Exhibit 4.49
________________________________________________________________________________
________________________________________________________________________________
NATIONAL RESTAURANT ENTERPRISES
HOLDINGS, INC.
_________________________________
SERIES A AND SERIES B
13% SENIOR PIK NOTES DUE 2008
_________________________________
_____________________________
INDENTURE
DATED AS OF JUNE 29, 2001
_____________________________
STATE STREET BANK AND TRUST COMPANY
Trustee
________________________________________________________________________________
________________________________________________________________________________
C-1
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE.................................................. 1
Section 1.01. DEFINITIONS....................................................................... 1
Section 1.02. OTHER DEFINITIONS................................................................. 16
Section 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT................................. 17
Section 1.04. RULES OF CONSTRUCTION............................................................. 17
Section 1.05. INCORPORATION OF BURGER KING AGREEMENT............................................ 17
ARTICLE 2 THE SENIOR PIK NOTES........................................................................ 17
Section 2.01. FORM AND DATING................................................................... 17
Section 2.02. EXECUTION AND AUTHENTICATION...................................................... 18
Section 2.03. REGISTRAR AND PAYING AGENT........................................................ 19
Section 2.04. PAYING AGENT TO HOLD MONEY IN TRUST............................................... 19
Section 2.05. HOLDER LISTS...................................................................... 20
Section 2.06. TRANSFER AND EXCHANGE............................................................. 20
Section 2.07. REPLACEMENT SENIOR PIK NOTES...................................................... 27
Section 2.08. OUTSTANDING SENIOR PIK NOTES...................................................... 27
Section 2.09. TREASURY SENIOR PIK NOTES......................................................... 28
Section 2.10. TEMPORARY SENIOR PIK NOTES........................................................ 28
Section 2.11. CANCELLATION...................................................................... 28
Section 2.12. DEFAULTED INTEREST................................................................ 28
Section 2.13. RECORD DATE....................................................................... 29
Section 2.14. CUSIP NUMBER...................................................................... 29
ARTICLE 3 OPTIONAL REDEMPTION AND MANDATORY OFFERS TO PURCHASE........................................ 29
Section 3.01. NOTICES TO TRUSTEE................................................................ 29
Section 3.02. SELECTION OF SENIOR PIK NOTES TO BE REDEEMED OR PURCHASED......................... 30
Section 3.03. NOTICE OF REDEMPTION.............................................................. 30
Section 3.04. EFFECT OF NOTICE OF REDEMPTION.................................................... 31
Section 3.05. DEPOSIT OF REDEMPTION PRICE....................................................... 31
Section 3.06. SENIOR PIK NOTES REDEEMED IN PART................................................. 32
Section 3.07. OPTIONAL REDEMPTION PROVISIONS.................................................... 32
Section 3.08. MANDATORY PURCHASE PROVISIONS..................................................... 32
ARTICLE 4 COVENANTS................................................................................... 34
Section 4.01. PAYMENT OF SENIOR PIK NOTES....................................................... 34
Section 4.02. COMMISSION REPORTS................................................................ 35
Section 4.03. COMPLIANCE CERTIFICATE............................................................ 35
Section 4.04. STAY, EXTENSION AND USURY LAWS.................................................... 36
Section 4.05. LIMITATION ON RESTRICTED PAYMENTS................................................. 36
Section 4.06. CORPORATE EXISTENCE............................................................... 39
Section 4.07. LIMITATION ON INCURRENCE OF INDEBTEDNESS.......................................... 40
Section 4.08. LIMITATION ON TRANSACTIONS WITH AFFILIATES........................................ 40
Section 4.09. LIMITATION ON LIENS............................................................... 41
Section 4.10. COMPLIANCE WITH LAWS, TAXES....................................................... 41
Section 4.11. LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS AFFECTING
RESTRICTED SUBSIDIARIES........................................................... 42
Section 4.12. MAINTENANCE OF OFFICE OR AGENCIES................................................. 42
Section 4.13. CHANGE OF CONTROL................................................................. 43
Section 4.14. LIMITATION ON ASSET SALES......................................................... 44
Section 4.15. LIMITATION ON GUARANTEES OF COMPANY INDEBTEDNESS BY RESTRICTED SUBSIDIARIES...... 45
Section 4.16. DESIGNATION OF RESTRICTED AND NON-RESTRICTED SUBSIDIARIES......................... 46
Section 4.17. LIMITATION ON ISSUANCE BY RESTRICTED SUBSIDIARIES OF PREFERRED EQUITY INTERESTS... 47
ARTICLE 5 SUCCESSORS.................................................................................. 47
Section 5.01. MERGER OR CONSOLATION............................................................. 47
Section 5.02. SUCCESSOR CORPORATION SUBSTITUTED................................................. 47
ARTICLE 6 DEFAULTS AND REMEDIES....................................................................... 48
Section 6.01. EVENTS OF DEFAULT................................................................. 48
Section 6.02. ACCELERATION...................................................................... 49
Section 6.03. OTHER REMEDIES.................................................................... 50
Section 6.04. WAIVER OF PAST DEFAULTS........................................................... 50
Section 6.05. CONTROL BY MAJORITY............................................................... 50
Section 6.06. LIMITATION ON SUITS............................................................... 51
Section 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.............................................. 51
Section 6.08. COLLECTION SUIT BY TRUSTEE........................................................ 51
Section 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.................................................. 51
Section 6.10. PRIORITIES........................................................................ 52
Section 6.11. UNDERTAKING FOR COSTS............................................................. 52
ARTICLE 7 TRUSTEE..................................................................................... 52
Section 7.01. DUTIES OF TRUSTEE................................................................. 52
Section 7.02. RIGHTS OF TRUSTEE................................................................ 54
Section 7.03. INDIVIDUAL RIGHTS OF TRUSTEE...................................................... 54
Section 7.04. TRUSTEE'S DISCLAIMER.............................................................. 54
Section 7.05. NOTICE TO HOLDERS OF DEFAULTS AND EVENTS OF DEFAULT............................... 54
Section 7.06. REPORTS BY TRUSTEE TO HOLDERS..................................................... 55
Section 7.07. COMPENSATION AND INDEMNITY........................................................ 55
Section 7.08. REPLACEMENT OF TRUSTEE............................................................ 56
Section 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.................................................. 57
Section 7.10. ELIGIBILITY; DISQUALIFICATION..................................................... 57
Section 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY............................. 57
ARTICLE 8 DISCHARGE OF INDENTURE...................................................................... 57
Section 8.01. DISCHARGE OF LIABILITY ON SENIOR PIK NOTES; DEFEASANCE............................ 57
Section 8.02. CONDITIONS TO DEFEASANCE.......................................................... 58
Section 8.03. APPLICATION OF TRUST MONEY........................................................ 59
Section 8.04. REPAYMENT TO THE COMPANY.......................................................... 59
Section 8.05. INDEMNITY FOR GOVERNMENT OBLIGATIONS.............................................. 60
Section 8.06. REINSTATEMENT..................................................................... 60
ARTICLE 9 AMENDMENTS.................................................................................. 60
Section 9.01. AMENDMENTS AND SUPPLEMENTS PERMITTED
WITHOUT CONSENT OF HOLDERS....................................................... 60
Section 9.02. AMENDMENTS AND SUPPLEMENTS REQUIRING
CONSENT OF HOLDERS............................................................... 61
Section 9.03. COMPLIANCE WITH TIA............................................................... 62
Section 9.04. REVOCATION AND EFFECT OF CONSENTS................................................. 62
Section 9.05. NOTATION ON OR EXCHANGE OF SENIOR PIK NOTES....................................... 62
Section 9.06. TRUSTEE PROTECTED................................................................. 62
Section 9.07. PAYMENT FOR CONSENTS.............................................................. 63
ARTICLE 10 MISCELLANEOUS............................................................................... 63
Section 10.01. TRUST INDENTURE ACT CONTROLS...................................................... 63
Section 10.02. NOTICES........................................................................... 63
Section 10.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS....................................... 64
Section 10.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT................................ 64
Section 10.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION..................................... 65
Section 10.06. RULES BY TRUSTEE AND AGENTS....................................................... 65
Section 10.07. LEGAL HOLIDAYS.................................................................... 65
Section 10.08. NO RECOURSE AGAINST OTHERS........................................................ 65
Section 10.09. COUNTERPARTS...................................................................... 66
Section 10.10. VARIABLE PROVISIONS............................................................... 66
Section 10.11. GOVERNING LAW..................................................................... 66
Section 10.12. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS..................................... 66
Section 10.13. SUCCESSORS........................................................................ 66
Section 10.14. SEVERABILITY...................................................................... 66
Section 10.15. TABLE OF CONTENTS, HEADINGS, ETC.................................................. 66
This Indenture, dated as of June 29, 2001, is between National Restaurant
Enterprises Holdings, Inc., a Delaware corporation (the "Company"), and State
Street Bank and Trust Company, as trustee (the "Trustee").
Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the holders of the Company's 13% Series A Senior
PIK Notes due 2008 (the "Series A Senior PIK Notes") and the Company's 13%
Series B Senior PIK Notes due 2008 (the "Series B Senior PIK Notes", and
together with the Series A Senior PIK Notes, the "Senior PIK Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Affiliate" means any of the following: (i) any Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company, (ii) any spouse, immediate family member or other
relative who has the same principal residence as any Person described in clause
(i) above, (iii) any trust in which any such Persons described in clause (i) or
(ii) above has a beneficial interest, and (iv) any corporation or other
organization of which any such Persons described above collectively own 50% or
more of the equity of such entity.
"Agent" means any Registrar, Paying Agent or co-registrar or any successor
thereto.
"Asset Sale" means the sale, lease, conveyance or other disposition by the
Company or a Restricted Subsidiary of assets or property whether owned on the
date of original issuance of the Senior PIK Notes or thereafter acquired, in a
single transaction or in a series of related transactions; provided that Asset
Sales will not include such sales, leases, conveyances or dispositions in
connection with (i) the sale or disposition of any Restricted Investment, (ii)
any Equity Offering by (a) the Company or (b) any Restricted Subsidiary if the
proceeds therefrom are used to make mandatory prepayments of Indebtedness under
the Credit Agreement or Indebtedness of the Restricted Subsidiaries or redeem
Senior PIK Notes as described in Section 3.07 hereof, (iii) the surrender or
waiver of contract rights or the settlement, release or surrender of contract,
tort or other claims of any kind, (iv) the sale of inventory in the ordinary
course of business, (v) a sale- leaseback of assets within one year following
the acquisition of such assets, (vi) the grant of any license of patents,
trademarks, registration therefor and other similar intellectual property, (vii)
a transfer of assets by the Company or Restricted Subsidiary to the Company or a
Restricted Subsidiary, (viii) the designation of a Restricted Subsidiary as a
Non-Restricted Subsidiary pursuant to Section 4.16 hereof, (ix) the sale, lease,
conveyance or other disposition of all or substantially all of the assets of the
Company as permitted under Section 5.01 hereof, (x) the sale or disposition of
obsolete equipment or other obsolete assets, (xi) Restricted Payments permitted
by Section 4.05 hereof, (xii) any foreclosure and sale pursuant to the Credit
Agreement, or (xiii) the exchange of assets for other non-cash assets that (a)
are useful in the business of the Company and its Restricted Subsidiaries and
(b) have a fair market value at least equal to the fair market value of the
assets being exchanged (as determined by the Board of Directors in good faith).
"BBI Note" means the promissory note in the aggregate principal amount of
$600,000 issued by the Company to BancBoston Investments, Inc. and all related
Obligations as in effect on the date of the original issuance of the Senior PIK
Notes.
"BKC" means Burger King Corporation and its successors and assigns.
"BKC Agreements" means the franchise, trademark, royalty, lease, sublease
and other agreements, obligations and liabilities of the Company and its
Subsidiaries with or to BKC.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state
law for the relief of debtors.
"Board of Directors" means the Company's board of directors or any
authorized committee of such board of directors.
"Business Day" means any day other than a Legal Holiday.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of corporate stock, including any
preferred stock.
"Cash Flow" means, for any given period and Person, the sum of, without
duplication, Consolidated Net Income, plus (a) the portion of Net Income
attributable to the minority interests in its Restricted Subsidiaries, to the
extent not included in calculating Consolidated Net Income, plus (b) any
provision for taxes based on income or profits to the extent such income or
profits were included in computing Consolidated Net Income, plus (c)
Consolidated Interest Expense, to the extent deducted in computing Consolidated
Net Income, plus (d) the amortization of all intangible assets, to the extent
such amortization was deducted in computing Consolidated Net Income (including,
but not limited to, inventory write-ups, goodwill, debt and financing costs, and
Incentive Arrangements), plus (e) any non-capitalized transaction costs incurred
in connection with financings, acquisitions or divestitures (including, but not
limited to, financing and refinancing fees, to the extent deducted in computing
Consolidated Net Income, including those in connection with the Offerings, to
the extent deducted in computing Consolidated Net Income), plus (f) all
depreciation and all other non-cash charges (including, without limitation,
those charges relating to the purchase accounting adjustments and LIFO
adjustments), to the extent deducted in computing Consolidated Net Income, plus
(g) any interest income, to the extent such income was not included in computing
Consolidated Net Income, plus (h) all dividend payments on preferred stock
(whether or not paid in cash) to the extent deducted in computing Consolidated
Net Income, plus (i) any extraordinary or non-recurring charge or expense
arising out of the implementation of SFAS 106 or SFAS 109 to the extent deducted
in computing Consolidated Net Income, plus (j) to the extent not covered in
clause (e) above, fees paid or payable in respect of the TJC Agreement to the
extent deducted in computing Consolidated Net Income, plus (k) the net loss of
any Person, other than those of a Restricted Subsidiary, to the extent deducted
in computing Consolidated Net Income, plus (l) net losses in respect of any
discontinued operations, as determined in accordance with GAAP, to the extent
deducted in computing Consolidated Net Income; provided, however, that if any
such calculation includes any period during which an acquisition or sale of a
Person or the incurrence or
2
repayment of Indebtedness occurred, then such calculation for such period shall
be made on a Pro Forma Basis.
"Cash Flow Coverage Ratio" means, for any given period and Person, the
ratio of: (i) Cash Flow, divided by (ii) the sum of Consolidated Interest
Expense and all dividend payments on any series of preferred stock of such
Person (except dividends paid or payable in additional shares of Capital Stock
(other than Disqualified Stock) and except for accrued and unpaid dividends with
respect to preferred stock outstanding on the date of original issuance of the
Senior PIK Notes), in each case, without duplication, provided, however that, if
any such calculation includes any period during which an acquisition or sale of
a Person or the incurrence or repayment of Indebtedness occurred, then such
calculation for such period shall be made on a Pro Forma Basis.
"Change of Control" means the occurrence of each of the following: (i) any
"person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act), excluding the Existing Stockholders, is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a Person shall be deemed to have "beneficial ownership" of all
securities that such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 50% of the total Voting Stock of the Company; and (ii)
the Company consolidates with, or merges with or into, another Person or sells,
assigns, conveys, transfers, leases or otherwise disposes of all or
substantially all of its assets to any Person, or any Person consolidates with,
or merges with or into, the Company, in any such event pursuant to a transaction
in which the outstanding Voting Stock of the Company is converted into or
exchanged for cash, securities or other property, other than any such
transaction where (A) the outstanding Voting Stock of the Company is converted
into or exchanged for (1) Voting Stock (other than Disqualified Stock) of the
surviving or transferee corporation or (2) cash, securities and other property
in an amount which could be paid by the Company as a Restricted Payment under
this Indenture and (B) immediately after such transaction no "person" or "group"
(as such terms are used in Section 13(d) and 14(d) of the Exchange Act),
excluding the Existing Stockholders, is the "beneficial owner" (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person shall be
deemed to have "beneficial ownership" of all securities that such Person has the
right to acquire, whether such right is exercisable immediately or only after
the passage of time), directly or indirectly, of more than 50% of the total
Voting Stock of the surviving or transferee corporation; and (iii) during any
consecutive two-year period, individuals who at the beginning of such period
constituted the Board of Directors of the Company (together with any new
directors whose election by such Board of Directors or whose nomination for
election by the stockholders of the Company was approved by a vote of a majority
of the directors then still in office who are entitled to vote to elect such new
director and were either directors at the beginning of such period or Persons
whose election as directors or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of the Company then in office; provided, however, that a Change of
Control shall not occur as a result of any changes in ownership of the Capital
Stock of Parent if such change results from a bankruptcy or insolvency
proceeding under any Bankruptcy Law.
"Commission" means the Securities and Exchange Commission.
3
"Company" means National Restaurant Enterprises Holdings, Inc. until a
successor replaces it in accordance with Article 5 hereof and thereafter means
the successor, and shall include any and all other obligors on the Senior PIK
Notes.
"Consolidated Interest Expense" means, for any given period and Person, the
aggregate of the interest expense in respect of all Indebtedness of such Person
and its Restricted Subsidiaries for such period, on a consolidated basis,
determined in accordance with GAAP (including amortization of original issue
discount on any such Indebtedness, all non-cash interest payments, the interest
portion of any deferred payment obligation and the interest component of capital
lease obligations, but excluding amortization of deferred financing fees if such
amortization would otherwise be included in interest expense); provided,
however, that for the purpose of the Cash Flow Coverage Ratio, Consolidated
Interest Expense shall be calculated on a Pro Forma Basis; provided further that
any premiums, fees and expenses (including the amortization thereof) payable in
connection with the Offerings and the application of the net proceeds therefrom
or any other refinancing of Indebtedness will be excluded.
"Consolidated Net Income" means, for any given period and Person, the
aggregate of the Net Income of such Person and its Restricted Subsidiaries for
such period, on a consolidated basis, determined in accordance with GAAP;
provided, however, that: (i) the Net Income of any Person acquired in a pooling
of interests transaction for any period prior to the date of such acquisition
shall be excluded and (ii) Consolidated Net Income of any Person will not
include, without duplication, any deduction for: (A) any increased amortization
or depreciation resulting from the write-up of assets pursuant to Accounting
Principles Board Opinion Nos. 16 and 17, as amended or supplemented from time to
time, (B) the amortization of all intangible assets (including amortization
attributable to inventory write-ups, goodwill, debt and financing costs, and
Incentive Arrangements), (C) any non-capitalized transaction costs incurred in
connection with accrual or proposed financings, acquisitions or divestitures
(including, but not limited to, financing and refinancing fees), (D) any
extraordinary or nonrecurring charges relating to any premium or penalty paid,
write-off or deferred financing costs or other financial recapitalization
charges in connection with redeeming or retiring any Indebtedness prior to its
stated maturity, and (E) any Restructuring Charges; provided, however, that for
purposes of determining the Cash Flow Coverage Ratio, Consolidated Net Income
shall be calculated on a Pro Forma Basis.
"Consolidated Net Worth" with respect to any Person means, as of any date,
the consolidated equity of the common stockholders of such Person (excluding the
cumulated foreign currency translation adjustment), all determined on a
consolidated basis in accordance with GAAP, but without any reduction in respect
of the payment of dividends on any series of such Person's preferred stock if
such dividends are paid in additional shares of Capital Stock (other than
Disqualified Stock); provided, however, that Consolidated Net Worth shall also
include, without duplication: (a) the amortization of all write-ups of
inventory, (b) the amortization of all intangible assets (including amortization
of goodwill, debt and financing costs, and Incentive Arrangements), (c) any non-
capitalized transaction costs incurred in connection with actual and proposed
financings, acquisitions or divestitures (including, but not limited to,
financing and refinancing fees), (d) any increased amortization or depreciation
resulting from the write-up of assets pursuant to Accounting Principles Board
Opinion Nos. 16 and 17, as amended and supplemented from time to time, (e) any
extraordinary or nonrecurring charges or expenses relating to any premium or
penalty paid, write-off or deferred financing
4
costs or other financial recapitalization charges incurred in connection with
redeeming or retiring any Indebtedness prior to its stated maturity, (f) any
Restructuring Charges, and (g) any extraordinary or non-recurring charge arising
out of the implementation of SFAS 106 or SFAS 109; provided, however, that
Consolidated Net Worth shall be calculated on a Pro Forma Basis.
"Consolidated Senior Indebtedness" means the Obligations on any
Indebtedness of the Company determined on a consolidated basis that effectively
ranks senior in right of payment to the Senior PIK Notes, including, without
limitation, (i) Indebtedness of the Company that by its terms is expressly
senior in right of payment to the Senior PIK Notes, other than Indebtedness of
the Company owed to one or more of its Subsidiaries, (ii) Indebtedness of the
Company that is secured by a Lien, (iii) Indebtedness of the Company's
Subsidiaries, including, without limitation, Indebtedness incurred under the
Credit Agreement, other than Indebtedness of such Subsidiaries owed to the
Company or to another of the Company's Subsidiaries.
"Consolidated Senior Leverage Ratio" means, for any fiscal quarter, the
ratio of the Company's (i) total Consolidated Senior Indebtedness less
consolidated cash and cash equivalents determined as of the last day of such
fiscal quarter to (ii) annualized consolidated earnings before deducting
interest, taxes, depreciation and amortization; provided, however, that if
during such fiscal quarter the Company or any of its Subsidiaries (a) acquired
one or more Persons the business or assets of one or more Persons, (b) sold or
disposed or one or more Persons or the business or assets or one or more Persons
or (c) opened one or more new or rebuilt restaurants, then the foregoing
calculation shall be made on a pro forma basis, giving effect to such
acquisition, sale, disposition or opening of restaurants, and related
incurrence, repayment or financing of Indebtedness or other related
transactions, including any restructuring charges which would other wise be
accounted for as an adjustment permitted by Regulation S-X under the Securities
Act or on a pro forma basis under GAAP, in each case as if such acquisition,
sale, disposition or opening of restaurants and related transactions, costs,
costs savings, charges, restructurings, incurrence, repayment or refinancing had
occurred on the first day of such fiscal quarter.
"Corporate Trust Office" of the Trustee shall be at the address of the
Trustee specified in Section 10.02 of this Indenture or such other address as to
which the Trustee gives notice to the Company.
"Credit Agreement" means the Consolidated Amended and Restated Revolving
Credit Agreement, dated June 29, 2001, among the Parent, the Company and certain
of its Subsidiaries and the lenders party thereto in their capacities as lenders
thereunder and Fleet National Bank, as agent, together with all loan documents
and instruments thereunder (including, without limitation, any guarantee
agreements and security documents), in each case as such agreements may be
amended (including any amendment and restatement thereof), supplemented or
otherwise modified from time to time, including any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring (including,
without limitation, increasing the amount of available borrowings thereunder,
and all Obligations with respect thereto, in each case, to the extent permitted
by Section 4.07 hereof, or adding Subsidiaries of the Parent 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.
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"Custodian" means any receiver, trustee, assignee, liquidator or similar
official under any Bankruptcy Law.
"Default" means any event that is, or after notice or passage of time or
both would be, an Event of Default.
"Definitive Senior PIK Notes" means Senior PIK Notes that are in the form
of Exhibit A attached hereto (but without including the text referred to in
footnotes 1 and 2 thereto).
"Depositary" means, with respect to the Senior PIK Notes issuable or issued
in whole or in part in global form, the Person specified in Section 2.03 hereof
as the Depositary with respect to the Senior PIK Notes, until a successor shall
have been appointed and become such pursuant to the applicable provision of this
Indenture and, thereafter, "Depositary" shall mean or include such successor.
"Disqualified Stock" means any Capital Stock that 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, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof, in whole or in part on, or prior to, the
maturity date of the Senior PIK Notes.
"Equity Interests" means Capital Stock or partnership interests or
warrants, options or other rights to acquire Capital Stock or partnership
interests (but excluding (i) any debt security that is convertible into, or
exchangeable for, Capital Stock or partnership interests, and (ii) any other
Indebtedness or Obligation) provided, however, that Equity Interests will not
include any Incentive Arrangements or obligations or payments thereunder.
"Equity Offering" means a public or private offering by the Company and/or
its Subsidiaries for cash of Capital Stock or other Equity Interests and all
warrants, options or other rights to acquire Capital Stock, other than (i) an
offering of Disqualified Stock or (ii) Incentive Arrangements or obligations or
payments thereunder.
"Exchange Offer" means the offer by the Company to Holders to exchange
Series B Senior PIK Notes for Series A Senior PIK Notes.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Stockholders" means (a) The Jordan Company and its affiliates,
principals, partners and employees, family members of any of the foregoing and
trusts for the benefit of any of the foregoing, including, without limitation,
JZ Equity Partners PLC, Leucadia National Corporation and Jordan Industries,
Inc., and their respective Subsidiaries, (b) the officers and directors of the
Parent on the date of original issuance of the Senior PIK Notes and their
respective Affiliates and family members and trusts for the benefit of any of
the foregoing and (c) the Parent.
"GAAP" means generally accepted accounting principles, consistently
applied, as of the date of original issuance of the Senior PIK Notes. All
financial and accounting determinations and calculations under this Indenture
will be made in accordance with GAAP.
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"Global Senior PIK Note" means a Senior PIK Note that contains the
paragraph referred to in footnote 1 and the additional schedule referred to in
footnote 2 to the form of the Senior PIK Note attached hereto as Exhibit A.
"Hedging Obligations" means, with respect to any Person, the Obligations of
such Persons under (i) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements, (ii) foreign exchange contracts,
currency swap agreements or similar agreements, and (iii) other agreements or
arrangements designed to protect such Person against fluctuations, or otherwise
to establish financial xxxxxx in respect of, exchange rates, currency rates or
interest rates.
"Holder" means a Person in whose name a Senior PIK Note is registered.
"Incentive Arrangements" means any earn-out agreements, stock appreciation
rights, "phantom" stock plans, employment agreements, non-competition
agreements, subscription and stockholders agreements and other incentive and
bonus plans and similar arrangements made in connection with acquisitions of
Persons or businesses by the Company or the Restricted Subsidiaries or the
retention of executives, officers or employees by the Company or the Restricted
Subsidiaries.
"Indebtedness" means, with respect to any Person, any indebtedness, whether
or not contingent, in respect of borrowed money or evidenced by bonds, notes,
debentures or similar instruments or letters of credit (or reimbursement
agreements in respect thereof) or representing the deferred and unpaid balance
of the purchase price of any property (including pursuant to capital leases),
except any such balance that constitutes an accrued expense or a trade payable,
and any Hedging Obligations, if and to the extent such indebtedness (other than
a Hedging Obligation) would appear as a liability upon a balance sheet of such
Person prepared on a consolidated basis in accordance with GAAP, and also
includes, to the extent not otherwise included, the guarantee of items that
would be included within this definition; provided, however, that "Indebtedness"
will not include (i) any Incentive Arrangements or obligations or payments
thereunder, or (ii) any BKC Agreement, except for any indebtedness in respect of
borrowed money or evidenced by bonds, notes, debentures or similar instruments
or representing the deferred and unpaid balance of the purchase price of any
property (including pursuant to capital leases).
"Indenture" means this Indenture, as amended or supplemented from time to
time.
"Insolvency or Liquidation Proceeding" means (i) any insolvency or
bankruptcy or similar case or proceeding, or any reorganization, receivership,
liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary, or (ii) any assignment for the benefit of creditors or any other
marshalling of assets and liabilities of the Company.
"Intercreditor Agreement" means the Agreement, dated the date of this
Indenture, among the Trustee, the Company and its Subsidiaries, and Burger King
Corporation in the form of Exhibit B.
"Investment" means any capital contribution to, or other debt or equity
investment in, any Person.
7
"issue" means create, issue, assume, guarantee, incur or otherwise become
directly or indirectly liable for any Indebtedness or Capital Stock, as
applicable; provided, however, that any Indebtedness or Capital Stock of a
Person existing at the time such Person becomes a Restricted Subsidiary (whether
by merger, consolidation, acquisition or otherwise) shall be deemed to be issued
by such Restricted Subsidiary at the time it becomes a Restricted Subsidiary.
For this definition, the terms "issuing," "issuer," "issuance" and "issued" have
meanings correlative to the foregoing.
"Jaro Leases" means the leases between the Company's Subsidiaries and
Xxxxxxxx X. Xxxx relating to two Burger King restaurants as in effect at the
date of original issuance of the Senior PIK Notes.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York, Boston, Massachusetts, or at a place of
payment are authorized by law, regulation or executive order to remain closed.
If a payment date is a Legal Holiday at a place of payment, payment may be made
at that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell and any filing of or
agreement to give any financing statement under the Uniform Commercial Code (or
equivalent statutes) of any jurisdiction).
"Liquidated Damages" means all liquidated damages then owing pursuant to
Section 5 of the Registration Rights Agreement.
"Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP, excluding, however, any gain or
loss, together with any related provision for taxes, realized in connection with
any Asset Sale (including, without limitation, dispositions pursuant to sale and
leaseback transactions).
"Net Proceeds" means, with respect to any Asset Sale, the aggregate amount
of cash proceeds (including any cash received by way of deferred payment
pursuant to a note receivable issued in connection with such Asset Sale, other
than the portion of such deferred payment constituting interest, and including
any amounts received as disbursements or withdrawals from any escrow or similar
account established in connection with any such Asset Sale, but, in either such
case, only as and when so received) received by the Company or any of its
Restricted Subsidiaries in respect of such Asset Sale, net of: (i) the cash
expenses of such Asset Sale (including, without limitation, the payment of
principal of, and premium, if any, and interest on, Indebtedness required to be
paid as a result of such Asset Sale (other than the Senior PIK Notes) and legal,
accounting, management and advisory and investment banking fees and sales
commissions), (ii) taxes paid or payable as a result thereof, (iii) any portion
of cash proceeds that the Company determines in good faith should be reserved
for post-closing adjustments, it being understood and agreed that on the day
that all such post-closing adjustments have been determined, the amount (if any)
by which the reserved amount in respect of such Asset Sale
8
exceeds the actual post-closing adjustments payable by the Company or any of its
Restricted Subsidiaries shall constitute Net Proceeds on such date, (iv) any
relocation expenses and pension, severance and shutdown costs incurred as a
result thereof, and (v) any deduction or appropriate amounts to be provided by
the Company or any of its Restricted Subsidiaries as a reserve in accordance
with GAAP against any liabilities associated with the asset disposed of in such
transaction and retained by the Company or such Restricted Subsidiary after such
sale or other disposition thereof, including, without limitation, pension and
other post-employment benefit liabilities and liabilities related to
environmental matters or against any indemnification obligations associated with
such transaction.
"Non-Restricted Subsidiary" means any Subsidiary of the Company other than
a Restricted Subsidiary.
"Obligations" means, with respect to any Indebtedness, all principal,
interest, premiums, penalties, fees, indemnities, expenses (including legal fees
and expenses), reimbursement obligations and other liabilities payable to the
holder of such Indebtedness under the documentation governing such Indebtedness,
and any other claims of such holder arising in respect of such Indebtedness.
"Offering Circular" means the Exchange Offer/Consent Solicitation Statement
dated May 31, 2001, as amended, supplemented or modified from time to time.
"Offerings" means the offer and sale of the Senior Notes and the Units
consisting of $50,000,000 initial aggregate principal amount of Senior PIK Notes
and the Warrants as contemplated by the Offering Circular.
"Officer" means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary or any Vice President of such Person.
"Officers' Certificate" means a certificate signed by two Officers.
"Opinion of Counsel" means an opinion from legal counsel that is reasonably
acceptable to the Trustee in form and substance and that meets the requirements
of Section 10.05 hereof. Such counsel may be an employee of or counsel to the
Company, any Subsidiary of the Company or the Trustee.
"Other Permitted Indebtedness" means: (i) Indebtedness of the Company and
its Restricted Subsidiaries existing as of the date of original issuance of the
Senior PIK Notes and all related Obligations as in effect on such date; (ii)
Indebtedness of the Company and its Restricted Subsidiaries in respect of
bankers acceptances and letters of credit (including, without limitation,
letters of credit in respect of workers' compensation claims) issued in the
ordinary course of business, or other Indebtedness in respect of reimbursement-
type obligations regarding workers' compensation clams; (iii) Refinancing
Indebtedness, provided that: (A) the principal amount of such Refinancing
Indebtedness shall not exceed the outstanding principal amount of Indebtedness
(including unused commitments) extended, refinanced, renewed, replaced,
substituted or refunded plus any amounts incurred to pay premiums, fees and
expenses in
9
connection therewith, (B) the Refinancing Indebtedness shall have a Weighted
Average Life to Maturity equal to or greater than the Weighted Average Life to
Maturity of the Indebtedness being extended, refinanced, renewed, replaced,
substituted or refunded; provided, however, that this limitation in this clause
(B) does not apply to Refinancing Indebtedness of Senior Indebtedness, and (C)
in the case of Refinancing Indebtedness of Subordinated Indebtedness, such
Refinancing Indebtedness shall be subordinated to the Senior PIK Notes at least
to the same extent as the Subordinated Indebtedness being extended, refinanced,
renewed, replaced, substituted or refunded; (iv) intercompany Indebtedness of
and among the Company and its Restricted Subsidiaries (excluding guarantees by
Restricted Subsidiaries of Indebtedness of the Company not issued in compliance
with Section 4.15 hereof); (v) Indebtedness of the Company and its Restricted
Subsidiaries incurred in connection with making permitted Restricted Payments
under clauses (iii), (iv), (v) (but only to the extent that such Indebtedness is
provided by the Company or a Restricted Subsidiary) or (xi) of Section 4.05(b)
hereof; (vi) Indebtedness of any Non-Restricted Subsidiary created after the
date of original issuance of the Senior PIK Notes, provided that such
Indebtedness is nonrecourse to the Company and its Restricted Subsidiaries and
the Company and its Restricted Subsidiaries have no Obligations with respect to
such Indebtedness; (vii) Indebtedness of the Company and its Restricted
Subsidiaries under Hedging Obligations; (viii) Indebtedness of the Company and
its Restricted Subsidiaries arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts, which will not be, and will not be
deemed to be, inadvertent) drawn against insufficient funds in the ordinary
course of business; (ix) Indebtedness of any Person at the time it is acquired
as a Restricted Subsidiary, provided that such Indebtedness was not issued by
such Person in connection with or in anticipation of such acquisition; (x)
guarantees by Restricted Subsidiaries of Indebtedness of any Restricted
Subsidiary if such Indebtedness so guaranteed is permitted under this Indenture;
(xi) guarantees by a Restricted Subsidiary of Indebtedness of the Company if the
Indebtedness so guaranteed is permitted under this Indenture and the Senior PIK
Notes are guaranteed by such Restricted Subsidiary to the extent required by
Section 4.15 hereof; (xii) guarantees by the Company of Indebtedness of any
Restricted Subsidiary if the Indebtedness so guaranteed is permitted under this
Indenture; (xiii) Indebtedness of the Company and its Restricted Subsidiaries in
connection with performance, surety, statutory, appeal or similar bonds in the
ordinary course of business; and (xiv) Indebtedness of the Company and its
Restricted Subsidiaries in connection with agreements providing for
indemnification, purchase price adjustments and similar obligations in
connection with the sale or disposition of any of their business, properties or
assets.
"Parent" means AmeriKing, Inc., a Delaware Corporation.
"Permitted Liens" means:
(a) with respect to the Company and its Restricted Subsidiaries, (i) Liens
for taxes, assessments, governmental charges or claims which are being contested
in good faith by appropriate proceedings promptly instituted and diligently
conducted and if a reserve or other appropriate provision, if any, as shall be
required in conformity with GAAP shall have been made therefor; (ii) statutory
Liens of landlords and carriers', warehousemen's, mechanics', suppliers',
materialmen's, repairmen's or other like Liens arising in the ordinary course of
business and with respect to amounts not yet delinquent or being contested in
good faith by appropriate proceedings, if a reserve or other appropriate
provision, if any, as shall be required in
10
conformity with GAAP shall have been made therefore; (iii) Liens incurred on
deposits made in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social security; (iv)
Liens incurred on deposits made to secure the performance of tenders, bids,
leases, statutory obligations, surety and appeal bonds, government contracts,
performance and return of money bonds and other obligations of a like nature
incurred in the ordinary course of business (exclusive of obligations for the
payment of borrowed money); (v) easements, rights-of-way, zoning or other
restrictions, minor defects or irregularities in title and other similar charges
or encumbrances not interfering in any material respect with the business of the
Company or any of its Restricted Subsidiaries incurred in the ordinary course of
business; (vi) Liens (including extensions, renewals and replacements thereof)
upon property acquired (the "Acquired Property") after the date of original
issuance of the Senior PIK Notes, provided that: (A) any such Lien is created
solely for the purpose of securing Indebtedness representing, or issued to
finance, refinance or refund, the cost (including the cost of construction) of
the Acquired Property, (B) the principal amount of the Indebtedness secured by
such Xxxx does not exceed 100% of the cost of the Acquired Property, (C) such
Lien does not extend to or cover any property other than the Acquired Property
and any improvements on such Acquired Property, and (D) the issuance of the
Indebtedness to purchase the Acquired Property is permitted by Section 4.07
hereof; (vii) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods; (viii) judgment and attachment Liens not giving rise to an
Event of Default; (ix) leases or subleases granted to others not interfering in
any material respect with the business of the Company or any of its Restricted
Subsidiaries; (x) Liens securing Indebtedness under Hedging Obligations; (xi)
Liens encumbering deposits made to secure obligations arising from statutory,
regulatory, contractual or warranty requirements; (xii) Liens arising out of
consignment or similar arrangements for the sale of goods entered into by the
Company or its Restricted Subsidiaries in the ordinary course of business;
(xiii) any interest or title of a lessor in property subject to any capital
lease obligation or operating lease; (xiv) Liens arising from filing Uniform
Commercial Code financing statements regarding leases; (xv) Liens existing on
the date of original issuance of the Senior PIK Notes and any extensions,
refinancings, renewals, replacements, substitutions or refundings thereof; (xvi)
any Lien granted to the Trustee and any substantially equivalent Lien granted to
any trustee or similar institution under any indenture for Senior Indebtedness
permitted by the terms of this Indenture; (xvii) Liens in respect of (A) the BKC
Intercreditor Agreement or (B) other BKC Agreements that do not constitute
Indebtedness; and (xviii) additional Liens at any one time outstanding in
respect of properties or assets where aggregate fair market value does not
exceed $5,000,000 (the fair market value to be determined on the date such Lien
is granted on such properties or assets);
(b) with respect to the Restricted Subsidiaries, (i) Liens securing
Restricted Subsidiaries' reimbursement Obligations with respect to letters of
credit that encumber documents and other property relating to such letters of
credit and the products and proceeds thereof; (ii) Liens securing Indebtedness
issued by Restricted Subsidiaries if such Indebtedness is (A) under the Credit
Agreement, or (B) permitted by Section 4.07(a) hereof, clauses (i) or (ii) of
Section 4.07(b) hereof, or clauses (i), (iii) (to the extent the Indebtedness
subject to such Refinancing Indebtedness was subject to Liens), (vi), (vii),
(ix) or (x) of the definition of Other Permitted Indebtedness; (iii) Liens
securing intercompany Indebtedness issued by any Restricted Subsidiary to the
Company or another Restricted Subsidiary; and (iv) Liens securing guarantees by
Restricted Subsidiaries of Indebtedness issued by the Company if such guarantees
permitted
11
by clause (xi) (but only in respect of the property, rights and assets of the
Restricted Subsidiaries issuing such guarantees) of the definition of Other
Permitted Indebtedness;
(c) with respect to the Company, (i) Liens securing Indebtedness issued by
the Company if such Indebtedness is (A) under the Credit Agreement, or (B) if
such Indebtedness is permitted by Section 4.07 hereof (including, but not
limited to, Indebtedness issued by the Company under the Credit Agreement
pursuant to clause (i) and/or clause (iii) of Section 4.07(b) hereof); (ii)
Liens securing Indebtedness of the Company if such Indebtedness is permitted by
clauses (i), (iii) (to the extent the Indebtedness subject to such Refinancing
Indebtedness was subject to Liens) or (vii) of the definition of Other Permitted
Indebtedness; (iii) Liens securing guarantees by the Company of Indebtedness
issued by Restricted Subsidiaries if such Indebtedness is permitted by Section
4.07 hereof (including, but not limited to, Indebtedness issued by Restricted
Subsidiaries under the Credit Agreement pursuant to clause (i) and/or clause
(iii) of Section 4.07(b) hereof) and if such guarantees are permitted by clause
(xii) (but only in respect of Indebtedness issued by the Restricted Subsidiaries
under the Credit Agreement pursuant to Section 4.07 hereof) of the definition of
Other Permitted Indebtedness; and (iv) Liens securing the Company's
reimbursement obligations with respect to letters of credit that encumber
documents and other property relating to such letters of credit and the products
and proceeds thereof; provided, however, that, notwithstanding any of the
foregoing, the Permitted Liens referred to in clause (c) of this definition
shall not include any Lien on Capital Stock of Restricted Subsidiaries held
directly by the Company (as distinguished from Liens on Capital Stock of
Restricted Subsidiaries held by other Restricted Subsidiaries) other than Liens
securing (A) Indebtedness of the Company issued under the Credit Agreement
pursuant to Section 4.07 hereof and any permitted Refinancing Indebtedness of
such Indebtedness, (B) Liens in respect of (1) the BKC Intercreditor Agreement
and (2) other BKC Agreements that do not constitute Indebtedness and (C)
guarantees by the Company of Indebtedness issued by Restricted Subsidiaries
under the Credit Agreement pursuant to Section 4.07 hereof and any permitted
Refinancing Indebtedness of such Indebtedness.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Post-Petition Interest" means, with respect to any Senior Indebtedness,
all interest accrued or accruing on such Senior Indebtedness after the
commencement of any Insolvency or Liquidation proceeding in accordance with and
at the contract rate (including, without limitation, any rate applicable upon
default) specified in the agreement or instrument creating, evidencing or
governing such Senior Indebtedness, whether or not, pursuant to applicable law
or otherwise, the claim for such interest is allowed as a claim in such
Insolvency or Liquidation Proceeding.
"Pro Forma Basis" means, for purposes of determining Consolidated Net
Income in connection with the Cash Flow Coverage Ratio (including in connection
with Section 4.05, Section 4.16 and Section 5.01 hereof, the incurrence of
Indebtedness pursuant to Section 4.07(a) hereof and Consolidated Net Worth for
purposes of Section 5.01 hereof), giving pro forma effect to (x) any acquisition
or sale of a Person, business or asset, related incurrence, repayment or
refinancing of Indebtedness or other related transactions, including any
Restructuring Charges which would otherwise be accounted for as an adjustment
permitted by Regulation S-X under the
12
Securities Act or on a pro forma basis under GAAP, or (y) any incurrence,
repayment or refinancing of any Indebtedness and the application of the proceeds
therefrom, in each case, as if such acquisition or sale and related
transactions, restructurings, consolidations, cost savings, reductions,
incurrence, repayment or refinancing were realized on the first day of the
relevant period permitted by Regulation S-X under the Securities Act or on a pro
forma basis under GAAP. Furthermore, in calculating the Cash Flow Coverage
Ratio, (1) interest on outstanding Indebtedness determined on a fluctuating
basis as of the determination date and which will continue to be so determined
thereafter shall be deemed to have accrued at a fixed rate per annum equal to
the rate of interest on such Indebtedness in effect on the determination date;
(2) if interest on any Indebtedness actually incurred on the determination date
may optionally be determined at an interest rate based upon a factor of a prime
or similar rate, a eurocurrency interbank offered rate, or other rates, then the
interest rate in effect on the determination date will be deemed to have been in
effect during the relevant period; and (3) notwithstanding clause (1) above,
interest on Indebtedness determined on a fluctuating basis, to the extent such
interest is covered by agreements relating to interest rate swaps or similar
interest rate protection Hedging Obligations, shall be deemed to accrue at the
rate per annum resulting after giving effect to the operation of such
agreements.
"Redeemable Preferred Stock" means preferred stock that by its terms or
otherwise is required to be redeemed or is redeemable at the option of the
holder thereof on, or prior to, the maturity date of the Senior PIK Notes.
"Refinancing Indebtedness" means (i) Indebtedness of the Company and its
Restricted Subsidiaries issued or given in exchange for, or the proceeds of
which are used to, extend, refinance, renew, replace, substitute or refund any
Indebtedness permitted under this Indenture or any Indebtedness issued to so
extend, refinance, renew, replace, substitute or refund such Indebtedness, (ii)
any refinancings of Indebtedness issued under the Credit Agreement, and (iii)
any additional Indebtedness issued to pay premiums and fees in connection with
clauses (i) and (ii).
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of June 29, 2001, with respect to the Senior PIK Notes.
"Restricted Investment" means any Investment in any person; provided that
Restricted Investments will not include: (i) Investments in marketable
securities and other negotiable instruments permitted by this Indenture; (ii)
any Incentive Arrangement; (iii) Investments in the Company; or (iv) Investments
in any Restricted Subsidiary (provided that any Investment in a Restricted
Subsidiary was made for fair market value (as determined by the Board of
Directors in good faith)). The amount of any Restricted Investment shall be the
amount of cash and the fair market value at the time of transfer of all other
property (as determined by the Board of Directors in good faith) initially
invested or paid for such Restricted Investment, plus all additions thereto,
without any adjustments for increases or decreases in value of or write-ups,
write-downs or write-offs with respect to, such Restricted Investment.
"Restricted Subsidiary" means: (i) any Subsidiary of the Company existing
on the date of original issuance of the Senior PIK Notes, and (ii) any other
Subsidiary of the Company formed, acquired or existing after the date of
original issuance of the Senior PIK Notes that is designated
13
as a "Restricted Subsidiary" by the Company pursuant to a resolution approved by
a majority of the Board of Directors, provided, however, that the term
Restricted Subsidiary shall not include any Subsidiary of the Company that has
been redesignated by the Company pursuant to a resolution approved by a majority
of the Board of Directors as a Non-Restricted Subsidiary in accordance with
Section 4.16 hereof unless such Subsidiary shall have subsequently been
redesignated a Restricted Subsidiary in accordance with clause (ii) of this
definition.
"Restructuring Charges" means any charges or expenses in respect of
restructuring or consolidating any business, operations or facilities, any
compensation or headcount reduction, or any other cost savings, of any Persons
or businesses either alone or together with the Company or any Restricted
Subsidiary, as permitted by GAAP or Regulation S-X under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means: (i) all Obligations (including any interest
accruing subsequent to the filing of a petition of bankruptcy at the rate
provided for in the documentation with respect thereto, whether or not such
interest is an allowed claim under applicable law) on any Indebtedness of the
Company, whether outstanding on the date of original issuance of the Senior PIK
Notes or thereafter created, incurred or assumed, of the following types: (A)
all Indebtedness of the Company (including without limitation the Credit
Agreement, the Senior Note and the Senior PIK Notes) for money borrowed, and (B)
all Indebtedness evidenced by notes, debentures, bonds or other similar
instruments for the payment of which the Company is responsible or liable; (ii)
all capitalized lease obligations of the Company; (iii) all Obligations of the
Company: (A) for the reimbursement of any obligor on any letter of credit,
banker's acceptance or similar credit transaction, (B) all constituting Hedging
Obligations, or (C) issued as the deferred purchase price of property and all
conditional sale Obligations of the Company and all Obligations of the Company
under any title retention agreement; (iv) all guarantees of the Company with
respect to Obligations of other Persons of the type referred to in clauses (ii)
and (iii) and with respect to the payment of dividends of other Persons; and (v)
all Obligations of the Company consisting of modifications, renewals,
extensions, replacements and refundings of any Obligations described in clauses
(i), (ii), (iii) or (iv) unless, in the instrument creating or evidencing the
same or pursuant to which the same is outstanding, it is expressly provided that
such Obligations are subordinated or junior in right of payment to the Senior
PIK Notes; provided, however, that Senior Indebtedness shall not be deemed to
include: (1) any Obligation of the Company to any Subsidiary, (2) any liability
for federal, state, local or other taxes owed or owing by the Company, (3) any
accounts payable or other liability to trade creditors arising in the ordinary
course of business (including guarantees thereof or instruments evidencing such
liabilities), (4) any Indebtedness, guarantee or Obligation of the Company that
is contractually subordinated or junior in any respect to any other
Indebtedness, guarantee or Obligation of the Company, or (5) any Indebtedness to
the extent the same is incurred in violation of this Indenture. Senior
Indebtedness shall include all Obligations in respect of the Senior PIK Notes
and this Indenture.
To the extent any payment on the Senior PIK Notes, whether by or on behalf
of the Company, as proceeds of security or enforcement of any right of setoff or
otherwise, is declared to be fraudulent or preferential, set aside or required
to be paid to a trustee, receiver or other similar party under any bankruptcy,
insolvency, receivership or similar law, then if such payment
14
is recovered by, or paid over to, such trustee, receiver or other similar party,
the Senior PIK Notes or part thereof originally intended to be satisfied by such
payment shall be deemed to be reinstated and outstanding as if such payment had
not occurred.
"Senior Notes" means the Company's 10 3/4% Series A Senior Notes due
November 15, 2007 and the Company's 10 3/4% Series B Senior Notes due November
15, 2007.
"Senior PIK Notes" means the Series A Senior PIK Notes and the Series B
Senior PIK Notes.
"Series A PIK Notes" means the Company's 13% Series A Senior PIK Notes due
May 15, 2008.
"Series B PIK Notes" means the Company's 13% Series B Senior PIK Notes due
May 15, 2008.
"Senior PIK Note Custodian" means the Trustee, as custodian with respect to
the Senior PIK Notes in global form, or any successor entity thereto.
"SFAS 106" means Statement of Financial Accounting Standards No.106.
"SFAS 109" means Statement of Financial Accounting Standards No.109.
"Significant Subsidiary" means any Restricted Subsidiary of the Company
that would be a "significant subsidiary" as defined in clause (2) of the
definition of such term in Rule 1-02 of Regulation S-X under the Securities Act
and the Exchange Act.
"Subordinated Indebtedness" means all Obligations of the type referred to
in clauses (i) through (v) of the definition of Senior Indebtedness, if the
instrument creating or evidencing the same, or pursuant to which the same is
outstanding, designates such Obligations as subordinated or junior in right of
payment to Senior Indebtedness.
"Subsidiary" of any Person means any entity of which the Equity Interests
entitled to cast at least a majority of the votes that may be cast by all Equity
Interests having ordinary voting power for the election of directors or other
governing body of such entity are owned by such Person (regardless of whether
such Equity Interests are owned directly by such Person or through one or more
Subsidiaries).
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-
77bbbb), as amended, as in effect on the date of original issuance of the Senior
PIK Notes.
"TJC Agreement" means the Management Consulting Agreement, effective
September 1, 1994, between the Parent and TJC Management Corporation, as in
effect on the date of original issuance of the Senior PIK Notes.
"Transfer Restricted Senior PIK Notes" means securities that bear or are
required to bear the legend set forth in Section 2.06.
15
"Trustee" means the party named as such above until a successor replaces it
in accordance with the applicable provisions of this Indenture and thereafter
means the successor serving hereunder.
"Trust Officer" means, when used with respect to the Trustee, any officer
within the corporate trust administration department of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers, and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referenced because of his knowledge of,
and familiarity with, the particular subject.
"U.S. Government Obligations" means direct obligations of the United States
of America for the payment of which the full faith and credit of the United
States of America is pledged, provided that no U.S. Government Obligation shall
be callable at the issuer's option.
"Voting Stock" means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect the board of directors.
"Warrants" means the warrants issued in the Offerings to purchase 19.99% of
the Company's Class A Common Stock and Class B Common Stock, each on a fully
diluted basis.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the then outstanding
principal amount of such Indebtedness into (ii) the sum of the product(s)
obtained by multiplying (a) the amount of each then remaining installment,
sinking fund, serial maturity or other requirement payment of principal,
including payment at final maturity, in respect thereof, by (b) the number of
years (calculated to the nearest one-twelfth) which will elapse between such
date and the making of such payment.
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
"Acceleration Notice" 6.02
"Affiliate Transaction" 4.08
"Asset Sale Disposition Date" 4.14
"Asset Sale Trigger Date" 4.14
"BKC Intercreditor Agreement" 1.05
"Change of Control Trigger Date" 4.13
"Covenant defeasance option" 8.01
"Disposition" 5.01
"DTC" 2.03
"Event of Default" 6.01
"Excess Proceeds" 4.14
"Legal defeasance option" 8.01
16
"Notice of Default" 6.01
"Offer" 3.08
"Other Company Indebtedness" 4.15
"Other Indebtedness Guarantee" 4.15
"Paying Agent" 2.03
"Purchase Date" 3.08
"Registrar" 2.03
"Restricted Payments" 4.05
"Senior PIK Notes" Preamble
"Successor Corporation" 5.01
"Trustee Expenses" 6.08
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in, and made a part of, this Indenture. Any terms
incorporated by reference in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by Commission rule under the TIA
have the meanings so assigned to them therein.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it herein;
(b) an accounting term not otherwise defined herein has the meaning
assigned to it under GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and in the plural include the
singular; and
(e) provisions apply to successive events and transactions.
SECTION 1.05. INCORPORATION OF BURGER KING AGREEMENT.
Concurrently with the execution of this Indenture, the Trustee shall
execute and deliver to Burger King Corporation the Intercreditor Agreement (the
"BKC Intercreditor Agreement"). The Senior PIK Notes shall be subject to the
terms of the Intercreditor Agreement, which are incorporated by reference
herein.
ARTICLE 2
THE SENIOR PIK NOTES
SECTION 2.01. FORM AND DATING.
The Senior PIK Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A, which is part of this Indenture. The
Senior PIK Notes may have notations,
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legends or endorsements required by law, stock exchange rule or usage. Each
Senior PIK Note shall be dated the date of its authentication.
The terms and provisions contained in the Senior PIK Notes shall
constitute, and are hereby expressly made, a part of this Indenture and, to the
extent applicable, the Company and the Trustee, by their execution and delivery
of this Indenture, expressly agree to such terms and provisions and to be bound
thereby.
Each Global Senior PIK Note shall represent such of the outstanding Senior
PIK Notes as shall be specified therein and each shall provide that it shall
represent the aggregate amount of outstanding Senior PIK Notes from time to time
endorsed thereon and that the aggregate amount of outstanding Senior PIK Notes
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Senior PIK Note to reflect the amount of any increase or decrease in the amount
of outstanding Senior PIK Notes represented thereby shall be made by the Trustee
or the Senior PIK Note Custodian, at the direction of the Trustee, in accordance
with instructions given by the Holder thereof as required by Section 2.06
hereof.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
One Officer shall sign the Senior PIK Notes for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Senior PIK Note no longer holds that
office at the time a Senior PIK Note is authenticated, the Senior PIK Note shall
nevertheless be valid.
A Senior PIK Note shall not be valid until authenticated by the manual
signature of an authorized signatory of the Trustee, and the Trustee's signature
shall be conclusive evidence that the Senior PIK Note has been authenticated
under this Indenture. The form of Trustee's certificate of authentication to be
borne by the Senior PIK Notes shall be substantially as set forth in Exhibit A.
The Trustee shall, upon a written order of the Company signed by two
Officers directing the Trustee to authenticate the Senior PIK Notes and
certifying that all conditions precedent to the issuance of the Senior PIK Notes
contained herein have been complied with, authenticate Senior PIK Notes for
original issuance up to an aggregate principal amount stated in paragraph 4 of
the Senior PIK Notes (the aggregate principal amount of outstanding Senior PIK
Notes may not exceed that amount at any time, except as provided in Section 2.07
hereof).
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Senior PIK Notes. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Senior PIK Notes whenever
the Trustee may do so. Each reference in this Indenture to authentication by
the Trustee includes authentication by such agent. An authenticating agent has
the same rights as an Agent to deal with the Company or an Affiliate of the
Company.
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SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency (the "Registrar") where
Senior PIK Notes may be presented for registration of transfer or for exchange
and an office or agency (the "Paying Agent") where Senior PIK Notes may be
presented for payment. The Registrar shall keep a register of the Senior PIK
Notes and of their transfer and exchange. The Company may appoint one or more
co-registrars and one or more additional paying agents. The term "Registrar"
includes any co-registrar, and the term "Paying Agent" includes any additional
paying agent. The Company may change any Paying Agent or Registrar without prior
notice to any Holder. The Company shall notify in writing the Trustee and the
Trustee shall notify the Holders in writing of the name and address of any Agent
not a party to this Indenture. If the Company fails to appoint or maintain
another entity as Registrar or Paying Agent, the Trustee shall act as such. The
Company shall enter into an appropriate agency agreement with any Agent not a
party to this Indenture, and such agreement shall incorporate the TIA's
provisions and implement the provisions of this Indenture that relate to such
Agent.
The Company initially appoints The Depository Trust Company ("DTC") to act
as Depositary with respect to the Global Senior PIK Notes.
The Company initially appoints the Trustee as Registrar, Paying Agent and
agent for service of notices and demands in connection with the Senior PIK Notes
and as Senior PIK Note Custodian with respect to the Global Senior PIK Notes.
The Company or any of its Subsidiaries may act as Paying Agent, Registrar or co-
registrar. If the Company fails to appoint or maintain a Registrar and Paying
Agent, the Trustee shall act as such, and shall be entitled to appropriate
compensation in accordance with Section 7.07 hereof.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee to agree
in writing that the Paying Agent will hold in trust for the Holders' benefit or
the Trustee all money the Paying Agent holds for redemption or purchase of the
Senior PIK Notes or for the payment of principal of, or premium, if any, or
interest on, or Liquidated Damages, if any, with respect to the Senior PIK
Notes, and will promptly notify the Trustee of any Default by the Company in
providing the Paying Agent with sufficient funds to (i) purchase Senior PIK
Notes tendered pursuant to an Offer arising under Section 4.13 hereof, (ii)
redeem Senior PIK Notes called for redemption, or (iii) make any payment of
principal, premium, interest or Liquidated Damages due on the Senior PIK Notes.
While any such Default continues, the Trustee may require the Paying Agent to
pay all money it holds to the Trustee and to account for any funds disbursed.
The Company at any time may require the Paying Agent to pay all money it holds
to the Trustee and to account for any funds disbursed. Upon payment over to the
Trustee, the Paying Agent (if other than the Company or any of its Subsidiaries)
shall have no further liability for the money it delivered to the Trustee. If
the Company or any of its Subsidiaries acts as Paying Agent, it shall segregate
and hold in a separate trust fund for the Holders' benefit or the Trustee all
money it holds as Paying Agent.
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SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with Section 312(a) of the TIA. If the
Trustee is not the Registrar, the Company shall furnish to the Trustee at least
seven Business Days before each interest payment date and at such other times as
the Trustee may request in writing, a list in such form and as of such date as
the Trustee may reasonably require that sets forth the names and addresses of,
and the aggregate principal amount of Senior PIK Notes held by, each Holder, and
the Company shall otherwise comply with Section 312(a) of the TIA.
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Definitive Senior PIK Notes. When
----------------------------------------------------
Definitive Senior PIK Notes are presented by a Holder to the Registrar with a
request:
(x) to register the transfer of the Definitive Senior PIK Notes; or
(y) to exchange such Definitive Senior PIK Notes for an equal
principal amount of Definitive Senior PIK Notes of other
authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
its requirements for such transactions are met; provided, however, that the
-------- -------
Definitive Senior PIK Notes presented or surrendered for register of transfer or
exchange:
(i) shall be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Registrar duly executed by
such Xxxxxx or by his attorney, duly authorized in writing; and
(ii) in the case of a Definitive Senior PIK Note that is a
Transfer Restricted Senior PIK Note, such request shall be accompanied by the
following additional information and documents, as applicable:
(A) if such Transfer Restricted Senior PIK Note is being
delivered to the Registrar by a Holder for registration in
the name of such Holder, without transfer, a certification
to that effect from such Holder (in substantially the form
of Exhibit B hereto); or
---------
(B) if such Transfer Restricted Senior PIK Note is being
transferred (1) to a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act) in accordance
with Rule 144A under the Securities Act or (2) pursuant to
an exemption from registration in accordance with Rule 144
under the Securities Act (and based on an opinion of counsel
if the Company so requests) or (3) pursuant to an effective
registration
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statement under the Securities Act, a certification to that
effect from such Holder (in substantially the form of Exhibit
-------
B hereto); or
-
(C) if such Transfer Restricted Senior PIK Note is being
transferred to an "accredited investor," within the meaning of
Rule 501(a) under the Securities Act pursuant to a private
placement exemption from the registration requirements of the
Securities Act (and based on an opinion of counsel if the
Company so requests), a certification to that effect from such
Holder (in substantially the form of Exhibit B hereto) and a
---------
certification from the applicable transferee (in substantially
the form of Exhibit C hereto); or
---------
(D) if such Transfer Restricted Senior PIK Note is being
transferred in reliance on another exemption from the
registration requirements of the Securities Act (and based on
an opinion of counsel if the Company so requests), a
certification to that effect from such Holder (in
substantially the form of Exhibit B hereto).
---------
(b) Transfer of a Definitive Senior PIK Note for a Beneficial Interest
------------------------------------------------------------------
in a Global Senior PIK Note. A Transfer Restricted Definitive Senior PIK Note
---------------------------
may not be exchanged for a beneficial interest in a Global Senior PIK Note. A
non-Transfer Restricted Definitive Senior PIK Note may not be exchanged for a
beneficial interest in a Global Senior PIK Note except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a Definitive
Senior PIK Note, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Trustee, together with written
instructions from the Holder thereof directing the Trustee to make, or to direct
the Senior PIK Note Custodian to make, an endorsement on the Global Senior PIK
Note to reflect an increase in the aggregate principal amount of the Senior PIK
Notes represented by the Global Senior PIK Note, the Trustee shall cancel such
Definitive Senior PIK Note in accordance with Section 2.11 and cause, or direct
the Senior PIK Note Custodian to cause, in accordance with the standing
instructions and procedures existing between the Depositary and the Senior PIK
Note Custodian, the aggregate principal amount of Senior PIK Notes represented
by the Global Senior PIK Note to be increased accordingly. If no Global Senior
PIK Notes are then outstanding, the Company shall issue and, upon receipt of an
authentication order in accordance with Section 2.02, the Trustee shall
authenticate a new Global Senior PIK Note in the appropriate principal amount.
(c) Transfer and Exchange of Global Senior PIK Notes. The transfer
------------------------------------------------
and exchange of Global Senior PIK Notes or beneficial interests therein shall be
effected through the Depositary, in accordance with this Indenture and the
procedures of the Depositary therefor, which shall include restrictions on
transfer comparable to those set forth herein to the extent required by the
Securities Act.
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(d) Transfer of a Beneficial Interest in a Global Senior PIK Note for
-----------------------------------------------------------------
a Definitive Senior PIK Note.
----------------------------
(i) Any Person having a beneficial interest in a Global Senior
PIK Note may upon request exchange such beneficial interest for a
Definitive Senior PIK Note. Upon receipt by the Trustee of written
instructions or such other form of instructions as is customary for the
Depositary, from the Depositary or its nominee on behalf of any Person
having a beneficial interest in a Global Senior PIK Note, and, in the case
of a Transfer Restricted Senior PIK Note, the following additional
information and documents (all of which may be submitted by facsimile):
(A) if such beneficial interest is being transferred to the
Person designated by the Depositary as being the
beneficial owner, a certification to that effect from
such Person (in substantially the form of Exhibit B
---------
hereto); or
(B) if such beneficial interest is being transferred (1) to a
"qualified institutional buyer" (as defined in Rule 144A
under the Securities Act) in accordance with Rule 144A
under the Securities Act or (2) pursuant to an exemption
from registration in accordance with Rule 144 under the
Securities Act (and based on an opinion of counsel if the
Company so requests) or (3) pursuant to an effective
registration statement under the Securities Act, a
certification to that effect from the transfer or (in
substantially the form of Exhibit B hereto); or
---------
(C) if such beneficial interest is being transferred to an
"accredited investor," within the meaning of Rule 501(a)
under the Securities Act pursuant to a private placement
exemption from the registration requirements of the
Securities Act (and based on an opinion of counsel if the
Company so requests), a certification to that effect from
such Holder (in substantially the form of Exhibit B
---------
hereto) and a certification from the applicable
transferee (in substantially the form of Exhibit C
---------
hereto); or
(D) if such beneficial interest is being transferred in
reliance on another exemption from the registration
requirements of the Securities Act (and based on an
opinion of counsel if the Company so requests), a
certification to that effect from such Holder (in
substantially the form of Exhibit B hereto).
---------
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The Trustee or the Senior PIK Note Custodian, at the direction of
the Trustee, shall, in accordance with the standing instructions
and procedures existing between the Depositary and the Senior PIK
Note Custodian, cause the aggregate principal amount of Global
Senior PIK Notes to be reduced accordingly and, following such
reduction, the Company shall execute and, upon receipt of an
authentication order in accordance with Section 2.02 hereof, the
Trustee shall authenticate and deliver to the transferee a
Definitive Senior PIK Note in the appropriate principal amount.
(ii) Definitive Senior PIK Notes issued in exchange for a
beneficial interest in a Global Senior PIK Note pursuant to this
Section 2.06(d) shall be registered in such names and in such
authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee. The Trustee shall deliver
in accordance with the standard procedures of the Depositary such
Definitive Senior PIK Notes to the Persons in whose names such
Senior PIK Notes are so registered.
(e) Restrictions on Transfer and Exchange of Global Senior PIK Notes.
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Notwithstanding any other provision of this Indenture (other than the provisions
set forth in subsection (f) of this Section 2.06), a Global Senior PIK Note may
not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) Authentication of Definitive Senior PIK Notes in Absence of
-----------------------------------------------------------
Depositary. If at any time:
----------
(i) the Depositary for the Senior PIK Notes notifies the Company
that the Depositary is unwilling or unable to continue as Depositary for
the Global Senior PIK Notes and a successor Depositary for the Global
Senior PIK Notes is not appointed by the Company within 90 days after
delivery of such notice; or
(ii) The Company, at its sole discretion, notifies the Trustee in
writing that it elects to cause the issuance of Definitive Senior PIK Notes
under this Indenture,
then the Company shall execute, and the Trustee shall, upon receipt of an
authentication order in accordance with Section 2.02, authenticate and deliver,
Definitive Senior PIK Notes in an aggregate principal amount equal to the
principal amount of the Global Senior PIK Notes in
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exchange for such Global Senior PIK Notes and registered in such names as the
Depositary shall instruct the Trustee or the Company in writing.
(g) Legends.
--------
(i) Except for any Transfer Restricted Senior PIK Note sold or
transferred (including any Transfer Restricted Senior PIK Note represented
by a Global Senior PIK Note) as described in (ii) below, each Senior PIK
Note certificate evidencing Global Senior PIK Notes and Definitive Senior
PIK Notes (and all Senior PIK Notes issued in exchange therefor or
substitution thereof) shall bear legends in substantially the following
form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF
THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND
--------------
THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY
IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE THE
UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, OR (c) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON
AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY
OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH
CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE
RESTRICTIONS SET FORTH IN (A) ABOVE."
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(ii) Upon any sale or transfer of a Transfer Restricted Senior
PIK Note (including any Transfer Restricted Senior PIK Note represented by
a Global Senior PIK Note) pursuant to an effective registration statement
under the Securities Act, pursuant to Rule 144 under the Securities Act or
pursuant to an opinion of counsel reasonably satisfactory to the Company
and the Registrar that no legend is required:
(A) in the case of any Transfer Restricted Senior PIK Note that
is a Definitive Senior PIK Note, the Registrar shall permit
the Holder thereof to exchange such Transfer Restricted
Senior PIK Note for a Definitive Senior PIK Note that does
not bear the legend set forth in (i) above and rescind any
restriction on the transfer of such Transfer Restricted
Senior PIK Note; and
(B) in the case of any Transfer Restricted Senior PIK Note
represented by a Global Senior PIK Note, such Transfer
Restricted Senior PIK Note shall not be required to bear the
legend set forth in (i) above if all other interests in such
Global Senior PIK Note have been or are concurrently being
sold or transferred pursuant to Rule 144 under the
Securities Act or pursuant to an effective registration
statement under the Securities Act, but such Transfer
Restricted Senior PIK Note shall continue to be subject to
the provisions of Sections 2.06(a) through (f); provided,
--------
however, that with respect to any request for an exchange of
-------
a Transfer Restricted Senior PIK Note that is represented by
a Global Senior PIK Note for a Definitive Senior PIK Note
that does not bear the legend set forth in (i) above, which
request is made in reliance upon Rule 144, the Holder
thereof shall certify in writing to the Registrar that such
request is being made pursuant to Rule 144 (such
certification to be substantially in the form of Exhibit B
---------
hereto).
(iii) Notwithstanding the foregoing, upon consummation of the
Exchange Offer, the Company shall issue and, upon receipt of an
authentication order in accordance with Section 2.02, the Trustee shall
authenticate, Series B Senior PIK Notes in exchange for Series A Senior PIK
Notes accepted for exchange in the Exchange Offer, which Series B Senior
PIK Notes shall not bear the legend set forth in (i) above, and the
Registrar shall rescind any restriction on the transfer of such Senior PIK
Notes, in each case unless the Holder of such Series A Senior PIK Notes is
either (A) a broker-dealer, (B) a Person participating in the distribution
of the Series A Senior PIK Notes or (C) a Person who is an affiliate (as
defined in Rule 144A) of the Company. The Company shall identify to the
Trustee such Holders of the Senior PIK Notes in a written certification
signed by an Officer of the Company and, absent certification from the
Company to such effect, the Trustee shall assume that there are no such
Holders.
(h) Cancellation and/or Adjustment of Global Senior PIK Notes. At such
---------------------------------------------------------
time as all beneficial interests in Global Senior PIK Notes have been exchanged
for Definitive Senior PIK Notes, redeemed, repurchased or cancelled, all Global
Senior PIK Notes shall be returned to or retained and cancelled by the Trustee
in accordance with Section 2.11 hereof. At any time prior
25
to such cancellation, if any beneficial interest in a Global Senior PIK Note is
exchanged for Definitive Senior PIK Notes, redeemed, repurchased or cancelled,
the principal amount of Senior PIK Notes represented by such Global Senior PIK
Note shall be reduced accordingly and an endorsement shall be made on such
Global Senior PIK Note, by the Trustee or the Senior PIK Notes Custodian, at the
direction of the Trustee, to reflect such reduction.
(i) General Provisions Relating to Transfers and Exchanges.
------------------------------------------------------
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate
Definitive Senior PIK Notes and Global Senior PIK Notes at
the Registrar's request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any transfer
tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or similar
governmental charge payable upon exchange or transfer
pursuant to Sections 3.07, 4.13, 4.14 and 9.05 hereof).
(iii) Neither the Company nor the Registrar shall be required to
register the transfer of or exchange any Senior PIK Note
selected for redemption in whole or in part, except the
unredeemed portion of any Senior PIK Note being redeemed in
part.
(iv) All Definitive Senior PIK Notes and Global Senior PIK Notes
issued upon any registration of transfer or exchange of
Definitive Senior PIK Notes or Global Senior PIK Notes in
accordance with this Indenture (including any increase in
the aggregate principal amount of the Senior PIK Notes
represented by the Global Senior PIK Note pursuant to
subsection (b) above) shall be the valid obligations of the
Company, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Definitive Senior PIK
Notes or Global Senior PIK Notes surrendered upon such
registration of transfer or exchange.
(v) The Company shall not be required to issue Senior PIK Notes
and the Registrar shall not be required to register the
transfer of or to exchange Senior PIK Notes during a period
beginning at the opening of business 15 days before the day
of any selection of Senior PIK Notes for redemption under
Section 3.02 hereof and ending at the close of business on
the day of selection, or to register the transfer of or to
exchange a Senior PIK Note between a record date and the
next succeeding interest payment date.
(vi) Prior to due presentment for the registration of a transfer
of any Senior PIK Note, the Trustee, any Agent and the
Company may deem and treat the Person in whose name any
Senior PIK Note is registered as the absolute owner of such
Senior PIK Note for the purpose of receiving payment of
principal of, premium, if any, and accrued and unpaid
interest,
26
and Liquidated Damages, if any, on such Senior PIK Notes,
and neither the Trustee, any Agent nor the Company shall be
affected by notice to the contrary.
(vii) The Trustee shall authenticate Definitive Senior PIK Notes
and Global Senior PIK Notes in accordance with the
provisions of Section 2.02 hereof.
(j) The Senior PIK Notes will be attached to and may be transferred only
with the pro rata portion of the Warrants until the earlier to occur of (i) the
effective date of the earliest registration statement referred to in Section 6
of the Registration Rights Agreement or (ii) the effective date of a
registration statement relating to the registration for resale of the shares of
the Company's common stock issuable upon exercise of the Warrants. The Company
shall notify the Trustee in writing of such date as soon as reasonably
practicable after its occurrence.
SECTION 2.07. REPLACEMENT SENIOR PIK NOTES.
If any mutilated Senior PIK Note is surrendered to the Trustee, or the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Senior PIK Note, the Company shall issue and
the Trustee, upon the Company's written order signed by two Officers, shall
authenticate a replacement Senior PIK Note if the Trustee's requirements are
met. If the Trustee or the Company requires it, the Holder must supply an
indemnity bond that is sufficient in the judgment of the Trustee and the Company
to protect the Company, the Trustee, any Agent or any authenticating agent from
any loss that any of them may suffer if a Senior PIK Note is replaced. The
Company and the Trustee may charge for their expenses in replacing a Senior PIK
Note. Every replacement Senior PIK Note is an additional Obligation of the
Company.
SECTION 2.08. OUTSTANDING SENIOR PIK NOTES.
The Senior PIK Notes outstanding at any time are all the Senior PIK Notes
the Trustee has authenticated except for those it has cancelled, those delivered
to it for cancellation, those representing reductions in the interest in a
Global Senior PIK Note effected by the Trustee in accordance with the provisions
hereof, and those described in this Section as not outstanding.
If a Senior PIK Note is replaced pursuant to Section 2.07 hereof, it ceases
to be outstanding unless the Trustee receives proof satisfactory to it that a
bona fide purchaser holds the replaced Senior PIK Note.
If the entire principal of, and premium, if any, and accrued interest on,
and Liquidated Damages, if any, with respect to any Senior PIK Note is
considered paid under Section 4.01 hereof, it ceases to be outstanding and
interest and Liquidated Damages on it cease to accrue.
Subject to Section 2.09 hereof, a Senior PIK Note does not cease to be
outstanding because the Company or an Affiliate holds the Senior PIK Note.
27
SECTION 2.09. TREASURY SENIOR PIK NOTES.
In determining whether the Holders of the required principal amount of
Senior PIK Notes have concurred in any direction, waiver or consent, Senior PIK
Notes owned by the Company or an Affiliate shall be considered as though not
outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Senior PIK Notes that a Trust Officer of the Trustee knows are so owned shall be
so disregarded. Notwithstanding the foregoing, Senior PIK Notes that the
Company or an Affiliate offers to purchase or acquires pursuant to an Offer,
exchange offer, tender offer or otherwise shall not be deemed to be owned by the
Company or an Affiliate until legal title to such Senior PIK Notes passes to the
Company or such Affiliate, as the case may be.
SECTION 2.10. TEMPORARY SENIOR PIK NOTES.
Until Definitive Senior PIK Notes are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Senior PIK Notes.
Temporary Senior PIK Notes shall be substantially in the form of Definitive
Senior PIK Notes but may have variations that the Company considers appropriate
for temporary Senior PIK Notes. Without unreasonable delay, the Company shall
prepare and the Trustee, upon receipt of the Company's written order signed by
two Officers which shall specify the amount of temporary Senior PIK Notes to be
authenticated and the date on which the temporary Senior PIK Notes are to be
authenticated, shall authenticate Definitive Senior PIK Notes and deliver them
in exchange for temporary Senior PIK Notes. Until such exchange, Holders of
temporary Senior PIK Notes shall be entitled to the same rights, benefits and
privileges as Definitive Senior PIK Notes.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Senior PIK Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Senior PIK Notes surrendered to them for registration of transfer, exchange,
replacement, payment (including all Senior PIK Notes called for redemption and
all Senior PIK Notes accepted for payment pursuant to an Offer) or cancellation,
and the Trustee shall cancel all such Senior PIK Notes and shall destroy all
cancelled Senior PIK Notes (subject to the Exchange Act's record retention
requirements) and deliver a certificate of their destruction to the Company
unless by written order, signed by two Officers of the Company, the Company
shall direct that cancelled Senior PIK Notes be returned to it. The Company may
not issue new Senior PIK Notes to replace any Senior PIK Notes that have been
cancelled by the Trustee or that have been delivered to the Trustee for
cancellation. If the Company or an Affiliate acquires any Senior PIK Notes
(other than by redemption or pursuant to an Offer), such acquisition shall not
operate as a redemption or satisfaction of the Indebtedness represented by such
Senior PIK Notes unless and until such Senior PIK Notes are delivered to the
Trustee for cancellation.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Senior PIK Notes,
it shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to Holders on a subsequent
special record date, in each case at the rate
28
provided in the Senior PIK Notes and in Section 4.01 of this Indenture. The
Company shall fix or cause to be fixed each such special record date and payment
date. As early as practicable prior to the special record date, the Company (or
the Trustee, in the name of and at the expense of the Company) shall mail a
notice that states the special record date, the related payment date and the
amount of interest to be paid.
SECTION 2.13. RECORD DATE.
The record date for purposes of determining the identity of Holders of
Senior PIK Notes entitled to vote or consent to any action by vote or consent
authorized or permitted under this Indenture shall be determined as provided for
in section 316(c) of the TIA.
SECTION 2.14. CUSIP NUMBER
A "CUSIP" number shall be printed on the Senior PIK Notes, and the Trustee
shall use the CUSIP number in notices of redemption, purchase or exchange as a
convenience to Holders, provided that any such notice may state that no
representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Senior PIK Notes and that reliance may be placed
only on the other identification numbers printed on the Senior PIK Notes. The
Company shall promptly notify the Trustee of any change in the CUSIP number.
ARTICLE 3
OPTIONAL REDEMPTION AND MANDATORY OFFERS TO PURCHASE
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Senior PIK Notes pursuant to Section 3.07
hereof, it shall furnish to the Trustee, at least 10 but not more than 15 days
before notice of redemption is to be mailed by the Company to Holders, an
Officers' Certificate stating that the Company has elected to redeem Senior PIK
Notes pursuant to Section 3.07(a), the date notice of redemption is to be mailed
to Holders, the redemption date, the aggregate principal amount of Senior PIK
Notes to be redeemed, the redemption price for such Senior PIK Notes and the
amount of accrued and unpaid interest on, and Liquidated Damages, if any, with
respect to such Senior PIK Notes as of the redemption date. If the Trustee is
not the Registrar, the Company shall, concurrently with delivery of its notice
to the Trustee of a redemption, cause the Registrar to deliver to the Trustee a
certificate (upon which the Trustee may rely) setting forth the name of, and the
aggregate principal amount of Senior PIK Notes held by, each Holder.
If the Company is required to offer to purchase Senior PIK Notes pursuant
to Section 4.13 or 4.14 hereof, it shall furnish to the Trustee, at least two
Business Days before notice of the Offer is to be mailed to Holders, an
Officers' Certificate setting forth that the Offer is being made pursuant to
Section 4.13 or 4.14 hereof, as the case may be, the Purchase Date, the maximum
principal amount of Senior PIK Notes the Company is offering to purchase
pursuant to the Offer, the purchase price for such Senior PIK Notes, and the
amount of accrued and unpaid interest on and Liquidated Damages, if any, with
respect to such Senior PIK Notes as of the Purchase Date.
The Company will also provide the Trustee with any additional information
that the Trustee reasonably requests in connection with any redemption or Offer.
29
SECTION 3.02. SELECTION OF SENIOR PIK NOTES TO BE REDEEMED OR
PURCHASED.
If less than all outstanding Senior PIK Notes are to be redeemed or if less
than all Senior PIK Notes tendered pursuant to an Offer are to be accepted for
payment, the Trustee shall select the outstanding Senior PIK Notes to be
redeemed or accepted for payment pro rata, by lot or by a method that complies
with the requirements of any stock exchange on which the Senior PIK Notes are
listed and that the Trustee considers fair and appropriate. If the Company
elects to mail notice of a redemption to Holders, the Trustee shall at least
five Business Days prior to the date notice of redemption is to be mailed, (i)
select the Senior PIK Notes to be redeemed from Senior PIK Notes outstanding not
previously called for redemption and (ii) notify the Company of the names of
each Holder of Senior PIK Notes selected for redemption, the principal amount of
Senior PIK Notes held by each such Holder and the principal amount of such
Holder's Senior PIK Notes that are to be redeemed. If less than all Senior PIK
Notes tendered pursuant to an Offer on the Purchase Date are to be accepted for
payment, the Trustee shall select on or promptly after the Purchase Date the
Senior PIK Notes to be accepted for payment. The Trustee shall select for
redemption or purchase Senior PIK Notes or portions of Senior PIK Notes. Except
as provided in the preceding sentence, provisions of this Indenture that apply
to Senior PIK Notes called for redemption or tendered pursuant to an Offer also
apply to portions of Senior PIK Notes called for redemption or tendered pursuant
to an Offer. The Trustee shall notify the Company promptly of the Senior PIK
Notes or portions of Senior PIK Notes to be called for redemption or selected
for purchase.
SECTION 3.03. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a redemption date, the
Company shall mail a notice of redemption to each Holder of Senior PIK Notes or
portions thereof that are to be redeemed at such Xxxxxx's registered address.
The notice shall identify the Senior PIK Notes or portions thereof to be
redeemed and shall state:
(a) the redemption date;
(b) the redemption price for the Senior PIK Notes and separately stating
the amount of unpaid and accrued interest on, and Liquidated Damages, if any,
with respect to, such Senior PIK Notes as of the date of redemption;
(c) if any Senior PIK Note is being redeemed in part, the portion of the
principal amount of such Senior PIK Notes to be redeemed and that, after the
redemption date, upon surrender of such Senior PIK Note, a new Senior PIK Note
or Senior PIK Notes in principal amount equal to the unredeemed portion will be
issued;
(d) the name and address of the Paying Agent;
(e) that Senior PIK Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price for, and any accrued and unpaid
interest on, and Liquidated Damages, if any, with respect to, such Senior PIK
Notes;
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(f) that, unless the Company defaults in making such redemption payment,
interest on Senior PIK Notes called for redemption ceases to accrue on and after
the redemption date;
(g) the paragraph of the Senior PIK Notes pursuant to which the Senior PIK
Notes called for redemption are being redeemed; and
(h) the CUSIP number; provided that no representation is made as to the
correctness or accuracy of the CUSIP number listed in such notice and printed on
the Senior PIK Notes.
At the Company's request, the Trustee shall (at the Company's expense) give
the notice of redemption in the Company's name at least 30 but not more than 60
days before a redemption; provided, however, that the Company shall deliver to
the Trustee, at least 45 days prior to the redemption date and at least 10 days
prior to the date that notice of the redemption is to be mailed to Holders, an
Officers' Certificate that (i) requests the Trustee to give notice of the
redemption to Holders, (ii) sets forth the information to be provided to Holders
in the notice of redemption, as set forth in the preceding paragraph, (iii)
states that the Company has elected to redeem Senior PIK Notes pursuant to
Section 3.07(a), and (iv) sets forth the aggregate principal amount of Senior
PIK Notes to be redeemed and the amount of accrued and unpaid interest and
Liquidated Damages, if any, thereon as of the redemption date. If the Trustee
is not the Registrar, the Company shall, concurrently with any such request,
cause the Registrar to deliver to the Trustee a certificate (upon which the
Trustee may rely) setting forth the name of, the address of, and the aggregate
principal amount of Senior PIK Notes held by, each Holder.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed, Senior PIK Notes called for redemption
become due and payable on the redemption date at the price set forth in the
Senior PIK Note. Upon surrender to the Trustee or Paying Agent, such Senior PIK
Notes called for redemption shall be paid at the redemption price (which shall
include accrued interest thereon to the redemption date) but installments of
interest, the maturity of which is on or prior to the redemption date, shall be
payable to Holders of record at the close of business on the relevant record
dates. On and after any redemption or purchase date, interest shall cease to
accrue on the Senior PIK Notes or portions thereof called for redemption or
accepted for payment.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
Prior to 10:00 a.m. on any redemption date, the Company shall deposit with
the Trustee or with the Paying Agent money sufficient to pay the redemption
price of, and accrued interest on, and Liquidated Damages, if any, with respect
to all Senior PIK Notes to be redeemed on that date. The Trustee or the Paying
Agent shall return to the Company any money that the Company deposited with the
Trustee or the Paying Agent in excess of the amounts necessary to pay the
redemption price of, and accrued interest on, and Liquidated Damages, if any,
with respect to, all Senior PIK Notes to be redeemed.
If the Company complies with the preceding paragraph, interest on the
Senior PIK Notes to be redeemed will cease to accrue on such Senior PIK Notes on
the applicable redemption date, whether or not such Senior PIK Notes are
presented for payment. If a Senior PIK Note is redeemed on or after an interest
record date but on or prior to the related interest payment date,
31
then any accrued and unpaid interest and Liquidated Damages, if any, shall be
paid to the Person in whose name such Senior PIK Note was registered at the
close of business on such record date. If any Senior PIK Note called for
redemption shall not be so paid upon surrender for redemption because of the
failure of the Company to comply with the preceding paragraph, interest will be
paid on the unpaid principal, premium, if any, interest and Liquidated Damages,
if any, from the redemption date until such principal, premium, interest and
Liquidated Damages, if any, is paid, at the rate of interest provided in the
Senior PIK Notes and Section 4.01 hereof.
SECTION 3.06. SENIOR XXX NOTES REDEEMED IN PART.
Upon surrender of a Senior PIK Note that is redeemed in part, the Company
shall issue and the Trustee shall authenticate for the Holder at the Company's
expense a new Senior PIK Note equal in principal amount to the unredeemed
portion of the Senior PIK Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION PROVISIONS.
(a) The Senior PIK Notes may not be redeemed at the option of the Company
prior to November 15, 2001. During the twelve-month period beginning on
November 15 of the years indicated below, the Senior PIK Notes will be
redeemable at the option of the Company, in whole or in part, on at least 30 but
not more than 60 days' notice to each Holder of Senior PIK Notes to be redeemed,
at the redemption prices (expressed as percentages of the principal amount) set
forth below, plus any accrued and unpaid interest and Liquidated Damages, if
any, to the redemption date:
Year Percentage
---- ----------
2001....................... 104.000%
2002....................... 102.000%
2003 and thereafter........ 100.000%
(b) Notwithstanding the foregoing, the restrictions on optional
redemptions described herein do not limit the Company's right to separately make
open market, privately negotiated or other purchases of Senior PIK Notes from
time to time.
SECTION 3.08. MANDATORY PURCHASE PROVISIONS.
(a) Within 30 days after any Change of Control Trigger Date or Asset Sale
Trigger Date, the Company shall mail a notice to each Holder at such Holder's
registered address stating: (i) that an offer ("Offer") is being made pursuant
to Section 4.13 or Section 4.14 hereof, as the case may be, the length of time
the Offer shall remain open and the maximum aggregate principal amount of Senior
PIK Notes that will be accepted for payment pursuant to such Offer; (ii) the
purchase price for the Senior PIK Notes (as set forth in Section 4.13 or Section
4.14 hereof, as the case may be), the amount of accrued and unpaid interest on,
and Liquidated Damages, if any, with respect to, such Senior PIK Notes as of the
purchase date, and the purchase date (which shall be no earlier than 30 days and
no later than 40 days from the date such notice is mailed (the "Purchase
Date")); (iii) that any Senior PIK Note not accepted for payment will continue
to accrue interest and Liquidated Damages, if any; (iv) that, unless the Company
fails to deposit with the Paying Agent on the Purchase Date an amount sufficient
to
32
purchase all Senior PIK Notes accepted for payment, interest shall cease to
accrue on such Senior PIK Notes after the Purchase Date; (v) that Holders
electing to tender any Senior PIK Note or portion thereof will be required to
surrender their Senior PIK Note, with a form entitled "Option of Holder to Elect
Purchase" completed, to the Paying Agent at the address specified in the notice
prior to the close of business on the Business Day preceding the Purchase Date;
(vi) that Holders will be entitled to withdraw their election to tender Senior
PIK Notes, if the Paying Agent receives, not later than the close of business on
the third Business Day preceding the Purchase Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of Senior PIK Notes delivered for purchase, and a statement that such
Xxxxxx is withdrawing his election to have such Senior PIK Note purchased; and
(vii) that Holders whose Senior PIK Notes are accepted for payment in part will
be issued new Senior PIK Notes equal in principal amount to the unpurchased
portion of Senior PIK Notes surrendered.
(b) On the Purchase Date for any Offer, the Company shall, to the extent
required by this Indenture and such Offer, (i) in the case of an Offer resulting
from a Change of Control, accept for payment all Senior PIK Notes or portions
thereof tendered pursuant to such Offer and, in the case of an Offer resulting
from an Asset Sale Trigger Date, accept for payment the maximum principal amount
of Senior PIK Notes or portions thereof tendered pursuant to such Offer that can
be purchased out of Excess Proceeds from such Asset Sale, (ii) deposit with the
Paying Agent the aggregate purchase price of all Senior PIK Notes or portions
thereof accepted for payment and any accrued and unpaid interest and Liquidated
Damages, if any, on such Senior PIK Notes as of the Purchase Date, and (iii)
deliver or cause to be delivered to the Trustee all Senior PIK Notes tendered
pursuant to the Offer.
(c) With respect to any Offer, if less than all of the Senior PIK Notes
tendered pursuant to an Offer are to be purchased by the Company, the Trustee
shall select on the Purchase Date the Senior PIK Notes or portions thereof to be
accepted for payment pursuant to Section 3.02 hereof.
(d) Promptly after consummation of an Offer, (i) the Paying Agent shall
mail (or cause to be transferred by book entry) to each Holder of Senior PIK
Notes or portions thereof accepted for payment an amount equal to the purchase
price for, plus any accrued and unpaid interest on, and Liquidated Damages, if
any, with respect to, such Senior PIK Notes, (ii) with respect to any tendered
Senior PIK Note not accepted for payment in whole or in part, the Trustee shall
return such Senior PIK Note to the Holder thereof, and (iii) with respect to any
Senior PIK Note accepted for payment in part, the Trustee shall authenticate and
mail to each such Holder a new Senior PIK Note equal in principal amount to the
unpurchased portion of the tendered Senior PIK Note. The Trustee shall not be
responsible for any interest payments that have ceased to accrue in accordance
with the terms of this Section 3.08.
(e) The Company will publicly announce the results of the Offer on or as
soon as practicable after the Purchase Date.
(f) The Company shall comply with any tender offer rules under the
Exchange Act which may then be applicable, including Rule 14e-1, in connection
with an Offer required to be made by the Company to repurchase the Senior PIK
Notes as a result of a Change of Control or an Asset Sale Trigger Date. To the
extent that the provisions of any securities laws or
33
regulations conflict with provisions of this Indenture, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under this Indenture by virtue thereof.
(g) With respect to any Offer, if the Company deposits prior to 10 a.m.
New York City time with the Paying Agent on the Purchase Date an amount in
available funds sufficient to purchase all Senior PIK Notes accepted for
payment, interest shall cease to accrue on such Senior PIK Notes after the
Purchase Date; provided, however, that if the Company fails to deposit such
amount on the Purchase Date, interest shall continue to accrue on such Senior
PIK Notes until such deposit is made.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF SENIOR PIK NOTES.
The Company shall pay the principal of, and premium, if any, and accrued
and unpaid interest on, and Liquidated Damages, if any, with respect to, the
Senior PIK Notes on the dates and in the manner provided in the Senior PIK
Notes. Payment of interest and Liquidated Damages, if any, on the Senior PIK
Notes shall be made through the issuance of additional Senior PIK Notes of like
tenor with a principal amount equal to the amount of such interest payment and
Liquidated Damages, if any. Holders of Senior PIK Notes must surrender their
Senior PIK Notes to the Paying Agent to collect principal payments. Principal
of and premium, if any, on the Senior PIK Notes shall be considered paid on the
date due if the Paying Agent (other than the Company or any of its
Subsidiaries), the Global Senior PIK Note Holder or each Holder that has
specified an account, holds, as of 10:00 a.m. New York City time, money the
Company deposited in immediately available funds designated for and sufficient
to pay in cash all principal and premium, if any, then due; provided that, to
the extent that the Holders have not specified accounts, such amounts shall be
considered paid on the date due if the Company mails a check for such amounts on
such date. The Paying Agent shall return to the Company, no later than five
days following the date of payment, any money (including accrued interest) that
exceeds the amount of principal and premium, if any, with respect to the Senior
PIK Notes. The Company shall pay all Liquidated Damages, if any, in the same
manner on the dates and in the amounts set forth in the Registration Rights
Agreement. If any Liquidated Damages become payable, the Company shall not
later than three Business days prior the date that any payment of Liquidated
Damages is due (i) deliver any Officers' Certificate to the Trustee setting
forth the amount of Liquidated Damages payable to Holders and (ii) instruct the
paying Agent to pay such amount of Liquidated Damages to Holders entitled to
receive such Liquidated Damages. Payment of interest and Liquidated Damages, if
any, shall be considered paid on the due date if the Company shall have
instructed the Trustee as of 10:00 a.m. on the applicable due date to issue,
authenticate and deliver additional Senior PIK Notes in a principal amount
sufficient to pay any interest and Liquidated Damages then due.
To the extent lawful, the Company shall pay interest (including Post-
Petition Interest) on (i) overdue principal and premium at the rate equal to 2%
per annum in excess of the then applicable interest rate on the Senior PIK
Notes, compounded semiannually and (ii) overdue
34
installments of interest and Liquidated Damages (without regard to any
applicable grace period) at the same rate as set forth in clause (i), compounded
semiannually.
SECTION 4.02. COMMISSION REPORTS.
(a) The Company shall file with the Trustee, within 15 days after it files
them with the Commission, copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the foregoing
as the Commission may by rules and regulations prescribe) that the Company is
required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act. Notwithstanding the foregoing, if the Company is not subject to
the requirements of Section 13 or 15(d) of the Exchange Act, the Company shall
file with the Commission and with the Trustee, within 15 days after it would
have been required to file with the Commission under the Exchange Act, financial
statements, including any notes thereto (and with respect to annual reports, an
auditor's report by a firm of established national reputation), and a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," both comparable to that which the Company would have been required
to include in such annual reports, information, documents or other reports if
the Company were subject to the requirements of Section 13 or 15(d) of the
Exchange Act. Subsequent to the qualification of this Indenture under the TIA,
the Company also shall comply with the provisions of Section 314(a) of the TIA.
(b) If the Company is required to furnish annual or quarterly reports to
its stockholders pursuant to the Exchange Act, the Company shall cause any
annual report furnished to its stockholders generally and any quarterly or other
financial reports it furnishes to its stockholders generally to be filed with
the Trustee and the Company shall mail to the Holders at their addresses
appearing in the register of Senior PIK Notes maintained by the Registrar. If
the Company is not required to furnish annual or quarterly reports to its
stockholders pursuant to the Exchange Act, the Company shall cause its financial
statements referred to in Section 4.02(a) hereof, including any notes thereto
(and with respect to annual reports, an auditors' report by a firm of
established national reputation), and a "Management's Discussion and Analysis of
Financial Condition and Results of Operations," to be so mailed to the Holders
within 120 days after the end of each of the Company's fiscal years and within
60 days after the end of each of the first three fiscal quarters of each year.
The Company shall cause to be disclosed in a statement accompanying any annual
report or comparable information as of the date of the most recent financial
statements in each such report or comparable information the amount available
for payments pursuant to Section 4.05 hereof.
SECTION 4.03. COMPLIANCE CERTIFICATE.
The Company shall deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company, an Officers' Certificate stating that a review
of the activities of the Company and its Subsidiaries during the preceding
fiscal year has been made under the supervision of the signing Officers with a
view to determining whether the Company has kept, observed, performed and
fulfilled its obligations under this Indenture, and further stating, as to each
such Officer signing such certificate, that, to the best of his or her
knowledge, the Company has kept, observed, performed and fulfilled each and
every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and
35
conditions hereof (or, if a Default or Event of Default shall have occurred,
describing all such Defaults or Events of Default of which he or she may have
knowledge and what action the Company has taken or proposes to take with respect
thereto) and that, to the best of his or her knowledge no event has occurred and
remains in existence by reason of which payments on account of the principal of,
premium, if any, and accrued and unpaid interest on, and Liquidated Damages, if
any, with respect to, the Senior PIK Notes are prohibited or if such event has
occurred, a description of the event and what action the Company is taking or
proposes to take with respect thereto.
So long as not contrary to the then current recommendations of the American
Institute of Certified Public Accountants, the financial statements delivered
pursuant to Section 4.02 hereof shall be accompanied by a written statement of
the Company's independent public accountants (who shall be a firm of established
national reputation reasonably satisfactory to the Trustee) that in making the
examination necessary for certification of such financial statements nothing has
come to their attention that would lead them to believe that the Company has
violated any provisions of Section 4.01, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10,
4.11, 4.12, 4.13, 4.14, 4.15, 4.16 or 4.17 or of Article 5 hereof or, if any
such violation has occurred, specifying the nature and period of existence
thereof, it being understood that such accountants shall not be liable directly
or indirectly to any Person for any failure to obtain knowledge of any such
violation.
The Company shall, so long as any of the Senior PIK Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.
SECTION 4.04. STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that might affect the covenants
or the performance of this Indenture; and the Company (to the extent it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not, by resort to any such law, hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law has been
enacted.
SECTION 4.05. LIMITATION ON RESTRICTED PAYMENTS.
(a) The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, (i) declare or pay any dividend or make any
distribution on account of the Company's or such Restricted Subsidiary's Capital
Stock or other Equity Interests (other than dividends or distributions payable
in Capital Stock or other Equity Interests (other than Disqualified Stock) of
the Company and dividends or distributions payable by a Restricted Subsidiary to
a Restricted Subsidiary or to the Company); (ii) purchase, redeem or otherwise
acquire or retire for value any Capital Stock or other Equity Interests of the
Company or any of its Restricted Subsidiaries (other than any such Equity
Interest purchased from the Company or any Restricted Subsidiary for fair market
value (as determined by the Board of Directors in good
36
faith)); (iii) voluntarily prepay any Subordinated Indebtedness of the Company,
whether any such Subordinated Indebtedness is outstanding on, or issued after,
the date of original issuance of the Senior PIK Notes except as specifically
permitted by the covenants of this Indenture; (iv) make any Restricted
Investment (all such dividends, distributions, purchases, redemptions,
acquisitions, retirements, prepayments and Restricted Investments being
collectively referred to as "Restricted Payments"), if, at the time of such
Restricted Payment:
(A) a Default or Event of Default shall have occurred and be continuing or
shall occur as a consequence thereof; or
(B) immediately after such Restricted Payment and after giving effect
thereto on a Pro Forma Basis, the Company shall not be able to issue
$1.00 of additional Indebtedness pursuant to Section 4.07(a) of this
Indenture; or
(C) such Restricted Payment, together with the aggregate of all other
Restricted Payments made after the date of original issuance of the
Senior PIK Notes, without duplication, exceeds the sum of (1) 50% of
the aggregate Consolidated Net Income (including, for this purpose,
gains from Asset Sales and, to the extent not included in Consolidated
Net Income, any gain from a sale or disposition of a Restricted
Investment) of the Company (or, in case such aggregate is a loss, 100%
of such loss) for the period (taken as one accounting period) from the
beginning of the first quarter commencing immediately after the date
of original issuance of the Senior PIK Notes and ended as of the
Company's most recently ended fiscal quarter at the time of such
Restricted Payment, plus (2) 100% of the aggregate net cash proceeds
and the fair market value of any property or securities (as determined
by the Board of Directors in good faith) received by the Company from
the issue or sale of Capital Stock or other Equity Interests of the
Company subsequent to the date of original issuance of the Senior PIK
Notes (other than (x) Capital Stock or other Equity Interests issued
or sold to a Restricted Subsidiary and (y) the issuance or sale of
Disqualified Stock), plus (3) $2,500,000, plus (4) the amount by which
the principal amount of and any accrued interest on either (x) Senior
Indebtedness of the Company or (y) any Indebtedness of any Restricted
Subsidiary is reduced on the Company's consolidated balance sheet upon
the conversion or exchange other than by a Restricted Subsidiary
subsequent to the date of original issuance of the Senior PIK Notes of
any Indebtedness of the Company or any Restricted Subsidiary (not held
by the Company or any Restricted Subsidiary) for Capital Stock or
other Equity Interests (other than Disqualified Stock) of the Company
(less the amount of any cash, or the fair market value of any other
property or securities (as determined by the Board of Directors in
good faith), distributed by the Company or any Restricted Subsidiary
(to Persons other than the Company or any other Restricted Subsidiary)
upon such conversion or exchange), plus (5) if any Non-Restricted
Subsidiary is redesignated as a Restricted Subsidiary, the value of
the Restricted Payment that would result if such Subsidiary were
redesignated as a Non-Restricted Subsidiary at such time as determined
in accordance with the second sentence of Section 4.16(a) hereof;
provided, however, that for purposes of this clause (5), the value of
any redesignated Non-Restricted Subsidiary shall be reduced by the
amount
37
that any such redesignation replenishes or increases the amount of
Restricted Investments permitted to be made pursuant to Section
4.05(b)(ii) hereof.
(b) Notwithstanding Section 4.05(a) hereof, the following shall not be
prohibited as Restricted Payments: (i) the payment of any dividend within 60
days after the date of declaration thereof, if at said date of declaration such
payment would comply with all the provisions hereof (including, but not limited
to, this Section 4.05); (ii) making Restricted Investments at any time, and from
time to time, in an aggregate outstanding amount of $5,000,000 after the date of
original issuance of the Senior PIK Notes (it being understood that if any
Restricted Investment after the date of original issuance of the Senior PIK
Notes pursuant to this clause (ii) is sold, transferred or otherwise conveyed to
any Person other than the Company or a Restricted Subsidiary, the portion of the
net cash proceeds or fair market value of securities or properties paid or
transferred to the Company and its Restricted Subsidiaries in connection with
such sale, transfer or conveyance that relates or corresponds to the repayment
or return of the original cost of such a Restricted Investment will replenish or
increase the amount of Restricted Investments permitted to be made pursuant to
this Section 4.05b)(ii), so that up to $5,000,000 of Restricted Investments may
be outstanding under this Section 4.05(b)(ii) at any given time) provided that,
without otherwise limiting this clause (ii), any Restricted Investment in a
Subsidiary made pursuant to this cause (ii) is made for fair market value (as
determined by the Board of Directors in good faith) ); provided further that,
the sum of the cumulative payments made by the Company pursuant to this clause
(ii), clause (iii) and clause (iv) (other than, so long as Parent files
consolidated income tax returns which include the Company, any payments pursuant
to any tax sharing agreement) may not exceed $5,000,000; (iii) (a) the payment
of cash by the Company to the Parent for the repurchase, redemption, retirement
or acquisition of the Parent's stock from the executives, management, employees
or consultants of the Parent or its Subsidiaries pursuant to the terms of any
subscription, stockholder or other agreement or plan, and (b) the repurchase,
redemption, retirement or acquisition of the Company's stock from the
executives, management, employees or consultants of the Company or its
Subsidiaries pursuant to the terms of any subscription, stockholder or other
agreement or plan, together up to an aggregate amount not to exceed $5,000,000;
provided that, the aggregate of the cumulative payments made by the Company
pursuant to this clause (iii), clause (ii) and clause (iv) (other than, so long
as Parent files consolidated income tax returns which include the Company, any
payments pursuant to any tax sharing agreement) may not exceed $5,000,000; (iv)
any loans, advances, distributions or payments from the Company to the Parent
pursuant to intercompany Indebtedness, intercompany management agreements and
other intercompany agreements and obligations; provided that, the aggregate of
the cumulative payments made by the Company pursuant to this clause (iv) (other
than, so long as Parent files consolidated income tax returns which include the
Company, any payments pursuant to any tax sharing agreement), clauses (ii) and
clause (iii) may not exceed $5,000,000; (v) any loans, advances, distributions
or payments from the Company to its Restricted Subsidiaries, or any loans,
advances, distributions or payments by the Parent or a Restricted Subsidiary to
the Company or to another Restricted Subsidiary, in each case pursuant to
intercompany Indebtedness, intercompany management agreements and other
intercompany agreements and obligations (vi) the purchase, redemption,
retirement or other acquisition of (A) any Senior Indebtedness of the Company or
any Indebtedness of Restricted Subsidiaries required by its terms to be
purchased, redeemed, retired or acquired with the net proceeds from asset sales
(as defined in the instrument evidencing such Senior Indebtedness or
Indebtedness) or upon a change of control (as defined in the instrument
evidencing such Senior Indebtedness or
38
Indebtedness) and (B) the Senior PIK Notes pursuant to Sections 4.13 and 4.14
hereof; (vii) payments by the Company of, and to the Parent in amounts
sufficient to permit Parent to make payments, in respect of (A) consulting,
financial and investment banking fees under the TJC Agreement, provided, that no
Default or Event of Default shall have occurred and be continuing or shall occur
as a consequence thereof, and the Company's Obligations to pay such fees under
the TJC Agreement shall be subordinated expressly to the Company's Obligations
in respect of the Senior PIK Notes, and (B) indemnities, expenses and other
amounts under the TJC Agreement; (viii) the redemption, repurchase, retirement
or other acquisition of any Capital Stock or other Equity Interests of the
Company or any Restricted Subsidiary in exchange for, or out of the proceeds of,
the substantially concurrent sale (other than to a Subsidiary of the Company) of
other Capital Stock or other Equity Interests of the Company (other than any
Disqualified Stock) or the redemption, repurchase, retirement or other
acquisition of any Capital Stock or other Equity Interests of any Restricted
Subsidiary in exchange for, or out of the proceeds of, the substantially
concurrent sale (other than to the Company or a Subsidiary of the Company) of
other Capital Stock or other Equity Interests of such Restricted Subsidiary;
provided that, in each case, any net cash proceeds that are utilized for any
such redemption, repurchase, retirement or other acquisition, and any Net Income
resulting therefrom, shall be excluded from Section 4.05(a)(C)(1) and (C)(2)
hereof; (ix) the defeasance, redemption or repurchase of pari passu or
Subordinated Indebtedness with the net cash proceeds from an issuance of
permitted Refinancing Indebtedness or the substantially concurrent sale (other
than to a Subsidiary of the Company) of Capital Stock or other Equity Interests
of the Company or of a Restricted Subsidiary (other than Disqualified Stock);
provided that any net cash proceeds that are utilized for any such defeasance,
redemption or repurchase, and any Net Income resulting therefrom, shall be
excluded from Section 4.05(a)(C)(1) and (C)(2) hereof; (x) Restricted
Investments made or received in connection with the sale, transfer or
disposition of any business, properties or assets of the Company or any
Restricted Subsidiary, provided, that if such sale, transfer or disposition
constitutes an Asset Sale, the Company complies with Section 4.14 hereof; (xi)
any Restricted Investment constituting securities or instruments of a Person
issued in exchange for trade or other claims against such Person in connection
with a financial reorganization or restructuring of such Person; (xii) payments
of fees, expenses and indemnities to the directors of the Company and its
Restricted Subsidiaries or to the Parent in respect of the fees expenses and
indemnities of the directors of the Parent; and (xiii) payments to Parent in
respect of the payments of interest when due and principal at maturity in
respect of up to $2 million in aggregate principal amount of the Parent's Senior
PIK Notes; and (xiv) payments to the Parent in respect of accounting, legal or
other professional or administrative expenses or reimbursements of franchise or
similar taxes and governmental charges incurred by the Parent relating to the
business, operations or finances of the Company and its Subsidiaries and in
respect of fees and related expenses associated with ongoing public reporting
requirements.
SECTION 4.06. CORPORATE EXISTENCE.
Subject to Section 4.14 and Article 5 hereof, the Company shall do or cause
to be done all things necessary to preserve and keep in full force and effect
its corporate existence and the corporate, partnership or other existence of
each of its Restricted Subsidiaries in accordance with the respective
organizational documents of each of its Restricted Subsidiaries and the rights
(charter and statutory), licenses and franchises of the Company and each of its
Restricted Subsidiaries; provided, however, that the Company shall not be
required to preserve any such
39
right, license or franchise, or the corporate, partnership or other existence of
any Restricted Subsidiary, if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Restricted Subsidiaries taken as a whole, and that the loss
thereof is not adverse in any material respect to the Holders.
SECTION 4.07. LIMITATION ON INCURRENCE OF INDEBTEDNESS
(a) The Company shall not, and shall not permit any Restricted Subsidiary
to, issue any Indebtedness (other than the Indebtedness represented by the
Credit Agreement, the Senior Notes and the Senior PIK Notes) unless the
Company's Consolidated Senior Leverage Ratio for the last full fiscal quarter
immediately preceding the date such additional Indebtedness is issued would have
been at least 3.5 to 1 determined on a Pro Forma Basis (including, for this
purpose, any other Indebtedness incurred since the end of the applicable four-
quarter period) as if such additional Indebtedness and any other Indebtedness
issued since the end of such quarter had been issued at the beginning of such
quarter.
(b) Section 4.07(a) hereof shall not apply to the issuance of (i) Senior
Indebtedness of the Company and/or its Restricted Subsidiaries, including the
Credit Agreement, as measured on such date of issuance in an aggregate principal
amount outstanding on any such date of issuance not exceeding $135,000,000
aggregate principal amount (excluding Indebtedness represented by the Senior PIK
Notes and the Senior Notes), which amount may be increased one dollar for each
dollar of net cash proceeds received by the Company from the issuance and sale
of its Capital Stock; (ii) Refinancing Indebtedness; and (iii) Other Permitted
Indebtedness.
(c) Notwithstanding Sections 4.07(a) and (b) hereof, no Restricted
Subsidiary shall under any circumstances issue a guarantee of any Indebtedness
of the Company except for guarantees issued by Restricted Subsidiaries pursuant
to Section 4.15 hereof, provided, however, that the foregoing will not limit or
restrict guarantees issued by Restricted Subsidiaries in respect of Indebtedness
of other Restricted Subsidiaries.
SECTION 4.08. LIMITATION ON TRANSACTIONS WITH AFFILIATES.
(a) Except as otherwise set forth herein, neither the Company nor any of
its Restricted Subsidiaries shall make any loan, advance, guarantee or capital
contribution to, or for the benefit of, or sell, lease, transfer or dispose of
any properties or assets to, or for the benefit of, or purchase or lease any
property or assets from, or enter into or amend any contract, agreement or
understanding with, or for the benefit of, an Affiliate (each such transaction
or series of related transactions that are part of a common plan are referred to
as an "Affiliate Transaction"), except in good faith and on terms that are no
less favorable to the Company or the relevant Restricted Subsidiary than those
that would have been obtained in a comparable transaction on an arm's length
basis from an unrelated Person.
(b) The Company shall not, and shall not permit any Restricted Subsidiary
to, engage in any Affiliate Transaction involving aggregate payments or other
transfers by the Company and its Restricted Subsidiaries in excess of $2,500,000
(including cash and non-cash payments and benefits valued at their fair market
value by the Board of Directors of the Company in good faith) unless the Company
delivers to the Trustee: (i) a resolution of the Board of Directors
40
stating that the Board of Directors (including a majority of the disinterested
directors, if any) has, in good faith, determined, that such Affiliate
Transaction complies with the provisions of this Indenture; and (ii)(A) with
respect to any Affiliate Transaction involving the incurrence of Indebtedness, a
written opinion of a nationally recognized investment banking or accounting firm
experienced in the review of similar types of transactions, (B) with respect to
any Affiliate Transaction involving the transfer of real property, fixed assets
or equipment, either directly or by a transfer of 50% or more of the Capital
Stock of a Restricted Subsidiary which holds any such real property, fixed
assets or equipment, a written appraisal from a nationally recognized appraiser
experienced in the review of similar types of transactions or (C) with respect
to any Affiliate Transaction not otherwise described in (A) or (B) above, a
written certification from a nationally recognized professional or firm
experienced in evaluating similar types of transactions, in each case, stating
that the terms of such transaction are fair to the Company or such Restricted
Subsidiary, as the case may be, from a financial point of view.
(c) Notwithstanding Sections 4.08(a) and (b) hereof, this Section 4.08
shall not apply to: (i) transactions between the Company and any Restricted
Subsidiary or between Restricted Subsidiaries; (ii) payments under the TJC
Agreement; (iii) any other payments or transactions permitted pursuant to
Section 4.05 hereof; (iv) payments and transactions under the Jaro Leases; (vi)
payments and transactions involving FleetBoston Financial Corporation and its
subsidiaries and affiliates in connection with the BBI Note or the Credit
Agreement; or (vii) payments and transactions in connection with the Offerings.
SECTION 4.09. LIMITATION ON LIENS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien (other than Permitted Liens) upon any property or asset now owned
or hereafter acquired by them, or any income or profits therefrom, or assign or
convey any right to receive income therefrom; provided, however, that in
addition to creating Permitted Liens on its properties or assets, the Company
and any of its Restricted Subsidiaries may create any Lien upon any of their
properties or assets (including, but not limited to, any Capital Stock of its
Subsidiaries) if the Senior PIK Notes are equally and ratably secured.
SECTION 4.10. COMPLIANCE WITH LAWS, TAXES.
The Company shall, and shall cause each of its Restricted Subsidiaries to,
comply with all statutes, laws, ordinances, or government rules and regulations
to which it is subject, the noncompliance with which would materially adversely
affect the business, prospects, earnings, properties, assets or condition,
financial or otherwise, of the Company and its Restricted Subsidiaries taken as
a whole.
The Company shall, and shall cause each of its Restricted Subsidiaries to,
pay prior to delinquency all taxes, assessments and governmental levies, except
those contested in good faith by appropriate proceedings.
41
SECTION 4.11. LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS
AFFECTING RESTRICTED SUBSIDIARIES.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective, any encumbrance or restriction on the ability of any
Restricted Subsidiary to: (i) pay dividends or make any other distributions on
its Capital Stock or any other interest or participation in, or measured by, its
profits, owned by the Company or any Restricted Subsidiary, or pay any
Indebtedness owed to, the Company or any Restricted Subsidiary; (ii) make loans
or advances to the Company; or (iii) transfer any of its properties or assets to
the Company, except for such encumbrances or restrictions existing under or by
reason of: (A) applicable law; (B) Indebtedness permitted (1) under Section
4.07(a) hereof, (2) under Sections 4.07(b)(i) or (iii) hereof or clauses (i),
(v), (vi), (vii), (ix), (x) or (xi) of the definition of Other Permitted
Indebtedness, or (3) by agreements and transactions permitted under Section 4.05
hereof; (C) customary provisions restricting subletting or assignment of any
lease or license of the Company or any Restricted Subsidiary; (D)(1) the terms
of the BKC Intercreditor Agreement and any other BKC Agreement, and (2)
customary provisions of any franchise, distribution or similar agreement; (E)
any instrument governing Indebtedness or any other encumbrance or restriction of
a Person acquired by the Company or any Restricted Subsidiary at the time of
such acquisition, which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired; (F) Indebtedness or other
agreements existing on the date of original issuance of the Senior PIK Notes;
(G) any Refinancing Indebtedness permitted under Section 4.07(b) hereof or
clauses (i), (v), (vi), (vii), (ix), (x) or (xi) of the definition of Other
Permitted Indebtedness; provided that the encumbrances and restrictions created
in connection with such Refinancing Indebtedness are no more restrictive in any
material respect with regard to the interests of the Holders of Senior PIK Notes
than the encumbrances and restrictions in the refinanced Indebtedness; (H) any
restrictions, with respect to a Restricted Subsidiary, imposed pursuant to an
agreement that has been entered into for the sale or disposition of the stock,
business, assets or properties of such Restricted Subsidiary; (I) the terms of
any indebtedness of the Company incurred in connection with Section 4.07 hereof,
provided that the terms of such Indebtedness constitute no greater encumbrance
or restriction on the ability of any Restricted Subsidiary to pay dividends or
make distributions, make loans or advances or transfer properties or assets than
is otherwise permitted by this Section 4.11; or (J) the terms of purchase money
obligations, but only to the extent such purchase money obligations restrict or
prohibit the transfer of the property so acquired.
(b) Nothing contained in this Section 4.11 shall prevent the Company
from entering into any agreement or instrument providing for the incurrence of
Permitted Liens or restricting the sale or other disposition of property or
assets of the Company or any of its Restricted Subsidiaries that are subject to
Permitted Liens.
SECTION 4.12. MAINTENANCE OF OFFICE OR AGENCIES.
The Company shall maintain in the Borough of Manhattan, the City of New
York an office or an agency (which may be an office of any Agent) where Senior
PIK Notes may be surrendered for registration of transfer or exchange and where
notices and demands to or upon the Company in respect of the Senior PIK Notes
and this Indenture may be served. The
42
Company shall give prompt written notice to the Trustee of any change in the
location of such office or agency. If at any tine the Company shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office.
The Company may also from time to time designate one or more other offices
or agencies where the Senior PIK Notes may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, the City of New York for such purposes. The Company shall
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.
The Company hereby designates the offices of State Street Bank and Trust
Company, N.A., located at 00 Xxxxxxxx - 00/xx/ Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
as one such office or agency of the Company in accordance with Section 2.03
hereof.
SECTION 4.13. CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control (such date being the
"Change of Control Trigger Date"), each Holder of Senior PIK Notes shall have
the right to require the Company to purchase all or any part of such Holder's
Senior PIK Notes pursuant to an Offer at a purchase price in cash equal to 101%
of the aggregate principal amount thereof, plus any accrued and unpaid interest
and Liquidated Damages, if any, to the date of purchase. The Company shall
furnish such notice to the Trustee, within five Business Days after notice of an
Offer is mailed to all Holders of Senior PIK Notes, pursuant to the procedures
described in Section 3.08. Although the failure of the Company to purchase all
Senior PIK Notes tendered in such an Offer shall be a Default, if the Company is
unable to purchase all Senior PIK Notes tendered in such an Offer, the Company
shall nevertheless purchase the maximum principal amount of Senior PIK Notes
that it is able to purchase at that time.
Prior to the mailing of the notice referred to in Section 3.08(a) hereof,
but in any event within 30 days following any Change of Control Trigger Date,
the Company covenants to (i) repay in full and terminate all commitments under
Indebtedness under the Credit Agreement and all other Senior Indebtedness the
terms of which require repayment upon a Change of Control or offer to repay in
full and terminate all commitments under all Indebtedness under the Credit
Agreement and all other such Senior Indebtedness and to repay the Indebtedness
owed to each lender which has accepted such offer or (ii) obtain the requisite
consents under the Credit Agreement and all such other Senior Indebtedness to
permit the repurchase of the Senior PIK Notes as provided herein. The Company
shall first comply with the covenant in the immediately preceding sentence
before it shall be required to repurchase Senior PIK Notes as provided herein.
The Company's failure to comply with this covenant shall constitute an Event of
Default described in clause (iii) and not in clause (ii) under Section 6.01(a)
hereof.
(b) In the event of a Change of Control, the Company shall not offer to
purchase or redeem any Subordinated Indebtedness required or entitled by its
terms to be redeemed or
43
purchased until the Offer for the Senior PIK Notes has been consummated and all
Senior PIK Notes tendered pursuant to such Offer have been accepted for payment.
SECTION 4.14. LIMITATION ON ASSET SALES.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, consummate an Asset Sale (including the
sale of any of the Capital Stock of any Restricted Subsidiary) providing for Net
Proceeds in excess of $2,500,000 unless at least 75% of the Net Proceeds from
such Asset Sale are applied (in any manner otherwise permitted hereunder) to one
or more of the following purposes in such combination as the Company shall
elect: (i) an investment in another asset or business in the same line of
business as, or a line of business similar to that of, the line of business of
the Company and its Restricted Subsidiaries at the time of the Asset Sale;
provided that such investment occurs on or prior to the 365th day following the
date of such Asset Sale (the "Asset Sale Disposition Date"), (ii) to reimburse
the Company or its Subsidiaries for expenditures made, and costs incurred, to
repair, rebuild, replace or restore property subject to loss, damage or taking
to the extent that the Net Proceeds consist of insurance proceeds received on
account of such loss, damage or taking, (iii) the purchase, redemption or other
prepayment or repayment of outstanding Senior Indebtedness of the Company or
Indebtedness of the Company's Restricted Subsidiaries on or prior to the 365th
day following the Asset Sale Disposition Date or (iv) an Offer expiring on or
prior to the Purchase Date.
(b) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, consummate an Asset Sale unless at least
75% of the consideration thereof received by the Company or such Restricted
Subsidiary is in the form of cash, cash equivalents or marketable securities;
provided that, solely for purposes of calculating such 75% of the consideration,
the amount of (i) any liabilities (as shown on the Company's or such Restricted
Subsidiary's most recent balance sheet or in the notes thereto, excluding
contingent liabilities and trade payables), of the Company or any Restricted
Subsidiary (other than liabilities that are by their terms subordinated to the
Senior PIK Notes) that are assumed by the transferee of any such assets and (ii)
any notes or other obligations received by the Company or any such Restricted
Subsidiary from such transferee that are promptly, but in no event more than 30
days after receipt, converted by the Company or such Restricted Subsidiary into
cash (to the extent of the cash received), shall be deemed to be cash and cash
equivalents for purposes of this provision. Any Net Proceeds from any Asset Sale
that are not applied or invested as provided in Section 4.14(a) hereof shall
constitute "Excess Proceeds."
(c) When the aggregate amount of Excess Proceeds exceeds $5,000,000
(such date being an "Asset Sale Trigger Date"), the Company shall make an Offer
to all Holders of Senior PIK Notes to purchase the maximum principal amount of
the Senior PIK Notes then outstanding that may be purchased out of Excess
Proceeds, at an offer price in cash in an amount equal to 100% of principal
amount thereof plus any accrued and unpaid interest and Liquidated Damages, if
any, to the Purchase Date in accordance with the procedures set forth in this
Indenture.
(d) To the extent that substantially concurrently with being required to
make an offer to the holders of the Senior PIK Notes on account of an Asset
Sale, the Company is required to make a similar Offer to holders of any other
Indebtedness ranking pari passu with the Senior
44
PIK Notes (including without limitation the Senior Notes), the Excess Proceeds
allocable to each such Offer shall be allocated as nearly as practicable pro
rata as between the Senior Notes and the Senior PIK Notes in accordance with the
respective principal amount thereof.
(e) To the extent that any Excess Proceeds remain after completion of an
Offer, the Company may use such remaining amount for general corporate purposes.
(f) If the aggregate principal amount of Senior PIK Notes surrendered by
Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select
the Senior PIK Notes to be purchased on a pro rata basis, by lot or by a method
that complies with the requirements of any stock exchange on which the Senior
PIK Notes are listed and that the Trustee considers fair and appropriate.
(g) Upon completion of an Asset Sale Offer, the amount of Excess
Proceeds shall be reset at zero.
(h) Notwithstanding the foregoing, to the extent that any or all of the
Net Proceeds of an Asset Sale is prohibited or delayed by applicable local law
from being repatriated to the United States, the portion of such Net Proceeds so
affected will not be required to be applied pursuant to this Section 4.14 but
may be retained for so long, but only for so long, as the applicable local law
prohibits repatriation to the United States. The Company will promptly take all
reasonable actions required by the applicable local law to permit such
repatriation, and once such repatriation of any affected Net Proceeds is not
prohibited under applicable local law, such repatriation will be immediately
effected and such repatriated Net Proceeds will be applied in the manner set
forth above as if such Asset Sale have occurred on the date of repatriation.
SECTION 4.15. LIMITATION ON GUARANTEES OF COMPANY INDEBTEDNESS BY RESTRICTED
SUBSIDIARIES.
(a) The Company shall not permit any Restricted Subsidiary, directly or
indirectly, to guarantee any Indebtedness of the Company other than the Senior
PIK Notes (the "Other Company Indebtedness") unless (i) such Restricted
Subsidiary contemporaneously executes and delivers a supplemental indenture to
this Indenture providing for a guarantee of payment of the Senior PIK Notes then
outstanding by such Restricted Subsidiary to the same extent as the guarantee of
payment (the "Other Company Indebtedness Guarantee") of the Other Company
Indebtedness (including waiver of subrogation, if any) and (ii) if the Other
Company Indebtedness guaranteed by such Restricted Subsidiary is (A) Senior
Indebtedness, the guarantee for the Senior PIK Notes shall be pari passu in
right of payment with the Other Company Indebtedness Guarantee and (B)
Subordinated Indebtedness, the guarantee for the Senior PIK Notes shall be
senior in right of payment to the Other Company Indebtedness Guarantee; provided
that the foregoing will not limit or restrict guarantees issued by Restricted
Subsidiaries in respect of Indebtedness of other Restricted Subsidiaries.
(b) Each guarantee of the Senior PIK Notes created by a Restricted
Subsidiary pursuant to Section 4.l5(a) hereof shall be in form and substance
satisfactory to the Trustee and shall provide, among other things, that it will
be automatically and unconditionally released and discharged upon (i) any sale,
exchange or transfer permitted by this Indenture of (A) all of the
45
Company's Capital Stock in such Restricted Subsidiary or (B) the sale of all or
substantially all of the assets of the Restricted Subsidiary and upon the
application of the Net Proceeds from such sale in accordance with the
requirements of Section 4.14 hereof or (ii) the release or discharge of the
Other Company Indebtedness Guarantee that resulted in the creation of such
guarantee of the Senior PIK Notes, except a discharge or release by or as a
result of direct payment under such Other Company Indebtedness Guarantee.
SECTION 4.16. DESIGNATION OF RESTRICTED AND NON-RESTRICTED SUBSIDIARIES.
(a) From and after the date of original issuance of the Senior PIK
Notes, the Company may designate any existing or newly formed or acquired
Subsidiary as a Non-Restricted Subsidiary, provided that (i) (A) the Subsidiary
to be so designated has total assets of $1,000,000 or less and (B) immediately
before and after giving effect to such designation on a Pro Forma Basis; (1) the
Company could incur $1.00 of additional Indebtedness pursuant to Section 4.07(a)
hereof determined on a Pro Forma Basis; and (2) no Default or Event of Default
shall have occurred and be continuing, (ii) all transactions between the
Subsidiary to be so designated and its Affiliates remaining in effect are
permitted pursuant to Section 4.08 hereof and (iii) the Subsidiary does not own
any preferred Equity Interests issued by a Restricted Subsidiary. Any Investment
made by the Company or any Restricted Subsidiary which is redesignated from a
Restricted Subsidiary to a Non-Restricted Subsidiary shall thereafter be
considered as having been a Restricted Payment (to the extent not previously
included as a Restricted Payment) made on the day such Subsidiary is designated
a Non-Restricted Subsidiary in the amount of the greater of (i) the fair market
value (as determined by the Board of Directors of the Company in good faith) of
the Equity Interests of such Subsidiary held by the Company and its Restricted
Subsidiaries on such date, and (ii) the amount of the Investments determined in
accordance with GAAP made by the Company and any of its Restricted Subsidiaries
in such Subsidiary.
(b) A Non-Restricted Subsidiary may be redesignated as a Restricted
Subsidiary. The Company shall not, and shall not permit any Restricted
Subsidiary to, take any action or enter into any transaction or series of
transactions that would result in a Person becoming a Restricted Subsidiary
(whether through an acquisition, the redesignation of a Non-Restricted
Subsidiary or otherwise, but not including through the creation of a new
Restricted Subsidiary) if immediately after such action, such Person would have
any preferred Equity Interests outstanding that would not be owned directly or
indirectly by the Company or one more Restricted Subsidiaries.
(c) The designation of a Subsidiary as a Restricted Subsidiary or the
removal of such designation is required to be made by a resolution adopted by a
majority of the Board of Directors of the Company stating that the Board of
Directors has made such designation in accordance with this Indenture, and the
Company is required to deliver to the Trustee such resolution together with an
Officers' Certificate certifying that the designation complies with this
Indenture. Such designation shall be effective as of the date specified in the
applicable resolution, which may not be before the date the applicable Officers'
Certificate is delivered to the Trustee.
46
SECTION 4.17. LIMITATION ON ISSUANCE BY RESTRICTED SUBSIDIARIES OF PREFERRED
EQUITY INTERESTS.
No Restricted Subsidiary may issue or sell its preferred Equity Interests
to any Person other than the Company or another Restricted Subsidiary.
ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER OR CONSOLATION.
(a) The Company shall not consolidate or merge with or into, or sell,
lease, convey or otherwise dispose of all or substantially all of its assets to,
any Person (any such consolidation, merger or sale being a "Disposition")
unless: (i) the successor corporation of such Disposition or the corporation to
which such Disposition shall have been made (each, a "Successor Corporation") is
a corporation organized or existing under the laws of the United States, any
state thereof or the District of Columbia; (ii) the Successor Corporation of
such Disposition or the corporation to which such Disposition shall have been
made expressly assumes the Obligations of the Company, pursuant to a
supplemental indenture in form and substance reasonably satisfactory to the
Trustee, under this Indenture and the Senior PIK Notes; (iii) immediately after
such Disposition, no Default or Event of Default shall exist; and (iv) the
corporation formed by or surviving any such Disposition, or the corporation to
which such Disposition shall have been made, shall (A) have Consolidated Net
Worth (immediately after the Disposition but prior to giving any pro forma
effect to purchase accounting adjustments or Restructuring Charges resulting
from the Disposition) equal to or greater than the Consolidated Net Worth of the
Company immediately preceding the Disposition, (B) be permitted immediately
after the Disposition by the terms of this Indenture to issue at least $1.00 of
additional Indebtedness determined on a Pro Forma Basis, and (C) have a Cash
Flow Coverage Ratio, for the four fiscal quarters immediately preceding the
applicable Disposition, and determined on a Pro Forma Basis, equal to or greater
than the actual Cash Flow Coverage Ratio of the Company for such four quarter
period. The limitations in this Section 5.01(a) on the Company's ability to make
a Disposition do not restrict the Company's ability to sell less than all or
substantially all of its assets, such sales being governed by Section 4.14
hereof.
(b) Prior to the consummation of any proposed Disposition, the Company
shall deliver to the Trustee an Officers' Certificate to the foregoing effect
and an Opinion of Counsel stating that the proposed Disposition and such
supplemental indenture comply with this Indenture.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any Disposition, the Successor Corporation resulting from such
Disposition shall succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture with the same effect as if
such Successor Corporation has been named as the Company herein; provided,
however, that neither the Company nor any Successor Corporation shall be
released from its Obligation to pay the principal of, premium, if any, and
accrued and unpaid interest on, and Liquidated Damages, if any, with respect to,
the Senior PIK Notes.
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ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
(a) An Event of Default is:
(i) a default for 30 days in payment of interest on, or
Liquidated Damages, if any, with respect to, the Senior PIK
Notes;
(ii) a default in payment when due of principal of, or premium, if
any, on the Senior PIK Notes;
(iii) the failure of the Company to comply with any of its other
agreements or covenants in, or provisions of, this Indenture
or the Senior PIK Notes outstanding under this Indenture and
the Default continues for the period, if applicable, and
after the notice specified in Section 6.01(b) hereof;
(iv) a default by the Company or any Restricted Subsidiary under
any mortgage, indenture or instrument under which there may
be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any
Restricted Subsidiary (or the payment of which is guaranteed
by the Company or any Restricted Subsidiary), whether such
Indebtedness or guarantee now exists or shall be created
hereafter, if (A) either (1) such default results from the
failure to pay principal of or interest on any such
Indebtedness (after giving effect to any extensions thereof)
or (2) as a result of such default the maturity of such
Indebtedness has been accelerated prior to its expressed
maturity, and (B) the principal amount of such Indebtedness,
together with the principal amount of any other such
Indebtedness in default for failure to pay principal or
interest thereon, or because of the acceleration of the
maturity thereof, aggregates in excess of $5,000,000;
(v) a failure by the Company or any Restricted Subsidiary to pay
final judgments (not covered by insurance) aggregating in
excess of $5,000,000 which judgments a court of competent
jurisdiction does not rescind, annul or stay within 45 days
after their entry;
(vi) in existence when the Company or any Significant Subsidiary
pursuant to or within the meaning of any Bankruptcy Law (A)
commences a voluntary case, (B) consents to the entry of an
order for relief against it in an involuntary case, (C)
consents to the appointment of a Custodian of it or for all
or substantially all of its property, or (D) makes a general
assignment for the benefit of its creditors; and
(vii) in existence when a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law that (A) is for
relief against the Company or any Significant Subsidiary in
an involuntary case, (B)
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appoints a Custodian of the Company or any Significant
Subsidiary or for all or substantially all of the property of
the Company or any Significant Subsidiary, or (C) orders the
liquidation of the Company or any Significant Subsidiary, and
any such order or decree remains unstayed and in effect for
60 days.
(b) A Default or Event of Default under Section 6.01(a)(iii) hereof
(other than an Event of Default arising under Section 5.01, which shall be an
Event of Default with the notice but without the passage of time specified in
this Section 6.01(b)), is not an Event of Default under this Indenture until the
Trustee or the Holders of at least 25% in principal amount of the Senior PIK
Notes then outstanding notify the Company of the Default and the Company does
not cure the Default within 30 days after receipt of the notice. The notice must
specify the Default, demand that it be remedied, and state that the notice is a
"Notice of Default."
(c) A Default or Event of Default under Section 6.01(a)(vi) or (vii)
will result in the Senior PIK Notes becoming due and payable without further
action or notice.
(d) In the case of any Event of Default pursuant to Section 6.01(a)(i)
or (ii) hereof occurring by reason of any willful action (or inaction) taken (or
not taken) by or on behalf of the Company with the intention of avoiding payment
of the premium that the Company would have to pay if the Company then had
elected to redeem the Senior PIK Notes pursuant to Section 3.07 hereof, an
equivalent premium shall also become and be immediately due and payable to the
extent permitted by law, anything in this Indenture or in the Senior PIK Notes
contained to the contrary notwithstanding.
(e) The Trustee shall not be charged with knowledge of any Default or
Event of Default unless written notice thereof shall have been given to a Trust
Officer at the Corporate Trust Office of the Trustee by the Company or any other
Person.
SECTION 6.02. ACCELERATION.
(a) Upon the occurrence of an Event of Default (other than an Event of
Default under Section 6.01(a)(vi) or (vii) hereof), the Trustee or the Holders
of at least 25% in aggregate principal amount of the then outstanding Senior PIK
Notes may declare all Senior PIK Notes 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" (the "Acceleration Notice").
Upon such declaration, the principal of, premium, if any, and any accrued and
unpaid interest on, and Liquidated Damages, if any, with respect to, all Senior
PIK Notes shall be due and payable immediately; provided, however, that if an
Event of Default arises under Section 6.01(a)(vi) or (vii) hereof, the principal
of, premium, if any, and any accrued and unpaid interest on, and Liquidated
Damages, if any, with respect to, all Senior PIK Notes, shall ipso facto become
and be immediately due and payable without any declaration or other act on the
part of the Trustee or any Holders of Senior PIK Notes.
(b) The Holders of a majority in aggregate principal amount of the
Senior PIK Notes then outstanding under this Indenture, by notice to the
Trustee, may rescind any declaration of acceleration of such Senior PIK Notes
and its consequences (if the rescission would not conflict
49
with any judgment or decree) if all existing Events of Default (other than the
nonpayment of principal of or interest on such Senior PIK Notes that shall have
become due by such declaration) shall have been cured or waived.
(c) If there has been a declaration of acceleration of the Senior PIK
Notes because an Event of Default under Section 6.01(a)(iv) hereof has occurred
and is continuing, such declaration of acceleration shall be automatically
annulled if the Holders of the Indebtedness described in Section 6.01(a)(iv)
hereof have rescinded the declaration of acceleration in respect of such
Indebtedness within 30 Business Days thereof and if (i) the annulment of such
acceleration would not conflict with any judgment or decree of a court of
competent jurisdiction, (ii) all existing Events of Default, except non-payment
of principal, premium or interest that shall have become due solely because of
the acceleration, have been cured or waived, and (iii) the Company has delivered
an Officers' Certificate to the Trustee to the effect of clauses (i) and (ii)
above.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of principal of, premium, if any, or any
accrued and unpaid interest on, or Liquidated Damages, if any, with respect to,
the Senior PIK Notes or to enforce the performance of any provision of the
Senior PIK Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Senior PIK Notes or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Holder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
The Holders of a majority in aggregate principal amount of the Senior PIK
Notes then outstanding by notice to the Trustee may on behalf of all Holders of
Senior PIK Notes waive any existing Default or Event of Default under this
Indenture and its consequences, except a continuing Default in the payment of
the principal of, premium, if any, and interest on, and Liquidated Damages, if
any, with respect to, such Senior PIK Notes, which may only be waived with the
consent of each Holder of Senior PIK Notes affected. Upon any such waiver, such
Default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been cured for every purpose of this Indenture; provided that
no such waiver shall extend to any subsequent or other Default or impair any
right consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Subject to Section 7.01(e) hereof, the Holders of a majority in aggregate
principal amount of the then outstanding Senior PIK Notes may direct the time,
method and place of conducting any proceeding for exercising any remedy
available to the Trustee or exercising any trust or power conferred on it by
this Indenture. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture, that the Trustee determines may be unduly
prejudicial to the rights of other Holders or would involve the Trustee in
personal liability.
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SECTION 6.06. LIMITATION ON SUITS.
A Holder may pursue a remedy with respect to this Indenture or the Senior
PIK Notes only if (i) the Holder gives to the Trustee notice of a continuing
Event of Default; (ii) the Holders of at least 25% in principal amount of the
then outstanding Senior PIK Notes make a request to the Trustee to pursue the
remedy; (iii) such Holder or Holders offer to the Trustee indemnity satisfactory
to the Trustee against any loss, liability or expense; (iv) the Trustee does not
comply with the request within 60 days after receipt of the request and the
offer of indemnity; and (v) during such 60-day period the Holders of a majority
in principal amount of the then outstanding Senior PIK Notes do not give the
Trustee a direction inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder.
Holders of the Senior PIK Notes may not enforce this Indenture, except as
provided herein.
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, premium, if any, and any accrued and
unpaid interest on, and Liquidated Damages, if any, with respect to, a Senior
PIK Note, on or after a respective due date expressed in the Senior PIK Note, or
to bring suit for the enforcement of any such payment on or after such
respective date, shall not be impaired or affected without the consent of the
Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a)(i) or (ii) hereof
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Company for (i) the
principal, premium, interest and Liquidated Damages, if any, remaining unpaid on
the Senior PIK Notes, (ii) interest on overdue principal and premium, if any,
and, to the extent lawful, interest, and (iii) such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel ("Trustee Expenses").
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable to have the claims of the Trustee (including any
claim for Trustee Expenses) and the Holders allowed in any Insolvency or
Liquidation Proceeding or other judicial proceeding relative to the Company (or
any other obligor upon the Senior PIK Notes), its creditors or its property and
shall be entitled and empowered to collect, receive and distribute to Holders
any money or other property payable or deliverable on any such claims and each
Holder authorizes any Custodian in any such Insolvency or Liquidation Proceeding
or other judicial proceeding to make such payments to the Trustee, and if the
Trustee shall consent to the making of such payments directly to the Holders any
such Custodian is hereby authorized to make such payments directly to the
Holders, and to pay to the Trustee any amount due to it hereunder for
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Trustee Expenses, and any other amounts due the Trustee under Section 7.07
hereof. To the extent that the payment of any such Trustee Expenses, and any
other amounts due the Trustee under Section 7.07 hereof out of the estate in any
such proceeding, shall be denied for any reason, payment of the same shall be
secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties which the Holders may be
entitled to receive in such proceeding, whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Senior PIK Notes or the rights of any Holder, or to
authorize the Trustee to vote in respect of the claim of any Holder in any
Insolvency or Liquidation Proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall pay
out the money in the following order:
First: to the Trustee for amounts due under Section 7.07 hereof;
Second: to Holders for amounts due and unpaid on the Senior PIK Notes for
principal, premium, interest and Liquidated Damages, if any,
ratably, without preference or priority of any kind, according to
the amounts due and payable on the Senior PIK Notes for
principal, premium, interest and Liquidated Damages, if any,
respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as a
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section does
not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07
hereof, or a suit by Holders of more than 10% in principal amount of the then
outstanding Senior PIK Notes.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default occurs (and has not been cured) the Trustee
shall (i) exercise the rights and powers vested in it by this Indenture, and
(ii) use the same degree of care
52
and skill in exercising such rights and powers as a prudent person would
exercise or use under the circumstances in the conduct of its own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee's duties shall be determined solely by the express
provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture
and no others, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates
or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. However, the Trustee shall
examine the certificates and opinions to determine whether they
conform to this Indenture's requirements without having any
obligation to verify the contents thereof.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) this paragraph does not limit the effect of Section 7.01(b)
hereof;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a
direction it receives pursuant to Section 6.05 hereof.
(d) Whether or not expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b), (c), (e) and (f) of this Section and Section 7.02 below.
(e) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders unless such Holders shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money it receives
except as the Trustee may agree in writing with the Company. Money the Trustee
holds in trust need not be segregated from other funds except to the extent
required by law.
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SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may rely on any document it believes to be genuine and to
have been signed or presented by the proper Person. The Trustee shall not be
obligated to investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may reasonably
require an Officers' Certificate or an Opinion of Counsel, or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may
consult with counsel and advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
(c) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any Agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take, except to the extent that such action or omission to act constitutes
negligence or willful misconduct on the part of the Trustee.
(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company shall be sufficient if signed by
an Officer.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Senior PIK Notes and may otherwise deal with the Company or an
Affiliate with the same rights it would have if it were not Trustee. However,
if the Trustee acquires any conflicting interest it must eliminate such conflict
within 90 days, apply to the Commission for permission to continue as Trustee or
resign. Any Agent may do the same with like rights. The Trustee is also
subject to Sections 7.10 and 7.l1 hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Senior PIK Notes, it shall not
be accountable for the Company's use of the proceeds from the Senior PIK Notes
or for any money paid to the Company or upon the Company's direction under any
provisions hereof, it shall not be responsible for the use or application of any
money any Paying Agent other than the Trustee receives, and it shall not be
responsible for any statement or recital herein or any statement in the Senior
PIK Notes or any other document furnished or issued in connection with the sale
of the Senior PIK Notes or pursuant to this Indenture, other than its
certificate of authentication.
SECTION 7.05. NOTICE TO HOLDERS OF DEFAULTS AND EVENTS OF DEFAULT.
If a Default or Event of Default occurs and is continuing and if it is
actually known to the Trustee, the Trustee shall mail to Holders a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment on any
54
Senior PIK Note (including any failure to redeem Senior PIK Notes called for
redemption or any failure to purchase Senior PIK Notes tendered pursuant to an
Offer that are required to be purchased by the terms of this Indenture), the
Trustee may withhold the notice if and so long as a committee of its Trust
Officers in good faith determines that withholding the notice is in the Holders'
interests.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each May 15 beginning with May 15, 2002, the Trustee
shall mail to Holders a brief report dated as of such reporting date that
complies with section 313(a) of the TIA (but if no event described in section
313(a) of the TIA has occurred within the twelve months preceding the reporting
date, no report need be transmitted). The Trustee also shall comply with
section 313(b)(2) of the TIA. The Trustee shall also transmit by mail all
reports as required by section 313(c) of the TIA.
Commencing at the time this Indenture is qualified under the TIA, a copy of
each report at the time of its mailing to Holders shall be filed with the
Commission and each national securities exchange on which the Senior PIK Notes
are listed. The Company shall notify the Trustee when the Senior PIK Notes are
listed on any national securities exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee (in its capacities as Trustee, Paying
Agent and/or Registrar) from time to time reasonable compensation for its
services hereunder. The Trustee's compensation shall not be limited by any law
on compensation of a trustee of an express trust. The Company shall reimburse
the Trustee upon request for all reasonable disbursements, advances, fees and
expenses it incurs or makes in addition to the compensation for its services.
Such expenses shall include the reasonable compensation, disbursements and
expenses of the Trustee's agents and counsel.
The Company shall indemnify and hold harmless the Trustee (in its
capacities as Trustee, Paying Agent and/or Registrar) against any and all
losses, liabilities or expenses the Trustee incurs arising out of or in
connection with the acceptance or administration of its duties under this
Indenture, except as set forth below. The Trustee shall notify the Company
promptly of any claim for which it may seek indemnity. Failure by the Trustee to
so notify the Company shall not relieve the Company of its Obligations
hereunder. The Company shall defend the claim and the Trustee shall reasonably
cooperate in the defense. The Trustee may have separate counsel and the Company
shall pay the reasonable fees and expenses of such counsel. The Company need not
pay for any settlement made without its consent, which consent shall not be
unreasonably withheld.
The Company's Obligations under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture.
The Company need not reimburse any expense or indemnify against any loss or
liability the Trustee incurs through negligence or bad faith.
55
To secure the Company's payment of its Obligations in this Section, the
Trustee shall have a Lien prior to the Senior PIK Notes on all money or property
the Trustee holds or collects, except that held in trust to pay principal of
premium, if any, and any accrued and unpaid interest on, and Liquidated Damages,
if any, with respect to, particular Senior PIK Notes. Such Lien shall survive
the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(a)(vi) or (vii) hereof occurs, the expenses
and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute administrative expenses under any
Bankruptcy Law.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign and be discharged from the trust hereby created by
so notifying the Company. The Holders of a majority in principal amount of the
then outstanding Senior PIK Notes may remove the Trustee by so notifying the
Trustee and the Company. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy
Law;
(c) a Custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee, provided that the Holders of a majority in principal amount of the then
outstanding Senior PIK Notes may appoint a successor Trustee to replace any
successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the then outstanding Senior PIK
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section 7.10 hereof, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon, the resignation or
removal of the retiring Trustee shall become effective and the successor Trustee
shall have all the rights, powers and duties of the
56
Trustee under this Indenture. The successor Trustee shall mail a notice of its
appointment to Holders. The retiring Trustee shall promptly transfer all
property it holds as Trustee to the successor Trustee, provided all sums owing
to the retiring Trustee hereunder have been paid and subject to the Lien
provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee
pursuant to this Section 7.08, the Company's obligations under Section 7.07
hereof shall continue for the retiring Trustee's benefit with respect to
expenses and liabilities it incurred prior to being replaced.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall be the successor Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION
The Trustee shall at all times (i) be a corporation organized and doing
business under the laws of the United States of America, of any state thereof,
or the District of Columbia authorized under such laws to exercise corporate
trustee power, (ii) be subject to supervision or examination by federal or state
authority, (iii) have a combined capital and surplus of at least $100,000,000 as
set forth in its most recent published annual report of condition, and (iv)
satisfy the requirements of sections 310(a)(1), (2) and (5) of the TIA. The
Trustee is subject to section 310(b) of the TIA.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY
The Trustee is subject to section 311(a) of the TIA, excluding any creditor
relationship listed in section 311(b) of the TIA. A Trustee who has resigned or
been removed shall be subject to section 311(a) of the TIA to the extent
indicated therein.
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01. DISCHARGE OF LIABILITY ON SENIOR PIK NOTES; DEFEASANCE.
(a) When (i) the Company delivers to the Trustee all outstanding Senior
PIK Notes (other than Senior PIK Notes replaced pursuant to Section 2.07 hereof)
for cancellation, or (ii) all outstanding Senior PIK Notes have become due and
payable and the Company irrevocably deposits with the Trustee funds sufficient
to pay at maturity all outstanding Senior PIK Notes, including interest and
premium thereon and Liquidated Damages, if any(other than Senior PIK Notes
replaced pursuant to Section 2.07 hereof), and if in either case the Company
pays all other sums payable under this Indenture by the Company, then this
Indenture shall, subject to Sections 8.01(c) and 8.06 hereof, cease to be of
further effect.
(b) Subject to Sections 8.01(c), 8.02, and 8.06 hereof, the Company at any
time may terminate (i) all its obligations under the Senior PIK Notes and this
Indenture ("legal defeasance option") or (ii) its obligations under Sections
4.02, 4.03, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11,
57
4.13, 4.14, 4.15, 4.16 and 4.17 hereof, and the operation of Sections
5.01(a)(iii), 5.01(a)(iv) or 6.01 (a)(iii) though (a)(v) hereof ("covenant
defeasance option"). The Company may exercise its legal defeasance option
notwithstanding its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment of the Senior
PIK Notes may not be accelerated because of an Event of Default. If the Company
exercises its covenant defeasance option, payment of the Senior PIK Notes shall
not be accelerated because of an Event of Default specified in Section
6.01(a)(iii) through (a)(v) hereof or because of the Company's failure to comply
with Section 5.01(a)(iii) and (iv) hereof.
Upon satisfaction of the conditions set forth herein and upon the Company's
request (and at the Company's expense), the Trustee shall acknowledge in writing
the discharge of those obligations that the Company has terminated.
(c) Notwithstanding clauses (a) and (b) above, the Company's obligations
in Sections 2.03, 2.04, 2.05, 2.06, 2,07, 4.01, 4.04, 7.07, 7.08, 8.04, 8.05 and
8.06 hereof, and the Trustee's and the Paying Agent's obligations in Section
8.04 hereof shall survive until the Senior PIK Notes have been paid in full.
Thereafter, the Company's obligations in Sections 7.07 and 8.05 hereof and the
Company's, the Trustee's and the Paying Agent's obligations in Section 8.04
hereof shall survive.
SECTION 8.02. CONDITIONS TO DEFEASANCE.
The Company may exercise its legal defeasance option or its covenant
defeasance option only if:
(a) the Company irrevocably deposits in trust (the "defeasance trust")
with the Trustee money or U.S. Government Obligations sufficient for the payment
in full of the principal of, premium, if any, and any accrued and unpaid
interest on, and Liquidated Damages, if any, with respect to, the Senior PIK
Notes then outstanding, as of the maturity date, the redemption date or the
Purchase Date, as the case may be;
(b) the Company delivers to the Trustee a certificate from a nationally
recognized firm of independent accountants expressing their opinion that the
payments of principal and interest when due and without reinvestment of the
deposited U.S. Government Obligations plus any deposited money without
investment will provide cash at such times and in such amounts as will be
sufficient to pay when due principal of, premium, if any, and any accrued and
unpaid interest on, and Liquidated Damages, if any, with respect to, all the
Senior PIK Notes to maturity or redemption, as the case may be;
(c) since the Company's irrevocable deposit provided for in Section
8.02(1) hereof, 91 days have passed;
(d) no Default has occurred and is continuing on the date of such deposit
and after giving effect to it;
(e) the deposit does not constitute a default under any other agreement
binding on the Company;
58
(f) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or is
qualified as, a regulated investment company under the Investment Company Act of
1940, as amended;
(g) in the case of the legal defeasance option, the Company shall have
delivered to the Trustee an Opinion of Counsel stating that (i) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (ii) under applicable federal income tax law, in either case, to the
effect that, and based thereon such Opinion of Counsel shall confirm that, the
Holders will not recognize income, gain or loss for federal income tax purposes
as a result of such deposit and defeasance and will be subject to federal income
tax on the same amount, in the same manner and at the same times as would have
been the case if such defeasance had not occurred;
(h) in the case of the covenant defeasance option, the Company shall have
delivered to the Trust an Opinion of Counsel to the effect that the Holders will
not recognize income, gain or loss for federal income tax purposes as a result
of such deposit and covenant defeasance and will be subject to federal income
tax on the same amount, in the same manner and at the same times as would have
been the case if such covenant defeasance had not occurred; and
(i) the Company delivers to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent to the defeasance
and discharge of the Senior PIK Notes contemplated by this Article 8 have been
satisfied.
Before or after a deposit, the Company may make arrangements satisfactory
to the Trustee for the redemption or purchase of Senior PIK Notes at a future
date in accordance with Article 3.
SECTION 8.03. APPLICATION OF TRUST MONEY.
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to this Article 8. It shall apply the deposited money
and the money from U.S. Government Obligations through the Paying Agent and in
accordance with this Indenture to the payment of principal of, premium, if any,
and any accrued and unpaid interest on, and Liquidated Damages, if any, with
respect to the Senior PIK Notes.
SECTION 8.04. REPAYMENT TO THE COMPANY.
After the Senior PIK Notes have been paid in full, the Trustee and the
Paying Agent shall promptly turn over to the Company any excess money or
securities they hold.
The Trustee and the Paying Agent shall pay to the Company upon written
request by the Company any money they hold for the payment of principal,
premium, interest or Liquidated Damages that remains unclaimed for 1 year after
the date upon which such payment shall have become due; provided, however, that
the Company shall have either caused notice of such payment to be mailed to each
Holder entitled thereto no less than 30 days prior to such repayment or within
such period shall have published such notice in a financial newspaper of
widespread circulation published in The City of New York (including, without
limitation, The Wall Street Journal). After payment to the Company, Holders
entitled to the money must look to
59
the Company for payment as general creditors unless an applicable abandoned
property law designates another Person, and all liability of the Trustee and
such Paying Agent with respect to such money shall cease.
SECTION 8.05. INDEMNITY FOR GOVERNMENT OBLIGATIONS.
The Company shall pay and shall indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against deposited U.S. Government
Obligations or the principal and interest received on such U.S. Government
Obligations.
SECTION 8.06. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with this Article 8 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture and the Senior PIK Notes shall be
revived and reinstated as though no deposit had occurred pursuant to this
Article 8 until such time as the Trustee or Paying Agent is permitted to apply
all such money or U.S. Government Obligations in accordance with this Article 8;
provided, however, that, if the Company has made any payment of principal of,
premium, if any, and any accrued and unpaid interest on, and Liquidated Damages,
if any, with respect to any Senior PIK Notes use of the reinstatement of its
Obligations, the Company shall be subrogated to the Holders' rights to receive
such payment from the money or U.S. Government Obligations the Trustee or Paying
Agent holds.
ARTICLE 9
AMENDMENTS
SECTION 9.01. AMENDMENTS AND SUPPLEMENTS PERMITTED WITHOUT CONSENT OF HOLDERS
Notwithstanding Section 9.02 hereof, the Company and the Trustee may amend
or supplement this Indenture or the Senior PIK Notes without the consent of any
Holder (a) to cure any ambiguity, defect or inconsistency; (b) to provide for
uncertificated Senior PIK Notes in addition to or in place of certificated
Senior PIK Notes; (c) to provide for the assumption by a Successor Corporation
of the Company's Obligations to the Holders in the event of a Disposition
pursuant to Article 5; (d) to comply with the Commission's requirements to
effect or maintain the qualification of this Indenture under the TIA; (e) to
provide for guarantees with respect to the Senior PIK Notes; or (f) to make any
change that does not materially adversely affect any Holder's legal rights under
this Indenture.
Upon the Company's request, after receipt by the Trustee of a resolution of
the Board of Directors authorizing the execution of any amended or supplemental
indenture, the documents described in Section 9.06 hereof, the Trustee shall
join with the Company in the execution of any amended or supplemental indenture
authorized or permitted by the terms of this Indenture and to make any further
appropriate agreements and stipulations that may be contained in any such
amended or supplemental indenture, but the Trustee shall not be obligated to
enter into an
60
amended or supplemental indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.02. AMENDMENTS AND SUPPLEMENTS REQUIRING CONSENT OF HOLDERS
Subject to Section 6.07 hereof, the Company and the Trustee may amend or
supplement this Indenture or the Senior PIK Notes with the written consent of
the Holders of at least a majority in aggregate principal amount of the then
outstanding Senior PIK Notes (including consents obtained in connection with a
tender offer or exchange offer for the Senior PIK Notes). Subject to Sections
6.04 and 6.07 hereof, the Holders of a majority in aggregate principal amount of
the Senior PIK Notes then outstanding (including consents obtained in connection
with a tender offer or exchange offer for the Senior PIK Notes) may also waive
any existing Default or Event of Default (other than a payment Default) and its
consequences or compliance in a particular instance by the Company with any
provision of this Indenture or the Senior PIK Notes.
Upon the Company's request and after receipt by the Trustee of a resolution
of the Board of Directors authorizing the execution of any supplemental
indenture, evidence of the Holders' consent, and the documents described in
Section 9.06 hereof, the Trustee shall join with the Company in the execution of
such amended or supplemental indenture unless such amended or supplemental
indenture affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but not
be obligated to, enter into such amended or supplemental indenture.
It shall not be necessary for the consent of the Holders under this Section
to approve the particular form of any proposed amendment or waiver, but it shall
be sufficient if such consent approves the substance thereof.
After an amendment or waiver under this Section becomes effective, the
Company shall mail to each Holder affected thereby a notice briefly describing
the amendment, supplement or waiver. Any failure of the Company to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such amended or supplemental indenture or waiver. Without
the consent of each Holder affected, an amendment, supplement or waiver under
this Section may not (1) reduce the principal amount of Senior PIK Notes whose
Holders must consent to an amendment, supplement or waiver; (2) reduce the rate
of or change the time for payment of interest, including default interest as set
forth in Section 4.01 hereof, or Liquidated Damages on any Senior PIK Note or
alter the redemption or purchase provisions with respect thereto (other than the
provisions of Sections 4.13 and 4.14 hereof) or the price at which the Company
is required to offer to purchase any Senior PIK Note; (3) reduce the principal
of or change the fixed maturity of any Senior PIK Note; (4) make any Senior PIK
Note payable in money other than that stated in the Senior PIK Note; (5) make
any change in Section 6.04 or 6.07 hereof or in this sentence of this Section
9.02 hereof; or (6) waive a default in the payment of the principal of, or
premium, if any, or any accrued and unpaid interest on, or Liquidated Damages,
if any, with respect to, or redemption or purchase payment with respect to, any
Senior PIK Note (except a rescission of acceleration of the Senior PIK Notes by
the Holders of at least a majority in aggregate principal amount of the then
outstanding Senior PIK Notes and a waiver of the payment default that resulted
from such acceleration).
61
SECTION 9.03. COMPLIANCE WITH XXX.
Every amendment or supplement to this Indenture or the Senior PIK Notes
shall be set forth in an amended supplemental indenture that complies with the
TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent to it
by a Holder of a Senior PIK Note is a continuing consent by the Holder and every
subsequent Holder of a Senior PIK Note or portion of a Senior PIK Note that
evidences the same Indebtedness as the consenting Xxxxxx's Senior PIK Note, even
if notation of the consent is not made on any Senior PIK Note. However, any such
Holder or subsequent Holder may revoke the consent as to his or her Senior PIK
Note or portion of a Senior PIK Note if the Trustee receives the notice of
revocation before the date on which the Trustee receives an Officer's
Certificate certifying that the Holders of the requisite principal amount of
Senior PIK Notes have consented to the amendment or waiver.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders of Senior PIK Notes entitled to consent to
any amendment or waiver. If a record date is fixed, then, notwithstanding the
provisions of the immediately preceding paragraph, those Persons who were
Holders of Senior PIK Notes at such record date (or their duly designated
proxies), and only those Persons, shall be entitled to consent to such amendment
or waiver or to revoke any consent previously given, whether or not such Persons
continue to be Holders of Senior PIK Notes after such record date. No consent
shall be valid or effective for more than 90 days after such record date unless
consents from Holders of the principal amount of Senior PIK Notes required
hereunder for such amendment or waiver to be effective shall have also been
given and not revoked within such 90-day period.
After an amendment or waiver becomes effective it shall bind every Holder,
unless it is of the type described in any of clauses (1) through (6) of Section
9.02 hereof. In such case, the amendment or waiver shall bind each Holder who
has consented to it and every subsequent Holder of a Senior PIK Note that
evidences the same debt as the consenting Xxxxxx's Senior PIK Note.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SENIOR PIK NOTES.
The Trustee may (at the Company's expense) place an appropriate notation
about an amendment, supplement or waiver on any Senior PIK Note thereafter
authenticated. The Company in exchange for all Senior PIK Notes may issue and
the Trustee shall authenticate new Senior PIK Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Senior PIK Note
shall not affect the validity and effect of such amendment, supplement or
waiver.
SECTION 9.06. TRUSTEE PROTECTED.
The Trustee shall sign any amendment or supplemental indenture authorized
pursuant to this Article 9 if the amendment does not adversely affect the
rights, duties, liabilities or
62
immunities of the Trustee. If it does, the Trustee may, but need not, sign it.
In signing such amendment or supplemental indenture, the Trustee shall be
entitled to receive and, subject to Section 7.01 hereof, shall be fully
protected in relying upon, an Officers' Certificate and Opinion of Counsel as
conclusive evidence that such amendment or supplemental indenture is authorized
or permitted by this Indenture, that it is not inconsistent herewith, and that
it will be valid and binding upon the Company in accordance with its terms. The
Company may not sign an amendment or supplemental indenture until the Board of
Directors approves it.
SECTION 9.07. PAYMENT FOR CONSENTS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Holder of
Senior PIK Notes for or as an inducement to any consent, waiver or amendment of
any of the terms or provisions of this Indenture or the Senior PIK Notes unless
such consideration is offered to be paid or agreed to be paid to all Holders of
the Senior PIK Notes that consent, waive or agree to amend in the time frame set
forth in the solicitation documents relating to such consent, waiver or
agreement.
ARTICLE 10
MISCELLANEOUS
SECTION 10.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies, or conflicts with the
duties imposed by operation of section 318(c) of the TIA, the imposed duties
shall control.
SECTION 10.02. NOTICES.
Any notice or communication by the Company or the Trustee to the other is
duly given if in writing and delivered in person, mailed by registered or
certified mail, postage prepaid, return receipt requested or delivered by
telecopier or overnight air courier guaranteeing next day delivery to the
other's address:
If to the Company:
National Restaurant Enterprises Holdings, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Telecopier No.: (000) 000-0000
with a copy to:
Xxxxx, Brown & Xxxxx
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
63
Attention: Xxxxx X. Xxxxxxx, Esq.
Telecopier No.: (000) 000-0000
If to the Trustee:
State Street Bank and Trust Company
0 Xxxxxx xx Xxxxxxxxx - 0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-1724
Attention: Corporate Trust Administration
Re: National Restaurant Enterprises Holdings, Inc.
Telephone: (000) 000-0000
Telecopier (000) 000-0000
The Company or the Trustee by notice to the other may designate additional
or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; the date receipt is acknowledged, if mailed by registered or
certified mail; when answered back, if telecopied; and the next Business Day
after timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first-class mail
to his or her address shown on the register kept by the Registrar. Failure to
mail a notice or communication to a Holder or any defect in it shall not affect
its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Holders, it shall mail a
copy to the Trustee and each Agent at the same time.
SECTION 10.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Holders may communicate pursuant to section 312(b) of the TIA with other
Holders with respect to their rights under this Indenture or the Senior PIK
Notes. The Company, the Trustee, the Registrar and any other Person shall have
the protection of section 312(c) of the TIA.
SECTION 10.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate (which shall include the statements set forth
in Section 10.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
64
(b) an Opinion of Counsel (which shall include the statements set forth in
Section 10.05 hereof) stating that, in the opinion of such counsel, all such
conditions precedent provided for in this Indenture relating to the proposed
action have been complied with.
SECTION 10.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to section 314(a)(4) of the TIA) shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has made
such examination or investigation as is necessary to enable him or her to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether, in such Person's opinion, such condition or
covenant has been complied with.
SECTION 10.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 10.07. LEGAL HOLIDAYS.
If a payment date is a Legal Holiday at a place of payment, payment may be
made at that place on the next succeeding day that is not a Legal Holiday, and
no interest shall accrue for the intervening period.
SECTION 10.08. NO RECOURSE AGAINST OTHERS.
No officer, employee, director, stockholder or Subsidiary of the Company
shall have any liability for any Obligations of the Company under the Senior PIK
Notes or this Indenture, or for any claim based on, in respect of, or by reason
of, such Obligations or the creation of any such Obligation, except, in the case
of a Subsidiary, for an express guarantee or an express creation of any Lien by
such Subsidiary of the Company's Obligations under the Senior PIK Notes issued
in accordance with this Indenture. Each Holder by accepting a Senior PIK Note
waives and releases all such liability, and such waiver and release is part of
the consideration for the issuance of the Senior PIK Notes.
65
SECTION 10.09. COUNTERPARTS.
This Indenture may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.
SECTION 10.10. VARIABLE PROVISIONS.
The Company initially appoints the Trustee as Paying Agent, Registrar and
authenticating agent.
The first compliance certificate to be delivered by the Company to the
Trustee pursuant to Section 4.03 hereof shall be for the fiscal year ending on
December 30, 1996.
SECTION 10.11. GOVERNING LAW.
The internal laws of the State of New York shall govern this Indenture and
the Senior PIK Notes, without regard to the conflict of laws provisions thereof.
SECTION 10.12. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or any of its Subsidiaries, and no other indenture,
loan or debt agreement may be used to interpret this Indenture.
SECTION 10.13. SUCCESSORS.
All agreements of the Company in this Indenture and the Senior PIK Notes
shall bind its successor. All agreements of the Trustee in this Indenture shall
bind its successor.
SECTION 10.14. SEVERABILITY.
If any provision in this Indenture or in the Senior PIK Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 10.15. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table, and headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof, and shall in no way modify or
restrict any of the terms or provisions hereof.
[SIGNATURE PAGE FOLLOWS]
66
Dated as of June 29, 2001 NATIONAL RESTAURANT ENTERPRISES
HOLDINGS, INC.
By: /s/ X. Xxxxxxx Xxxxxx
-------------------------------
Name: X. Xxxxxxx Xxxxxx
Title: Vice President
Dated as of June 29, 2001 STATE STREET BANK AND TRUST
COMPANY
as Trustee
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Assistant Vice President
67
EXHIBIT A
(Face of Senior PIK Note)
13% Senior PIK Note due 2008
No. $__________
CUSIP No.
NATIONAL RESTAURANT ENTERPRISES HOLDINGS, INC.
promises to pay to
or registered assigns,
the principal sum of
Dollars on May 15, 2008.
Interest Payment Dates: May 15 and November 15.
Record Dates: May 1 and November 1.
Dated: __________ __, 2001
NATIONAL RESTAURANT ENTERPRISES HOLDINGS, INC.
By:____________________________________
Name:
Title:
Trustee's Certificate of Authentication
Dated:_________________________________
This is one of the [Global] Senior PIK Notes referred to in the within-mentioned
Indenture:
STATE STREET BANK AND TRUST COMPANY
as Trustee
By:____________________________________
(Authorized Signatory)
[Unless and until it is exchanged in whole or in part for Senior PIK Notes in
definitive form, this Senior PIK Note may not be transferred except as a whole
by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary of any such nominee to a successor Depositary or a nominee of such
successor Depositary. The Depositary Trust Company shall act as the Depositary
until a successor shall be appointed by the Company and the Registrar. Unless
this Certificate is presented by an authorized representative of The Depositary
Trust Company (00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx) ("DTC"), to the issuer or
---
its agent for registration of the transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or such other name as
may be requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
A-1
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.]/1/
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED
STATES SECURITIES ACT OF 1933 ("THE "SECURITIES ACT"), AND THE SECURITY
-------------------
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT
THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE
HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE
COMPANY THAT ( A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (1) (a) INSIDE THE UNITED STATES TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, OR (c) IN ACCORDANCE
WITH ANOTHER EXEMPTION FORM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE.
[UNTIL THE WARRANT SEPARATION DATE, THIS SENIOR PIK NOTE IS PART OF A
UNIT THAT CONSISTS OF THIS SENIOR PIK NOTE AND A WARRANT ENTITLING THE
HOLDER TO PUCHASE SHARES OF THE COMPANY'S CLASS A COMMON STOCK AND CLASS
B COMMON STOCK. UNTIL THE WARRANT SEPARATION DATE, THIS SENIOR PIK NOTE
AND THE WARRANT MUST BE TRANSFERRED TOGETHER AS A UNIT. "WARRANT
SEPARATION DATE" MEANS THE EARLIER TO OCCUR OF (I) THE EFFECTIVE DATE OF
THE EARLIEST REGISTRATION STATEMENT REFERRED TO IN SECTION 6 OF
_____________________
This paragraph should be included only if the Senior PIK Note is issued in
global form.
A-2
THE REGISTRATION RIGHTS AGREEMENT, DATED JUNE 29, 2001, WITH RESPECT TO
THE SENIOR PIK NOTES OR (II) THE EFFECTIVE DATE OF A REGISTRATION
STATEMENT RELATING TO THE REGISTRATION FOR RESALE OF THE SHARES OF THE
COMPANY'S COMMON STOCK ISSUABLE UPON EXERCISE OF THE WARRANTS.]/2/
Additional provisions of this Senior PIK Note are set forth on the other
side of this Senior PIK Note.
_________________
/2/ Include on this Senior PIK Note issued prior to the Warrant Separation Date
A-3
(Back of Senior PIK Note)
13% SERIES [A/B] SENIOR PIK NOTE DUE 2008
1. Interest. National Restaurant Enterprises Holdings, Inc. (the
"Company") promises to pay interest on the principal amount of the Senior PIK
-------
Notes at the rate and in the manner specified below. Interest on the Senior PIK
Notes will accrue at 13% per annum. Interest and Liquidation Damages, if any,
will be payable semiannually in arrears on May 15 and November 15 of each year,
or if any such day is not a Business Day on the next succeeding Business Day
(each, an "Interest Payment Date"). Interest on the Senior PIK Notes will
---------------------
accrue from the most recent date on which interest has been paid, or if no
interest has been paid, from May 15, 2001. To the extent lawful, the Company
shall pay interest (including Post-Petition Interest) on (i) overdue principal
and premium at the rate equal to 2% per annum in excess of the then applicable
interest rate on the Senior PIK Notes, compounded semiannually and (ii) overdue
installments of interest and Liquidated Damages (without regard to any
applicable grace period) at the same rate as set forth in clause (i), compounded
semiannually. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
2. Method of Payment. The Company will pay interest on the Senior PIK
Notes (except defaulted interest) and Liquidated Damages to the Persons who are
registered holders of Senior PIK Notes at the close of business on the record
date for the next Interest Payment Date even if such Senior PIK Notes are
cancelled after such record date and on or before such Interest Payment Date.
Holders must surrender Senior PIK Notes to a Paying Agent to collect principal
payments on such Senior PIK Notes. The Company will pay principal and premium,
if any, in money of the United States that at the time of payment is legal
tender for payment of public and private debts. The Company will pay principal
and premium, if any, by wire transfer of immediately available funds to the
accounts specified by the Holders or, if no such account is specified, by
mailing a check to each such Holder's registered address; provided that payment
--------
by wire transfer of immediately available funds will be required with respect to
principal and premium, if any, on all Global Senior PIK Notes. Payment of
interest and Liquidated Damages, if any, shall be made through the issuance of
additional Senior PIK Notes of like tenor with a principal amount equal to the
amount of such interest payment and Liquidated Damages, if any.
3. Paying Agent and Registrar. State Street Bank and Trust Company (the
"Trustee") will initially act as the Paying Agent and Registrar. The Company
-------
may appoint additional paying agents or co-registrars, and change the Paying
Agent, any additional paying agent, the Registrar or any co-registrar without
prior notice to any Holder. The Company or any of its Subsidiaries may act in
any such capacity.
4. Indenture. The Company issued the Senior PIK Notes under an Indenture,
dated as of June 29, 2001 (the "Indenture"), among the Company and the Trustee.
The terms of the Senior PIK Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S. Code (S)(S) 77aaa-77bbbb) as in effect on the date of the original
issuance of the Senior PIK Notes (the "Trust Indenture Act"). The Senior PIK
-------------------
Notes are subject to, and qualified by, all such terms, certain of which are
summarized herein, and Holders are referred to the Indenture and the Trust
Indenture Act for a statement of such terms (all capitalized terms not defined
herein shall have the meanings assigned them in the Indenture).
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5. Optional Redemption. The Senior PIK Notes may not be redeemed at the
option of the Company prior to November 15, 2001. During the twelve (12) month
period beginning November 15 of the years indicated below, the Senior PIK Notes
will be redeemable at the option of the Company, in whole in part, on at least
30 but not more than 60 days' notice to each Holder of Senior PIK Notes to be
redeemed, at the redemption prices (expressed as percentages of the principal
amount) set forth below, plus any accrued and unpaid interest and Liquidated
Damages, if any, to the date of redemption:
Year Percentage
---- ----------
2001...................... 104.0000%
2002...................... 102.0000%
2003 and thereafter....... 100.0000%
6. Mandatory Redemption. Subject to the Company's obligation to make an
offer to purchase Senior PIK Notes under certain circumstances pursuant to
Sections 4.13 and 4.14 of Indenture (as described in paragraph 7 below), the
Company is not required to make any mandatory redemption, purchasing or sinking
funds payments with respect to the Senior PIK Notes.
7. Mandatory Offers to Purchase Senior PIK Notes. (a) Upon the
occurrence of a Change of Control, each Holder of Senior PIK Notes shall have
the right to require the Company to purchase all or any part of such Holder's
Senior PIK Notes pursuant to an Offer (as defined herein) at a purchase price
equal to 101% of the aggregate principal amount thereof, plus any accrued and
unpaid interest and Liquidated Damages, if any, to the date of purchase.
(b) If the Company or any Restricted Subsidiary consummates one or
more Asset Sales and does not use all of the Net Proceeds from such Asset Sales
as provided in the Indenture, the Company will be required, under certain
circumstances, to utilize the Excess Proceeds from such Asset Sales to make an
Offer (as defined herein) to purchase Senior PIK Notes at a purchase price equal
to 100% of the principal amount of the Senior PIK Notes, plus any accrued and
unpaid interest and Liquidated Damages, if any, to the date of purchase. If the
Excess Proceeds are insufficient to purchase all Senior PIK Notes tendered
pursuant to any Asset Sale Offer, the Trustee shall select the Senior PIK Notes
to be purchased in accordance with the terms of the Indenture.
(c) Holders may tender all or, subject to paragraph 8 below, any
portion of their Senior PIK Notes in a Change of Control Offer or Asset Sale
Offer (collectively, an "Offer") by completing the form below entitled "OPTION
-----
OF HOLDER TO ELECT PURCHASE."
(d) The Company shall comply with Rule 14e-1 under the Exchange Act
and any other securities laws and regulations to the extent such laws and
regulations are applicable to any Offer. To the extent that the provisions of
any of such securities laws or regulations conflict with provisions of this
Indenture, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Indenture by virtue thereof.
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8. Notice of Redemption or Purchase. Notice of an optional redemption or an
Offer will be mailed to each Holder at its registered address at least 30 days
but not more than 60 days before the date of redemption or purchase. Senior PIK
Notes may be redeemed or purchased in part. On or after any date on which
Senior PIK Notes are redeemed or purchased, interest ceases to accrue on the
Senior PIK Notes or portions thereof called for redemption or accepted for
purchase on such date.
9. Denominations, Transfer, Exchange. The Senior PIK Notes are in registered
form without coupons. The transfer of Senior PIK Notes may be registered and
Senior PIK Notes may be exchanged as provided in the Indenture. Holders seeking
to transfer or exchange their Senior PIK Notes may be required, among other
things, to furnish appropriate endorsements and transfer documents and to pay
any taxes and fees required by law or permitted by the Indenture. The Paying
Agent need not exchange or register the transfer of any Senior PIK Note or
portion of a Senior PIK Note selected for redemption or tendered pursuant to an
Offer. Also, it need not exchange or register the transfer of any Senior PIK
Notes for a period of 15 Business Days before a selection of Senior PIK Notes to
be redeemed or purchased or between a record date and the next succeeding
Interest Payment Date.
10. Persons Deemed Owners. The registered Holder of a Senior PIK Note may be
treated as its owner for all purposes.
11. Amendments and Waivers. Subject to certain exceptions, the Indenture or
the Senior PIK Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the then outstanding
Senior PIK Notes, and any existing Default (except a payment Default) may be
waived with the consent of the Holders of a majority in principal amount of the
then outstanding Senior PIK Notes. Without the consent of any Holder, the
Indenture or the Senior PIK Notes may be amended to: cure any ambiguity, defect
or inconsistency; provide for uncertificated Senior PIK Notes in addition to or
in place of certificated Senior PIK Notes; provide for the assumption of the
Company's obligations in the event of a merger or consolidation of the Company
in which the Company is not the surviving corporation or a sale of substantially
all of the Company's assets to such other corporation; comply with the
Securities and Exchange Commission's requirements to effect or maintain the
qualification of the Indenture under the Trust Indenture Act; provide for
additional Guarantees with respect to the Senior PIK Notes; or, make any change
that does not materially adversely affect any Holder's rights under the
Indenture.
12.Defaults and Remedies. Events of Default include: default for 30 days in
payment of interest on, or Liquidated Damages, if any, with respect to, the
Senior PIK Notes; default in payment when due of principal or premium, if any,
with respect to the Senior PIK Notes; failure by the Company for 45 days after
notice to it to comply with any of its other agreements or covenants in, or
provisions of, the Indenture or the Senior PIK Notes; certain defaults under and
acceleration prior to maturity of, or failure to pay at maturity, certain other
Indebtedness; certain final judgments that remain undischarged; and certain
events of bankruptcy or insolvency involving the Company or any Restricted
Subsidiary that is a Significant Subsidiary. If an Event of Default occurs and
is continuing, the Trustee or the Holders of at least 25% in principal amount of
the Senior PIK Notes may declare all the Senior PIK Notes to be immediately due
and payable in an amount equal to the principal of, premium, if any, and any
accrued and unpaid interest on, and Liquidated Damages, if any, with respect to
such Senior PIK Notes; provided, however, that in the case of an Event of
-------- -------
Default arising from certain events of
A-6
bankruptcy or insolvency, the principal of, premium, if any, and any accrued and
unpaid interest on, and Liquidated Damages, if any, with respect to the Senior
PIK Notes becomes due and payable immediately without further action or notice.
Subject to certain exceptions, Holders of a majority in principal amount of the
then outstanding Senior PIK Notes may direct the Trustee in its exercise of any
trust or power, provided that the Trustee will be under no obligation to
--------
exercise any of its rights or powers under the Indenture at the request of
Holders unless such Holders have offered to the Trustee security and indemnity
satisfactory to it. Holders may not enforce the Indenture or the Senior PIK
Notes except as provided in the Indenture. The Trustee may withhold from Holders
notice of any continuing default (except a payment Default) if it determines
that withholding notice is in their interests. The Company must furnish an
annual compliance certificate to the Trustee.
13. Trustee Dealings With The Company. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or any Affiliate, and may otherwise deal with the Company or any
Affiliate, as if it were not Trustee.
14. No Recourse Against Others. No officer, employee, director, stockholder
or Subsidiary of the Company shall have any liability for any Obligations of the
Company under the Senior PIK Notes or the Indenture, or for any claim based on,
in respect of, or by reason of, such Obligations or the creation of any such
Obligation, except, in the case of a Subsidiary, for an express guarantee or an
express creation of any Lien by such Subsidiary of the Company's Obligations
under the Senior PIK Notes. Each Holder by accepting a Senior PIK Note waives
and releases all such liability, and such waiver and release is part of the
consideration for the issuance of the Senior PIK Notes.
15. Successor Substituted. Upon the consolidation or merger by the Company
with or into another corporation, or upon the sale, lease, conveyance or other
disposition of all or substantially all of its assets to another corporation, in
accordance with the Indenture, the corporation surviving any such merger or
consolidation (if not the Company) or the corporation to which such assets were
sold or transferred to shall succeed to, and be substituted for, and may
exercise every right and power of the Company under the Indenture with the same
effect as if such surviving or other corporation had been named as the Company
in the Indenture.
16. Governing Law. This Senior PIK Note shall be governed by and construed
in accordance with the internal laws of the State of New York without regard to
the conflict of laws provisions thereof.
17. Authentication. This Senior PIK Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
18. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
19. CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee
on Uniform Senior PIK Note Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Senior PIK Notes and have directed the
Trustee to use CUSIP numbers in notices of redemption as a convenience to
Holders. No representation is made as to the accuracy of such numbers either as
printed on the Senior PIK Notes or as contained in any
A-7
notice of redemption and reliance may be placed only on the other identification
numbers printed on the Senior PIK Notes.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture, which has in it the text of this Senior PIK Note
in larger type. Request may be made to:
National Restaurant Enterprises Holdings, Inc.
0000 Xxxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
A-8
ASSIGNMENT FORM
To assign this Senior PIK Note, fill in the form below: (I) or (we) assign and
transfer this Senior PIK Note to:
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
as agent to transfer this Senior PIK Note on the books of the Company. The agent
may substitute another to act for him.
Date:___________________ Your Signature:___________________________
(Sign exactly as your name appears on the
face of this Senior PIK Note)
Signature Guarantee:
________________________
A-9
OPTION OF HOLDER TO ELECT PURCHASE
If you elect to have this Senior PIK Note purchased by the Company pursuant
to Section 4.13 of the Indenture, check the box: [_] /S/\B\
If you elect to have this Senior PIK Note purchased by the Company pursuant
to Section 4.14 of the Indenture, check the box: [_] /S/\B\
If you elect to have only part of this Senior PIK Note purchased by the
Company pursuant to Section 4.13 or 4.14 of the Indenture, state the amount
(multiples of $1000 only):
$_______________________
Date: ____________ Your Signature:_______________________________________
(Sign exactly as your name appears on
the other side of this Senior PIK Note)
Signature Guarantee:
________________________
A-10
SCHEDULE OF EXCHANGES OF DEFINITIVE SENIOR PIK NOTES/3/
The following exchanges of a part of this Global Senior PIK Note for
Definitive Senior PIK Notes have been made:
Amount of decrease in Amount of increase in Principal Amount of this Signature of
Principal Amount of Principal Amount of Global Senior PIK Note authorized officer of
this Global Senior PIK this Global Senior PIK following such decrease Trustee or Senior
---------------------- ----------------------
Date of Exchange Note Note (or increase) Note Custodian
---- ---- ------------- --------------
_________________________
/3/ This should be included only if the Senior PIK Note is issued in global
form.
A-11
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SENIOR PIK NOTES
,
--------------------------------
Re: 13% Series [A/B] Senior PIK Notes due 2008 of National Restaurants
Enterprises Holdings, Inc.
This Certificate relates to $__________ principal amount of Senior PIK Notes
held in * ___________ book-entry or * ___________ definitive form by __________
(the "Transferor")
----------
The Transferor*:
[_] has requested the Trustee by written order to deliver in exchange for
its beneficial interest in the Global Senior PIK Note held by the Depositary a
Senior PIK Note or Senior PIK Notes in definitive, registered form equal to its
beneficial interest in such Global Senior PIK Note (or the portion thereof
indicated above); or
[_] has requested the Trustee by written order to exchange or register the
transfer of a Senior PIK Note or Senior PIK Notes.
In connection with such request and in respect of each such Senior PIK
Note, the Transferor does hereby certify that the Transferor is familiar with
the Indenture relating to the above captioned Senior PIK Notes and that the
transfer of this Senior PIK Note does not require registration under the
Securities Act (as defined below) because:*
[_] /S/\B\ Such Senior PIK Note is being acquired for the Transferor"s own
account without transfer (in satisfaction of Section 2.06(a)(ii)(A) or Section
2.06(d)(i)(A) of the Indenture).
[_] /S/\B\ Such Senior PIK Note is being transferred to a "qualified
institutional buyer" (as defined in Rule 144A under the Securities Act of 1933,
as amended (the "Securities Act"), in reliance on Rule 144A.
--------------
[_] /S/\B\ Such Senior PIK Note is being transferred (i) in accordance
with Rule 144 under the Securities Act (and based on an opinion of counsel if
the Company so requests) or (ii) pursuant to an effective registration statement
under the Securities Act.
[_] /S/\B\ Such Senior PIK Note is being transferred to an accredited
investor within the meaning of Rule 501(a) under the Securities Act pursuant to
a private placement exemption from the registration requirements of the
Securities Act (and based on an opinion of counsel if the Company so requests
together with a certification in substantially the form of Exhibit C to the
Indenture).
____________________________
* Check applicable box.
B-1
[_] /S/\B\ Such Senior PIK Note is being transferred in reliance on and in
compliance with another exemption from the registration requirements of the
Securities Act (and based on an opinion of counsel if the Company so requests).
___________________________________________
[INSERT NAME OF TRANSFEROR]
By:
________________________________________
Name:
Title
Address:
B-2
TABLE OF CONTENTS
(continued)
Page
EXHIBIT C
FORM OF CERTIFICATE TO BE DELIVERED BY
ACCREDITED INVESTORS
,
--------------------------------
State Street Bank and Trust Company, as Registrar
Attention: Corporate Trust Department
Ladies and Gentlemen:
In connection with our proposed purchase of certain 13% Series [A/B] Senior
PIK Notes due 2008 (the "Senior PIK Notes") of National Restaurant Enterprises
----------------
Holdings, Inc., a Delaware corporation (the "Company"), we represent that:
-------
(i) we are an "accredited investor" within the meaning of
Rule 501(a) under the Securities Act (an "Accredited Investor");
-------------------
(ii) any purchase of Senior PIK Notes will be for our own
account or for the account of one or more other Accredited Investors as to
which we exercise sole investment discretion;
(iii) we have such knowledge and experience in financial and
business matters that we are capable of evaluating the merits and risks of
purchasing Senior PIK Notes and we and any accounts for which we are acting
are able to bear the economic risks of our or their investment;
(iv) we are not acquiring Senior PIK Notes with a view to
any distribution thereof in a transaction that would violate the Securities
Act or the securities laws of any State of the United States or any other
applicable jurisdiction; provided that the disposition of our property and
--------
the property of any accounts for which we are acting as fiduciary shall
remain at all times within our control; and
(v) we acknowledge that we have had access to such
financial and other information, and have been afforded the opportunity to
ask such questions of representatives of the Company and receive answers
thereto, as we deem necessary in connection with our decision to purchase
Senior PIK Notes.
We understand that the Senior PIK Notes have not been registered under the
Securities Act, and we agree, on our own behalf and on behalf of each account
for which we acquire any Senior PIK Notes, that such Senior PIK Notes my be
offered, resold, pledged or otherwise transferred only (i) to a person whom we
reasonably believe to be a qualified institutional buyer (as defined in Rule
144A under the Securities Act) in a transaction meeting the requirements of Rule
144A, in a transaction meeting the requirements of Rule 144 under the Securities
Act, (ii) to the Company or (iii) pursuant to an effective registration
statement, and, in each case, in
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TABLE OF CONTENTS
(continued)
Page
accordance with any applicable securities laws of any State of the United States
or any other applicable jurisdiction. We understand that the registrar will not
be required to accept for registration of transfer any Senior PIK Notes, except
upon presentation of evidence satisfactory to the Company that the foregoing
restrictions on transfer have been complied with. We further understand that the
Senior PIK Notes purchased by us will be in the form of definitive physical
certificates and that such certificates will bear a legend reflecting the
substance of this paragraph. We further agree to provide to any person acquiring
any of the Senior PIK Notes from us a notice advising such person that resales
of the Senior PIK Notes are restricted as stated herein.
We acknowledge that you, the Company and others will rely upon our
confirmations, acknowledgements and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS
THEREOF.
Very truly yours,
_____________________________________________
[Name of Transferor]
By: ________________________________________
Name:
Title:
Address:
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