outstanding;
(7) Investments received by the Company or its Restricted
Subsidiaries as consideration for asset sales, including Asset Sales;
provided, however, in the case of an Asset Sale, such Asset Sale is
effected in compliance with Section 4.16;
(8) Currency Agreements and Interest Swap Obligations entered into
in the ordinary course of the Company's or its Restricted Subsidiaries'
business and otherwise in compliance with this Indenture;
(9) guarantees by the Company or any of its Restricted Subsidiaries
of Indebtedness or other obligations otherwise permitted to be incurred by
the Company or any of its Restricted Subsidiaries under this Indenture;
(10) so long as no Default or Event of Default has occurred and is
continuing, Investments in Joint Ventures not to exceed $10.0 million at
any one time outstanding; and
(11) any Investments received in exchange for the issuance of
Qualified Capital Stock of the Company or any warrants, rights or options
to purchase or acquire shares of any such Qualified Capital Stock.
"Permitted Junior Securities" means
(1) Qualified Capital Stock of the Company or any Guarantor; or
(2) debt securities that are subordinated to (a) all Senior Debt or
Guarantor Senior Debt and (b) any debt securities issued in exchange for
Senior Debt or Guarantor Senior Debt to substantially the same extent as,
or to a greater extent than, the Securities and the Guarantees of the
Securities are subordinated to Senior Debt and Guarantor Senior Debt,
respectively, under this Indenture.
"Permitted Liens" means
(1) Liens securing Indebtedness consisting of Capitalized Lease
Obligations;
(2) Liens securing any Senior Debt or Guarantor Senior Debt,
including liens securing the New Credit Agreement;
(3) Liens on property existing at the time of acquisition thereof by
the Company or a Restricted Subsidiary; provided that such Liens were in
existence prior to the contemplation of such acquisition;
19
(4) Liens at any time outstanding with respect to assets of the
Company and its Restricted Subsidiaries, the fair market value of which at
the time the Lien was imposed does not exceed $1.0 million;
(5) Liens securing Indebtedness incurred pursuant to clauses (9),
(11), (13) or (14) of the definition of Permitted Indebtedness;
(6) Liens created to replace Liens described in clause (3) or (6)
above or clause (7) below to the extent that such Liens do not extend
beyond the originally encumbered property (other than improvements thereto
or thereon, attachments and other modifications reasonably required to
maintain such property) and are not otherwise materially less favorable to
the Company and its Restricted Subsidiaries than the Liens being replaced,
as determined by the Board of Directors of the Company in good faith; and
(7) Liens existing on the Issue Date.
"Person" means an individual, partnership, corporation, limited
liability company, unincorporated organization, trust or joint venture, or a
governmental agency or political subdivision thereof.
"Preferred Stock" of any Person means any Capital Stock of such
Person that has preferential rights to any other Capital Stock of such Person
with respect to dividends or redemptions or upon liquidation.
"principal" of any Indebtedness (including the Securities) means the
principal amount of such Indebtedness plus the premium, if any, on such
Indebtedness.
"pro forma" means, with respect to any calculation made or required
to be made pursuant to the terms of this Indenture, a calculation in accordance
with Article 11 of Regulation S-X under the Securities Act.
"Pro Rata Share" has the meaning set forth in Section 4.16.
"Productive Assets" means assets of a kind used or usable in the
businesses of the Company and its Restricted Subsidiaries as conducted on the
date of the relevant Asset Sale or any Related Business (including Capital Stock
in any such businesses or Related Business and licenses or similar rights to
operate); provided, however, that accounts receivable acquired as part of an
acquisition of assets of a kind used or usable in such businesses shall be
deemed to be Productive Assets.
"Qualified Capital Stock" means any stock that is not Disqualified
Capital Stock.
"Record Date" means the applicable Record Date (whether or not a
Business Day) specified in the Securities.
20
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to this Indenture
and the Securities.
"Redemption Price," when used with respect to any Security to be
redeemed, means the price fixed for such redemption, payable in immediately
available funds, pursuant to this Indenture and the Securities.
"Registrar" has the meaning set forth in Section 2.03.
"Related Business" means the businesses of the Company and its
Restricted Subsidiaries as conducted on the Issue Date and similar,
complementary or related businesses or reasonable extensions, developments or
expansions thereof.
"Responsible Officer" means, when used with respect to the Trustee,
any officer in the Corporate Trust Administration department at the Corporate
Trust Office of the Trustee including any vice president, assistant vice
president, assistant secretary, assistant treasurer, trust officer, assistant
trust officer, or any other officer of the Trustee who customarily performs
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of such officer's knowledge of and familiarity with the particular
subject.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Payment" has the meaning set forth in Section 4.03.
"Restricted Subsidiary" of any Person means any Subsidiary of such
Person which at the time of determination is not an Unrestricted Subsidiary.
"S&P" means Standard & Poor's, a division of the XxXxxx-Xxxx
Companies, and its successors.
"Sale and Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a party, providing
for the leasing to the Company or a Restricted Subsidiary of any property,
whether owned by the Company or any Restricted Subsidiary at the Issue Date or
later acquired, which has been or is to be sold or transferred by the Company or
such Restricted Subsidiary to such Person or to any other Person from whom funds
have been or are to be advanced by such Person on the security of such property;
provided, however, that a Sale and Leaseback Transaction shall not include a
transaction or series of related transactions for which the Company or its
Restricted Subsidiaries receive aggregate consideration (exclusive of
indemnities) of less than $1.0 million (a "De Minimis Transaction") so long as
the aggregate consideration (exclusive of indemnities) received by the Company
or its Restricted Subsidiaries from all De Minimis Transactions does not exceed
an aggregate of $10.0 million.
"Securities" has the meaning set forth in the preamble hereto.
21
"Securities Act" means the Securities Act of 1933, as amended, or
any successor statute or statutes thereto.
"Senior Debt" means the principal of and interest (including any
interest accruing subsequent to the filing of a petition of bankruptcy at the
rate provided for in the documentation with respect thereto, whether or not such
interest is an allowed claim under applicable law) on any Indebtedness of the
Company, whether outstanding on the Issue Date or thereafter created, incurred
or assumed, unless, in the case of any particular Indebtedness, the instrument
creating or evidencing the same or pursuant to which the same is outstanding
expressly provides that such Indebtedness shall not be senior in right of
payment to the Securities. Without limiting the generality of the foregoing,
"Senior Debt" shall also include the principal of, interest (including any
interest accruing subsequent to the filing of a petition of bankruptcy at the
rate provided for in the documentation with respect thereto, whether or not such
interest is an allowed claim under applicable law) on, and all other amounts
owing in respect of, all monetary obligations (including guarantees thereof) of
every nature of the Company under the New Credit Agreement, including, without
limitation, obligations to pay principal and interest, reimbursement obligations
under letters of credit, fees, expenses and indemnities. "Senior Debt" shall not
include
(1) Indebtedness evidenced by the Securities;
(2) any Indebtedness of the Company to a Subsidiary of the Company;
(3) Indebtedness to, or guaranteed on behalf of, any director,
officer or employee of the Company or any Subsidiary of the Company or
Affiliate of the Company (including, without limitation, amounts owed for
compensation);
(4) trade payables and other current liabilities arising in the
ordinary course of business in connection with obtaining goods, materials
or services;
(5) Indebtedness represented by Disqualified Capital Stock;
(6) any liability for federal, state, local or other taxes owed or
owing by the Company;
(7) that portion of any Indebtedness incurred in violation of this
Indenture;
(8) any Indebtedness which is, by its express terms, subordinated in
right of payment or junior to any other Indebtedness of the Company; and
(9) any Indebtedness which, when incurred and without respect to any
other election under Section 1111(b) of Xxxxx 00, Xxxxxx Xxxxxx Code, is
without recourse to the Company.
"Significant Subsidiary" has the meaning set forth in Rule 1.02(w)
of Regulation S-X under the Securities Act.
22
"Subsidiary," with respect to any Person, means (i) any corporation
of which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the election of directors under ordinary circumstances
shall at the time be owned, directly or indirectly, by such Person, or (ii) any
other Person of which at least a majority of the voting interest under ordinary
circumstances is at the time, directly or indirectly, owned by such Person.
"Surviving Entity" has the meaning set forth in Section 5.01.
"Tender Offer" means the offer to purchase and related consent
solicitation in respect of the Old Notes to be consummated on or about the Issue
Date pursuant to the terms of an Offer to Purchase and Solicitation of Consents
dated November 24, 2004.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. xx.xx.
77aaa-77bbbb), as amended, as in effect on the date of the execution of this
Indenture until such time as this Indenture is qualified under the TIA, and
thereafter as in effect on the date on which this Indenture is qualified under
the TIA, or as the TIA may otherwise be amended from time to time.
"Transactions" means, collectively, the offer and sale of the
Securities on the Issue Date, the concurrent offer and sale of the Convertible
Debentures and the entrance into the New Credit Agreement and the initial
borrowings thereunder on the Issue Date, and the use of proceeds of each thereof
as described under the heading "Use of proceeds" in the Offering Memorandum,
dated as of December 9, 2004, in respect of the initial offering of the
Securities, including the repayment in full of all Obligations under and
termination of the Existing Credit Agreement on the Issue Date and the
consummation of the Tender Offer.
"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.
"Unrestricted Subsidiary" of any Person means
(1) any Subsidiary of such Person that at the time of determination
shall be or continue to be designated an Unrestricted Subsidiary by the
Board of Directors of such Person in the manner provided below; and
(2) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors of the Company may designate any Subsidiary
(including any newly acquired or newly formed Subsidiary) to be an Unrestricted
Subsidiary unless such Subsidiary owns any Capital Stock of, or owns or holds
any Lien on any property of, the Company or any other Subsidiary of the Company
that is not a Subsidiary of the Subsidiary to be so designated; provided,
however, that
(x) the Company certifies to the Trustee that such designation
complies with Section 4.03; and
23
(y) each Subsidiary to be so designated and each of its Subsidiaries
has not at the time of designation, and does not thereafter, create,
incur, issue, assume, guarantee or otherwise become directly or indirectly
liable with respect to any Indebtedness pursuant to which the lender has
recourse to any of the assets of the Company or any of its Restricted
Subsidiaries except to the extent permitted by Section 4.03 and Section
4.04.
The Board of Directors of the Company may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary only if
(x) immediately after giving effect to such designation, the Company
is able to incur at least $1.00 of additional Indebtedness (other than
Permitted Indebtedness) in compliance with Section 4.04; and
(y) immediately before and immediately after giving effect to such
designation, no Default or Event of Default shall have occurred and be
continuing.
Any such designation by the Board of Directors shall be evidenced to
the Trustee by promptly filing with the Trustee a copy of the resolution giving
effect to such designation and an Officers' Certificate certifying that such
designation complied with the foregoing provisions.
"U.S. Government Obligations" means direct obligations of and
obligations guaranteed by the United States of America for the payment of which
the full faith and credit of the United States of America is pledged.
"U.S. Legal Tender" means such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing
(a) the then outstanding aggregate principal amount of such
Indebtedness into
(b) the sum of the total of the products obtained by multiplying
(1) the amount of each then remaining installment, sinking
fund, serial maturity or other required payment of principal,
including payment at final maturity, in respect thereof, by
(2) the number of years (calculated to the nearest
one-twelfth) which will elapse between such date and the making of
such payment.
"Wholly Owned Restricted Subsidiary" of any Person means any
Restricted Subsidiary of such Person of which all the outstanding voting
securities (other than directors' qualifying shares) are owned by such Person or
any Wholly Owned Restricted Subsidiary of such Person.
24
SECTION 1.02. Incorporation by Reference of TIA. Whenever this
Indenture refers to a provision of the TIA, such provision is incorporated by
reference in, and made a part of, this Indenture. The following TIA terms used
in this Indenture have the following meanings:
"indenture securities" means the Securities.
"indenture security holder" means a Holder or a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and each
Guarantor of 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 Commission rule
and, in each case, not otherwise defined herein have the meanings assigned to
them therein.
SECTION 1.03. Rules of Construction. Unless the context otherwise
requires:
(1) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(2) "or" is not exclusive;
(3) words in the singular include the plural, and words in the
plural include the singular;
(4) provisions apply to successive events and transactions;
(5) "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;
(6) unsecured Indebtedness shall not be deemed to be subordinate or
junior to secured Indebtedness merely by virtue of its nature as unsecured
Indebtedness;
(7) secured Indebtedness shall not be deemed to be subordinate or
junior to any other secured Indebtedness merely because it has a junior
priority with respect to the same collateral; and
(8) all references to the date the Securities were originally issued
shall refer to the Issue Date.
25
ARTICLE 2
The Securities
--------------
SECTION 2.01. Form and Dating. Provisions relating to the Initial
Securities and the Exchange Securities are set forth in Appendix A hereto which
is hereby incorporated in, and expressly made part of, this Indenture. The
Initial Securities and the Trustee's certificate of authentication thereof shall
be substantially in the form of Exhibit 1 to Appendix A hereto, which is hereby
incorporated in, and expressly made a part of, this Indenture. The Exchange
Securities and the Trustee's certificate of authentication thereof shall be
substantially in the form of Exhibit 2 to Appendix A hereto, which is hereby
incorporated in and expressly made a part of this Indenture. The Securities may
have notations, legends or endorsements required by law, stock exchange rule or
usage. The Company and the Trustee shall approve the form of the Securities and
any notation, legend or endorsement on them. Each Security shall be dated the
date of its authentication and shall show the date of its issuance. The terms of
the Securities set forth in Appendix A and the exhibits thereto are part of the
terms of this Indenture.
SECTION 2.02. Execution and Authentication. An Officer shall sign
the Securities for the Company by manual or facsimile signature.
If an Officer whose signature is on a Security was an Officer at the
time of such execution but no longer holds that or any office at the time the
Trustee authenticates the Security, the Security shall be valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually 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 Securities for original issue on the
Issue Date in the aggregate principal amount of $200,000,000 and, at any time
and from time to time thereafter, the Trustee shall authenticate Securities for
original issue in an aggregate principal amount specified in a written order of
the Company in the form of an Officers' Certificate. The Officers' Certificate
shall specify the amount of Securities to be authenticated and the date on which
the Securities are to be authenticated and, in the case of an issuance of
Additional Securities pursuant to Section 2.15 after the Issue Date, shall
certify that such issuance is in compliance with Section 4.04. Upon receipt of a
written order of the Company in the form of an Officers' Certificate, the
Trustee shall authenticate Securities in substitution for Securities originally
issued to reflect any name change of the Company. The Trustee may appoint an
authenticating agent reasonably acceptable to the Company to authenticate
Securities. Unless otherwise provided in the appointment, an authenticating
agent may authenticate Securities whenever the Trustee may do so. Each reference
in this Indenture to authentication by the Trustee includes authentication by
such agent. An authenticating agent has the same rights as an Agent to deal with
the Company and Affiliates of the Company.
The Securities shall be issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof.
26
SECTION 2.03. Registrar and Paying Agent. The Company shall maintain
an office or agency in the Borough of Manhattan, The City of New York, where (a)
Securities may be presented or surrendered for registration of transfer or for
exchange (the "Registrar"), (b) Securities may be presented or surrendered for
payment (the "Paying Agent") and (c) notices and demands in respect of the
Securities and this Indenture may be served. The Registrar shall keep a register
of the Securities and of their transfer and exchange. The Company, upon notice
to the Trustee, may have one or more additional Paying Agents reasonably
acceptable to the Trustee. 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, which agreement shall incorporate the
provisions of the TIA and implement the provisions of this Indenture that relate
to such Agent. The Company shall notify the Trustee of the name and address of
any such Agent. If the Company fails to maintain a Registrar or Paying Agent, or
fails to give the foregoing notice, the Trustee shall act as such. The Company
or any Subsidiary of the Company incorporated or organized within The United
States of America may act as Agent.
The Company initially appoints the Trustee as Registrar, Paying
Agent and agent for service of demands and notices in connection with the
Securities, until such time as the Trustee has resigned or a successor has been
appointed. The Paying Agent or Registrar may resign upon 45 days notice to the
Company.
SECTION 2.04. Paying Agent to Hold Assets in Trust. The Company
shall require each Paying Agent other than the Trustee to agree in writing that
each Paying Agent shall hold in trust for the benefit of Holders or the Trustee
all assets held by the Paying Agent for the payment of principal of, or interest
on, the Securities (whether such assets have been distributed to it by the
Company or any other obligor on the Securities), and shall notify the Trustee of
any Default by the Company (or any other obligor on the Securities) in making
any such payment. If the Company or a Subsidiary of the Company acts as Paying
Agent, it shall segregate the money and hold it in a separate trust. The Company
at any time may require a Paying Agent to distribute all assets held by it to
the Trustee and account for any assets disbursed 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 distribute all assets held by it to the
Trustee and to account for any assets distributed. Upon distribution to the
Trustee of all assets that shall have been delivered by the Company to the
Paying Agent, the Paying Agent shall have no further liability for such assets.
SECTION 2.05. 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 Holders and otherwise comply with TIA ss.312(a).
If the Trustee is not the Registrar, the Company shall furnish or cause the
Registrar to furnish to the Trustee by each Record Date and at such other times
as the Trustee may reasonably request in writing a list as of such date and in
such form as the Trustee may reasonably require of the names and addresses of
Holders, which list (subject to Section 7.01 hereof) may be conclusively relied
upon by the Trustee.
27
SECTION 2.06. Transfer and Exchange. The Securities shall be issued
in registered form and shall be transferable only upon the surrender of a
Security for registration of transfer. When a Security is presented to the
Registrar with a request to register a transfer, the Registrar shall register
the transfer as requested if the requirements of this Indenture (including
Appendix A hereto) and Section 8-401(1) of the Uniform Commercial Code are met.
When Securities are presented to the Registrar with a request to exchange them
for an equal principal amount of Securities of other denominations, the
Registrar shall make the exchange as requested if the same requirements are met.
SECTION 2.07. Replacement Securities. If a mutilated Security is
surrendered to the Trustee or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the Trustee's and
Company's requirements are met. If required by the Trustee or the Company, such
Holder shall provide an indemnity bond or other indemnity, sufficient in the
judgment of both the Company and the Trustee, to protect the Company, the
Guarantors, the Trustee and any Agent from any loss which any of them may suffer
if a Security is replaced. The Company may charge such Holder for its reasonable
out-of-pocket expenses in replacing a Security, including reasonable fees and
expenses of counsel. Every replacement Security shall constitute an additional
obligation of the Company and every replacement Guarantee shall constitute an
additional obligation of the Guarantors.
SECTION 2.08. Outstanding Securities. Securities outstanding at any
time are all the Securities that have been authenticated by the Trustee except
those cancelled by it, those delivered to it for cancellation and those
described in this Section as not outstanding. Subject to Section 2.09, a
Security does not cease to be outstanding because the Company or any of its
Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.07 (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser. A mutilated Security ceases to be outstanding
upon surrender of such Security and replacement thereof pursuant to Section
2.07.
If on a Redemption Date or the Final Maturity Date the Paying Agent
holds (or, if the Company or a Subsidiary of the Company acts as Paying Agent,
segregates and holds in trust) in accordance with the terms of this Indenture
U.S. Legal Tender sufficient to pay all of the principal and interest due on the
Securities payable on that date, and the Paying Agent is not prohibited from
paying such money to the Holders on that date pursuant to the terms of this
Indenture, then on and after that date such Securities cease to be outstanding
and interest on them ceases to accrue.
SECTION 2.09. Treasury Securities. In determining whether the
Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company or any of its
Affiliates shall be disregarded, except that, for the purposes of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Securities that the Trustee has received notice are so owned
shall be disregarded.
28
The Trustee may require an Officers' Certificate listing Securities
owned by the Company or its Affiliates.
SECTION 2.10. Temporary Securities. Until definitive Securities are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities upon receipt of a written order of the Company in the form
of an Officers' Certificate. The Officers' Certificate shall specify the amount
of temporary Securities to be authenticated and the date on which the temporary
Securities are to be authenticated. Temporary Securities shall be substantially
in the form of definitive Securities but may have variations that the Company
considers appropriate for temporary Securities. Without unreasonable delay, the
Company shall prepare and the Trustee shall authenticate upon receipt of a
written order of the Company pursuant to Section 2.02 definitive Securities in
exchange for temporary Securities.
SECTION 2.11. Cancellation. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for transfer,
exchange or payment. The Trustee, or at the direction of the Trustee, the
Registrar or the Paying Agent, and no one else, shall cancel and dispose of all
Securities surrendered for transfer, exchange, payment or cancellation, in
accordance with its customary practices. Subject to Section 2.07, the Company
may not issue new Securities to replace Securities that it has paid or delivered
to the Trustee for cancellation. If the Company shall acquire any of the
Securities, such acquisition shall not operate as a redemption or satisfaction
of the Indebtedness represented by such Securities unless and until the same are
surrendered to the Trustee for cancellation pursuant to this Section 2.11.
SECTION 2.12. Defaulted Interest. The Company will pay interest on
overdue principal from time to time on demand at the rate of interest then borne
by the Securities. The Company shall, to the extent lawful, pay interest on
overdue installments of interest (without regard to any applicable grace
periods) from time to time on demand at the rate of interest then borne by the
Securities. Interest will be computed on the basis of a 360-day year comprised
of twelve 30-day months.
If the Company defaults in a payment of interest on the Securities,
it shall pay the defaulted interest, plus (to the extent lawful) any interest
payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, which date shall be the fifteenth day next
preceding the date fixed by the Company for the payment of defaulted interest.
At least 15 days before the subsequent special record date, the Company shall
mail to each Holder, with a copy to the Trustee (or cause the Trustee to mail) a
notice that states the subsequent special record date, the payment date and the
amount of defaulted interest, and interest payable on such defaulted interest,
if any, to be paid.
Notwithstanding the foregoing, any interest which is paid prior to
the expiration of the 30-day period set forth in Section 6.01(a) shall be paid
to Holders as of the regular Record Date for the Interest Payment Date for which
interest has not been paid.
29
Notwithstanding the foregoing, the Company may make payment of
defaulted interest in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be listed.
SECTION 2.13. CUSIP Number. The Company in issuing the Securities
may use one or more "CUSIP" numbers, and if so, the Trustee shall use the CUSIP
numbers in notices of redemption or exchange as a convenience to Holders;
provided, however, that no representation is hereby deemed to be made as to the
correctness or accuracy of the CUSIP numbers 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 shall promptly notify the Trustee
of any change in the CUSIP number.
SECTION 2.14. Deposit of Moneys. Prior to 10:00 a.m. New York City
time on each Interest Payment Date and the Final Maturity Date, the Company
shall have deposited with the Paying Agent in immediately available funds U.S.
Legal Tender sufficient to make cash payments, if any, due on such Interest
Payment Date or Final Maturity Date, as the case may be, in a timely manner
which permits the Paying Agent to remit payment to the Holders on such Interest
Payment Date or Final Maturity Date, as the case may be.
SECTION 2.15. Issuance of Additional Securities. After the Issue
Date, the Company shall be entitled, subject to its compliance with Section
4.04, to issue Additional Securities under this Indenture in an unlimited
aggregate principal amount, which Securities shall have identical terms as the
Initial Securities issued on the Issue Date, other than with respect to the date
of issuance and issue price. The Initial Securities issued on the Issue Date,
any Additional Securities and all Exchange Securities issued in exchange
therefor shall be treated as a single class for all purposes under this
Indenture, including waivers, amendments, redemptions and offers to purchase.
With respect to any Additional Securities, the Company shall set
forth in a Board Resolution of the Board of Directors of the Company and an
Officers' Certificate, a copy of each which shall be delivered to the Trustee,
the following information:
(1) the aggregate principal amount of such Additional Securities to
be authenticated and delivered pursuant to this Indenture and the
provision of Section 4.04 that the Company is relying on to issue such
Additional Securities;
(2) the issue price, the issue date and the CUSIP number of such
Additional Securities; provided, however, that Additional Securities may
be issued only if they are fungible with the other Securities issued under
this Indenture for United States federal income tax purposes; and
(3) whether such Additional Securities shall be Initial Securities
or shall be issued in the form of Exchange Securities as set forth in
Exhibit 2 to Appendix A.
30
ARTICLE 3
Redemption
----------
SECTION 3.01. Notices to Trustee. If the Company elects to redeem
Securities pursuant to the optional redemption provisions of Paragraph 5 or
Paragraph 6 of the Securities, it shall notify the Trustee in writing of the
Redemption Date, the Redemption Price and the principal amount of Securities to
be redeemed. The Company shall give notice of redemption to the Paying Agent and
Trustee at least 45 days but not more than 60 days before the Redemption Date
(unless a shorter notice shall be satisfactory to the Trustee), together with an
Officers' Certificate stating that such redemption will comply with the
conditions contained herein. Any such notice may be cancelled at any time prior
to notice of such redemption being mailed to any Holder and shall thereby be
void and of no effect.
SECTION 3.02. Selection of Securities to be Redeemed. In the event
that less than all of the Securities are to be redeemed at any time pursuant to
the optional redemption provisions of Paragraph 5 or Paragraph 6 of the
Securities, selection of such Securities for redemption will be made by the
Trustee by lot, pro rata or in such manner as the Trustee shall deem appropriate
and fair and in such manner as complies with any applicable requirements of the
principal national securities exchange, if any, on which the Securities are
listed and in such manner as complies with applicable law; provided, however,
that if a partial redemption is made with the proceeds of an Equity Offering
pursuant to Paragraph 6 of the Securities, selection of the Securities or
portions thereof for redemption shall be made by the Trustee only on a pro rata
basis (subject to the procedures of the Depositary (as defined in Appendix A
hereto)), unless such method is otherwise prohibited.
The Trustee shall make the selection from the Securities outstanding
and not previously called for redemption and shall promptly notify the Company
in writing of the Securities selected for redemption and, in the case of any
Security selected for partial redemption, the principal amount thereof to be
redeemed. Securities in denominations of $1,000 or less may be redeemed only in
whole. The Trustee may select for redemption portions (equal to $1,000 or any
integral multiple thereof) of the principal amount of Securities that have
denominations larger than $1,000. Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called for
redemption.
SECTION 3.03. Notice of Optional Redemption. In the case of an
optional redemption pursuant to the provisions of Paragraph 5 or Paragraph 6 of
the Securities, at least 30 days but not more than 60 days before a Redemption
Date, the Company shall mail a notice of redemption by first class mail, postage
prepaid, to each Holder whose Securities are to be redeemed at its registered
address. At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. Each notice for
redemption shall identify the Securities to be redeemed (including the CUSIP
number(s), if any) and shall state:
(1) the Redemption Date;
31
(2) the Redemption Price and the amount of accrued interest, if any,
to be paid;
(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 plus accrued interest, if
any;
(5) that, unless the Company defaults in making the redemption
payment or the Paying Agent is prohibited from making such payment
pursuant to the terms of this Indenture, interest on Securities called for
redemption ceases to accrue on and after the Redemption Date, and the only
remaining right of the Holders of such Securities is to receive payment of
the Redemption Price upon surrender to the Paying Agent of the Securities
redeemed;
(6) if any Security is being redeemed in part, the portion of the
principal amount of such Security to be redeemed and that, after the
Redemption Date, and upon surrender of such Security, a new Security or
Securities in aggregate principal amount equal to the unredeemed portion
thereof will be issued upon surrender of the original Security;
(7) if fewer than all the Securities are to be redeemed, the
identification of the particular Securities (or portion thereof) to be
redeemed, as well as the aggregate principal amount of Securities to be
redeemed and the aggregate principal amount of Securities to be
outstanding after such partial redemption; and
(8) the paragraph of the Securities pursuant to which the Securities
are to be redeemed.
SECTION 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed in accordance with Section 3.03, Securities called for
redemption become due and payable on the Redemption Date and at the Redemption
Price plus accrued interest, if any. Upon surrender to the Trustee or Paying
Agent, such Securities called for redemption shall be paid at the Redemption
Price (which shall include accrued interest thereon to the Redemption Date), but
installments of interest, the maturity of which is on or prior to the Redemption
Date, shall be payable to Holders of record at the close of business on the
relevant Record Dates.
SECTION 3.05. Deposit of Redemption Price. On or before 11:00 a.m.
New York Time on the Redemption Date, the Company shall deposit with the Paying
Agent (or, if the Company or a Subsidiary is the Paying Agent, shall segregate
and hold in trust) U.S. Legal Tender sufficient to pay the Redemption Price plus
accrued interest, if any, of all Securities to be redeemed on that date (other
than Securities or portions thereof called for redemption on that date which
have been delivered by the Company to the Trustee for cancellation). The Paying
Agent or Trustee shall promptly return to the Company any U.S. Legal Tender so
deposited which is not required for that purpose.
32
If the Company complies with the preceding paragraph, then, unless
the Company defaults in the payment when due of such Redemption Price plus
accrued interest, if any, or the Paying Agent is prohibited from making such
payment pursuant to the terms of this Indenture, interest on the Securities to
be redeemed will cease to accrue on and after the applicable Redemption Date,
whether or not such Securities are presented for payment.
SECTION 3.06. Securities Redeemed in Part. Upon surrender and
cancellation of a Security that is to be redeemed in part only, the Trustee
shall authenticate for the Holder a new Security or Securities in a principal
amount equal to the unredeemed portion of the Security surrendered.
ARTICLE 4
Covenants
---------
SECTION 4.01. Payment of Securities. The Company will pay the
principal of and interest on the Securities in the manner provided in the
Securities and in this Indenture. An installment of principal of or interest on
the Securities shall be considered paid on the date it is due if the Trustee or
Paying Agent (other than the Company or a Subsidiary of the Company) holds on
that date U.S. Legal Tender designated for and sufficient to pay the installment
in full and is not prohibited from paying such money to the Holders pursuant to
the terms of this Indenture. Interest, including defaulted interest, if any,
will be computed on the basis of a 360-day year comprised of twelve 30-day
months and in the case of a partial month, the actual number of days elapsed.
Notwithstanding anything to the contrary contained in this
Indenture, the Company may, to the extent it is required to do so by law, deduct
or withhold income or other similar taxes imposed by the United States of
America from principal or interest payments hereunder.
SECTION 4.02. Maintenance of Office or Agency. The Company will
maintain in the Borough of Manhattan, The City of New York, the office or agency
required under Section 2.03. The Company shall 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 13.02. The Company hereby initially
designates the office or agency of the Trustee in the Borough of Manhattan, The
City of New York (the address for which may be obtained from the Company or the
Trustee at the Corporate Trust Office) where presentations and surrenders may be
made and notices or demands may be served on the Company.
SECTION 4.03. Limitation on Restricted Payments. The Company will
not, and will not cause or permit any of its Restricted Subsidiaries to,
directly or indirectly,
(a) declare or pay any dividend or make any distribution (other than
dividends or distributions payable in Qualified Capital Stock of the Company or
in warrants,
33
rights or options (other than debt securities or Disqualified Capital Stock) to
acquire Qualified Capital Stock of the Company) on or in respect of shares of
the Company's Capital Stock to holders of such Capital Stock;
(b) purchase, redeem or otherwise acquire or retire for value any
Capital Stock of the Company or any warrants, rights or options (other than debt
securities or Disqualified Capital Stock) to purchase or acquire shares of any
class of such Capital Stock, other than the exchange of such Capital Stock,
warrants, rights or options for Qualified Capital Stock and/or for warrants,
rights or options (other than debt securities or Disqualified Capital Stock) to
acquire Qualified Capital Stock; or
(c) make any Restricted Investment (other than Permitted
Investments)
(each of the foregoing actions set forth in clauses (a), (b) and (c) being
referred to as a "Restricted Payment"), if at the time of such Restricted
Payment or immediately after giving effect thereto,
(1) a Default or an Event of Default shall have occurred and be
continuing;
(2) the Company is not able to incur at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with
Section 4.04; or
(3) the aggregate amount of Restricted Payments made subsequent to
the Issue Date (without duplication and excluding Restricted Payments
permitted by clauses (2)(a), (4) and (5) of the following paragraph) shall
exceed the sum of:
(w) 50% of the cumulative Consolidated Net Income, or if
cumulative Consolidated Net Income shall be a loss, minus 100% of
such loss, of the Company earned subsequent to September 30, 2004
and on or prior to the last day of the most recent fiscal quarter
for which internal financial statements are available treating such
period as a single accounting period; plus
(x) the sum of (i) 100% of the aggregate net cash proceeds
received by the Company from any Person (other than a Subsidiary of
the Company) from the issuance and sale subsequent to the Issue Date
and on or prior to the date the Restricted Payment occurs of
Qualified Capital Stock, or in respect of warrants, rights or
options (other than debt securities or Disqualified Capital Stock)
to acquire Qualified Capital Stock, including Qualified Capital
Stock issued upon the conversion of convertible Indebtedness and
(ii) 100% of any cash capital contribution received by the Company
from its shareholders subsequent to the Issue Date and on or prior
to the date the Restricted Payment occurs; plus
(y) the amount by which Indebtedness of the Company or a
Restricted Subsidiary is reduced on the Company's consolidated
balance sheet upon the conversion or exchange (other than by a
Subsidiary of the Company) subsequent to the Issue Date of any
Indebtedness of the Company or a
34
Restricted Subsidiary convertible or exchangeable for Qualified
Capital Stock of the Company (less the amount of any cash, or the
fair value of any other property, distributed by the Company upon
such conversion or exchange); plus
(z) with respect to Restricted Investments made after the
Issue Date, the net reduction of such Restricted Investments as a
result of (without duplication with respect to any item below as
among such items or any item listed in clause (3) of the next
paragraph):
(i) any disposition of any such Restricted Investments
sold or otherwise liquidated or repaid, to the extent of the
net cash proceeds received by the Company or a Restricted
Subsidiary;
(ii) cash dividends or repayments of loans or advances
in cash to the Company or any Restricted Subsidiary or, to the
extent that a guarantee issued by the Company or a Restricted
Subsidiary constitutes a Restricted Investment, the release of
such guarantee; or
(iii) a Person becoming a Restricted Subsidiary, to the
extent of the Company's portion (proportionate to the
Company's equity interest in such Person) of the fair market
value of the net assets of such Person;
provided, that in no event shall the net reduction in Restricted Investments
attributable to any particular Restricted Investment exceed the amount of such
Restricted Investment on the date originally made; provided, further, that any
net reduction in Restricted Investments pursuant to this clause (z) shall only
be included in the calculation required by clause (3) above to the extent that
such net reduction in Restricted Investments is not included in the Company's
Consolidated Net Income.
Notwithstanding the foregoing, the provisions set forth in the
immediately preceding paragraph shall not prohibit
(1) the payment of any dividend or distribution or the redemption of
any securities within 60 days after the date of declaration of such
dividend or distribution or the giving of formal notice by the Company of
such redemption, if the dividend or distribution would have been permitted
on the date of declaration or the redemption would have been permitted on
the date of the giving of the formal notice thereof;
(2) so long as no Default or Event of Default shall have occurred
and be continuing, the making of any Restricted Payment, either
(a) in exchange for shares of Qualified Capital Stock and/or
warrants, rights or options (other than debt securities or
Disqualified Capital Stock) to acquire Qualified Capital Stock; or
35
(b) through the application of the net proceeds of a sale for
cash (other than to a Subsidiary of the Company) of shares of
Qualified Capital Stock and/or warrants, rights or options (other
than debt securities or Disqualified Capital Stock) to acquire
Qualified Capital Stock, so long as such net proceeds are applied
pursuant to this clause (b) within 180 days of such sale;
(3) so long as no Default or Event of Default shall have occurred
and be continuing, any other Restricted Payment by the Company; provided,
however, that the aggregate amounts expended pursuant to this clause (3)
do not exceed $50.0 million plus, to the extent that any Restricted
Payment made pursuant to this clause (3) is in the form of a Restricted
Investment, the net reduction of such Restricted Investments as a result
of (without duplication with respect to any item below as among such items
or any item listed in clause (3)(z) of the previous paragraph)
(a) any disposition of any such Restricted Investments sold or
otherwise liquidated or repaid, to the extent of the net cash
proceeds received by the Company or a Restricted Subsidiary;
(b) cash dividends or repayments of loans or advances in cash
to the Company or any Restricted Subsidiary or, to the extent that a
guarantee issued by the Company or a Restricted Subsidiary
constitutes a Restricted Investment, the release of such guarantee;
or
(c) a Person becoming a Restricted Subsidiary, to the extent
of the Company's portion (proportionate to the Company's equity
interest in such Person) of the fair market value of the net assets
of such Person;
provided that in no event shall the net reduction in Restricted
Investments attributable to any particular Restricted Investment exceed
the amount of such Restricted Investment on the date originally made;
provided, further, that any net reduction in Restricted Investments
pursuant to this clause (3) shall only be included in the calculation
required by this clause (3) to the extent that such net reduction in
Restricted Investments is not included in the Company's Consolidated Net
Income;
(4) the repurchase of any Capital Stock of the Company or any
warrants, rights or options to purchase or acquire shares of any such
Capital Stock deemed to occur upon the exercise of stock options to
acquire Qualified Capital Stock or other similar arrangements to acquire
Qualified Capital Stock if such repurchased Capital Stock or warrants,
rights or options to acquire shares of any such Capital Stock represent a
portion of the exercise price thereof and applicable withholding taxes, if
any; and
(5) the entrance into and making of any payments pursuant to the
Convertible Debentures Hedge and Warrant Option Transactions.
In determining the aggregate amount of Restricted Payments made
subsequent to the Issue Date in accordance with clause (3) of the immediately
preceding paragraph,
36
amounts expended (to the extent such expenditure is in the form of cash)
pursuant to clauses (1), (2)(b) and (3) of this paragraph shall be included in
such calculation.
SECTION 4.04. Limitation on Incurrence of Additional Indebtedness.
The Company will not, and will not permit any of its Restricted Subsidiaries to,
incur any Indebtedness, other than Permitted Indebtedness; provided, however,
that if no Default or Event of Default shall have occurred and be continuing at
the time or as a consequence of the incurrence of any such Indebtedness, the
Company or any Guarantor may incur Indebtedness if on the date of the incurrence
of such Indebtedness, after giving effect to the incurrence thereof, the
Consolidated Fixed Charge Coverage Ratio of the Company is equal to or greater
than 2.0 to 1.0.
Neither the Company nor any Guarantor will, directly or indirectly,
in any event incur any Indebtedness which, by its terms or by the terms of any
agreement governing such Indebtedness, is both subordinated pursuant to its
terms in right of payment to any other Indebtedness of the Company or such
Guarantor, as the case may be, and senior in right of payment to the Securities
or any such Guarantor's Guarantee, as the case may be.
SECTION 4.05. Corporate Existence. Except as otherwise permitted by
Article Five, the Company shall do or cause to be done, at its own cost and
expense, all things necessary to preserve and keep in full force and effect its
corporate existence and the corporate, partnership or other existence of each of
its Subsidiaries in accordance with the respective organizational documents of
the Company or the Subsidiary, as the case may be, and the rights (charter and
statutory) and material franchises of the Company and each of its Subsidiaries;
provided, however, that the Company shall not be required to preserve any such
right or franchise, or the corporate existence of any Subsidiary, if the Board
of Directors of the Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and each of its
Subsidiaries, taken as a whole.
SECTION 4.06. Payment of Taxes and Other Claims. The Company will
pay or discharge or cause to be paid or discharged, before the same shall become
delinquent, (a) all material taxes, assessments and governmental charges levied
or imposed upon it or any of its Subsidiaries or upon the income, profits or
property of it or any of its Subsidiaries and (b) all lawful claims for labor,
materials and supplies which, in each case, if unpaid, might by law become a
material liability or Lien upon the property of it or any of its Subsidiaries;
provided, however, that the Company shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim the
amount, applicability or validity of which is being contested in good faith by
appropriate proceedings and for which adequate provision has been made or for
which adequate reserves, to the extent required under GAAP, have been
established or where the failure to effect such payment or discharge is not
adverse in any material respect to the Holders.
SECTION 4.07. Maintenance of Properties and Insurance. (a) The
Company shall cause all material properties owned by or leased by it or any of
its Subsidiaries used or useful to the conduct of its business or the business
of any of its Subsidiaries to be maintained and kept in normal condition, repair
and working order and supplied with all necessary equipment and shall cause to
be made all necessary repairs, renewals and
37
replacements thereof, all as in its judgment may be reasonably necessary, so
that the business carried on in connection therewith may be properly conducted
at all times; provided, however, that nothing in this Section 4.07 shall prevent
the Company or any of its Subsidiaries from discontinuing the use, operation or
maintenance of any of such properties, or disposing of any of them, if such
properties are, in the reasonable and good faith judgment of the Board of
Directors of the Company or such Subsidiary, as the case may be, no longer
reasonably necessary in the conduct of their respective businesses or such
disposition is otherwise permitted by this Indenture.
(b) The Company shall provide or cause to be provided, for itself
and each of its Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds that, in the reasonable, good faith judgment
of the Board of Directors of the Company, are adequate and appropriate for the
conduct of the business of the Company and such Subsidiaries in a prudent
manner, with reputable insurers or with the government of the United States of
America or an agency or instrumentality thereof, in such amounts, with such
deductibles and by such methods as shall be customary, in the good faith
judgment of the Board of Directors of the Company, for companies similarly
situated in the industry.
SECTION 4.08. Compliance Certificate; Notice of Default. (a) The
Company shall deliver to the Trustee, within 90 days after the end of each of
the Company's fiscal years, an Officers' Certificate (signed by the principal
executive officer, principal financial officer and principal accounting officer)
stating that a review of its activities and the activities of its Subsidiaries
during the preceding fiscal year has been made under the supervision of the
signing officers with a view to determining whether it has kept, observed,
performed and fulfilled its Obligations under this Indenture and further
stating, as to each such officer signing such certificate, that to the best of
his knowledge the Company during such preceding fiscal year has kept, observed,
performed and fulfilled each and every such Obligation and no Default or Event
of Default has occurred during such year and at the date of such certificate
there is no Default or Event of Default that has occurred and is continuing or,
if such signers do know of such Default or Event of Default, the certificate
shall describe the Default or Event of Default and its status in reasonable
detail. The Officers' Certificate shall also notify the Trustee should the
Company elect to change the manner in which it fixes its fiscal year end.
(b) The annual financial statements delivered to the Trustee
pursuant to Section 4.10 shall be accompanied by a written report of the
Company's independent accountants that in conducting their audit of the
financial statements which are a part of such annual report or such annual
financial statements nothing has come to their attention that would lead them to
believe that the Company has violated any provisions of Article Four, Five or
Six insofar as they relate to accounting matters or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) So long as any of the Securities are outstanding, if any Default
or Event of Default has occurred and is continuing, the Company shall promptly
deliver to the Trustee by registered or certified mail or by telegram, telex or
facsimile transmission an Officers'
38
Certificate specifying such event, notice or other action within 30 Business
Days of its becoming aware of such occurrence.
SECTION 4.09. Compliance with Laws. The Company will comply, and
will cause each of its Subsidiaries to comply, with all applicable statutes,
rules, regulations, orders and restrictions of the United States, all states and
municipalities thereof, and of any governmental department, commission, board,
regulatory authority, bureau, agency and instrumentality of the foregoing, in
respect of the conduct of their respective businesses and the ownership of their
respective properties, except for such noncompliances as are being contested in
good faith and by appropriate proceedings and except for such noncompliances as
would not in the aggregate have a material adverse effect on the financial
condition or results of operations of the Company and its Subsidiaries taken as
a whole.
SECTION 4.10. Commission Reports. (a) The Company promptly will
deliver to the Trustee, but in any event no later than 15 days after it files
with the Commission, copies of the quarterly and annual reports and of the
information, documents and other reports, if any, which the Company is required
to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act.
Notwithstanding that the Company may not be required to remain subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company
will file with the Commission all information, documents and reports required to
be filed with the Commission to the extent permitted, and provide the Trustee
and the Holders with such annual reports and such information, documents and
other reports specified in Sections 13 and 15(d) of the Exchange Act. The
Company shall also comply with the other provisions of TIA ss. 314(a).
(b) Regardless of whether the Company is required to furnish such
reports to its stockholders pursuant to the Exchange Act, the Company (at its
own expense) shall cause its consolidated financial statements, comparable to
those which would have been required to appear in annual or quarterly reports,
to be delivered to the Trustee and the Holders.
(c) For so long as any of the Securities remain outstanding, the
Company will make available to any prospective purchaser of the Securities or
beneficial owner of the Securities in connection with any sale thereof the
information required by Rule 144A(d)(4) under the Securities Act during any
period when the Company is not subject to Section 13 or 15(d) under the Exchange
Act.
(d) Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.11. Waiver of Stay, Extension or Usury Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, plead, or in any manner whatsoever claim or take the benefit
or advantage of, any stay or extension law or any usury law or other law that
would prohibit or forgive the Company from paying all or any portion of the
principal of and/or interest on the Securities as contemplated
39
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture, and (to the extent
that it may lawfully do so) the Company hereby expressly waives all 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 4.12. Limitations on Transactions with Affiliates. The
Company will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction or series
of related transactions with any of its Affiliates (an "Affiliate Transaction"),
other than
(x) Affiliate Transactions permitted under the next paragraph; and
(y) Affiliate Transactions on terms that are no less favorable to
the Company or such Restricted Subsidiary than those that might reasonably
have been obtained in a comparable transaction at such time on an
arm's-length basis from a Person that is not an Affiliate;
provided, however, that for a transaction or series of related transactions
with an aggregate value of $5.0 million or more
(1) such determination shall be made in good faith by a majority of
the disinterested members of the Board of the Directors of the Company; or
(2) the Board of Directors of the Company shall have received an
opinion from an independent nationally recognized investment banking,
accounting or valuation firm, selected by the Company, that such
transaction or series of related transactions is on terms which are fair,
from a financial point of view, to the Company or such Restricted
Subsidiary;
and provided, further, that for a transaction or series of related
transactions with an aggregate value of $20.0 million or more,
(1) such determination shall be made in good faith by a majority of
the disinterested members of the Board of Directors of the Company; and
(2) the Board of Directors of the Company shall have received an
opinion from an independent nationally recognized investment banking,
accounting or valuation firm, selected by the Company, that such
transaction or series of related transactions is on terms which are fair,
from a financial point of view, to the Company or such Restricted
Subsidiary.
The foregoing restrictions shall not apply to
(1) reasonable fees and compensation paid to, and indemnity provided
on behalf of, officers, directors, employees or consultants of the Company
or any
40
Subsidiary as determined in good faith by the Company's Board of Directors
or senior management;
(2) transactions between or among the Company and any of its
Restricted Subsidiaries so long as no portion of the minority interest in
such Restricted Subsidiary is owned by an Affiliate of the Company (other
than a Wholly Owned Subsidiary of the Company or directors or officers of
such Subsidiary that hold stock of such Subsidiary to the extent that
local law requires a resident of such jurisdiction to own stock of such
company) or between or among such Restricted Subsidiaries; provided such
transactions are not otherwise prohibited by this Indenture;
(3) 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 amendment 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;
(4) Permitted Investments and Restricted Payments permitted by this
Indenture;
(5) commercially reasonable transactions between the Company or a
Restricted Subsidiary and any Joint Venture in the ordinary course of
business that have been determined by the Board of Directors of the
Company to comply with clause (y) of the first paragraph above; and
(6) the issuance or sale of any Qualified Capital Stock of the
Company.
SECTION 4.13. Limitation on Dividend and Other Payment Restrictions
Affecting Subsidiaries.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or permit to
exist or become effective any consensual encumbrance or restriction on the
ability of any Restricted Subsidiary to
(a) pay dividends or make any other distributions on or in respect
of its Capital Stock;
(b) make loans or advances to or pay any Indebtedness or other
obligation owed to the Company or any other Restricted Subsidiary of the
Company; or
(c) transfer any of its property or assets to the Company or any
other Restricted Subsidiary of the Company,
except for such encumbrances or restrictions existing under or by
reason of:
(1) applicable law and agreements with governmental authorities with
respect to assets located in their jurisdiction;
41
(2) the Securities, this Indenture or any Guarantee;
(3) (A) customary provisions restricting (1) the subletting or
assignment of any lease or (2) the transfer of copyrighted or patented
materials, (B) provisions in agreements that restrict the assignment of
such agreements or rights thereunder or (C) provisions of a customary
nature contained in the terms of Capital Stock restricting the payment of
dividends and the making of distributions on Capital Stock;
(4) any agreement or instrument governing Acquired Indebtedness,
which encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than (a) the Person or the
properties or assets of the Person so acquired (including the Capital
Stock of such Person), or (b) any Restricted Subsidiary having no assets
other than (i) the Person or the properties or assets of the Person so
acquired (including the Capital Stock of such Person) and (ii) other
assets having a fair market value not in excess of $50,000, and, in each
case, the monetary proceeds thereof;
(5) any agreement or instrument (A) in effect at or entered into on
the Issue Date or (B) governing Senior Debt or Guarantor Senior Debt,
including the New Credit Agreement;
(6) any agreement or instrument governing Indebtedness incurred
pursuant to clause (9), (13) or (16) of the definition of Permitted
Indebtedness;
(7) restrictions on the transfer of assets subject to any Lien
permitted under this Indenture;
(8) restrictions imposed by any agreement to sell assets not in
violation of this Indenture to any Person pending the closing of such
sale;
(9) customary rights of first refusal with respect to the Company's
and its Restricted Subsidiaries' interests in their respective Restricted
Subsidiaries and Joint Ventures;
(10) Indebtedness of a Person that was a Restricted Subsidiary at
the time of incurrence and the incurrence of which Indebtedness is
permitted by Section 4.04; provided that such encumbrances and
restrictions apply only to such Restricted Subsidiary and its assets; and
provided, further, that the Board of Directors of the Company has
determined in good faith, at the time of creation of each such encumbrance
or restriction, that such encumbrances and restrictions would not singly
or in the aggregate have a materially adverse effect on the Holders of the
Securities;
(11) the subordination of any Indebtedness owed by the Company or
any of its Restricted Subsidiaries to the Company or any other Restricted
Subsidiary to any other Indebtedness of the Company or any of its
Restricted Subsidiaries; provided (A) such other Indebtedness is permitted
under this Indenture and (B) the Board of Directors of the Company has
determined in good faith, at the time of creation of
42
each such encumbrance or restriction, that such encumbrances and
restrictions would not singly or in the aggregate have a materially
adverse effect on the Holders of the Securities; or
(12) an agreement effecting a refinancing, replacement or
substitution of Indebtedness issued, assumed or incurred pursuant to an
agreement referred to in clauses (2), (4) and (5) above or any other
agreement evidencing Indebtedness permitted under this Indenture;
provided, however, that the provisions relating to such encumbrance or
restriction contained in any such refinancing, replacement or substitution
agreement or any such other agreement are not less favorable to the
Company in any material respect as determined by the Board of Directors of
the Company than the provisions of the Indebtedness being refinanced.
SECTION 4.14. Limitation on Liens. The Company will not, and will
not permit any of its Restricted Subsidiaries to, directly or indirectly,
create, incur, assume or suffer to exist any Lien securing Indebtedness (other
than Permitted Liens) upon any property or asset now owned or hereafter acquired
by them, or any income or profits therefrom, or assign or convey any right to
receive income therefrom; provided, however, that in addition to creating
Permitted Liens on their properties or assets, the Company and any of its
Restricted Subsidiaries may create, incur, assume or suffer to exist any Lien
securing Indebtedness upon any of their properties or assets (including, but not
limited to, any Capital Stock of its Subsidiaries) if the Securities are equally
and ratably secured.
SECTION 4.15. Change of Control. (a) Upon the occurrence of a Change
of Control, each Holder will have the right to require that the Company
repurchase all or a portion of such Holder's Securities, at a purchase price
equal to 101% of the principal amount thereof, plus accrued and unpaid interest,
if any, to the date of repurchase.
(b) Prior to the mailing of the notice described in paragraph (c)
below, but in any event within 30 days following any Change of Control, the
Company covenants to
(1) repay in full and terminate all commitments under Indebtedness
under the New Credit Agreement and all other Senior Debt, the terms of
which require repayment upon a Change of Control or offer to repay in
full, and terminate all commitments under all Indebtedness under the New
Credit Agreement and all other such Senior Debt and to repay the
Indebtedness owed to each lender which has accepted such offer; or
(2) obtain the requisite consents under the New Credit Agreement and
all such other Senior Debt to permit the purchase of the Securities as
provided below.
The Company shall first comply with the covenant in the immediately preceding
sentence before it shall be required to repurchase Securities pursuant to the
provisions described below. The Company's failure to comply with this Section
4.15 shall constitute an Event of Default described in clause (c) and not in
clause (b) of Section 6.01.
43
(c) Within 30 days following the date upon which the Change of
Control occurred, the Company shall send, by first class mail, a notice to each
Holder, with a copy to the Trustee, which notice shall govern the terms of the
Change of Control offer to purchase (the "Change of Control Offer"). The notice
to the Holders shall contain instructions and materials necessary to enable such
Holders to tender Securities pursuant to the Change of Control Offer. Such
notice shall state:
(1) that the Change of Control Offer is being made pursuant to this
Section 4.15 and that all Securities tendered and not withdrawn will be
accepted for payment;
(2) the purchase price (including the amount of accrued interest)
and the purchase date, which shall be no earlier than 30 days nor later
than 60 days from the date such notice is mailed, other than as may be
required by law (the "Change of Control Payment Date");
(3) that any Security not tendered will continue to accrue interest;
(4) that, unless the Company defaults in making payment therefor,
any Security accepted for payment pursuant to the Change of Control Offer
shall cease to accrue interest after the Change of Control Payment Date;
(5) that Holders electing to have a Security purchased pursuant to a
Change of Control Offer will be required to surrender the Security, with
the form entitled "Option of Holder to Elect Purchase" on the reverse of
the Security completed, to the Paying Agent at the address specified in
the notice prior to 5:00 p.m. New York City time on the third Business Day
prior to the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than 5:00 p.m. New York time on the
second Business Day prior to the Change of Control Payment Date, a
telegram, telex, facsimile transmission or letter setting forth the name
of the Holder, the principal amount of the Securities the Holder delivered
for purchase and a statement that such Holder is withdrawing his election
to have such Security purchased;
(7) that Holders whose Securities are purchased only in part will be
issued new Securities in a principal amount equal to the unpurchased
portion of the Securities surrendered; and
(8) the circumstances and relevant facts regarding such Change of
Control.
On or before the Change of Control Payment Date, the Company shall
(i) accept for payment Securities or portions thereof tendered (in integral
multiples of $1,000) pursuant to the Change of Control Offer, (ii) deposit with
the Paying Agent U.S. Legal Tender sufficient to pay the purchase price plus
accrued interest, if any, of all Securities so tendered and (iii) deliver to the
Trustee Securities so accepted together with an Officers' Certificate stating
the Securities or portions thereof being purchased by the Company. The
44
Paying Agent shall promptly mail to the Holders of Securities so accepted
payment in an amount equal to the purchase price plus accrued and unpaid
interest, if any, thereon to the Change of Control Payment Date and the Trustee
shall promptly authenticate and mail to such Holders new Securities equal in
principal amount to any unpurchased portion of the Securities surrendered. Any
Securities not so accepted shall be promptly mailed by the Company to the Holder
thereof. For purposes of this Section 4.15, the Trustee shall act as the Paying
Agent.
Any amounts remaining after the purchase of Securities pursuant to a
Change of Control Offer promptly shall be returned by the Trustee to the
Company.
The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Securities pursuant to a Change of Control Offer. To the extent
the provisions of any securities laws or regulations conflict with the
provisions under this Section 4.15, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this Section 4.15 by virtue thereof.
SECTION 4.16. Limitation on Asset Sales. The Company will not, and
will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale
unless:
(1) the Company or the applicable Restricted Subsidiary, as the case
may be, receives consideration at the time of such Asset Sale at least
equal to the fair market value of the assets sold or otherwise disposed
of, as determined in good faith by the Company's Board of Directors;
(2) at least 75% of the consideration received by the Company or
such Restricted Subsidiary exclusive of indemnities, as the case may be,
from such Asset Sale shall be cash or Cash Equivalents and is received at
the time of such disposition; provided that the amount of (a) any
liabilities of the Company or any such Restricted Subsidiary, as shown on
the Company's or such Restricted Subsidiary's most recent balance sheet,
that are assumed by the transferee of any such assets, (b) any notes or
other obligations received by the Company or any such Restricted
Subsidiary from such transferee that are converted by the Company or such
Restricted Subsidiary into cash or Cash Equivalents within 60 days of the
time of such disposition, to the extent of the cash or Cash Equivalents
received and (c) any Designated Non-Cash Consideration received by the
Company or any of its Restricted Subsidiaries in such Asset Sale having an
aggregate fair market value, taken together with all other Designated
Non-Cash Consideration received pursuant to this clause (c), not to exceed
$25.0 million, with the fair market value of each item of Designated
Non-Cash Consideration being measured at the time received and without
giving effect to subsequent changes in value, shall be deemed to be cash
for the purposes of this clause (2); and
(3) upon the consummation of an Asset Sale, the Company shall apply
directly or through a Restricted Subsidiary, or cause such Restricted
Subsidiary to
45
apply, the Net Cash Proceeds relating to such Asset Sale within 360 days
of receipt thereof either (A) to repay Senior Debt (and in the case of any
Indebtedness outstanding under a revolving credit facility and repaid in
satisfaction of this covenant, to permanently reduce the amounts that may
be reborrowed thereunder by an equivalent amount), with the Net Cash
Proceeds received in respect thereof, (B) to reinvest in Productive
Assets, or (C) a combination of prepayment, reduction and investment
permitted by the foregoing clauses (3)(A) and (3)(B);
provided that the 75% limitation referred to above shall not apply to any sale,
transfer or other disposition of assets in which the cash portion of the
consideration received therefor is equal to or greater than what the after-tax
net proceeds would have been had such transaction complied with the
aforementioned 75% limitation. On the 361st day after an Asset Sale or such
earlier date, if any, as the Board of Directors of the Company or of such
Restricted Subsidiary determines not to apply the Net Cash Proceeds relating to
such Asset Sale as set forth in clauses (3)(A), (3)(B) and (3)(C) of the
preceding sentence (each, a "Net Proceeds Offer Trigger Date"), such aggregate
amount of Net Cash Proceeds which have not been so applied on or before such Net
Proceeds Offer Trigger Date as permitted in clauses (3)(A), (3)(B) and (3)(C) of
the preceding sentence (each, a "Net Proceeds Offer Amount") shall be applied by
the Company to make an offer to repurchase (the "Net Proceeds Offer") on a date
(the "Net Proceeds Offer Payment Date") not less than 30 nor more than 45 days
following the applicable Net Proceeds Offer Trigger Date, from all Holders on a
pro rata basis that amount of Securities equal to the Net Proceeds Offer Amount
multiplied by a fraction, the numerator of which is the aggregate principal
amount of Securities then outstanding and the denominator of which is the sum of
the aggregate principal amount of Securities and Pari Passu Indebtedness then
outstanding (the "Pro Rata Share"), at a price equal to 100% of the principal
amount of the Securities to be repurchased, plus accrued interest to the date of
repurchase.
Notwithstanding the foregoing, if a Net Proceeds Offer Amount is
less than $20.0 million, the application of the Net Cash Proceeds constituting
such Net Proceeds Offer Amount to a Net Proceeds Offer may be deferred until
such time as such Net Proceeds Offer Amount plus the aggregate amount of all Net
Proceeds Offer Amounts arising subsequent to the Net Proceeds Offer Trigger Date
relating to such initial Net Proceeds Offer Amount from all Asset Sales by the
Company and its Restricted Subsidiaries aggregates at least $20.0 million, at
which time the Company shall apply all Net Cash Proceeds constituting all Net
Proceeds Offer Amounts that have been so deferred to make a Net Proceeds Offer,
the first date the aggregate of all such deferred Net Proceeds Offer Amounts is
equal to $20.0 million or more being deemed to be a Net Proceeds Offer Trigger
Date. To the extent that the aggregate purchase price of Securities tendered
pursuant to any Net Proceeds Offer is less than the Pro Rata Share, the Company
or any Guarantor may use such amount for general corporate purposes. Upon
completion of any Net Proceeds Offer, the Net Proceeds Offer Amount shall be
reset to zero.
Notwithstanding the first two paragraphs of this Section 4.16, the
Company and its Restricted Subsidiaries will be permitted to consummate an Asset
Sale without complying with such paragraphs to the extent
46
(1) at least 50% of the consideration for such Asset Sale
constitutes Productive Assets; and
(2) such Asset Sale is for fair market value; provided that if the
fair market value is determined to exceed $25.0 million, such
determination shall be made in good faith by the Company's Board of
Directors; provided, further, that the fair market value of any
consideration not constituting Productive Assets received by the Company
or any of its Restricted Subsidiaries in connection with any Asset Sale
permitted to be consummated under this paragraph shall constitute Net Cash
Proceeds subject to the provisions of the first two paragraphs of this
Section 4.16.
In the event of the transfer of substantially all, but not all, of
the property and assets of the Company and its Restricted Subsidiaries as an
entirety to a Person in a transaction permitted under Section 5.01, the
successor corporation shall be deemed to have sold the properties and assets of
the Company and its Restricted Subsidiaries not so transferred for purposes of
this Section 4.16, and shall comply with the provisions of this Section 4.16
with respect to such deemed sale as if it were an Asset Sale. In addition, the
fair market value of such properties and assets of the Company or its Restricted
Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for
purposes of this Section 4.16.
Notice of a Net Proceeds Offer shall be mailed, by first class mail,
by the Company to Holders at their last registered address not less than 30 days
nor more than 60 days before the Net Proceeds Offer Payment Date, with a copy to
the Trustee. The notice shall contain instructions and materials necessary to
enable such Holders to tender Securities pursuant to the Net Proceeds Offer and
shall state the following terms:
(1) that the Net Proceeds Offer is being made pursuant to this
Section 4.16, that all Securities tendered will be accepted for payment;
provided, however, that if the aggregate principal amount of Securities
tendered in a Net Proceeds Offer plus accrued interest at the expiration
of such offer exceeds the aggregate amount of the Net Proceeds Offer, the
Company shall select the Securities to be purchased on a pro rata basis
(with such adjustments as may be deemed appropriate by the Company so that
only Securities in denominations of $1,000 or multiples thereof shall be
purchased) and that the Net Proceeds Offer shall remain open for a period
of 20 Business Days or such longer period as may be required by law;
(2) the Net Proceeds Offer Amount (including the amount of accrued
interest) and the Net Proceeds Offer Payment Date (which shall be not less
than 30 nor more than 45 days following the applicable Net Proceeds Offer
Trigger Date and which shall be at least five Business Days after the
Trustee receives notice thereof from the Company);
(3) that any Security not tendered will continue to accrue interest;
(4) that, unless the Company defaults in making payment therefor,
any Security accepted for payment pursuant to the Net Proceeds Offer shall
cease to accrue interest after the Net Proceeds Offer Payment Date;
47
(5) that Holders electing to have a Security purchased pursuant to a
Net Proceeds Offer will be required to surrender the Security, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Security completed, to the Paying Agent at the address specified in the
notice prior to the close of business on the Business Day prior to the Net
Proceeds Offer Payment Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the second Business Day prior to the
Net Proceeds Offer Payment Date, a telegram, telex, facsimile transmission
or letter setting forth the name of the Holder, the principal amount of
the Securities such Holder delivered for purchase and a statement that
such Holder is withdrawing his election to have such Securities purchased;
and
(7) that Holders whose Securities are purchased only in part will be
issued new Securities in a principal amount equal to the unpurchased
portion of the Securities surrendered; provided, however, that each
Security purchased and each new Security issued shall be in an original
principal amount of $1,000 or integral multiples thereof.
On or before the Net Proceeds Offer Payment Date, the Company shall
(i) accept for payment Securities or portions thereof tendered pursuant to the
Net Proceeds Offer which are to be purchased in accordance with item (1) above,
(ii) deposit with the Paying Agent U.S. Legal Tender sufficient to pay the
purchase price plus accrued interest, if any, of all Securities to be purchased
and (iii) deliver to the Trustee Securities so accepted together with an
Officers' Certificate stating the Securities or portions thereof being purchased
by the Company. The Paying Agent shall promptly mail to the Holders of
Securities so accepted payment in an amount equal to the purchase price plus
accrued interest, if any. For purposes of this Section 4.16, the Trustee shall
act as the Paying Agent.
Any amounts remaining after the purchase of Securities pursuant to a
Net Proceeds Offer promptly shall be returned by the Trustee to the Company.
If an offer is made to repurchase the Securities pursuant to a Net
Proceeds Offer, the Company will and will cause its Restricted Subsidiaries to
comply with all tender offer rules under state and federal securities laws,
including, but not limited to, Section 14(e) under the Exchange Act and Rule
14e-1 thereunder, to the extent applicable to such offer. To the extent that the
provisions of any securities laws or regulations conflict with this Section
4.16, the Company shall comply with the applicable securities laws and
obligations and shall not be deemed to have breached its obligations hereunder
by virtue thereof.
SECTION 4.17. Limitation on Preferred Stock of Restricted
Subsidiaries. The Company will not permit any of its Restricted Subsidiaries
that are not Guarantors of the Securities to issue any Preferred Stock (other
than to the Company or to a Wholly Owned Restricted Subsidiary of the Company)
or permit any Person (other than the Company or a Wholly Owned Restricted
Subsidiary of the Company) to own any Preferred Stock of any Restricted
Subsidiary of the Company that is not a Guarantor of the Securities.
48
SECTION 4.18. Limitation on Sale and Leaseback Transactions. The
Company will not, and will not permit any Restricted Subsidiary to, enter into
any Sale and Leaseback Transaction; provided that the Company and any Guarantor
may enter into a Sale and Leaseback Transaction if
(1) the Company or such Guarantor could have
(a) incurred Indebtedness in an amount equal to the Attributable
Debt relating to such Sale and Leaseback Transaction pursuant to Section
4.04; and
(b) incurred a Lien to secure such Indebtedness pursuant to Section
4.14;
(2) the gross cash proceeds of such Sale and Leaseback Transaction
are at least equal to the fair market value, as determined in good faith
by the Board of Directors of the Company and set forth in an Officers'
Certificate delivered to the Trustee, of the property that is the subject
of such Sale and Leaseback Transaction; and
(3) the transfer of assets in such Sale and Leaseback Transaction is
permitted by, and the Company or the applicable Guarantor applies the
proceeds of such transaction in accordance with, Section 4.16.
SECTION 4.19. Limitation of Guarantees by Restricted Subsidiaries.
The Company will not permit any Restricted Subsidiary that is not a Guarantor,
directly or indirectly, by way of the pledge of any intercompany note or
otherwise, to assume, guarantee or in any other manner become liable with
respect to any Indebtedness of the Company, other than
(A) Indebtedness incurred in reliance on clause (12) (to the extent
the Indebtedness being refinanced, modified, replaced, renewed, restated,
refunded, deferred, extended, substituted, supplemented, reissued or
resold was permitted to be guaranteed by Restricted Subsidiaries) of the
definition of Permitted Indebtedness or under Currency Agreements in
reliance on clause (5) of the definition of Permitted Indebtedness;
(B) Interest Swap Obligations incurred in reliance on clause (4) of
the definition of Permitted Indebtedness; or
(C) additional Indebtedness incurred in reliance on clause (13) of
the definition of Permitted Indebtedness;
unless, in any such case (except as otherwise provided in Section 11.17)
(a) such Restricted Subsidiary has executed and delivered or
executes and delivers a supplemental indenture to this Indenture,
providing a guarantee of payment of the Securities by such Restricted
Subsidiary in the form required by this Indenture; and
49
(b) if such assumption, guarantee or other liability of such
Restricted Subsidiary is provided in respect of Indebtedness that is
expressly subordinated to the Securities, the guarantee or other
instrument provided by such Restricted Subsidiary in respect of such
subordinate Indebtedness shall be similarly subordinated to the Guarantee
of the Securities.
Any Guarantee of the Securities by a Restricted Subsidiary shall
provide by its terms that it shall be automatically and unconditionally released
and discharged, without any further action required on the part of the Trustee
or any Holder, upon:
(1) the unconditional release of such Restricted Subsidiary from its
liability in respect of the Indebtedness in connection with which such
Guarantee of the Securities was executed and delivered pursuant to the
preceding paragraph; or
(2) any sale or other disposition (by merger or otherwise) to any
Person which is not a Restricted Subsidiary of the Company, of all of the
Company's Capital Stock in, or all or substantially all of the assets of,
such Restricted Subsidiary; provided, however, that
(a) such sale or disposition of such Capital Stock or assets is
otherwise in compliance with the terms of this Indenture; and
(b) such assumption, guarantee or other liability of such Restricted
Subsidiary has been released by the holders of the other Indebtedness so
guaranteed.
ARTICLE 5
Successor Corporation
---------------------
SECTION 5.01. Merger, Consolidation and Sale of Assets. The Company
will not, in a single transaction or series of related transactions, consolidate
or merge with or into any Person, or sell, assign, transfer, lease, convey or
otherwise dispose of (or cause or permit any Restricted Subsidiary of the
Company to sell, assign, transfer, lease, convey or otherwise dispose of) all or
substantially all of the Company's assets (determined on a consolidated basis
for the Company and its Restricted Subsidiaries) whether as an entirety or
substantially as an entirety to any Person unless:
(1) either (A) the Company or a Restricted Subsidiary of the Company
shall be the surviving or continuing Person or (B) the Person, if other
than the Company or a Restricted Subsidiary of the Company, formed by such
consolidation or into which the Company is merged or the Person which
acquires by sale, assignment, transfer, lease, conveyance or other
disposition of all or substantially all of the Company's assets determined
on a consolidated basis for the Company and its Restricted Subsidiaries
(the "Surviving Entity") (x) shall be a Person 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
50
reasonably satisfactory to the Trustee, executed and delivered to the
Trustee, the due and punctual payment of the principal of and interest on
all of the Securities and the performance of every covenant of the
Securities, this Indenture and the Registration Rights Agreement (as
defined in Appendix A hereto) on the part of the Company to be performed
or observed;
(2) immediately after giving effect to such transaction and the
assumption contemplated by clause (1)(B)(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 or such Surviving Entity, as the case may be, shall be able to
incur at least $1.00 of additional Indebtedness, other than Permitted
Indebtedness, pursuant to Section 4.04;
(3) immediately before and immediately after giving effect to such
transaction and the assumption contemplated by clause (1)(B)(y) above,
including, without limitation, giving effect to any Indebtedness and
Acquired Indebtedness incurred or anticipated to be incurred and any Lien
granted in connection with or in respect of the transaction, no Default or
Event of Default shall have occurred and be continuing; and
(4) the Company or the Surviving Entity shall have delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, each stating
that such consolidation, merger, sale, assignment, transfer, lease,
conveyance or other disposition and, if a supplemental indenture is
required in connection with such transaction, such supplemental indenture,
shall comply with the applicable provisions of this Indenture and that all
conditions precedent in this Indenture relating to the execution of such
supplemental indenture have been satisfied.
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, other than to a Wholly Owned Subsidiary that is a
Guarantor, 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 consolidation, combination or merger or any transfer of all
or substantially all of the assets of the Company in accordance with the
foregoing, in which the Company is not the continuing Person, 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 and the Securities with the same effect as if such Surviving
Entity had been named as such and the Company shall be relieved of all of its
obligations and duties under this Indenture and the Securities.
Each Guarantor, other than any Guarantor whose Guarantee is to be
released in accordance with the terms of the Guarantee and this Indenture, will
not, and the Company
51
will not cause or permit any Guarantor to, consolidate with or merge with or
into any Person other than the Company or any other Guarantor unless:
(1) the entity formed by or surviving any such consolidation or
merger, if other than the Guarantor, or to which such sale, lease,
conveyance or other disposition shall have been made is a Person organized
and existing under the laws of the United States or any State thereof or
the District of Columbia;
(2) such entity assumes by supplemental indenture all of the
obligations of the Guarantor on the Guarantee;
(3) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing; and
(4) immediately after giving effect to such transaction and the use
of any net proceeds therefrom on a pro forma basis, the Company could
satisfy the provisions of clause (2) of the first paragraph of this
Section 5.01.
Any merger or consolidation of a Guarantor with and into the
Company, with the Company being the Surviving Entity, or another Guarantor that
is a Wholly Owned Restricted Subsidiary of the Company need not comply with this
Section 5.01.
SECTION 5.02. Successor Substituted. Upon any such consolidation,
merger, conveyance, lease or transfer of all or substantially all of the assets
of the Company in accordance with Section 5.01, in which the Company is not the
surviving Person, the Surviving Entity will succeed to, and be substituted for,
and may exercise every right and power of, the Company under this Indenture and
the Securities with the same effect as if such successor had been named as the
Company therein. When a Surviving Entity assumes all of the Obligations of the
Company hereunder and under the Securities and agrees to be bound hereby and
thereby, the predecessor shall be released from such Obligations.
ARTICLE 6
Default and Remedies
--------------------
SECTION 6.01. Events of Default. An "Event of Default" means any of
the following events:
(a) the failure to pay interest on any Securities when the same
becomes due and payable and the Default continues for a period of 30 days;
(b) the failure to pay the principal on any Securities, when such
principal becomes due and payable, at maturity, upon redemption or
otherwise, including the failure to make a payment to repurchase
Securities tendered pursuant to a Change of Control Offer or a Net
Proceeds Offer;
(c) a Default in the observance or performance of any other covenant
or agreement contained in this Indenture, which Default continues for a
period of 45
52
days after the Company receives written notice specifying the Default, and
demanding that such Default be remedied, from the Trustee or the Holders
of at least 25% of the outstanding principal amount of the Securities;
(d) the failure to pay at final maturity, giving effect to any
extensions thereof, the principal amount of any Indebtedness of the
Company or any Restricted Subsidiary of the Company that is a Significant
Subsidiary, other than intercompany Indebtedness, and such failure
continues for a period of 20 days or more, or the acceleration of the
final stated maturity of any such Indebtedness, which acceleration is not
rescinded, annulled or otherwise cured within 20 days of receipt by the
Company or such Restricted Subsidiary of notice of any such acceleration,
if, in either case, the aggregate principal amount of such Indebtedness,
together with the principal amount of any other such Indebtedness in
default for failure to pay principal at final maturity or which has been
accelerated, in each case with respect to which the 20-day period
described above has passed, aggregates $25.0 million or more at any time;
(e) any final judgment or final judgments for the payment of money
in excess (net of amounts covered by third-party insurance with insurance
carriers who in the reasonable judgment of the Board of Directors of the
Company are creditworthy and who have not disclaimed liability with
respect to such judgment or judgments) of $25.0 million shall be rendered
against the Company or any of its Restricted Subsidiaries that is a
Significant Subsidiary and shall not be discharged for any period of 60
consecutive days during which a stay of enforcement shall not be in
effect;
(f) the Company or any Restricted Subsidiary that is a Significant
Subsidiary (i) admits in writing its inability to pay its debts generally
as they become due, (ii) commences a voluntary case or proceeding under
any Bankruptcy Law with respect to itself, (iii) consents to the entry of
a judgment, decree or order for relief against it in an involuntary case
or proceeding under any Bankruptcy Law, (iv) consents to the appointment
of a Custodian of it or for substantially all of its property, (v)
consents to or acquiesces in the institution of a bankruptcy or an
insolvency proceeding against it, (vi) makes a general assignment for the
benefit of its creditors or (vii) takes any partnership or corporate
action, as the case may be, to authorize or effect any of the foregoing;
(g) a court of competent jurisdiction enters a judgment, decree or
order for relief in respect of the Company or any Restricted Subsidiary
that is a Significant Subsidiary in an involuntary case or proceeding
under any Bankruptcy Law, which shall (i) approve as properly filed a
petition seeking reorganization, arrangement, adjustment or composition in
respect of the Company or any such Significant Subsidiary, (ii) appoint a
Custodian of the Company or any such Significant Subsidiary or for
substantially all of any of their property or (iii) order the winding-up
or liquidation of its affairs; and such judgment, decree or order shall
remain unstayed and in effect for a period of 60 consecutive days; or
53
(h) any of the Guarantees ceases to be in full force and effect or
any of the Guarantees is held in a judicial proceeding to be null and void
and unenforceable or any of the Guarantees is found to be invalid by a
final judgment or order that is not appealable or any of the Guarantors
denies its liability under its Guarantee, other than by reason of release
of a Guarantor in accordance with the terms of this Indenture.
SECTION 6.02. Acceleration. If an Event of Default (other than an
Event of Default specified in Section 6.01(f) or (g) with respect to the
Company) shall occur and be continuing, the Trustee or the Holders of at least
25% in principal amount of outstanding Securities may declare the principal of
and accrued and unpaid interest on all the Securities to be due and payable by
notice in writing to the Company and the Trustee specifying the respective Event
of Default and that it is a "notice of acceleration", and the same shall become
immediately due and payable. If an Event of Default specified in Section 6.01(f)
or (g) with respect to the Company occurs and is continuing, then all unpaid
principal of and accrued and unpaid interest on all of the outstanding
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.
At any time after a declaration of acceleration with respect to the
Securities as described in the preceding paragraph, the Holders of a majority in
principal amount of the Securities may rescind and cancel such declaration and
its consequences (i) if the rescission would not conflict with any judgment or
decree, (ii) if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of the
acceleration, (iii) to the extent the payment of such interest is lawful,
interest on overdue installments of interest and overdue principal, which has
become due otherwise than by such declaration of acceleration, has been paid,
(iv) if the Company has paid the Trustee its reasonable compensation and
reimbursed the Trustee for its reasonable expenses, disbursements and advances
and (v) in the event of the cure or waiver of an Event of Default of the type
described in clause (f) or (g) of Section 6.01, the Trustee shall have received
an Officers' Certificate and an Opinion of Counsel that such Event of Default
has been cured or waived. No such rescission shall affect any subsequent Default
or impair any right consequent thereto.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the 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. A delay
or omission by the Trustee or any Securityholder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
SECTION 6.04. Waiver of Past Defaults. Subject to Sections 2.09,
6.07 and 9.02, the Holders of not less than a majority in principal amount of
the outstanding Securities
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by written notice to the Trustee may waive an existing Default or Event of
Default and its consequences, except a Default in the payment of principal of or
interest on any Security as specified in clauses (a) and (b) of Section 6.01.
When a Default or Event of Default is waived, it is cured and ceases.
SECTION 6.05. Control by Majority. The Holders of not less than a
majority in principal amount of the outstanding Securities may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on it. Subject to Section
7.01, however, the Trustee may refuse to follow any direction that conflicts
with any law or this Indenture, that the Trustee determines may be unduly
prejudicial to the rights of another Securityholder, or that may, in the sole
judgment of the Trustee, give rise to or subject the Trustee to personal
liability; provided that the Trustee may take any other action deemed proper by
the Trustee.
In the event the Trustee takes any action or follows any direction
pursuant to this Indenture, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against any loss or expense caused by
taking such action or following such direction.
SECTION 6.06. Limitation on Suits. A Securityholder may not pursue
any remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(2) the Holder or Holders of at least 25% in principal amount of the
outstanding Securities make a written request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer to the Trustee indemnity or
security satisfactory to the Trustee in its sole judgment, against any
loss, liability or expense;
(4) the Trustee does not comply with the request within 30 days
after receipt of the request and the offer described in clause (3) above;
and
(5) during such 30-day period the Holder or Holders of a majority in
principal amount of the outstanding Securities do not give the Trustee a
written direction which, in the opinion of the Trustee, 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 6.07. 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 such Security, or to bring suit for the enforcement of
any such payment on or after such respective dates, shall not be impaired or
affected without the written consent of the Holder.
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SECTION 6.08. Collection Suit by Trustee. If an Event of Default in
payment of principal or interest specified in clause (a) or (b) of Section 6.01
occurs and is continuing, the Trustee may recover judgment in its own name and
as trustee of an express trust against the Company or any other obligor on the
Securities for the whole amount of principal and accrued interest and fees
remaining unpaid, together with interest on overdue principal and, to the extent
that payment of such interest is lawful, interest on overdue installments of
interest, in each case at the rate per annum borne by the Securities and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the actual, documented and reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and the Securityholders allowed in any judicial
proceedings relating to the Company, its Subsidiaries, their creditors or their
property and shall be entitled and empowered to collect and receive any monies
or other property payable or deliverable on any such claims 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 7.07.
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 or
property pursuant to this Article Six, it shall pay out the money or property in
the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: if the Holders are forced to proceed against the Company
directly without the Trustee, to Holders for their reasonable
collection costs;
Third: to holders of Senior Debt of the Company and, if such
money or property has been collected from a Guarantor, to the holders
of Guarantor Senior Debt of such Guarantor, in each case if and to the
extent required by Article 10 or 12, respectively;
Fourth: to Holders for amounts due and unpaid on the Securities
for principal and interest, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Securities
for principal and interest, respectively; and
Fifth: to the Company.
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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. Each party to this Indenture
agrees and each Holder of any Security by its acceptance thereof shall be deemed
to have agreed that, 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 and expenses, 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 instituted by the
Company, any suit instituted by the Trustee, any suit instituted by a Holder
pursuant to Section 6.07, or any suit instituted by a Holder or Holders of more
than 10% in principal amount of the outstanding Securities.
SECTION 6.12. 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 Holders, then
and in every such case, subject to any determination in such proceeding, the
Company, the Guarantors, 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 7
Trustee
SECTION 7.01. Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture and use the same degree of care and skill
in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties as are expressly and
specifically set forth in this Indenture or the TIA and no covenants,
duties or obligations whatsoever shall be implied under this Indenture
that are adverse to the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions and such
other documents delivered to it pursuant to Section 13.04 hereof furnished
to the Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
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(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:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section 7.01.
(2) The Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.02, 6.04 or 6.05.
(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 to take or omit to take any action
under this Indenture or take any action at the request or direction of Holders
if it shall reasonably believe that repayment of such funds is not assured to it
or it does not receive an indemnity that is, in its sole discretion, adequate
against such risk, liability, loss, fee or expense which might be incurred by it
in compliance with such request or direction.
(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 7.01.
(f) The Trustee shall not be liable for interest on any money or
assets received by it except as the Trustee may agree in writing with the
Company. Assets held in trust by the Trustee need not be segregated from other
assets of the Trustee except to the extent required by law.
(g) In the absence of bad faith, negligence or willful misconduct on
the part of the Trustee, the Trustee shall not be accountable for the use of any
of the Securities delivered hereunder or the proceeds thereof.
SECTION 7.02. Rights of Trustee. Subject to Section 7.01:
(a) The Trustee may rely conclusively on any document believed by it
to be genuine and to have been signed or presented by the proper Person.
The Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate and an Opinion of Counsel, which shall conform to
the provisions of Sections 13.04 and 13.05. 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.
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(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 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 which it reasonably believes to be authorized or
within its rights or powers.
(e) The Trustee may consult with counsel of its selection 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 be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this
Indenture, unless such Holders shall have offered to the Trustee
reasonable security or indemnity satisfactory to the Trustee in its sole
judgment against the costs, expenses and liabilities which may be incurred
therein or thereby.
(g) The Trustee shall not be deemed to have notice of any Event of
Default unless a Responsible Officer of the Trustee has received written
notice thereof or unless written notice of any event which is in fact such
a Default is received by the Trustee at the Corporate Trust Office of the
Trustee, and such notice references the Securities and this Indenture.
(h) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate (including any
Officers' Certificate), statement, instrument, opinion (including any
Opinion of Counsel), notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters
as it may see fit and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled, upon reasonable notice to
the Company, to examine the books, records, and premises of the Company,
personally or by agent or attorney.
(i) The rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in
each of its capacities hereunder, and to each agent, custodian and other
Person employed to act hereunder.
(j) The Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of
officers authorized at such time to take specified actions pursuant to
this Indenture, which Officers' Certificate may be signed by any Person
authorized to sign an Officers' Certificate, including any Person
specified as so authorized in any such certificate previously delivered
and not superseded.
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SECTION 7.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company, its Subsidiaries, or their respective
Affiliates with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. However, the Trustee must comply with Sections
7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities (other than the certificate of authentication
of the Trustee), it shall not be accountable for the Company's use of the
proceeds from the Securities, and it shall not be responsible for any statement
of the Company in this Indenture or any document issued in connection with the
sale of Securities or any statement in the Securities other than the Trustee's
certificate of authentication.
SECTION 7.05. Notice of Default. If an Event of Default occurs and
is continuing and the Trustee receives actual notice of such event, the Trustee
shall mail to each Securityholder, as their names and addresses appear on the
Securityholder list described in Section 2.05, notice of the uncured Event of
Default within 90 days after the Trustee receives such notice. Except in the
case of an Event of Default in payment of principal of, or interest on, any
Security, including the failure to make payment on (i) the Change of Control
Payment Date pursuant to a Change of Control Offer or (ii) the Net Proceeds
Offer Payment Date pursuant to a Net Proceeds Offer, the Trustee shall not be
deemed to have actual knowledge or actual notice of an Event of Default unless a
Responsible Officer of the Trustee has received written notice of such Event of
Default. The Trustee may withhold the notice if and so long as the Board of
Directors, the executive committee, or a trust committee of directors and/or
Responsible Officers, of the Trustee in good faith determines that withholding
the notice is in the interest of the Securityholders. As used herein, the term
"actual knowledge" means the actual fact or state of knowing, without any duty
to make any investigation with regard thereto.
SECTION 7.06. Reports by Trustee to Holders. Within 60 days after
June 15 of each year, beginning with June 15, 2005, the Trustee shall, to the
extent that any of the events described in TIA ss. 313(a) occurred within the
previous twelve months, but not otherwise, mail to each Securityholder a brief
report dated as of June 15 that complies with TIA ss. 313(a). The Trustee also
shall comply with TIA xx.xx. 313(b), 313(c) and 313(d).
A copy of each report at the time of its mailing to Securityholders
shall be mailed to the Company and filed with the Commission and each securities
exchange, if any, on which the Securities are listed.
The Company shall notify the Trustee if the Securities become listed
on any securities exchange or of any delisting thereof.
SECTION 7.07. Compensation and Indemnity. The Company shall pay to
the Trustee from time to time reasonable compensation for its services hereunder
(which shall be agreed to from time to time in writing by the Company and the
Trustee). The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an
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express trust. The Company shall reimburse the Trustee upon written request for
all reasonable and documented out-of-pocket disbursements, expenses and advances
(including reasonable and documented fees and expenses of counsel) incurred or
made by it in addition to the compensation for its services, except any such
disbursements, expenses and advances as may be attributable to the Trustee's
negligence or willful misconduct. Such expenses shall include the reasonable and
documented compensation, disbursements and expenses of the Trustee's agents,
accountants, experts and counsel.
The Company shall indemnify the Trustee or any predecessor Trustee
and its agents, employees, officers, stockholders and directors for, and hold
them harmless against, any loss, liability or expense, including taxes (other
than taxes based upon, measured or determined by the income of the Trustee),
incurred by them except for such actions to the extent caused by any negligence,
bad faith or willful misconduct on their part, arising out of or in connection
with the acceptance or administration of this trust including the reasonable
costs and expenses of defending themselves against or investigating any claim or
liability in connection with the exercise or performance of any of the Trustee's
rights, powers or duties hereunder. The Trustee shall notify the Company
promptly of any claim asserted against the Trustee or any of its agents,
employees, officers, stockholders and directors for which it may seek indemnity.
At the Trustee's reasonable discretion, the Company shall defend the claim and
the Trustee shall cooperate and may participate in the defense; provided that
any settlement of a claim shall be approved in writing by the Trustee.
Alternatively, the Trustee may at its option have separate counsel of its own
choosing and the Company shall pay the reasonable fees and expenses of such
counsel; provided, however, that the Company will not be required to pay such
fees and expenses if it assumes the Trustee's defense and there is no conflict
of interest between the Company and the Trustee and its agents, employees,
officers, stockholders and directors subject to the claim in connection with
such defense as reasonably determined by the Trustee. The Company need not pay
for any settlement made without its written consent. The Company need not
reimburse any expense or indemnify against any loss or liability to the extent
incurred by the Trustee through its negligence, bad faith or willful misconduct.
To secure the Company's payment Obligations in this Section 7.07,
the Trustee shall have a lien prior to the Securities against all money or
property held or collected by the Trustee, in its capacity as Trustee.
When the Trustee incurs expenses or renders services after an Event
of Default specified in clause (f) or (g) of Section 6.01 occurs, the expenses
and the compensation for the services shall be paid to the extent allowable
under any Bankruptcy Law. The Company's Obligations under this Section 7.07 and
any claim arising hereunder shall survive the resignation or removal of any
Trustee, the discharge of the Company's Obligations pursuant to Article Eight
and any rejection or termination under any Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. The Trustee may resign at any
time by so notifying the Company in writing at least 30 days in advance. The
Holders of a majority in principal amount of the outstanding Securities may
remove the Trustee by so notifying the Company and the Trustee in writing and
may appoint a successor trustee. A
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resignation or removal of the Trustee and appointment of a successor Trustee
shall become effective only with the successor Trustee's acceptance of
appointment as provided in this Section 7.08. The Company may remove the Trustee
if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee
or its property; or
(4) the Trustee 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 Company shall notify in writing each
Holder of such event and 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.
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, after payment of all sums then owing to the
Trustee pursuant to Section 7.07, all property held by it as Trustee to the
successor Trustee, subject to the lien provided in Section 7.07, the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Securityholder.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the outstanding Securities may
petition any court of competent jurisdiction at the expense of the Company 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
7.08, the Company's Obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, etc. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another Person, the resulting, surviving
or transferee Person without any further act shall, if such resulting, surviving
or transferee Person is otherwise eligible hereunder, be the successor Trustee;
provided, however, that such Person shall be otherwise qualified and eligible
under this Article Seven.
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SECTION 7.10. Eligibility; Disqualification. This Indenture shall
always have a Trustee who satisfies the requirement of TIA xx.xx. 310(a)(1),
310(a)(2), if applicable, and 310(a)(5). The Trustee shall be a commercial bank
with trust powers or a trust company, which shall have (or, in the case of a
financial institution, commercial bank with trust powers or a trust company
included in a bank holding company system, the related bank holding company
shall have) a combined capital and surplus of at least $50,000,000 as set forth
in its most recent published annual report of condition, and subject to
supervision or examination by federal or state authorities, so long as any of
the Securities are outstanding. The Trustee shall comply with TIA ss. 310(b);
provided, however, that there shall be excluded from the operation of TIA ss.
310(b)(1) any indenture or indentures under which other securities, or
certificates of interest or participation in other securities, of the Company
are outstanding, if the requirements for such exclusion set forth in TIA ss.
310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA ss. 311(a), excluding any creditor relationship
listed in TIA ss. 311(b). A Trustee who has resigned or been removed shall be
subject to TIA ss. 311(a) to the extent indicated therein. The provisions of TIA
ss. 311 shall apply to the Company and any other obligor of the Securities.
ARTICLE 8
Discharge of Indenture; Defeasance
----------------------------------
SECTION 8.01. Termination of the Company's Obligations. The Company
may terminate all of its obligations under this Indenture (except as provided
below) when
(i) all outstanding Securities theretofore authenticated have been
delivered to the Trustee for cancellation and the Company has paid or
caused to be paid all sums payable under this Indenture by the Company; or
(ii) the Company has called for redemption pursuant to this
Indenture all of the Securities under arrangements satisfactory to the
Trustee, deposited the amounts described in Section 8.03(a), satisfied the
conditions in clauses (i) and (ii) of the proviso to Section 8.03(a) and
delivered the Officers' Certificate and Opinion of Counsel described in
Section 8.03(g).
Notwithstanding the foregoing, the Opinion of Counsel required by
clause (ii) above need not be delivered if all Securities not theretofore
delivered to the Trustee for cancellation (i) have become due and payable, (ii)
will become due and payable on the maturity date within one year or (iii) are to
be called for redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the Trustee in the name, and
at the expense, of the Company.
Notwithstanding the first paragraph of this Section 8.01, the
Company's obligations in Sections 2.05, 2.06, 2.07, 2.08, 4.01, 4.02, 7.07, 8.05
and 8.06 shall survive until the Securities are no longer outstanding pursuant
to the last paragraph of Section 2.08.
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After the Securities are no longer outstanding, only the Company's obligations
in Sections 7.07, 8.05 and 8.06 shall survive.
After such delivery or irrevocable deposit, the Trustee shall
acknowledge in writing the discharge of the Company's and Guarantors'
obligations under the Securities and this Indenture except for those surviving
obligations specified above.
SECTION 8.02. Legal Defeasance and Covenant Defeasance. (a) The
Company may, at its option by Board Resolution of the Board of Directors of the
Company, at any time, elect to have either paragraph (b) or (c) below be applied
to all outstanding Securities upon compliance with the conditions set forth in
Section 8.03.
(b) Upon the Company's exercise under paragraph (a) hereof of the
option applicable to this paragraph (b), the Company and each Guarantor shall,
subject to the satisfaction of the conditions set forth in Section 8.03, be
deemed to have been discharged from its obligations with respect to all
outstanding Securities on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, 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 Section 8.04 and the other Sections of
this Indenture referred to in (i) and (ii) below, and to have satisfied all its
other obligations under such Securities and this Indenture (and the Trustee, on
demand of and at the expense of the Company, shall execute proper instruments
acknowledging the same), and Holders of the Securities and any amounts deposited
under Section 8.03 shall cease to be subject to any other obligations, except
for the following provisions, 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 Section 8.04, and as more fully
set forth in such Section, payments in respect of the principal of and interest
on such Securities when such payments are due, (ii) the Company's obligations
with respect to such Securities under Sections 2.05, 2.06, 2.07, 2.08 and 4.02,
(iii) the rights, obligations and immunities of the Trustee under this Indenture
and (iv) this Article Eight. Subject to compliance with this Section 8.02, the
Company may exercise its option under this paragraph (b) notwithstanding the
prior exercise of its option under paragraph (c) hereof.
(c) Upon the Company's exercise under paragraph (a) hereof of the
option applicable to this paragraph (c), the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.03, be released from its
Obligations under the covenants contained in Sections 4.03, 4.04 and 4.12
through 4.19 and Article Five 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 not
"outstanding" for the purposes 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 (it being understood that such Securities shall not be deemed
outstanding for accounting purposes) and Holders of the Securities and any
amounts deposited under Section 8.03 shall cease to be subject to any other
obligations. For this purpose, such Covenant Defeasance means that, with respect
to the outstanding Securities, the Company may omit to comply with and shall
have no liability in
64
respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document and such omission to comply
shall not constitute a Default or an Event of Default under Section 6.01(c),
but, except as specified above, the remainder of this Indenture and such
Securities shall be unaffected thereby. In addition, upon the Company's exercise
under paragraph (a) hereof of the option applicable to this paragraph (c),
subject to the satisfaction of the conditions set forth in Section 8.03,
Sections 6.01(c), 6.01(d), 6.01(e) and 6.01(h) shall not constitute Events of
Default.
SECTION 8.03. Conditions to Legal Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of either Section
8.02(b) or 8.02(c) to the outstanding Securities:
(a) the Company irrevocably deposits, or causes to be deposited,
with the Trustee, in trust for the benefit of the Holders pursuant to an
irrevocable trust and security agreement in form and substance reasonably
satisfactory to the Trustee (i) U.S. Legal Tender, (ii) U.S. Government
Obligations or (iii) a combination thereof, in an amount sufficient after
payment of all federal, state and local taxes or other charges or assessments in
respect thereof payable by the Trustee, which through the payment of interest
and principal will provide, not later than one day before the due date of
payment in respect of the Securities, U.S. Legal Tender in an amount which, in
the opinion of a nationally recognized firm of independent certified public
accountants expressed in a written certification thereof (in form and substance
reasonably satisfactory to the Trustee) delivered to the Trustee, is sufficient
to pay the principal of and interest on the Securities then outstanding on the
dates on which any such payments are due and payable in accordance with the
terms of this Indenture and of the Securities; provided, however, that (i) the
trustee of the irrevocable trust shall have been irrevocably instructed to pay
such money or the proceeds of such U.S. Government Obligations to the Trustee;
and (ii) the Trustee shall have been irrevocably instructed to apply such U.S.
Legal Tender or the proceeds of such U.S. Government Obligations to the payment
of said principal and interest with respect to the Securities;
(b) in the case of Legal Defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel from independent counsel
reasonably satisfactory to the Trustee or a tax ruling from the Internal Revenue
Service to the effect that the Holders will not recognize income, gain or loss
for federal income tax purposes as a result of such deposit and Legal Defeasance
and will be subject to federal income tax in the same amounts and in the same
manner and at the same times as would have been the case if such deposit and
Legal Defeasance had not occurred;
(c) in the case of Covenant Defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel in the United States reasonably
acceptable to the Trustee confirming that the Holders will not recognize income,
gain or loss for federal income tax purposes as a result of such deposit and
Covenant Defeasance and will be subject to federal income tax at the same
amounts and in the same manner and at the same times as would have been the case
if such deposit and Covenant Defeasance had not occurred;
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(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
with respect to this Indenture resulting from the incurrence of Indebtedness all
or a portion of which will be used to defease the Securities concurrently with
such incurrence);
(e) such Legal Defeasance or Covenant Defeasance shall not result in
a default under this Indenture or any other material agreement or instrument to
which the Company is a party or by which the Company is bound;
(f) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that after the 91st day following the deposit, such money
or the proceeds of such U.S. Government Obligations will not be subject to the
effect of any applicable Bankruptcy Law; and
(g) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each in form and substance reasonably
satisfactory to the Trustee, each stating that all conditions precedent relating
to the satisfaction and discharge of this Indenture have been complied with or
waived.
Notwithstanding the foregoing, the Opinion of Counsel required by
clauses (b), (c) and (f) above need not be delivered if all Securities not
theretofore delivered to the Trustee for cancellation (i) have become due and
payable, (ii) will become due and payable on the maturity date within one year
or (iii) are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the Company.
SECTION 8.04. Application of Trust Money. The Trustee or Paying
Agent shall hold in trust U.S. Legal Tender or U.S. Government Obligations
deposited with it pursuant to this Article Eight, and shall apply the deposited
U.S. Legal Tender and the U.S. Legal Tender from U.S. Government Obligations in
accordance with this Indenture to the payment of principal of and interest on
the Securities. The Trustee shall be under no obligation to invest said U.S.
Legal Tender or U.S. Government Obligations except as it may agree with the
Company.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Legal Tender or U.S.
Government Obligations deposited pursuant to Section 8.03 or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding
Securities.
Anything in this Article Eight to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the Company's
request any U.S. Legal Tender or U.S. Government Obligations held by it as
provided in Section 8.03 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 that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
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SECTION 8.05. Repayment to the Company. Subject to Section 8.01, the
Trustee and the Paying Agent shall promptly pay to the Company upon request any
excess U.S. Legal Tender or U.S. Government Obligations held by them at any time
and thereupon shall be relieved from all liability with respect to such money.
The Trustee and the Paying Agent shall pay to the Company upon request any money
held by them for the payment of principal or interest that remains unclaimed for
one year; provided that the Trustee or such Paying Agent, before being required
to make any payment, may 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, Holders
entitled to such money must look to the Company for payment as general creditors
unless an applicable law abandoned property designates another Person.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is
unable to apply any U.S. Legal Tender or U.S. Government Obligations in
accordance with Article Eight by reason of any legal proceeding or by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Company's Obligations
under this Indenture and the Securities shall be revived and reinstated as
though no deposit had occurred pursuant to Article Eight until such time as the
Trustee or Paying Agent is permitted to apply all such U.S. Legal Tender or U.S.
Government Obligations in accordance with Article Eight; provided that if the
Company has made any payment of interest on or principal of any Securities
because of the reinstatement of its Obligations, the Company shall be subrogated
to the rights of the Holders of such Securities to receive such payment from the
U.S. Legal Tender or U.S. Government Obligations held by the Trustee or Paying
Agent.
ARTICLE 9
Amendments, Supplements and Waivers
-----------------------------------
SECTION 9.01. Without Consent of Holders. The Company and the
Trustee, together, may amend or supplement this Indenture or the Securities
without notice to or consent of any Securityholder:
(1) to cure any ambiguity, defect or inconsistency so long as such
change does not adversely affect the rights of any Holders in any material
respect;
(2) to evidence the succession in accordance with Article Five
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;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
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(4) to comply with any requirements of the Commission in connection
with the qualification of this Indenture under the TIA;
(5) to make any change that would provide any additional benefit or
rights to the Securityholders or that does not adversely affect the rights
of any Holder in any material respect;
(6) to add a Guarantor;
(7) to make any change to Article 10 or Article 12 that would limit
or terminate the benefits available to any holder of Senior Debt or
Guarantor Senior Debt under Article 10 or Article 12, respectively; or
(8) to secure the Securities and the Guarantees;
provided that the Company has delivered to the Trustee an Opinion of Counsel and
an Officers' Certificate, each stating that such amendment or supplement
complies with the provisions of this Section 9.01.
SECTION 9.02. With Consent of Holders. Subject to Section 6.07, the
Company and the Trustee, together, with the written consent of the Holder or
Holders of at least a majority in aggregate principal amount, unless a greater
principal amount is specified herein, of the outstanding Securities, may amend
or supplement this Indenture or the Securities, without notice to any other
Securityholders. Subject to Section 6.07, the Holder or Holders of a majority in
aggregate principal amount, unless a greater principal amount is specified
herein, of the outstanding Securities may waive compliance by the Company with
any provision of this Indenture or the Securities without notice to any other
Securityholder. Without the consent of each Securityholder affected, however, no
amendment, supplement or waiver, including a waiver pursuant to Section 6.04,
may:
(1) reduce the amount of Securities whose Holders must consent to an
amendment, supplement or waiver;
(2) reduce the rate of or extend the time for payment of interest,
including defaulted interest, on any Securities;
(3) reduce the principal of or change or have the effect of changing
the fixed maturity of any Securities, or change the date on which any
Securities may be subject to redemption, or reduce the redemption price
therefor;
(4) make any Securities payable in money other than that stated in
the Securities;
(5) make any change in provisions of this Indenture protecting the
right of each Holder to receive payment of principal of and interest on
such Security on or after the due date thereof or to bring suit to enforce
such payment, or permitting Holders of a majority in principal amount of
the Securities to waive Defaults or
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Events of Default (other than Defaults or Events of Default with respect
to the payment of principal of or interest on the Securities); or
(6) adversely affect the ranking of the Securities or the
Guarantees.
In addition, following the occurrence of a Change of Control or an
Asset Sale (if the Company is obligated to make and consummate a Net Proceeds
Offer as a result of such Asset Sale), as the case may be, without the consent
of Holders of at least 75% of the outstanding aggregate principal amount of
Securities, an amendment, supplement or waiver may not make any change to the
Company's obligations to make and consummate the required Change of Control
Offer or Net Proceeds Offer, as the case may be, or modify any of the provisions
or definitions with respect thereto.
It shall not be necessary for the consent of the Holders under this
Section 9.02 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 9.02
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amendment, supplement, waiver
or supplemental indenture.
SECTION 9.03. Compliance with TIA. From the date on which this
Indenture is qualified under the TIA, every amendment, waiver or supplement of
this Indenture or the Securities shall comply with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents. Until an amendment,
waiver or supplement becomes effective, a consent to it by a Holder is a
continuing consent by the Holder and every subsequent Holder of a Security or
portion of a 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 his Security by notice to the Trustee or the Company received
before the date on which the Trustee receives an Officers' Certificate
certifying that the Holders of the requisite principal amount of Securities have
consented (and not theretofore revoked such consent) to the amendment,
supplement or waiver.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then notwithstanding the last
sentence of the immediately preceding paragraph, those Persons who were Holders
at such record date (or their duly designated proxies), and only those Persons,
shall be entitled to revoke any consent previously given, whether or not such
Persons continue to be Holders after such record date. No such consent shall be
valid or effective for more than 90 days after such record date.
SECTION 9.05. Notation on or Exchange of Securities. If an
amendment, supplement or waiver changes the terms of a Security, the Company may
require the Holder
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of the Security to deliver it to the Trustee. The Trustee may 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 9.06. Trustee to Sign Amendments, etc. The Trustee shall
execute any amendment, supplement or waiver authorized pursuant to this Article
Nine; provided that the Trustee may, but shall not be obligated to, execute any
such amendment, supplement or waiver which affects the Trustee's own rights,
duties or immunities under this Indenture. The Trustee shall be entitled to
receive, and shall be fully protected in relying upon, an Opinion of Counsel and
an Officers' Certificate each stating that the execution of any amendment,
supplement or waiver authorized pursuant to this Article Nine is authorized or
permitted by this Indenture and constitutes the legal, valid and binding
obligations of the Company enforceable in accordance with its terms (subject to
customary exceptions).
ARTICLE 10
Subordination of Securities
---------------------------
SECTION 10.01. Securities Subordinated to Senior Debt. The Company
covenants and agrees, and the Trustee and each Holder by accepting a Security
likewise covenants and agrees, that all Securities shall be issued subject to
the provisions of this Article Ten; and each Person holding any Security,
whether upon original issue or upon transfer, assignment or exchange thereof,
accepts and agrees that all payments of the principal of and interest on the
Securities by the Company shall, to the extent and in the manner set forth in
this Article Ten, be subordinated and junior in right of payment to the prior
payment in full in cash of all amounts payable under Senior Debt, whether
outstanding on the Issue Date or thereafter incurred.
SECTION 10.02. No Payment on Securities in Certain Circumstances.
(a) No direct or indirect payment by or on behalf of the Company of principal of
or interest on the Securities, including any deposit to the defeasance trust
pursuant to Section 8.03, whether pursuant to the terms of the Securities, upon
acceleration, pursuant to an Asset Sale Offer or Change of Control Offer or
otherwise, shall be made to the Holders (except that Holders may receive and
retain payments made from the defeasance trust described under Article Eight) if
(i) a default in the payment of the principal of or interest on Designated
Senior Debt occurs and is continuing beyond any applicable period of grace or
(ii) any other default occurs and is continuing with respect to Designated
Senior Debt that permits holders of the Designated Senior Debt as to which such
default relates to accelerate its maturity and the Trustee receives a written
notice of such other default (a "Payment Blockage Notice") from the Company or
the holders of any Designated Senior Debt (with a copy to the Company) until all
Obligations with respect to such Designated Senior Debt are paid in full in
cash; provided, that payments on the Securities shall be resumed (x) in the case
of a payment default, upon the date on which such default is cured, waived or
ceases to exist and (y) in case of a nonpayment default, the earlier of the date
on which such nonpayment default
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is cured, waived or ceases to exist and 179 days after the date on which the
applicable Payment Blockage Notice is received by the Trustee (such period being
referred to herein as the "Payment Blockage Period"), unless the maturity of any
Designated Senior Debt has been accelerated (and written notice of such
acceleration has been received by the Trustee).
Notwithstanding anything herein or in the Securities to the
contrary, (x) in no event shall a Payment Blockage Period extend beyond 179 days
from the date the Payment Blockage Notice in respect thereof was given and (y)
not more than one Payment Blockage Period may be commenced with respect to the
Securities during any period of 360 consecutive days. No nonpayment default that
existed or was continuing on the date of delivery of any Payment Blockage Notice
to the Trustee shall be, or be made, the basis for a subsequent Payment Blockage
Notice (it being understood that any subsequent action, or any breach of any
covenant for a period commencing after the date of receipt by the Trustee of
such Payment Blockage Notice, that, in either case, would give rise to such a
default pursuant to any provisions under which a default previously existed or
was continuing shall constitute a new default for this purpose).
(b) In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee or any Holder when such payment is prohibited
by Section 10.02(a), such payment shall be held in trust for the benefit of, and
shall be paid over or delivered to, the holders of Designated Senior Debt or
their respective representatives, or to the trustee or trustees under any
indenture pursuant to which any of such Designated Senior Debt 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 Debt that such
prohibited payment has been made, the holders of such Designated Senior Debt (or
their representative or representatives or a trustee) notify the Trustee in
writing of the amounts then due and owing on the Designated Senior Debt, if any,
and only the amounts specified in such notice to the Trustee shall be paid to
the holders of Designated Senior Debt.
SECTION 10.03. Payment Over of Proceeds upon Dissolution, etc. (a)
Upon any payment or distribution of assets or securities of the Company of any
kind or character, whether in cash, property or securities, upon any dissolution
or winding-up or liquidation or reorganization of the Company, whether voluntary
or involuntary or in bankruptcy, insolvency, receivership or other similar
proceedings, an assignment for the benefit of creditors or any marshaling of the
Company's assets, the holders of Senior Debt of the Company shall be entitled to
receive payment in full in cash of all Obligations due in respect of such Senior
Debt before the Holders or the Trustee on behalf of such Holders shall be
entitled to receive any payment by the Company of the principal of or interest
on the Securities, or any payment by the Company to acquire any of the
Securities for cash, property or securities, or any distribution with respect to
the Securities of any cash, property or securities (except that the Holders may
receive and retain (I) Permitted Junior Securities and (II) payments made from
the defeasance trust described under Article Eight). Before any payment (other
than Permitted Junior Securities or by virtue of the defeasance trust) may be
made by, or on behalf of, the Company of the principal of or interest on the
Securities upon any such dissolution or winding-up or liquidation or
reorganization, any payment or distribution of assets or securities of the
Company of any kind or character, whether in cash,
71
property or securities, 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 Debt (pro rata to such
holders on the basis of the respective amounts of Senior Debt held by such
holders) or their representatives or to the trustee or trustees or agent or
agents under any agreement or indenture pursuant to which any of such Senior
Debt may have been issued, as their respective interests may appear, to the
extent necessary to pay all such Senior Debt in full in cash after giving effect
to any prior or concurrent payment, distribution or provision therefor to or for
the holders of such Senior Debt.
(b) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution of assets
or securities of the Company of any kind or character, whether in cash, property
or securities, shall be received by the Trustee or any Holder of Securities at a
time when such payment or distribution is prohibited by Section 10.03(a) and
before all Obligations in respect of Senior Debt are paid in full in cash, or
payment provided for, such payment or distribution shall be received and held in
trust for the benefit of, and shall be paid over or delivered to, the holders of
Senior Debt of the Company (pro rata to such holders on the basis of the
respective amounts of Senior Debt held by such holders) or their respective
representatives, or to the trustee or trustees or agent or agents under any
indenture pursuant to which any of such Senior Debt may have been issued, as
their respective interests may appear, for application to the payment of Senior
Debt remaining unpaid until all such Senior Debt has been paid in full in cash
after giving effect to any prior or concurrent payment, distribution or
provision therefor to or for the holders of such Senior Debt; provided that the
Trustee shall be entitled to receive from the holders of such Senior Debt
written notice of the amounts owing on such Senior Debt.
The consolidation of the Company with, or the merger of the Company
with or into, another Person or the liquidation or dissolution of the Company
following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another Person upon the terms and conditions
provided in Article Five shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section 10.03 if such
other Person shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated in Article Five.
SECTION 10.04. Subrogation. Upon the payment in full in cash of all
Senior Debt of the Company, or provision for payment, the Holders of the
Securities shall be subrogated to the rights of the holders of Senior Debt to
receive payments or distributions of cash, property or securities of the Company
made on such Senior Debt until the principal of and interest on the Securities
shall be paid in full in cash; and, for the purposes of such subrogation, no
payments or distributions to the holders of the Senior Debt of any cash,
property or securities to which the Holders of the Securities or the Trustee on
their behalf would be entitled except for the provisions of this Article Ten,
and no payment over pursuant to the provisions of this Article Ten to the
holders of Senior Debt by Holders of the Securities or the Trustee on their
behalf shall, as between the Company, its creditors other than holders of Senior
Debt, and the Holders of the Securities, be deemed to be a payment by
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the Company to or on account of the Senior Debt. It is understood that the
provisions of this Article Ten 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 the Senior Debt, on the other hand.
If any payment or distribution to which the Holders of the
Securities would otherwise have been entitled but for the provisions of this
Article Ten shall have been applied, pursuant to the provisions of this Article
Ten, to the payment of all amounts payable under Senior Debt, then and in such
case, the Holders of the Securities shall be entitled to receive from the
holders of such Senior Debt any payments or distributions received by such
holders of any Senior Debt in excess of the amount required to make payment in
full, or provision for payment, of such Senior Debt.
SECTION 10.05. Obligations of Company Unconditional. Nothing
contained in this Article Ten or elsewhere in this Indenture or in the
Securities is intended to or shall impair, as between the Company and the
Holders of the 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 Senior Debt, nor shall anything herein or therein prevent the
Holder of any Security or the Trustee on their behalf from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article Ten of the holders
of Senior Debt in respect of cash, property or securities of the Company
received upon the exercise of any such remedy.
Without limiting the generality of the foregoing, nothing contained
in this Article Ten shall restrict the right of the Trustee or the Holders of
Securities to take any action to declare the Securities to be due and payable
prior to their stated maturity pursuant to Article Six or to pursue any rights
or remedies hereunder; provided, however, that all Senior Debt then due and
payable shall first be paid in full before the Holders of the Securities or the
Trustee are entitled to receive any direct or indirect payment from the Company
of principal of or interest on the Securities.
SECTION 10.06. Notice to Trustee. The Company shall give prompt
written notice to the Trustee of any fact known to the Company which would
prohibit the making of any payment to or by the Trustee in respect of the
Securities pursuant to the provisions of this Article Ten. The Trustee shall not
be charged with knowledge of the existence of any event of default with respect
to any Senior Debt or of any other facts which would prohibit the making of any
payment to or by the Trustee unless and until the Trustee shall have received
notice in writing at its Corporate Trust Office to that effect signed by an
Officer of the Company, or by a holder of Senior Debt or trustee or agent
therefor; and prior to the receipt of any such written notice, the Trustee
shall, subject to Article Seven, be entitled to assume that no such facts exist;
provided that if the Trustee shall not have received the notice provided for in
this Section 10.06 at least two Business Days prior to the date upon which by
the terms of this Indenture any moneys shall become payable for any purpose
(including, without limitation, the payment of the principal of or interest on
any Security), then,
73
regardless of anything herein to the contrary, the Trustee shall have full power
and authority to receive any moneys from the Company and to apply the same to
the purpose for which they were received, and shall not be affected by any
notice to the contrary which may be received by it on or after such prior date.
Nothing contained in this Section 10.06 shall limit the right of the holders of
Senior Debt to recover payments as contemplated by Section 10.03. The Trustee
shall be entitled to rely on the delivery to it of a written notice by a Person
representing himself or itself to be a holder of any Senior Debt (or a trustee
on behalf of, or other representative of, such holder) to establish that such
notice has been given by a holder of such Senior Debt or a trustee or
representative on behalf of any such holder.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Senior Debt to participate in any payment or distribution pursuant to this
Article Ten, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Debt held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article Ten, and if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
SECTION 10.07. Reliance on Judicial Order or Certificate of
Liquidating Agent. Upon any payment or distribution of assets or securities
referred to in this Article Ten, 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 bankruptcy, dissolution, winding-up, liquidation
or reorganization proceedings are pending, or upon a certificate of the
receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, delivered to the Trustee or to the Holders
of the Securities for the purpose of ascertaining the Persons entitled to
participate in such distribution, the holders of the Senior Debt and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article Ten.
SECTION 10.08. Trustee's Relation to Senior Debt. The Trustee and
any Paying Agent shall be entitled to all the rights set forth in this Article
Ten with respect to any Senior Debt which may at any time be held by it in its
individual or any other capacity to the same extent as any other holder of
Senior Debt, and nothing in this Indenture shall deprive the Trustee or any
Paying Agent of any of its rights as such holder.
With respect to the holders of Senior Debt, the Trustee undertakes
to perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article Ten, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt. The Trustee shall not be liable to
any such holders if the Trustee shall in good faith mistakenly pay over or
distribute to Holders of Securities or to the Company or to any other Person
cash, property or securities to which any holders of Senior Debt shall be
entitled by virtue of this Article Ten or otherwise.
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SECTION 10.09. Subordination Rights Not Impaired by Acts or
Omissions of the Company or Holders of Senior Debt. No right of any present or
future holders of any Senior Debt to enforce subordination as provided herein
shall at any time in any way be prejudiced or impaired by any act, including any
amendment to this Article Ten without the consent of the holders of such Senior
Debt, or failure to act on the part of the Company or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by the Company
with the terms of this Indenture, regardless of any knowledge thereof which any
such holder may have or otherwise be charged with. The provisions of this
Article Ten are intended to be for the benefit of, and shall be enforceable
directly by, the holders of Senior Debt.
SECTION 10.10. Securityholders Authorize Trustee to Effectuate
Subordination of Securities. Each Holder of Securities by his acceptance of such
Securities authorizes and expressly directs the Trustee on its or his behalf to
take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article Ten, and appoints the Trustee its or his
attorney-in-fact for such purposes, including, in the event of any dissolution,
winding-up, liquidation or reorganization of the Company (whether in bankruptcy,
insolvency, receivership, reorganization or similar proceedings or upon an
assignment for the benefit of creditors or otherwise) tending towards
liquidation of the business and assets of the Company, the filing of a claim for
the unpaid balance of its or his Securities in the form required in those
proceedings.
SECTION 10.11. This Article Not to Prevent Events of Default. The
failure to make a payment on account of principal of or interest on the
Securities by reason of any provision of this Article Ten shall not be construed
as preventing the occurrence of an Event of Default specified in Section 6.01.
SECTION 10.12. Trustee's Compensation Not Prejudiced. Nothing in
this Article Ten shall apply to amounts due to the Trustee pursuant to other
sections in this Indenture.
SECTION 10.13. No Waiver of Subordination Provisions. Without in any
way limiting the generality of Section 10.09, the holders of Senior Debt may, at
any time and from time to time, without the consent of or notice to the Trustee
or the Holders of the Securities, without incurring responsibility to the
Holders of the Securities and without impairing or releasing the subordination
provided in this Article Ten or the obligations hereunder of the Holders of the
Securities to the holders of Senior Debt, do any one or more of the following:
(a) change the manner, place or terms of payment or extend the time of payment
of, or renew or alter, Senior Debt or any instrument evidencing the same or any
agreement under which Senior Debt is outstanding or secured; (b) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Debt; (c) release any Person liable in any manner for the
collection of Senior Debt; and (d) exercise or refrain from exercising any
rights against the Company and any other Person.
SECTION 10.14. Subordination Provisions Not Applicable to Assets
Held in Trust for Securityholders; Payments May be Paid Prior to Dissolution.
All money and United States Government Obligations deposited in trust with the
Trustee pursuant to and in
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accordance with Article Eight shall be for the sole benefit of the Holders and
shall not be subject to this Article Ten.
Nothing contained in this Article Ten or elsewhere in this Indenture
shall prevent (i) the Company, except under the conditions described in Section
10.02, from making payments of principal of and interest on the Securities, or
from depositing with the Trustee any moneys for such payments or from effecting
a termination of the Company's and the Guarantors' Obligations under the
Securities and this Indenture as provided in Article Eight or (ii) the
application by the Trustee of any moneys deposited with it for the purpose of
making such payments of principal of and interest on the Securities, to the
Holders entitled thereto unless at least two Business Days prior to the date
upon which such payment becomes due and payable, the Trustee shall have received
the written notice provided for in Section 10.02(b) or in Section 10.06. The
Company shall give prompt written notice to the Trustee of any dissolution,
winding-up, liquidation or reorganization of the Company.
SECTION 10.15. Acceleration of Securities. If payment of the
Securities is accelerated because of an Event of Default, the Company (or the
Trustee at the direction of the Company) shall promptly notify the holders of
Designated Senior Debt of the Company (or the representative of such Designated
Senior Debt) of the acceleration.
ARTICLE 11
Guarantee of Securities
-----------------------
SECTION 11.01. Unconditional Guarantee. Each of the Guarantors
hereby, jointly and severally and unconditionally guarantees, on a senior
subordinated basis (such guarantee to be referred to herein as a "Guarantee") to
each Holder of a Security authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns that: (a) the principal of and interest
on the Securities shall be promptly paid in full when due (subject to any
applicable grace periods) whether at maturity, xxxx xxxxxxxxxx, xxxx xxxxxxxxxx
at the option of Holders pursuant to the provisions of the Securities relating
thereto, 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 to the Holders or the Trustee hereunder or
thereunder (including amounts due the Trustee under Section 7.07 hereof) and all
other Obligations shall 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 or any of such other Obligations, the same
shall be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, subject to any applicable grace period,
whether at maturity, by acceleration or otherwise, subject, however, in the case
of (a) and (b) to the limitations set forth in Section 11.04. Failing payment
when due of any amount so guaranteed, or failing performance of any other
obligation of the Company to the Holders under this Indenture or under the
Securities, for whatever reason, each Guarantor shall 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 Guarantee, and shall entitle the Holders of Securities to accelerate
the Obligations of the Guarantors hereunder in the same manner and to the same
extent as the Obligations of the Company.
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Each of the 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 Guarantor,
the recovery of any judgment against the Company, any action to enforce the
same, whether or not a 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 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 covenants that its Guarantee shall not be discharged except by
complete performance of the Obligations contained in the Securities, this
Indenture and this Guarantee. This Guarantee is a guarantee of payment and not
of collection. If any Holder or the Trustee is required by any court or
otherwise to return to the Company or to any Guarantor, or any custodian,
trustee, liquidator or other similar official acting in relation to the Company
or such Guarantor, any amount paid by the Company or such Guarantor to the
Trustee or such Holder, this Guarantee, to the extent theretofore discharged,
shall be reinstated in full force and effect. Each Guarantor further agrees
that, as between it, on the one hand, and the Holders of Securities and the
Trustee, on the other hand, (a) the maturity of the Obligations guaranteed
hereby may be accelerated as provided in Article Six for the purposes of this
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 Six
hereof, such Obligations (whether or not due and payable) shall forthwith become
due and payable by the Guarantors for the purpose of this Guarantee.
No stockholder, officer, director, employee, agent or incorporator,
past, present or future, of any Guarantor, as such, shall have any personal
liability under this Guarantee by reason of his, her or its status as such
stockholder, officer, director, employee, agent or incorporator.
Each Guarantor that makes a payment or distribution under its
Guarantee shall be entitled to a contribution from each other Guarantor in an
amount pro rata, based on the net assets of each Guarantor, determined in
accordance with GAAP.
SECTION 11.02. Limitations on Guarantees. The Obligations of each
Guarantor under its Guarantee are limited to the maximum amount which, after
giving effect to all other contingent and fixed liabilities of such Guarantor
and after giving effect to any collections from or payments made by or on behalf
of any other Guarantor in respect of the Obligations of such other Guarantor
under its Guarantee or pursuant to its contribution Obligations under this
Indenture, will result in the Obligations of such Guarantor under the Guarantee
not constituting a fraudulent conveyance or fraudulent transfer under any laws
of the United States, any state or territory of the United States or the
District of Columbia.
SECTION 11.03. Execution and Delivery.
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Each of the Guarantors hereby agrees that its Guarantee set forth in
Section 11.01 shall remain in full force and effect (unless released in
accordance with Section 11.04) notwithstanding any failure to endorse on any
Security a notation of such Guarantee.
If an Officer of a Guarantor whose signature is on this Indenture no
longer holds that or any office at the time the Trustee authenticates any
Security, such Guarantor's 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 Guarantee
set forth in this Indenture on behalf of each Guarantor.
SECTION 11.04. Release of a Guarantor. (a) Upon (i) the sale or
disposition of all of the Capital Stock of a Guarantor by the Company in
compliance with Section 4.16 or the consolidation or merger of a Guarantor with
or into any Person in compliance with Article Five, in each case, (A) other than
to the Company or an Affiliate of the Company and (B) in a transaction following
which all liability of such Guarantor with respect to Indebtedness of the
Company shall have been released by the holders of such Indebtedness, (ii) the
liquidation or dissolution of any Guarantor in accordance with this Indenture or
(iii) a Guarantor ceasing to be a Restricted Subsidiary, such Guarantor's
Guarantee pursuant to this Article Eleven shall be released, and such Guarantor
shall be deemed released from all Obligations under this Indenture and the
Securities without any further action required on the part of the Trustee or any
Holder. Any Guarantor not so released or the entity surviving such Guarantor, as
applicable, shall remain or be liable under its Guarantee as provided in this
Article Eleven. Concurrently with the defeasance or satisfaction and discharge
of the Securities under Article Eight hereof, the Guarantors shall be released
from all of their obligations under this Indenture and the Securities. In
addition, a Guarantor's Guarantee will also be released and such Guarantor will
also be released from all Obligations under this Indenture and the Securities if
such Guarantor (1) is released from any and all guarantees of Indebtedness of
the Company and (2) has no other outstanding Indebtedness other than
Indebtedness which could be incurred by a Restricted Subsidiary that is not a
Guarantor of the Securities on the date of the proposed release of such
Guarantor's Guarantee.
(b) The Trustee shall deliver an appropriate instrument evidencing
the release of a Guarantor upon receipt of a request by the Company or such
Guarantor accompanied by an Officers' Certificate and, upon request, an Opinion
of Counsel certifying as to the compliance with this Section 11.04; provided the
legal counsel delivering such Opinion of Counsel may rely as to matters of fact
on one or more Officers' Certificates of the Company.
The Trustee shall execute any documents reasonably requested by the
Company or a Guarantor in order to evidence the release of such Guarantor from
its Obligations under its Guarantee pursuant to this Article Eleven.
Except as set forth in Articles Four and Five and this Section
11.04, nothing contained in this Indenture or in any of the Securities shall
prevent any consolidation or merger of a Guarantor with or into the Company or
another Guarantor or shall prevent any
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sale or conveyance of the property of a Guarantor as an entirety or
substantially as an entirety to the Company or another Guarantor.
SECTION 11.05. Waiver of Subrogation. Until this Indenture is
discharged and all of the Securities are discharged and paid in full, each
Guarantor hereby irrevocably waives and agrees not to exercise any claim or
other rights which it may now or hereafter acquire against the Company that
arise from the existence, payment, performance or enforcement of the Company's
Obligations under the Securities or this Indenture and such Guarantor's
Obligations under its Guarantee under this Indenture, in any such instance
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution, indemnification, and any right to participate in any
claim or remedy of the Holders against the Company, 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,
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 Guarantor in violation of the preceding sentence and
any amounts owing to the Trustee or the Holders of Securities under the
Securities, this Indenture, or any other document or instrument delivered under
or in connection with such agreements or instruments, shall not have been paid
in full, such amount shall have been deemed to have been paid to such Guarantor
for the benefit of, and held in trust for the benefit of, the Trustee or the
Holders and shall forthwith be paid to the Trustee for the benefit of itself or
such Holders to be credited and applied to the Obligations in favor of the
Trustee or the Holders, as the case may be, whether matured or unmatured, in
accordance with the terms of this Indenture. Each 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
11.05 is knowingly made in contemplation of such benefits.
SECTION 11.06. Obligations Continuing. Subject to Section 11.04, the
Obligations of each Guarantor hereunder shall be continuing and shall remain in
full force and effect until all the Obligations have been paid and satisfied in
full.
SECTION 11.07. Obligations Reinstated. Subject to Section 11.04, the
Obligations of each Guarantor hereunder shall continue to be effective or shall
be reinstated, as the case may be, if at any time any payment which would
otherwise have reduced the Obligations of any Guarantor hereunder (whether such
payment shall have been made by or on behalf of the Company or by or on behalf
of a Guarantor) is rescinded or reclaimed from any of the Holders upon the
insolvency, bankruptcy, liquidation or reorganization of the Company or any
Guarantor or otherwise, all as though such payment had not been made. If demand
for, or acceleration of the time for, payment by the Company is stayed upon the
insolvency, bankruptcy, liquidation or reorganization of the Company, all such
Obligations otherwise subject to demand for payment or acceleration shall
nonetheless be payable by each Guarantor as provided herein.
SECTION 11.08. Waiver. Without in any way limiting the provisions of
Section 11.01, each Guarantor hereby waives notice or proof of reliance by the
Holders upon the Obligations of any Guarantor hereunder, and diligence,
presentment, demand for payment on the Company, protest or notice of dishonor of
any of the Obligations.
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SECTION 11.09. No Obligation to Take Action Against the Company.
Neither the Trustee nor any other Person shall have any obligation to enforce or
exhaust any rights or remedies or to take any other steps under any security for
the Obligations or against the Company or any other Person or any property of
the Company or any other Person before the Trustee is entitled to demand payment
and performance by any or all Guarantors of their liabilities and Obligations
under this Indenture.
SECTION 11.10. Default and Enforcement. If any Guarantor fails to
pay in accordance with Section 11.01, the Trustee may proceed in its name as
trustee hereunder in the enforcement of the Guarantee of any such Guarantor and
such Guarantor's Obligations hereunder by any remedy provided by law, whether by
legal proceedings or otherwise, and to recover from such Guarantor the
Obligations under this Indenture.
SECTION 11.11. Amendment, Etc. No amendment, modification or waiver
of any provision of this Indenture relating to any Guarantor or consent to any
departure by any Guarantor or any other Person from any such provision will in
any event be effective unless it is signed by such Guarantor and the Trustee,
other than a release pursuant to Section 11.04.
SECTION 11.12. Acknowledgment. Each Guarantor hereby acknowledges
communication of the terms of this Indenture and the Securities and consents to
and approves of the same.
SECTION 11.13. Costs and Expenses. Each Guarantor shall pay on
demand by the Trustee any and all reasonable costs, fees and expenses
(including, without limitation, reasonable legal fees and disbursements)
incurred by the Trustee, its agents, advisors and counsel or any of the Holders
in enforcing any of their rights under any Guarantee.
SECTION 11.14. No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Trustee or the Holders,
any right, remedy, power or privilege under this Indenture or the Securities,
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege under this Indenture or the Securities
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
in the Guarantee under this Indenture, the Securities and any other document or
instrument between a Guarantor and/or the Company and the Trustee are cumulative
and not exclusive of any rights, remedies, powers and privilege provided by law.
SECTION 11.15. Successors and Assigns. Each Guarantee shall be
binding upon and inure to the benefit of each Guarantor and the Trustee and the
other Holders and their respective successors and permitted assigns, except that
no Guarantor may assign any of its Obligations hereunder.
SECTION 11.16. Contribution. In order to provide for just and
equitable contribution among the Guarantors, the Guarantors agree, inter se,
that in the event any payment or distribution is made by any Guarantor (a
"Funding Guarantor") under its Guarantee, such Funding Guarantor shall be
entitled to contribution from all other
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Guarantors in a pro rata amount based on the net assets (determined in
accordance with GAAP) of each Guarantor (including the Funding Guarantor) for
all payments, damages and expenses incurred by that Funding Guarantor in
discharging the Company's Obligations with respect to the Securities or any
other Guarantor's Obligations with respect to its Guarantee hereunder.
SECTION 11.17. Future Guarantors. The Company shall cause each of
the Company's Restricted Subsidiaries to the extent required by Section 4.19, in
each case, to execute and deliver a supplemental indenture in form reasonably
satisfactory to the Trustee and thereby become a Guarantor bound by the
Guarantee of the Securities on the terms set forth in this Article Eleven;
provided that no Subsidiary organized outside the United States of America and
no Unrestricted Subsidiary shall be required to become a Guarantor.
ARTICLE 12
Subordination of Guarantee
SECTION 12.01. Guarantee Obligations Subordinated to Guarantor
Senior Debt. Each Guarantor covenants and agrees, and the Trustee and each
Holder of the Securities by its or his acceptance thereof likewise covenant and
agree, that all Guarantees shall be issued subject to the provisions of this
Article Twelve; and each Person holding any Guarantee, whether upon original
issue or upon transfer, assignment or exchange thereof, accepts and agrees that
all payments of the principal of and interest on the Securities pursuant to the
Guarantee made by or on behalf of such Guarantor shall, to the extent and in the
manner set forth in this Article Twelve, be subordinated and junior in right of
payment to the prior payment in full in cash of all amounts payable under
Guarantor Senior Debt of such Guarantor, whether outstanding on the Issue Date
or thereafter incurred.
SECTION 12.02. No Payment on Guarantee in Certain Circumstances. (a)
No direct or indirect payment by or on behalf of any Guarantor of principal of
or interest on the Securities, whether pursuant to the terms of the Securities
or the Guarantees, including any deposit to the defeasance trust pursuant to
Section 8.03, upon acceleration, pursuant to an Asset Sale Offer or Change of
Control Offer or otherwise, shall be made to the Holders of Securities (except
that holders of Securities may receive and retain payments made from the
defeasance trust described under Article Eight) if (i) a default in the payment
of the principal of or interest on Designated Guarantor Senior Debt occurs and
is continuing beyond any applicable period of grace or (ii) any other default
occurs and is continuing with respect to Designated Guarantor Senior Debt that
permits holders of the Designated Guarantor Senior Debt as to which such default
relates to accelerate its maturity and the Trustee receives a written notice of
such other default (a "Guarantor Payment Blockage Notice") from the Company or a
Guarantor or the holders of any Designated Guarantor Senior Debt (with a copy to
the Company) until all Obligations with respect to such Designated Guarantor
Senior Debt are paid in full in cash; provided, that payments on the Securities
shall be resumed (x) in the case of a payment default, upon the date on which
such default is cured, waived or ceases to exist and (y) in case of a nonpayment
default, the earlier of the date on which such nonpayment default is cured,
waived or ceases to exist and 179 days after the date on which the applicable
Guarantor Payment Blockage Notice is received by the Trustee (such period
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being referred to herein as the "Guarantor Payment Blockage Period"), unless the
maturity of any Designated Guarantor Senior Debt has been accelerated (and
written notice of such acceleration has been received by the Trustee).
Notwithstanding anything herein or in the Securities to the
contrary, (x) in no event shall a Guarantor Payment Blockage Period extend
beyond 179 days from the date the Guarantor Payment Blockage Notice in respect
thereof was given and (y) not more than one Guarantor Payment Blockage Period
may be commenced with respect to the Securities during any period of 360
consecutive days. No nonpayment default that existed or was continuing on the
date of delivery of any Guarantor Payment Blockage Notice to the Trustee shall
be, or be made, the basis for a subsequent Guarantor Payment Blockage Notice (it
being understood that any subsequent action, or any breach of any covenant for a
period commencing after the date of receipt by the Trustee of such Guarantor
Payment Blockage Notice, that, in either case, would give rise to such a default
pursuant to any provisions under which a default previously existed or was
continuing shall constitute a new default for this purpose).
(b) In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee or any Holder when such payment is prohibited
by Section 12.02(a), such payment shall be held in trust for the benefit of, and
shall be paid over or delivered to, the holders of such Designated Guarantor
Senior Debt or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Designated Guarantor Senior
Debt 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 such Designated
Guarantor Senior Debt that such prohibited payment has been made, the holders of
such Designated Guarantor Senior Debt (or their representative or
representatives or a trustee) notify the Trustee in writing of the amounts then
due and owing on such Designated Guarantor Senior Debt, if any, and only the
amounts specified in such notice to the Trustee shall be paid to the holders of
such Designated Guarantor Senior Debt.
SECTION 12.03. Payment Over of Proceeds upon Dissolution, etc. (a)
Upon any payment or distribution of assets or securities of any Guarantor of any
kind or character, whether in cash, property or securities, upon any dissolution
or winding-up or liquidation or reorganization of such Guarantor, whether
voluntary or involuntary or in bankruptcy, insolvency, receivership or other
similar proceedings, an assignment for the benefit of creditors or any
marshaling of such Guarantor's assets, the holders of Guarantor Senior Debt of
such Guarantor shall be entitled to receive payment in full in cash of all
Obligations due in respect of such Guarantor Senior Debt before the Holders of
the Securities or the Trustee on behalf of such Holders shall be entitled to
receive any payment by such Guarantor of the principal of or interest on the
Securities pursuant to its Guarantee, or any payment to acquire any of the
Securities for cash, property or securities, or any distribution with respect to
the Securities of any cash, property or securities (except that Holders may
receive and retain (I) Permitted Junior Securities and (II) payments made from
the defeasance trust described under Article Eight). Before any payment (other
than Permitted Junior Securities or by virtue of the defeasance trust) may be
made by, or on behalf of, any Guarantor of the principal of or interest on the
Securities upon any such dissolution or
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winding-up or liquidation or reorganization, any payment or distribution of
assets or securities of such Guarantor of any kind or character, whether in
cash, property or securities, 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 such Guarantor or by any receiver, trustee
in bankruptcy, liquidating trustee, agent or other Person making such payment or
distribution, directly to the holders of the Guarantor Senior Debt of such
Guarantor (pro rata to such holders on the basis of the respective amounts of
such Guarantor Senior Debt held by such holders) or their representatives or to
the trustee or trustees or agent or agents under any agreement or indenture
pursuant to which any such Guarantor Senior Debt may have been issued, as their
respective interests may appear, to the extent necessary to pay all such
Guarantor Senior Debt in full in cash after giving effect to any prior or
concurrent payment, distribution or provision therefor to or for the holders of
such Guarantor Senior Debt.
(b) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution of assets
or securities of a Guarantor of any kind or character, whether in cash, property
or securities, shall be received by the Trustee or any Holder of Securities at a
time when such payment or distribution is prohibited by Section 12.03(a) and
before all Obligations in respect of the Guarantor Senior Debt of such Guarantor
are paid in full in cash, or payment provided for, such payment or distribution
shall be received and held in trust for the benefit of, and shall be paid over
or delivered to, the holders of such Guarantor Senior Debt (pro rata to such
holders on the basis of the respective amounts of Guarantor Senior Debt held by
such holders) or their respective representatives, or to the trustee or trustees
or agent or agents under any indenture pursuant to which any of such Guarantor
Senior Debt may have been issued, as their respective interests may appear, for
application to the payment of the Guarantor Senior Debt remaining unpaid until
all such Guarantor Senior Debt has been paid in full in cash after giving effect
to any prior or concurrent payment, distribution or provision therefor to or for
the holders of such Guarantor Senior Debt; provided that the Trustee shall be
entitled to receive from the holders of Guarantor Senior Debt written notice of
the amounts owing on the Guarantor Senior Debt.
The consolidation of a Guarantor with, or the merger of a Guarantor
with or into, another Person or the liquidation or dissolution of a Guarantor
following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another Person upon the terms and conditions
provided in Article Five shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section 12.03 if such
other Person shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated in Article Five.
SECTION 12.04. Subrogation. Upon the payment in full in cash of all
Guarantor Senior Debt of a Guarantor, or provision for payment, the Holders of
the Securities shall be subrogated to the rights of the holders of Guarantor
Senior Debt to receive payments or distributions of cash, property or securities
of such Guarantor made on Guarantor Senior Debt of such Guarantor until the
principal of and interest on the Securities shall be paid in full in cash; and,
for the purposes of such subrogation, no payments or distributions to the
holders of Guarantor Senior Debt of any cash, property or securities to
83
which the Holders of the Securities or the Trustee on their behalf would be
entitled except for the provisions of this Article Twelve, and no payment over
pursuant to the provisions of this Article Twelve to the holders of the
Guarantor Senior Debt by Holders of the Securities or the Trustee on their
behalf shall, as between such Guarantor, its creditors other than holders of
such Guarantor Senior Debt of such Guarantor, and the Holders of the Securities,
be deemed to be a payment by such Guarantor to or on account of the Guarantor
Senior Debt of such Guarantor. It is understood that the provisions of this
Article Twelve 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 Guarantor Senior Debt, on the other hand.
If any payment or distribution to which the Holders of the
Securities would otherwise have been entitled but for the provisions of this
Article Twelve shall have been applied, pursuant to the provisions of this
Article Twelve, to the payment of all amounts payable under Guarantor Senior
Debt, then and in such case, the Holders of the Securities shall be entitled to
receive from the holders of such Guarantor Senior Debt any payments or
distributions received by such holders of Guarantor Senior Debt in excess of the
amount required to make payment in full, or provision for payment, of such
Guarantor Senior Debt.
SECTION 12.05. Obligations of Guarantor Unconditional. Nothing
contained in this Article Twelve or elsewhere in this Indenture or in the
Securities is intended to or shall impair, as between any Guarantor and the
Holders of the Securities, the obligation of such Guarantor, 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 the terms of its Guarantee, or is intended to or shall affect
the relative rights of the Holders of the Securities and creditors of the
Guarantors other than the holders of Guarantor Senior Debt, nor shall anything
herein or therein prevent the Holder of any Security or the Trustee on their
behalf from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this Article
Twelve of the holders of Guarantor Senior Debt in respect of cash, property or
securities of the Guarantors received upon the exercise of any such remedy.
Without limiting the generality of the foregoing, nothing contained
in this Article Twelve shall restrict the right of the Trustee or the Holders of
Securities to take any action to declare the Securities to be due and payable
prior to their stated maturity pursuant to Section 6.01 or to pursue any rights
or remedies hereunder; provided, however, that all Guarantor Senior Debt of any
Guarantor then due and payable shall first be paid in full before the Holders of
the Securities or the Trustee are entitled to receive any direct or indirect
payment from such Guarantor of principal of or interest on the Securities
pursuant to such Guarantor's Guarantee.
SECTION 12.06. Notice to Trustee. The Company and the Guarantors
shall give prompt written notice to the Trustee of any fact known to the Company
or the Guarantors which would prohibit the making of any payment to or by the
Trustee in respect of the Guarantees pursuant to the provisions of this Article
Twelve. The Trustee shall not be charged with knowledge of the existence of any
event of default with respect to any Guarantor Senior Debt or of any other facts
which would prohibit the making of any payment to or by the Trustee unless and
until the Trustee shall have received notice in writing at its
84
Corporate Trust Office to that effect signed by an Officer of the Company or a
Guarantor, or by a holder of Guarantor Senior Debt or trustee or agent therefor;
and prior to the receipt of any such written notice, the Trustee shall, subject
to Article Seven, be entitled to assume that no such facts exist; provided that
if the Trustee shall not have received the notice provided for in this Section
12.06 at least two Business Days prior to the date upon which by the terms of
this Indenture any moneys shall become payable for any purpose (including,
without limitation, the payment of the principal of or interest on any
Security), then, regardless of anything herein to the contrary, the Trustee
shall have full power and authority to receive any moneys from the Guarantors
and to apply the same to the purpose for which they were received, and shall not
be affected by any notice to the contrary which may be received by it on or
after such prior date. Nothing contained in this Section 12.06 shall limit the
right of the holders of Guarantor Senior Debt to recover payments as
contemplated by Section 12.03. The Trustee shall be entitled to rely on the
delivery to it of a written notice by a Person representing himself or itself to
be a holder of any Guarantor Senior Debt (or a trustee on behalf of, or other
representative of, such holder) to establish that such notice has been given by
a holder of Guarantor Senior Debt or a trustee or representative on behalf of
any such holder.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Guarantor Senior Debt to participate in any payment or distribution pursuant to
this Article Twelve, the Trustee may request such Person to furnish evidence to
the reasonable satisfaction of the Trustee as to the amount of Guarantor Senior
Debt held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article Twelve, and if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
SECTION 12.07. Reliance on Judicial Order or Certificate of
Liquidating Agent. Upon any payment or distribution of assets or securities of
any Guarantor referred to in this Article Twelve, 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 bankruptcy, dissolution, winding-up,
liquidation or reorganization proceedings are pending, or upon a certificate of
the receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, delivered to the Trustee or to the Holders
of the Securities for the purpose of ascertaining the Persons entitled to
participate in such distribution, the holders of Guarantor Senior Debt and other
Indebtedness of such Guarantor, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article Twelve.
SECTION 12.08. Trustee's Relation to Guarantor Senior Debt. The
Trustee and any Paying Agent shall be entitled to all the rights set forth in
this Article Twelve with respect to any Guarantor Senior Debt which may at any
time be held by it in its individual or any other capacity to the same extent as
any other holder of Guarantor Senior Debt, and nothing in this Indenture shall
deprive the Trustee or any Paying Agent of any of its rights as such holder.
85
With respect to the holders of Guarantor Senior Debt, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article Twelve, and no implied covenants
or obligations with respect to the holders of Guarantor Senior Debt shall be
read into this Indenture against the Trustee. The Trustee shall not be deemed to
owe any fiduciary duty to the holders of Guarantor Senior Debt. The Trustee
shall not be liable to any such holders if the Trustee shall in good faith
mistakenly pay over or distribute to Holders of Securities or to the Company or
to any other Person cash, property or securities to which any holders of
Guarantor Senior Debt shall be entitled by virtue of this Article Twelve or
otherwise.
SECTION 12.09. Subordination Rights Not Impaired by Acts or
Omissions of the Guarantors or Holders of Guarantor Senior Debt. No right of any
present or future holders of any Guarantor Senior Debt to enforce subordination
as provided herein shall at any time in any way be prejudiced or impaired by any
act, including any amendment to this Article Twelve without the consent of the
holders of such Senior Debt, or failure to act on the part of any Guarantor or
by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by any Guarantor with the terms of this Indenture, regardless of
any knowledge thereof which any such holder may have or otherwise be charged
with. The provisions of this Article Twelve are intended to be for the benefit
of, and shall be enforceable directly by, the holders of Guarantor Senior Debt.
SECTION 12.10. Securityholders Authorize Trustee to Effectuate
Subordination of Guarantees. Each Holder of Securities by its or his acceptance
of such Securities authorizes and expressly directs the Trustee on its or his
behalf to take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article Twelve, and appoints the Trustee its or
his attorney-in-fact for such purposes, including, in the event of any
dissolution, winding-up, liquidation or reorganization of any Guarantor (whether
in bankruptcy, insolvency, receivership, reorganization or similar proceedings
or upon an assignment for the benefit of creditors or otherwise) tending towards
liquidation of the business and assets of such Guarantor, the filing of a claim
for the unpaid balance of its or his Securities in the form required in those
proceedings.
SECTION 12.11. This Article Not to Prevent Events of Default. The
failure to make a payment on account of principal of or interest on the
Securities by reason of any provision of this Article Twelve shall not be
construed as preventing the occurrence of an Event of Default specified in
Section 6.01.
SECTION 12.12. Trustee's Compensation Not Prejudiced. Nothing in
this Article Twelve shall apply to amounts due to the Trustee pursuant to other
sections in this Indenture.
SECTION 12.13. No Waiver of Guarantee Subordination Provisions.
Without in any way limiting the generality of Section 12.09, the holders of
Guarantor Senior Debt may, at any time and from time to time, without the
consent of or notice to the Trustee or the Holders of the Securities, without
incurring responsibility to the Holders of the Securities and without impairing
or releasing the subordination provided in this Article Twelve or the
obligations hereunder of the Holders of the Securities to the holders of
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Guarantor Senior Debt, do any one or more of the following: (a) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, Guarantor Senior Debt or any instrument evidencing the same or any
agreement under which Guarantor Senior Debt is outstanding or secured; (b) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Guarantor Senior Debt; (c) release any Person liable in any
manner for the collection of Guarantor Senior Debt; and (d) exercise or refrain
from exercising any rights against the Guarantor and any other Person.
SECTION 12.14. Payments May be Paid Prior to Dissolution. Nothing
contained in this Article Twelve or elsewhere in this Indenture shall prevent
(i) the Guarantors, except under the conditions described in Section 12.02, from
making payments of principal of and interest on the Securities, or from
depositing with the Trustee any moneys for such payments or from effecting a
termination of the Guarantors' obligations under the Securities and this
Indenture as provided in Article Eight, or (ii) the application by the Trustee
of any moneys deposited with it for the purpose of making such payments of
principal of and interest on the Securities, to the Holders entitled thereto
unless at least two Business Days prior to the date upon which such payment
becomes due and payable, the Trustee shall have received the written notice
provided for in Section 12.02(b) or in Section 12.06. The Company shall give
prompt written notice to the Trustee of any dissolution, winding-up, liquidation
or reorganization of any Guarantor.
ARTICLE 13
Miscellaneous
SECTION 13.01. TIA Controls. If any provision of this Indenture
limits, qualifies, or conflicts with another provision which is required to be
included in this Indenture by the TIA, the required provision shall control. If
any provision of this Indenture modifies or excludes any provision of the TIA
that may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or excluded, as the case may be.
SECTION 13.02. Notices. Any notices or other communications required
or permitted hereunder shall be in writing, and shall be sufficiently given if
made by hand delivery, by telecopier, by reputable overnight delivery service,
or registered mail, postage prepaid, return receipt requested, addressed as
follows:
if to the Company or any Guarantor:
Scientific Games Corporation
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
87
with a copy to
Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxx, Esq.
Facsimile: (000) 000-0000
if to the Trustee:
Xxxxx Fargo Bank, National Association
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Corporate Trust Department
Facsimile: (000) 000-0000
Each of the Company, the Guarantors and the Trustee by written
notice to each other may designate additional or different addresses for notices
to such Person. Any notice or communication to the Company and the Guarantors
shall be deemed to have been given or made as of the date so delivered if
personally delivered; when answered back, if telexed; when receipt is
acknowledged, if telecopied; one (1) business day after mailing by reputable
overnight courier; and five (5) calendar days after mailing if sent by
registered mail, postage prepaid (except that, notwithstanding the foregoing, a
notice of change of address shall not be deemed to have been given until
actually received by the addressee). Notice to the Trustee shall be deemed given
when actually received by the Trustee.
Any notice or communication mailed to a Securityholder shall be
mailed to him by first class mail or other equivalent means at his address as it
appears on the registration books of the Registrar and shall be sufficiently
given to him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 13.03. Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA ss. 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 ss. 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee at the request of
the Trustee:
88
(1) an Officers' Certificate, in form and substance reasonably
satisfactory to the Trustee, stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 13.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture, other than the Officers' Certificate required by
Section 4.08(a), shall include:
(1) a statement that the Person making such certificate or opinion
has read such covenant or condition and the definitions relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of each such
Person, such condition or covenant has been complied with; provided,
however, that with respect to matters of fact an Opinion of Counsel may
rely on an Officers' Certificate or certificates of public officials.
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar. The
Trustee may make reasonable rules in accordance with the Trustee's customary
practices for action by or at a meeting of Holders. The Paying Agent or
Registrar may make reasonable rules for its functions.
SECTION 13.07. Legal Holidays. A "Legal Holiday" used with respect
to a particular place of payment is a Saturday, a Sunday or a day on which
banking institutions in New York, New York, or at such place of payment are not
required to be open. If a payment date is a Legal Holiday at such place, payment
may be made at such place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
SECTION 13.08. Governing Law. THIS INDENTURE AND THE SECURITIES WILL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO
THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY. Each of the parties hereto agrees to submit to the
jurisdiction of the courts of the
89
State of New York in any action or proceeding arising out of or relating to this
Indenture or the Securities.
SECTION 13.09. No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret another indenture, loan or debt agreement
of any of the Company or any of its Subsidiaries. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.
SECTION 13.10. No Recourse Against Others. A director, officer,
employee, stockholder or incorporator, as such, of the Company or any Guarantor
shall not have any liability for any Obligations of the Company or any Guarantor
under the Securities, the Guarantees or this Indenture 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.
Such waiver and release are part of the consideration for the issuance of the
Securities.
SECTION 13.11. Successors. All agreements of the Company in this
Indenture and the Securities shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successor.
SECTION 13.12. Duplicate Originals. All parties may sign any number
of copies of this Indenture. Each signed copy or counterpart shall be an
original, but all of them together shall represent the same agreement.
SECTION 13.13. Severability. In case any one or more of the
provisions in this Indenture or in the Securities shall be held invalid, illegal
or unenforceable, in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions shall not in any way be affected or impaired thereby, it being
intended that all of the provisions hereof shall be enforceable to the full
extent permitted by law.
90
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the date first written above.
THE COMPANY:
SCIENTIFIC GAMES CORPORATION
by_________________________________
Name:
Title:
GUARANTORS:
SCIENTIFIC GAMES MANAGEMENT
CORPORATION
by_________________________________
Name:
Title:
SCIENTIFIC GAMES HOLDINGS CORP.
by_________________________________
Name:
Title:
SCIENTIFIC GAMES (GREECE), INC.
by_________________________________
Name:
Title:
91
SCIENTIFIC GAMES ACQUISITION, INC.
by_________________________________
Name:
Title:
SCIENTIFIC GAMES FINANCE CORPORATION
by_________________________________
Name:
Title:
SCIENTIFIC GAMES INTERNATIONAL, INC.
by_________________________________
Name:
Title:
MDI ENTERTAINMENT, LLC
by_________________________________
Name:
Title:
SCIENTIFIC GAMES ROYALTY CORPORATION
by_________________________________
Name:
Title:
92
SCIENTIFIC GAMES RACING, LLC
by_________________________________
Name:
Title:
AUTOTOTE INTERNATIONAL, INC.
by_________________________________
Name:
Title:
SG RACING, INC.
by_________________________________
Name:
Title:
AUTOTOTE ENTERPRISES, INC.
by_________________________________
Name:
Title:
AUTOTOTE KENO CORPORATION
by_________________________________
Name:
Title:
AUTOTOTE GAMING, INC.
by_________________________________
Name:
Title:
93
AUTOTOTE DOMINICANA INC.
by_________________________________
Name:
Title:
AUTOTOTE INTERACTIVE, INC.
by_________________________________
Name:
Title:
SCIENTIFIC GAMES ONLINE
ENTERTAINMENT SYSTEMS, INC.
by_________________________________
Name:
Title:
94
THE TRUSTEE:
XXXXX FARGO BANK, NATIONAL
ASSOCIATION
by_________________________________
Name:
Title:
95
APPENDIX A
PROVISIONS RELATING TO INITIAL SECURITIES,
------------------------------------------
ADDITIONAL SECURITIES,
----------------------
AND EXCHANGE SECURITIES
-----------------------
1. Definitions
1.1 Definitions
Capitalized terms used in this Appendix and not otherwise defined
shall have the meanings provided in the Indenture. For the purposes of this
Appendix A and the Indenture as a whole, the following terms shall have the
meanings indicated below:
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Regulation S Global Security or beneficial interest
therein, the rules and procedures of the Depositary for such Global Security, to
the extent applicable to such transaction and as in effect from time to time.
"Definitive Security" means a certificated Initial Security or
Exchange Security (bearing the Restricted Securities Legend if the transfer of
such Security is restricted by applicable law) that does not include the Global
Securities Legend.
"Depositary" means The Depository Trust Company, its nominees and
their respective successors or another Person designated as Depositary by the
Company, which must be a clearing agency registered under the Exchange Act.
"Distribution Compliance Period", with respect to any Securities,
means the period of 40 consecutive days beginning on and including the later of
(i) the day on which such Securities are first offered to Persons other than
distributors (as defined in Regulation S under the Securities Act) in reliance
on Regulation S and (ii) the issue date with respect to such Securities.
"Exchange Securities" means (1) the 6 1/4% Senior Subordinated Notes
due 2012 issued pursuant to this Indenture in connection with a Registered
Exchange Offer pursuant to a Registration Rights Agreement and (2) Additional
Securities, if any, issued pursuant to a registration statement filed with the
Commission under the Securities Act.
"Global Securities Legend" means the legend set forth under that
caption in Exhibit 1 to this Appendix.
"IAI" means an institutional "accredited investor" as described in
Rule 501.
"Initial Purchasers" means (1) with respect to the Initial
Securities issued on the Issue Date, X.X. Xxxxxx Securities Inc., Bear,
Xxxxxxx & Co. Inc., Xxxxxxxxx & Company, Inc., Ramius Securities, LLC, ABN
AMRO Incorporated, BNY Capital Markets, Inc. and Commerzbank Capital Markets
Corp. and (2) with respect to each issuance of Additional Securities, the
Persons purchasing such Additional Securities under the related Purchase
Agreement.
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"Initial Securities" means (1) $200.0 million aggregate principal
amount of 6 1/4% Senior Subordinated Notes due 2012 issued on the Issue Date and
(2) Additional Securities, if any, issued in a transaction exempt from the
registration requirements of the Securities Act.
"Purchase Agreement" means (1) with respect to the Initial
Securities issued on the Issue Date, the Purchase Agreement dated as of December
9, 2004, among the Company, the Guarantors party thereto and the Initial
Purchasers and (2) any other similar purchase or underwriting agreement relating
to Additional Securities.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Registered Exchange Offer" means the offer by the Company, pursuant
to a Registration Rights Agreement, to certain Holders of Initial Securities, to
issue and deliver to such Holders, in exchange for their Initial Securities, a
like aggregate principal amount of Exchange Securities registered under the
Securities Act.
"Registration Rights Agreement" means (1) with respect to the
Initial Securities issued on the Issue Date, the Registration Rights Agreement
dated December 23, 2004, among the Company, the Guarantors party thereto and the
Initial Purchasers and (2) any other similar Registration Rights Agreement
relating to Additional Securities.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Securities" means all Initial Securities offered and
sold outside the United States in reliance on Regulation S.
"Restricted Securities Legend" means the legend set forth in Section
2.3(e)(i) herein.
"Rule 501" means Rule 501(a)(1), (2), (3) or (7) under the
Securities Act.
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 144A Securities" means all Initial Securities offered and sold
to QIBs in reliance on Rule 144A.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to a Global
Security (as appointed by the Depositary) or any successor person thereto, who
shall initially be the Trustee.
"Shelf Registration Statement" means a registration statement filed
by the Company in connection with the offer and sale of Initial Securities
pursuant to a Registration Rights Agreement.
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"Transfer Restricted Securities" means Definitive Securities and any
other Securities that bear or are required to bear the Restricted Securities
Legend.
1.2 Other Definitions
Term: Defined in Section:
----- -------------------
"Agent Members".........................................2.1(c)
"IAI Global Security"...................................2.1(b)
"Global Security".......................................2.1(b)
"Regulation S Global Security"..........................2.1(b)
"Rule 144A Global Security".............................2.1(b)
2. The Securities
2.1 Form and Dating
(a) The Initial Securities issued on the date hereof will be (i)
offered and sold by the Company pursuant to a Purchase Agreement and (ii)
resold, initially only to (1) QIBs in reliance on Rule 144A and (2) Persons
other than U.S. Persons (as defined in Regulation S) in reliance on Regulation
S. Such Initial Securities may thereafter be transferred to, among others, QIBs,
purchasers in reliance on Regulation S and, except as set forth below, IAIs in
accordance with Rule 501. Additional Securities offered after the date hereof
may be offered and sold by the Company from time to time pursuant to one or more
Purchase Agreements in accordance with applicable law.
(b) Global Securities. Rule 144A Securities shall be issued
initially in the form of one or more permanent global Securities in definitive,
fully registered form (collectively, the "Rule 144A Global Security") and
Regulation S Securities shall be issued initially in the form of one or more
global Securities (collectively, the "Regulation S Global Security"), in each
case without interest coupons and bearing the Global Securities Legend and
Restricted Securities Legend, which shall be deposited on behalf of the
purchasers of the Securities represented thereby with the Securities Custodian,
and registered in the name of the Depositary or a nominee of the Depositary,
duly executed by the Company and authenticated by the Trustee as provided in
this Indenture. One or more global Securities in definitive, fully registered
form without interest coupons and bearing the Global Securities Legend and the
Restricted Securities Legend (collectively, the "IAI Global Security") shall
also be issued, deposited with the Securities Custodian, and registered in the
name of the Depositary or a nominee of the Depositary, duly executed by the
Company and authenticated by the Trustee as provided in this Indenture to
accommodate transfers of beneficial interests in the Securities to IAIs
subsequent to the initial distribution. Beneficial ownership interests in the
Regulation S Global Security shall not be exchangeable for interests in the Rule
144A Global Security, the IAI Global Security or any other Security without a
Restricted Securities Legend until the expiration of the Distribution Compliance
Period. The Rule 144A Global Security, the IAI Global Security and the
Regulation S Global Security are each referred to herein as a "Global Security"
and are collectively referred to herein as "Global Securities"; provided that
the term "Global Security" when used in Sections 2.1(b), 2.1(c), 2.3(g)(i),
A-3
2.3(h)(i) and 2.4 shall also include any Security in global form issued in
connection with a Registered Exchange Offer. The aggregate principal amount of
the Global Securities may from time to time be increased or decreased by
adjustments made on the records of the Trustee and the Depositary or its
nominee.
(c) Book-Entry Provisions. This Section 2.1(c) shall apply only to a
Global Security deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.1(c) and Section 2.02 of this Indenture, and pursuant to an
authentication order delivered to the Trustee pursuant to Section 2.02 of this
Indenture, authenticate and deliver initially one or more Global Securities that
(i) shall be registered in the name of the Depositary for such Global Security
or Global Securities or the nominee of such Depositary and (ii) shall be
delivered by the Trustee to such Depositary or pursuant to such Depositary's
instructions or held by the Trustee as Securities Custodian.
Members of, or participants in, the Depositary ("Agent Members")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depositary or by the Trustee as Securities Custodian
or under such Global Security, and the Depositary may be treated by the Company,
the Trustee and any agent of the Company (including any Agent) or the Trustee as
the absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company (including any Agent) or the Trustee from
giving effect to any written certification, proxy or other authorization
furnished by the Depositary or impair, as between the Depositary and its Agent
Members, the operation of customary practices of such Depositary governing the
exercise of the rights of a holder of a beneficial interest in any Global
Security.
(d) Definitive Securities. Except as provided in Section 2.3 or 2.4,
owners of beneficial interests in Global Securities will not be entitled to
receive physical delivery of certificated Securities.
2.2 Authentication of Exchange Securities. The Trustee shall
authenticate and make available for delivery upon a written order of the Company
signed by two Officers Exchange Securities for issue only in a Registered
Exchange Offer pursuant to a Registration Rights Agreement and for a like
principal amount of Initial Securities exchanged pursuant thereto. Such order
shall specify the amount of the Securities to be authenticated and the date the
Exchange Securities are to be authenticated. The aggregate principal amount of
Securities that may be outstanding at any time is unlimited.
2.3 Transfer and Exchange. (a) Transfer and Exchange of
Definitive Securities. When Definitive Securities are presented to the
Registrar with a request:
(i) to register the transfer of such Definitive Securities; or
(ii) to exchange such Definitive Securities for an equal principal
amount of Definitive Securities of other authorized denominations,
A-4
the Registrar shall register the transfer or make the exchange as requested if
its reasonable requirements for such transaction are met; provided, however,
that the Definitive Securities surrendered for transfer or exchange:
(1) shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the Registrar,
duly executed by the Holder thereof or his attorney duly authorized in
writing; and
(2) in the case of Transfer Restricted Securities, are accompanied
by the following additional information and documents, as applicable:
(A) if such Definitive Securities are being delivered to the
Registrar by a Holder for registration in the name of such Holder,
without transfer, a certification from such Holder to that effect
(in the form set forth on the reverse side of the Initial Security);
or
(B) if such Definitive Securities are being transferred to the
Company, a certification to that effect (in the form set forth on
the reverse side of the Initial Security); or
(C) if such Definitive Securities are being transferred
pursuant to an exemption from registration in accordance with Rule
144 under the Securities Act or in reliance upon another exemption
from the registration requirements of the Securities Act, (x) a
certification to that effect (in the form set forth on the reverse
side of the Initial Security), (y) if the Company so requests, an
opinion of counsel or other evidence reasonably satisfactory to it
as to the compliance with the restrictions set forth in the legend
set forth in Section 2.3(e)(i) and (z) in the case of a transfer to
an IAI, a signed letter substantially in the form of Exhibit 3 to
this Appendix.
(b) Restrictions on Transfer of a Definitive Security for a
Beneficial Interest in a Global Security. A Definitive Security may not be
exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below. Upon receipt by the Trustee of
a Definitive Security, duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the Registrar,
together with:
(i) certification (in the form set forth on the reverse side of the
Initial Security) that such Definitive Security is being transferred (1)
to a QIB in accordance with Rule 144A, (2) to an IAI that has furnished to
the Trustee a signed letter substantially in the form of Exhibit 3 to this
Appendix or (3) outside the United States in an offshore transaction
within the meaning of Regulation S and in compliance with Rule 904 under
the Securities Act;
(ii) if the Company so requests, an opinion of counsel or other
evidence reasonably satisfactory to it as to the compliance with the
restrictions set forth in the legend set forth in Section 2.3(e)(i); and
A-5
(iii) written instructions directing the Trustee to make, or to
direct the Securities Custodian to make, an adjustment on its books and
records with respect to such Global Security to reflect an increase in the
aggregate principal amount of the Securities represented by the Global
Security, such instructions to contain information regarding the
Depositary account to be credited with such increase,
then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Securities Custodian, the
aggregate principal amount of Securities represented by the Global Security to
be increased by the aggregate principal amount of the Definitive Security to be
exchanged and shall credit or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the Global Security
equal to the principal amount of the Definitive Security so canceled. If no
Global Securities are then outstanding and the Global Security has not been
previously exchanged for certificated securities pursuant to Section 2.4, the
Company shall issue and the Trustee shall authenticate, in accordance with
Section 2.02 of this Indenture, a new Global Security in the appropriate
principal amount.
(c) Transfer and Exchange of Global Securities. (i) The transfer and
exchange of Global Securities or beneficial interests therein shall be
effected through the Depositary, in accordance with this Indenture
(including applicable restrictions on transfer set forth herein, if any)
and the procedures of the Depositary therefor. A transferor of a
beneficial interest in a Global Security shall deliver a written order
given in accordance with the Depositary's procedures containing
information regarding the participant account of the Depositary to be
credited with a beneficial interest in such Global Security or another
Global Security and such account shall be credited in accordance with such
order with a beneficial interest in the applicable Global Security and the
account of the Person making the transfer shall be debited by an amount
equal to the beneficial interest in the Global Security being transferred.
Transfers by an owner of a beneficial interest in the Rule 144A Global
Security or the IAI Global Security to a transferee who takes delivery of
such interest through the Regulation S Global Security, whether before or
after the expiration of the Distribution Compliance Period, shall be made
only upon receipt by the Trustee of a certification from the transferor in
the form provided on the reverse of the Initial Securities to the effect
that such transfer is being made in accordance with Regulation S or (if
available) Rule 144 under the Securities Act. In the case of a transfer of
a beneficial interest in the Regulation S Global Security or the Rule 144A
Global Security for an interest in the IAI Global Security, the transferee
must furnish a signed letter substantially in the form of Exhibit 3 to
this Appendix to the Trustee and an opinion of counsel or other evidence
reasonably satisfactory to the Company or the Trustee as to compliance
with the restrictions set forth in the legend set forth in Section
2.3(e)(i).
(ii) If the proposed transfer is a transfer of a beneficial interest
in one Global Security to a beneficial interest in another Global
Security, the Registrar shall reflect on its books and records the date
and an increase in the principal amount of the Global Security to which
such interest is being transferred in an amount equal to the principal
amount of the interest to be so transferred, and the Registrar shall
reflect on
A-6
its books and records the date and a corresponding decrease in the
principal amount of the Global Security from which such interest is being
transferred.
(iii) Notwithstanding any other provisions of this Appendix (other
than the provisions set forth in Section 2.4), a Global Security may not
be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(iv) In the event that a Global Security is exchanged for Definitive
Securities pursuant to Section 2.4 prior to the consummation of a
Registered Exchange Offer or the effectiveness of a Shelf Registration
Statement with respect to such Securities, such Securities may be
exchanged only in accordance with such procedures as are substantially
consistent with the provisions of this Section 2.3 (including the
certification requirements set forth on the reverse of the Initial
Securities intended to ensure that such transfers comply with Rule 144A,
Regulation S or such other applicable exemption from registration under
the Securities Act, as the case may be) and such other procedures as may
from time to time be adopted by the Company.
(d) Restrictions on Transfer of Regulation S Global Security. (i)
Prior to the expiration of the Distribution Compliance Period, interests in the
Regulation S Global Security may only be sold, pledged or transferred in
accordance with the Applicable Procedures and only (1) to the Company, (2) so
long as such Security is eligible for resale pursuant to Rule 144A, to a person
whom the selling holder reasonably believes is a QIB that purchases for its own
account or for the account of a QIB to whom notice is given that the resale,
pledge or transfer is being made in reliance on Rule 144A, (3) in an offshore
transaction in accordance with Regulation S, (4) pursuant to an exemption from
registration under the Securities Act provided by Rule 144 (if applicable) under
the Securities Act, (5) to an IAI purchasing for its own account, or for the
account of such an IAI, in a minimum principal amount of Securities of $250,000
or (6) pursuant to an effective registration statement under the Securities Act,
in each case in accordance with any applicable securities laws of any state of
the United States. Prior to the expiration of the Distribution Compliance
Period, transfers by an owner of a beneficial interest in the Regulation S
Global Security to a transferee who takes delivery of such interest through the
Rule 144A Global Security or the IAI Global Security shall be made only in
accordance with Applicable Procedures and upon receipt by the Trustee of a
written certification from the transferor of the beneficial interest in the form
provided on the reverse of the Initial Security to the effect that such transfer
is being made to (1) a QIB within the meaning of Rule 144A in a transaction
meeting the requirements of Rule 144A or (2) an IAI purchasing for its own
account, or for the account of such an IAI, in a minimum principal amount of the
Securities of $250,000. Such written certification shall no longer be required
after the expiration of the Distribution Compliance Period. In the case of a
transfer of a beneficial interest in the Regulation S Global Security for an
interest in the IAI Global Security, the transferee must furnish a signed letter
substantially in the form of Exhibit 3 to this Appendix to the Trustee and an
opinion of
A-7
counsel or other evidence reasonably satisfactory to the Company or the Trustee
as to compliance with the restrictions set forth in the legend set forth in
Section 2.3(e)(i)
(ii) Upon the expiration of the Distribution Compliance Period,
beneficial ownership interests in the Regulation S Global Security shall
be transferable in accordance with applicable law and the other terms of
this Indenture.
(e) Legend.
(i) Except as permitted by the following paragraphs (ii), (iii) or
(iv), each Security certificate evidencing the Global Securities and the
Definitive Securities (and all Securities issued in exchange therefor or
in substitution thereof) shall bear a legend in substantially the
following form (each defined term in the legend being defined as such for
purposes of the legend only):
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
SUCH REGISTRATION. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF,
AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH
IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE")
THAT IS [IN THE CASE OF RULE 144A NOTES: TWO YEARS] [IN THE CASE OF
REGULATION S NOTES: 40 DAYS] AFTER THE LATER OF THE ORIGINAL ISSUE DATE
HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE
ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH
SECURITY), ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C)
FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR
A-8
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO
OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING
OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR
(7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL
AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH
A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE ISSUER'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST
OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
Each Definitive Security shall also bear the following additional
legend:
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR
AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS.
(ii) Upon any sale or transfer of a Transfer Restricted Security
that is a Definitive Security, the Registrar shall permit the Holder
thereof to exchange such Transfer Restricted Security for a Definitive
Security that does not bear the legends set forth above and rescind any
restriction on the transfer of such Transfer Restricted Security if the
Holder certifies in writing to the Registrar that its request for such
exchange was made in reliance on Rule 144 (such certification to be in the
form set forth on the reverse of the Initial Security).
(iii) After a transfer of any Initial Securities during the period
of the effectiveness of a Shelf Registration Statement with respect to
such Initial Securities, all requirements pertaining to the Restricted
Securities Legend on such Initial Securities shall cease to apply and the
requirements that any such Initial Securities be issued in global form
shall continue to apply.
(iv) Upon the consummation of a Registered Exchange Offer with
respect to the Initial Securities pursuant to which Holders of such
Initial Securities are offered Exchange Securities in exchange for their
Initial Securities, all requirements pertaining to Initial Securities that
Initial Securities be issued in global form shall continue to apply, and
Exchange Securities in global form without the Restricted Securities
Legend shall be available to Holders that exchange such Initial Securities
in such Registered Exchange Offer.
(v) Upon a sale or transfer after the expiration of the Distribution
Compliance Period of any Initial Security acquired pursuant to Regulation
S, all requirements that such Initial Security bear the Restricted
Securities Legend shall cease to apply and the
A-9
requirements requiring any such Initial Security be issued in global form
shall continue to apply.
(vi) Any Additional Securities sold in a registered offering shall
not be required to bear the Restricted Securities Legend.
(f) Cancelation or Adjustment of Global Security. At such time as
all beneficial interests in a Global Security have either been exchanged
for Definitive Securities, transferred, redeemed, repurchased or canceled,
such Global Security shall be returned by the Depositary to the Trustee
for cancelation or retained and canceled by the Trustee. At any time prior
to such cancelation, if any beneficial interest in a Global Security is
exchanged for Definitive Securities, transferred in exchange for an
interest in another Global Security, redeemed, repurchased or canceled,
the principal amount of Securities represented by such Global Security
shall be reduced and an adjustment shall be made on the books and records
of the Trustee (if it is then the Securities Custodian for such Global
Security) with respect to such Global Security, by the Trustee or the
Securities Custodian, to reflect such reduction.
(g) Obligations with Respect to Transfers and Exchanges of
Securities.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate, Definitive Securities
and Global Securities at the Registrar's request.
(ii) No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax, assessments, or similar governmental
charge payable in connection therewith (other than any such transfer
taxes, assessments or similar governmental charge payable upon exchanges
pursuant to Sections 2.06, 3.06, 4.16 and 9.05 of this Indenture).
(iii) Prior to the due presentation for registration of transfer of
any Security, the Company, the Trustee, the Paying Agent or the Registrar
may deem and treat the person in whose name a Security is registered as
the absolute owner of such Security for the purpose of receiving payment
of principal of and interest on such Security and for all other purposes
whatsoever, whether or not such Security is overdue, and none of the
Company, the Trustee, the Paying Agent or the Registrar shall be affected
by notice to the contrary.
(iv) All Securities issued upon any transfer or exchange pursuant to
the terms of this Indenture shall evidence the same debt and shall be
entitled to the same benefits under this Indenture as the Securities
surrendered upon such transfer or exchange.
(h) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to any
beneficial owner of a Global Security, a member of, or a participant in
the Depositary or any
A-10
other Person with respect to the accuracy of the records of the Depositary
or its nominee or of any participant or member thereof, with respect to
any ownership interest in the Securities or with respect to the delivery
to any participant, member, beneficial owner or other Person (other than
the Depositary) of any notice (including any notice of redemption or
repurchase) or the payment of any amount, under or with respect to such
Securities. All notices and communications to be given to the Holders and
all payments to be made to Holders under the Securities shall be given or
made only to the registered Holders (which shall be the Depositary or its
nominee in the case of a Global Security). The rights of beneficial owners
in any Global Security shall be exercised only through the Depositary
subject to the applicable rules and procedures of the Depositary. The
Trustee may rely and shall be fully protected in relying upon information
furnished by the Depositary with respect to its members, participants and
any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to any
transfer of any interest in any Security (including any transfers between
or among Depositary participants, members or beneficial owners in any
Global Security) other than to require delivery of such certificates,
opinions and other documentation or evidence as are expressly required by,
and to do so if and when expressly required by, the terms of this
Indenture, and to examine the same to determine substantial compliance as
to form with the express requirements hereof.
2.4 Definitive Securities
(a) A Global Security deposited with the Depositary or with the
Trustee as Securities Custodian pursuant to Section 2.1 or issued in connection
with a Registered Exchange Offer shall be transferred to the beneficial owners
thereof in the form of Definitive Securities in an aggregate principal amount
equal to the principal amount of such Global Security, in exchange for such
Global Security, only if such transfer complies with Section 2.3 and (i) the
Depositary notifies the Company that it is unwilling or unable to continue as a
Depositary for such Global Security or if at any time the Depositary ceases to
be a "clearing agency" registered under the Exchange Act, and a successor
depositary is not appointed by the Company within 90 days of such notice or
after the Company becomes aware of such cessation, (ii) an Event of Default has
occurred and is continuing or (iii) the Company, in its sole discretion,
notifies the Trustee in writing that it elects to cause the issuance of
certificated Securities under this Indenture.
(b) Any Global Security that is transferable to the beneficial
owners thereof pursuant to this Section 2.4 shall be surrendered by the
Depositary to the Trustee, to be so transferred, in whole or from time to time
in part, without charge, and the Trustee shall authenticate and deliver, upon
such transfer of each portion of such Global Security, an equal aggregate
principal amount of Definitive Securities of authorized denominations. Any
portion of a Global Security transferred pursuant to this Section shall be
executed, authenticated and delivered only in denominations of $1,000 and any
integral multiple thereof and registered in such names as the Depositary shall
direct. Any certificated Initial
A-11
Security in the form of a Definitive Security delivered in exchange for an
interest in the Global Security shall, except as otherwise provided by Section
2.3(e), bear the Restricted Securities Legend.
(c) Subject to the provisions of Section 2.4(b), the registered
Holder of a Global Security may grant proxies and otherwise authorize any
Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Securities.
(d) In the event of the occurrence of any of the events specified in
Section 2.4(a)(i), (ii) or (iii), the Company will promptly make available to
the Trustee a reasonable supply of Definitive Securities in fully registered
form without interest coupons.
A-12
EXHIBIT 1
to
APPENDIX A
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO 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 IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[[FOR REGULATION S GLOBAL SECURITY ONLY] UNTIL 40 DAYS AFTER THE
LATER OF COMMENCEMENT OR COMPLETION OF THE OFFERING, AN OFFER OR SALE OF
SECURITIES WITHIN THE UNITED STATES BY A DEALER (AS DEFINED IN THE SECURITIES
ACT) MAY VIOLATE THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IF SUCH
OFFER OR SALE IS MADE OTHERWISE THAN IN ACCORDANCE WITH RULE 144A THEREUNDER.]
[Restricted Securities Legend]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF
THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF
OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE") THAT IS [IN THE CASE OF RULE 144A NOTES: TWO YEARS] [IN THE
CASE OF REGULATION S NOTES: 40 DAYS] AFTER THE LATER OF THE ORIGINAL ISSUE DATE
HEREOF AND THE LAST DATE ON
B-1
WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY
(OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE ISSUER, (B) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT
THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E)
TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED
INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH
AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT
OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR
FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER'S AND THE
TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES
(D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE
REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION
DATE.
[Definitive Securities Legend]
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH
THE FOREGOING RESTRICTIONS.
B-2
No. $___________
CUSIP No.______________
6 1/4% Senior Subordinated Notes due 2012
Scientific Games Corporation, a Delaware corporation, promises to
pay to [ ] or registered assigns, the principal sum of [ ] Dollars [as such sum
may be increased or reduced as reflected on the records of the Trustee in
accordance with the Indenture](1) on December 15, 2012.
Interest Payment Dates: June 15 and December 15
Record Dates: June 1 and December 1
Additional provisions of this Security are set forth on the other
side of this Security.
SCIENTIFIC GAMES CORPORATION
By
------------------------------
Name:
------------------------------
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
Dated:
XXXXX FARGO BANK, NATIONAL ASSOCIATION
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
By
-------------------------------------
Authorized Signatory
--------------------------
(1) Insert if a global security.
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[FORM OF REVERSE SIDE OF INITIAL SECURITY]
6 1/4% Senior Subordinated Note due 2012
1. Interest
--------
SCIENTIFIC GAMES CORPORATION, a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Security at
the rate per annum shown above; provided, however, that if a Registration
Default (as defined in the Registration Rights Agreement) occurs, additional
interest will accrue on this Security at a rate of 0.25% per annum (increasing
by an additional 0.25% per annum after each consecutive 90-day period that
occurs after the date on which such Registration Default occurs up to a maximum
additional interest rate of 1.00%) from and including the date on which any such
Registration Default shall occur to but excluding the date on which all
Registration Defaults have been cured. All references in this Security and in
the Indenture to interest payable on any Security shall include any such
additional interest. The Company will pay interest semi-annually on June 15 and
December 15 of each year (each an "Interest Payment Date"), commencing June 15,
2005. Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from December 23, 2004.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
The Company shall pay interest at the rate of interest then borne by
the Securities on overdue installments of principal and on overdue installments
of interest to the extent lawful as provided in the Indenture.
2. Method of Payment
-----------------
The Company shall pay interest on the Securities (except defaulted
interest) to the Persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date even if the
Securities are cancelled after such Record Date and before the corresponding
Interest Payment Date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company shall pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts ("U.S. Legal Tender"). However, the Company
may pay principal and interest by wire transfer of federal funds, or interest by
check payable in such U.S. Legal Tender. The Company may deliver any such
interest payment to the Paying Agent or to a Holder at the Holder's registered
address.
3. Paying Agent and Registrar
--------------------------
Initially, Xxxxx Fargo Bank, National Association (the "Trustee")
will act as Paying Agent and Registrar. The Company may change any Paying Agent
or Registrar without notice to the Holders. The Company or any of its
Subsidiaries may act as Registrar or Paying Agent.
B-4
4. Indenture
---------
The Company issued the Securities under an Indenture, dated as of
December 23, 2004 (the "Indenture"), by and among the Company, the Guarantors
named therein and the Trustee. Capitalized terms herein are used as defined in
the Indenture unless otherwise defined herein. The terms of the Securities
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S.C. xx.xx. 77aaa-77bbbb)
(the "TIA"), as in effect on the date of the Indenture until such time as the
Indenture is qualified under the TIA, and thereafter as in effect on the date on
which the Indenture is qualified under the TIA and as it may be amended from
time to time. Notwithstanding anything to the contrary herein, the Securities
are subject to all such terms, and Holders are referred to the Indenture and the
TIA for a statement of them. The Securities are senior subordinated obligations
of the Company initially limited in aggregate principal amount to $200,000,000
on the Issue Date, and, subject to compliance with Section 4.04 of the
Indenture, unlimited in aggregate principal amount thereafter.
5. Optional Redemption
-------------------
The Securities will be redeemable, at the Company's option, in whole
at any time or in part from time to time, on and after December 15, 2008, upon
not less than 30 nor more than 60 days' notice, at the following redemption
prices (expressed as percentages of the principal amount thereof) if redeemed
during the twelve-month period commencing on December 15 of the years set forth
below, plus, in each case, accrued and unpaid interest to the Redemption Date:
Period Percentage
------ ----------
2008...................................... 103.125%
2009...................................... 101.563%
2010 and thereafter....................... 100.000%
6. Optional Redemption upon Equity Offering
----------------------------------------
At any time, or from time to time, on or prior to December 15, 2007,
the Company may, at its option, use the net cash proceeds of one or more Equity
Offerings (as defined below) to redeem in the aggregate up to 35% of the
original principal amount of the Securities (which includes Additional
Securities, if any) at a redemption price equal to 106.25% of the principal
amount thereof, plus accrued and unpaid interest to the date of redemption;
provided, however, that at least 65% of the original principal amount of the
Securities (which includes Additional Securities, if any) remains outstanding
immediately after any such redemption. In order to effect the foregoing
redemption with the proceeds of any Equity Offering, the Company shall make such
redemption not more than 120 days after the consummation of any such Equity
Offering.
As used in the preceding paragraph, "Equity Offering" means any
private or public offering of Qualified Capital Stock of the Company.
B-5
7. Notice of Optional Redemption
-----------------------------
Notice of redemption will be sent, by first class mail, postage
prepaid, at least 30 days but not more than 60 days before the Redemption Date
to each Holder of Securities to be redeemed at such Holder's registered address.
Securities in denominations larger than $1,000 may be redeemed in part.
Except as set forth in the Indenture, if monies for the redemption
of the Securities called for redemption shall have been deposited with the
Paying Agent for redemption on such Redemption Date, then, unless the Company
defaults in the payment of such Redemption Price plus accrued and unpaid
interest, if any, the Securities called for redemption will cease to bear
interest from and after such Redemption Date and the only right of the Holders
of such Securities will be to receive payment of the Redemption Price plus
accrued and unpaid interest, if any, to the Redemption Date.
8. Offers to Purchase
------------------
Sections 4.15 and 4.16 of the Indenture provide that upon the
occurrence of a Change of Control (as defined in the Indenture) and after
certain Asset Sales (as defined in the Indenture), and subject to further
limitations contained therein, the Company will make an offer to purchase
certain amounts of the Securities in accordance with the procedures set forth in
the Indenture.
9. Denominations; Transfer; Exchange
---------------------------------
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of 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 certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof (i) during a period beginning at the
opening of business 15 days before the mailing of a notice of redemption of
Securities and ending at the close of business on the day of such mailing and
(ii) selected for redemption, except the unredeemed portion of any Security
being redeemed in part.
10. Persons Deemed Owners
---------------------
The registered Holder of this Security shall be treated as the owner
of it for all purposes.
11. Unclaimed Funds
---------------
If funds for the payment of principal or interest remain unclaimed
for one year, the Trustee and the Paying Agent will repay the funds to the
Company at its request. After that, all liability of the Trustee and such Paying
Agent with respect to such funds shall cease.
B-6
12. Legal Defeasance and Covenant Defeasance
----------------------------------------
The Company may be discharged from its Obligations under the
Indenture and the Securities except for certain provisions thereof, and may be
discharged from its Obligations to comply with certain covenants contained in
the Indenture and the Securities, in each case upon satisfaction of certain
conditions specified in the Indenture.
13. Amendment; Supplement; Waiver
-----------------------------
Subject to certain exceptions, the Indenture and the Securities may
be amended or supplemented with the written consent of the Holders of at least a
majority in aggregate principal amount of the Securities then outstanding, and
any existing Default or Event of Default or compliance with any provision may be
waived with the consent of the Holders of a majority in aggregate principal
amount of the Securities then outstanding. Without notice to or consent of any
Holder, the parties thereto may amend or supplement the Indenture and the
Securities to, among other things, cure any ambiguity, defect or inconsistency,
provide for uncertificated Securities in addition to or in place of certificated
Securities or comply with any requirements of the Commission in connection with
the qualification of the Indenture under the TIA, or make any other change that
does not adversely affect the rights of any Holder in any material respect.
14. Restrictive Covenants
---------------------
The Indenture contains certain covenants that, among other things,
limit the ability of the Company and its Restricted Subsidiaries to incur
additional Indebtedness, create certain liens, pay dividends or make certain
other restricted payments, consummate certain asset sales, enter into certain
transactions with affiliates and merge or consolidate with any other person or
sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of the assets of the Company. The limitations are subject to a
number of important qualifications and exceptions. The Company must annually
report to the Trustee on compliance with such covenants.
15. Subordination
-------------
The Indebtedness evidenced by the Securities is, to the extent and
in the manner provided in the Indenture, subordinated in right of payment to the
prior payment in full in cash of all Senior Debt, and this Security is issued
subject to such provisions. Each Holder of this 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
or appropriate to effectuate the subordination as provided in the Indenture and
(c) appoints the Trustee attorney-in-fact of such Holder for such purpose.
16. Defaults and Remedies
---------------------
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare the principal of and accrued interest on all the
Securities to be due and payable immediately in
B-7
the manner and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture or the Securities except as provided in the
Indenture. The Trustee is not obligated to enforce the Indenture or the
Securities unless it has received indemnity satisfactory to it. The Indenture
permits, subject to certain limitations therein provided, Holders of a majority
in aggregate principal amount of the Securities then outstanding to direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of Securities notice of certain continuing Defaults or Events of Default
if it determines that withholding notice is in their interest.
17. Trustee Dealings with Company
-----------------------------
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company, its Subsidiaries or their respective Affiliates as if it were
not the Trustee.
18. No Recourse Against Others
--------------------------
No stockholder, director, officer, employee or incorporator, as
such, of the Company shall have any liability for any obligation of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of, such Obligations or their creation. Each Holder of a Security
by accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities.
19. Authentication
--------------
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on this Security by its manual
signature.
20. Guarantees
----------
The payment by the Company of the principal of and interest on the
Securities is fully and unconditionally guaranteed on a joint and several senior
subordinated basis by each of the Guarantors to the extent set forth in the
Indenture.
21. Abbreviations
-------------
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
22. CUSIP Numbers
-------------
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused a CUSIP number to be
printed on the Securities as a convenience to the Holders. No representation is
made as to the accuracy of such numbers as printed on the Securities and
reliance may be placed only on the other identification numbers printed hereon.
B-8
23. Holders' Compliance with Registration Rights Agreement
------------------------------------------------------
Each Holder of a Security, by acceptance hereof, acknowledges and
agrees to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.
The Company will furnish to any Holder of a Security upon written
request and without charge a copy of the Indenture and the Registration Rights
Agreement. Requests may be made to: Scientific Games Corporation, 000 Xxxxxxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn: Chief Financial Officer.
24. Governing Law
-------------
This Security and the Indenture shall be governed by and construed
in accordance with the laws of the State of New York, but without giving effect
to applicable principles of conflicts of laws to the extent that the application
of the law of another jurisdiction would be required thereby. Each of the
parties hereto 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
Security.
B-9
--------------------------------------------------------------------------
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
------------------------------------------------------
(Print or type assignee's name, address and zip code)
------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this
Security on the books of the Company. The agent may substitute another to
act for him.
--------------------------------------------------------------------------
Date:_____________ Your Signature:______________________
------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act after the later of the date of original issuance
of such Securities and the last date, if any, on which such Securities were
owned by the Company or any Affiliate of the Company, the undersigned confirms
that such Securities are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
|_| to the Company; or
1. |_| pursuant to an effective registration statement under the
Securities Act of 1933; or
2. |_| inside the United States to a "qualified institutional buyer"
(as defined in Rule 144A under the Securities Act of 1933)
that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that
such transfer is being made in reliance on Rule 144A, in each
case pursuant to and in compliance with Rule 144A under the
Securities Act of 1933; or
B-10
3. |_| outside the United States in an offshore transaction within
the meaning of Regulation S under the Securities Act in
compliance with Rule 904 under the Securities Act of 1933; or
4. |_| pursuant to the exemption from registration provided by Rule
144 under the Securities Act of 1933; or
5. |_| to an institutional "accredited investor" (as defined in Rule
501(a)(1),(2),(3) or (7) under the Securities Act of 1933)
that has furnished to the Trustee a signed letter containing
certain representations and agreements.
Unless one of the boxes is checked, the Trustee will refuse to
register any of the Securities evidenced by this certificate in the
name of any person other than the registered holder thereof;
provided, however, that if box (3), (4) or (5) is checked, the
Trustee shall be entitled to require, prior to registering any such
transfer of the Securities, such legal opinions, certifications and
other information as the Company has reasonably requested to confirm
that such transfer is being made pursuant to an exemption from, or
in a transaction not subject to, the registration requirements of
the Securities Act of 1933.
-----------------------------------------
Your Signature
Signature Guarantee:
Date:____________________________
---------------------------------
Signature of Signature Guarantee
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
------------------------------------------------------------------------------
B-11
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company and
the Guarantors as the undersigned has requested pursuant to Rule 144A or has
determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
Dated:_________________ ________________________
Notice: To be executed by
an executive officer
B-12
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.15 (Change of Control) or 4.16 (Asset Sales) of the
Indenture, check the box:
|_| Change of Control
|_| Asset Sales
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.15 or 4.16 of the Indenture, state the amount
in principal amount: $
Dated:_____________ Your Signature:__________________________________
(Sign exactly as your name appears
on the other side of this Security.)
Signature Guarantee:_____________________________________________________
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
B-13
EXHIBIT 2
to
APPENDIX A
[FORM OF FACE OF EXCHANGE SECURITY]
------------------------------
*/ [If the Security is to be issued in global form add the Global Securities
Legend from Exhibit 1 to Appendix A.]
**/[If the Security is an Exchange Security issued in a Registered Exchange
Offer to an Initial Purchaser holding an unsold portion of its initial
allotment, add the Restricted Securities Legend from Exhibit 1 to Appendix A and
replace the Assignment Form included in this Exhibit A with the Assignment Form
included in such Exhibit 1.]
C-1
No.__________ $____________
CUSIP No.______________
6 1/4% Senior Subordinated Notes due 2012
Scientific Games Corporation, a Delaware corporation, promises to pay to [
], or registered assigns, the principal sum of [ ] Dollars [as such sum may be
increased or reduced as reflected on the records of the Trustee in accordance
with the Indenture](2) on December 15, 2012.
Interest Payment Dates: June 15 and December 15
Record Dates: June 1 and December 1
Additional provisions of this Security are set forth on the other side of
this Security.
SCIENTIFIC GAMES CORPORATION
By_________________________________________
Name:
-------------------------------------
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
Dated:
XXXXX FARGO BANK, NATIONAL ASSOCIATION
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
By
-------------------------------------
Authorized Signatory
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY]
6 1/4% Senior Subordinated Note due 2012
1. Interest
--------
---------------------
(2) Insert if a global security.
C-2
SCIENTIFIC GAMES CORPORATION, a Delaware corporation (the "Company"), promises
to pay interest on the principal amount of this Security at the rate per annum
shown above[; provided, however, that if a Registration Default (as defined in
the Registration Rights Agreement) occurs, additional interest will accrue on
this Security at a rate of 0.25% per annum (increasing by an additional 0.25%
per annum after each consecutive 90-day period that occurs after the date on
which such Registration Default occurs up to a maximum additional interest rate
of 1.00%) from and including the date on which any such Registration Default
shall occur to but excluding the date on which all Registration Defaults have
been cured. All references in this Security and in the Indenture to interest
payable on any Security shall include any such additional interest.](3). The
Company will pay interest semi-annually on June 15 and December 15 of each year
(each an "Interest Payment Date"), commencing June 15, 2005. Interest on the
Securities will accrue from the most recent date to which interest has been paid
or, if no interest has been paid, from December 23, 2004. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
The Company shall pay interest at the rate of interest then borne by
the Securities on overdue installments of principal and on overdue installments
of interest to the extent lawful as provided in the Indenture.
2. Method of Payment
-----------------
The Company shall pay interest on the Securities (except defaulted
interest) to the Persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date even if the
Securities are cancelled after such Record Date and before the corresponding
Interest Payment Date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company shall pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts ("U.S. Legal Tender"). However, the Company
may pay principal and interest by wire transfer of federal funds, or interest by
check payable in such U.S. Legal Tender. The Company may deliver any such
interest payment to the Paying Agent or to a Holder at the Holder's registered
address.
3. Paying Agent and Registrar
--------------------------
Initially, Xxxxx Fargo Bank, National Association (the "Trustee")
will act as Paying Agent and Registrar. The Company may change any Paying Agent
or Registrar without notice to the Holders. The Company or any of its
Subsidiaries may, act as Registrar or Paying Agent.
4. Indenture
---------
-------------------------
(3) Insert if at the date of issuance of the Exchange Security any
Registration Default has occurred with respect to the related Initial
Securities during the interest period in which such date of issuance
occurs.
C-3
The Company issued the Securities under an Indenture, dated as of
December 23, 2004 (the "Indenture"), by and among the Company, the Guarantors
named therein and the Trustee. Capitalized terms herein are used as defined in
the Indenture unless otherwise defined herein. The terms of the Securities
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S.C. xx.xx. 77aaa-77bbbb)
(the "TIA"), as in effect on the date of the Indenture until such time as the
Indenture is qualified under the TIA, and thereafter as in effect on the date on
which the Indenture is qualified under the TIA and as it may be amended from
time to time. Notwithstanding anything to the contrary herein, the Securities
are subject to all such terms, and Holders are referred to the Indenture and the
TIA for a statement of them. The Securities are senior subordinated obligations
of the Company initially limited in aggregate principal amount to $200,000,000
on the Issue Date, and, subject to compliance with Section 4.04 of the
Indenture, unlimited in aggregate principal amount thereafter.
5. Optional Redemption
-------------------
The Securities will be redeemable, at the Company's option, in whole
at any time or in part from time to time, on and after December 15, 2008, upon
not less than 30 nor more than 60 days' notice, at the following redemption
prices (expressed as percentages of the principal amount thereof) if redeemed
during the twelve-month period commencing on December 15 of the years set forth
below, plus, in each case, accrued and unpaid interest to the Redemption Date:
Period Percentage
------ ----------
2008...................................... 103.125%
2009...................................... 101.563%
2010 and thereafter....................... 100.000%
6. Optional Redemption upon Equity Offering
----------------------------------------
At any time, or from time to time, on or prior to December 15, 2007,
the Company may, at its option, use the net cash proceeds of one or more Equity
Offerings (as defined below) to redeem in the aggregate up to 35% of the
original principal amount of the Securities (which includes Additional
Securities, if any) at a redemption price equal to 106.25% of the principal
amount thereof, plus accrued and unpaid interest to the date of redemption;
provided, however, that at least 65% of the original principal amount of the
Securities (which includes Additional Securities, if any) remains outstanding
immediately after any such redemption. In order to effect the foregoing
redemption with the proceeds of any Equity Offering, the Company shall make such
redemption not more than 120 days after the consummation of any such Equity
Offering.
As used in the preceding paragraph, "Equity Offering" means any
private or public offering of Qualified Capital Stock of the Company.
7. Notice of Optional Redemption
-----------------------------
C-4
Notice of redemption will be sent, by first class mail, postage
prepaid, at least 30 days but not more than 60 days before the Redemption Date
to each Holder of Securities to be redeemed at such Holder's registered address.
Securities in denominations larger than $1,000 may be redeemed in part.
Except as set forth in the Indenture, if monies for the redemption
of the Securities called for redemption shall have been deposited with the
Paying Agent for redemption on such Redemption Date, then, unless the Company
defaults in the payment of such Redemption Price plus accrued and unpaid
interest, if any, the Securities called for redemption will cease to bear
interest from and after such Redemption Date and the only right of the Holders
of such Securities will be to receive payment of the Redemption Price plus
accrued and unpaid interest, if any, to the Redemption Date.
8. Offers to Purchase
------------------
Sections 4.15 and 4.16 of the Indenture provide that upon the
occurrence of a Change of Control (as defined in the Indenture) and after
certain Asset Sales (as defined in the Indenture), subject to further
limitations contained therein, the Company will make an offer to purchase
certain amounts of the Securities in accordance with the procedures set forth in
the Indenture.
9. Denominations; Transfer; Exchange
---------------------------------
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of 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 certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof (i) during a period beginning at the
opening of business 15 days before the mailing of a notice of redemption of
Securities and ending at the close of business on the day of such mailing and
(ii) selected for redemption, except the unredeemed portion of any Security
being redeemed in part.
10. Persons Deemed Owners
---------------------
The registered Holder of this Security shall be treated as the owner
of it for all purposes.
11. Unclaimed Funds
---------------
If funds for the payment of principal or interest remain unclaimed
for one year, the Trustee and the Paying Agent will repay the funds to the
Company at its request. After that, all liability of the Trustee and such Paying
Agent with respect to such funds shall cease.
12. Legal Defeasance and Covenant Defeasance
----------------------------------------
C-5
The Company may be discharged from its Obligations under the
Indenture and the Securities except for certain provisions thereof, and may be
discharged from its Obligations to comply with certain covenants contained in
the Indenture and the Securities, in each case upon satisfaction of certain
conditions specified in the Indenture.
13. Amendment; Supplement; Waiver
-----------------------------
Subject to certain exceptions, the Indenture and the Securities may
be amended or supplemented with the written consent of the Holders of at least a
majority in aggregate principal amount of the Securities then outstanding, and
any existing Default or Event of Default or compliance with any provision may be
waived with the consent of the Holders of a majority in aggregate principal
amount of the Securities then outstanding. Without notice to or consent of any
Holder, the parties thereto may amend or supplement the Indenture and the
Securities to, among other things, cure any ambiguity, defect or inconsistency,
provide for uncertificated Securities in addition to or in place of certificated
Securities or comply with any requirements of the Commission in connection with
the qualification of the Indenture under the TIA, or make any other change that
does not adversely affect the rights of any Holder in any material respect.
14. Restrictive Covenants
---------------------
The Indenture contains certain covenants that, among other things,
limit the ability of the Company and its Restricted Subsidiaries to incur
additional Indebtedness, create certain liens, pay dividends or make certain
other restricted payments, consummate certain asset sales, enter into certain
transactions with affiliates and merge or consolidate with any other person or
sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of the assets of the Company. The limitations are subject to a
number of important qualifications and exceptions. The Company must annually
report to the Trustee on compliance with such covenants.
15. Subordination
-------------
The Indebtedness evidenced by the Securities is, to the extent and
in the manner provided in the Indenture, subordinated in right of payment to the
prior payment in full in cash of all Senior Debt, and this Security is issued
subject to such provisions. Each Holder of this 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
or appropriate to effectuate the subordination as provided in the Indenture and
(c) appoints the Trustee attorney-in-fact of such Holder for such purpose.
16. Defaults and Remedies
---------------------
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare the principal of and accrued interest on all the
Securities to be due and payable immediately in the manner and with the effect
provided in the Indenture. Holders of Securities may not enforce the Indenture
or the Securities except as provided in the Indenture. The Trustee is not
C-6
obligated to enforce the Indenture or the Securities unless it has received
indemnity satisfactory to it. The Indenture permits, subject to certain
limitations therein provided, Holders of a majority in aggregate principal
amount of the Securities then outstanding to direct the Trustee in its exercise
of any trust or power. The Trustee may withhold from Holders of Securities
notice of certain continuing Defaults or Events of Default if it determines that
withholding notice is in their interest.
17. Trustee Dealings with Company
-----------------------------
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company, its Subsidiaries or their respective Affiliates as if it were
not the Trustee.
18. No Recourse Against Others
--------------------------
No stockholder, director, officer, employee or incorporator, as
such, of the Company shall have any liability for any obligation of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of, such Obligations or their creation. Each Holder of a Security
by accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities.
19. Authentication
--------------
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on this Security by its manual
signature.
20. Guarantees
----------
The payment by the Company of the principal of and interest on the
Securities is fully and unconditionally guaranteed on a joint and several senior
subordinated basis by each of the Guarantors to the extent set forth in the
Indenture.
21. Abbreviations
-------------
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
22. CUSIP Numbers
-------------
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused a CUSIP number to be
printed on the Securities as a convenience to the Holders. No representation is
made as to the accuracy of such numbers as printed on the Securities and
reliance may be placed only on the other identification numbers printed hereon.
C-7
The Company will furnish to any Holder of a Security upon written
request and without charge a copy of the Indenture.
[23. Holders' Compliance with Registration Rights Agreement
------------------------------------------------------
Each Holder of a Security, by acceptance hereof, acknowledges and
agrees to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.
The Company will furnish to any Holder of a Security upon written
request and without charge a copy of the Indenture and the Registration
Rights Agreement. Requests may be made to: Scientific Games Corporation, 000
Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn: Chief Financial
Officer.](4)
24. Governing Law
-------------
This Security and the Indenture shall be governed by and construed
in accordance with the laws of the State of New York, but without giving effect
to applicable principles of conflicts of law to the extent that the application
of the law of another jurisdiction would be required thereby. Each of the
parties hereto 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
Security.
--------------------
(4) Delete if this Security is not being issued in exchange for an Initial
Security.
C-8
-------------------------------------------------------------------------------
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
----------------------------------------------------
(Print or type assignee's name, address and zip code)
-----------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this
Security on the books of the Company. The agent may substitute another to
act for him.
-------------------------------------------------------------------------------
Date:_______ Your Signature:______________________________________
-------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
C-9
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.15 (Change of Control) or 4.16 (Asset Sales) of the
Indenture, check the box:
|_| Change of Control
|_| Asset Sales
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.15 or 4.16 of the Indenture, state the amount
in principal amount: $
Dated:______________ Your Signature:__________________________________
(Sign exactly as your name appears
on the other side of this Security.)
Signature Guarantee:_____________________________________________________
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
C-10
EXHIBIT 3
to
APPENDIX A
Form of
Transferee Letter of Representation
Scientific Games Corporation
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
Ladies and Gentlemen:
This certificate is delivered to request a transfer of $[ ] principal
amount of the 6 1/4% Senior Subordinated Notes due 2012 (the "Securities") of
Scientific Games Corporation (the "Company").
Upon transfer, the Securities would be registered in the name of the new
beneficial owner as follows:
Name:________________________
Address:______________________
Taxpayer ID Number:____________
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the
"Securities Act")), purchasing for our own account or for the account of such an
institutional "accredited investor" at least $250,000 principal amount of the
Securities, and we are acquiring the Securities not with a view to, or for offer
or sale in connection with, any distribution in violation of the Securities Act.
We have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Securities,
and we invest in or purchase securities similar to the Securities in the normal
course of our business. We, and any accounts for which we are acting, are each
able to bear the economic risk of our or its investment.
2. We understand that the Securities have not been registered under the
Securities Act and, unless so registered, may not be sold except as permitted in
the following sentence. We agree on our own behalf and on behalf of any investor
account for which we are purchasing Securities to offer, sell or otherwise
transfer such Securities prior to the date that is two years after the later of
the date of original issue and the last date on which the Company or any
affiliate of the Company was the owner of such Securities (or any predecessor
thereto) (the "Resale Restriction Termination Date") only (i) to the
D-1
Company, (ii) in the United States to a person whom the seller reasonably
believes is a qualified institutional buyer in a transaction meeting the
requirements of Rule 144A, (iii) to an institutional "accredited investor"
within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act
that is an institutional accredited investor purchasing for its own account or
for the account of an institutional accredited investor, in each case in a
minimum principal amount of the Securities of $250,000, (iv) outside the United
States in a transaction complying with the provisions of Rule 904 under the
Securities Act, (v) pursuant to an exemption from registration under the
Securities Act provided by Rule 144 (if available) or (vi) pursuant to an
effective registration statement under the Securities Act, in each of cases (i)
through (vi) subject to any requirement of law that the disposition of our
property or the property of such investor account or accounts be at all times
within our or their control and in compliance with any applicable state
securities laws. The foregoing restrictions on resale will not apply subsequent
to the Resale Restriction Termination Date. If any resale or other transfer of
the Securities is proposed to be made pursuant to clause (iii) above prior to
the Resale Restriction Termination Date, the transferor shall deliver a letter
from the transferee substantially in the form of this letter to the Company and
the Trustee, which shall provide, among other things, that the transferee is an
institutional "accredited investor" within the meaning of Rule 501(a)(1), (2),
(3) or (7) under the Securities Act and that it is acquiring such Securities for
investment purposes and not for distribution in violation of the Securities Act.
Each purchaser acknowledges that the Company and the Trustee reserve the right
prior to the offer, sale or other transfer prior to the Resale Restriction
Termination Date of the Securities pursuant to clause (iii), (iv) or (v) above
to require the delivery of an opinion of counsel, certifications or other
information satisfactory to the Company and the Trustee.
TRANSFEREE:_________________,
By:__________________
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