Exhibit 4.1
EXECUTION COPY
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XXXXXX RESPIRATORY CARE INC.
9 1/8% Senior Subordinated Notes due 2008
___________________________________________
INDENTURE
Dated as of April 7, 1998
__________________________________________
UNITED STATES TRUST COMPANY OF NEW YORK,
Trustee
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TABLE OF CONTENTS
Page
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ARTICLE 1
Definitions and Incorporation by Reference
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SECTION 1.01. Definitions......................................... 1
SECTION 1.02. Other Definitions................................... 29
SECTION 1.03. Incorporation by Reference of Trust Indenture Act... 30
SECTION 1.04. Rules of Construction............................... 30
ARTICLE 2
The Securities
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SECTION 2.01. Amount of Securities; Issuable in Series............ 31
SECTION 2.02. Form and Dating..................................... 31
SECTION 2.03. Execution and Authentication........................ 32
SECTION 2.04. Registrar and Paying Agent.......................... 33
SECTION 2.05. Paying Agent To Hold Money in Trust................. 34
SECTION 2.06. Securityholder Lists................................ 34
SECTION 2.07. Replacement Securities.............................. 34
SECTION 2.08. Outstanding Securities.............................. 35
SECTION 2.09. Temporary Securities................................ 35
SECTION 2.10. Cancelation......................................... 36
SECTION 2.11. Defaulted Interest.................................. 36
SECTION 2.12. CUSIP Numbers....................................... 36
ARTICLE 3
Redemption
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SECTION 3.01. Notices to Trustee.................................. 37
SECTION 3.02. Selection of Securities To Be Redeemed.............. 37
SECTION 3.03. Notice of Redemption................................ 37
SECTION 3.04. Effect of Notice of Redemption...................... 38
SECTION 3.05. Deposit of Redemption Price......................... 39
SECTION 3.06. Securities Redeemed in Part......................... 40
Contents, p.2
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ARTICLE 4
Covenants
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SECTION 4.01. Payment of Securities............................... 40
SECTION 4.02. SEC Reports......................................... 40
SECTION 4.03. Limitation on Company and Subsidiary Guarantor
Debt............................................. 41
SECTION 4.04. Limitation on Non-Guarantor Subsidiary Debt......... 41
SECTION 4.05. Limitation on Restricted Payments................... 41
SECTION 4.06. Limitation on Restrictions on Distributions from
Restricted Subsidiaries......................... 45
SECTION 4.07. Limitation on Asset Sales........................... 46
SECTION 4.08. Limitation on Transactions with Affiliates.......... 50
SECTION 4.09. Limitation on Issuance or Sale of Capital Stock of
Restricted Subsidiaries......................... 51
SECTION 4.10. Repurchase at the Option of Holders Upon a Change
of Control...................................... 51
SECTION 4.11. Limitation on Liens................................. 54
SECTION 4.12. Compliance Certificate.............................. 54
SECTION 4.13. Further Instruments and Acts........................ 54
SECTION 4.14. Limitation on Layered Debt.......................... 54
SECTION 4.15. Designation of Restricted and Unrestricted
Subsidiaries.................................... 55
SECTION 4.16. Limitation on Holding's Business.................... 56
ARTICLE 5
Successor Company
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SECTION 5.01. When Company May Merge or Transfer Assets........... 56
ARTICLE 6
Defaults and Remedies
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SECTION 6.01. Events of Default................................... 57
SECTION 6.02. Acceleration........................................ 60
SECTION 6.03. Other Remedies...................................... 60
SECTION 6.04. Waiver of Defaults.................................. 60
SECTION 6.05. Control by Majority................................. 61
SECTION 6.06. Limitation on Suits................................. 61
Contents, p.3
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SECTION 6.07. Rights of Holders To Receive Payment................ 62
SECTION 6.08. Collection Suit by Trustee.......................... 62
SECTION 6.09. Trustee May File Proofs of Claim.................... 62
SECTION 6.10. Priorities.......................................... 62
SECTION 6.11. Undertaking for Costs............................... 63
SECTION 6.12. Waiver of Stay or Extension Laws.................... 63
ARTICLE 7
Trustee
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SECTION 7.01. Duties of Trustee................................... 64
SECTION 7.02. Rights of Trustee................................... 65
SECTION 7.03. Individual Rights of Trustee........................ 66
SECTION 7.04. Trustee's Disclaimer................................ 66
SECTION 7.05. Notice of Defaults.................................. 66
SECTION 7.06. Reports by Trustee to Holders....................... 66
SECTION 7.07. Compensation and Indemnity.......................... 67
SECTION 7.08. Replacement of Trustee.............................. 68
SECTION 7.09. Successor Trustee by Merger......................... 69
SECTION 7.10. Eligibility; Disqualification....................... 69
SECTION 7.11. Preferential Collection of Claims Against Company... 70
ARTICLE 8
Discharge of Indenture; Defeasance
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SECTION 8.01. Discharge of Liability on Securities; Defeasance.... 70
SECTION 8.02. Conditions to Defeasance............................ 71
SECTION 8.03. Application of Trust Money.......................... 73
SECTION 8.04. Repayment to Company................................ 73
SECTION 8.05. Indemnity for Government Obligations................ 73
SECTION 8.06. Reinstatement....................................... 73
ARTICLE 9
Amendments
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SECTION 9.01. Without Consent of Holders.......................... 74
SECTION 9.02. With Consent of Holders............................. 75
SECTION 9.03. Compliance with Trust Indenture Act................. 76
SECTION 9.04. Revocation and Effect of Consents
Contents, p.4
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and Waivers....................................... 76
SECTION 9.05. Notation on or Exchange of Securities............... 77
SECTION 9.06. Trustee To Sign Amendments.......................... 77
SECTION 9.07. Payment for Consent................................. 78
ARTICLE 10
Subordination
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SECTION 10.01. Agreement To Subordinate........................... 78
SECTION 10.02. Liquidation, Dissolution, Bankruptcy............... 78
SECTION 10.03. Default on Senior Debt............................. 79
SECTION 10.04. Acceleration of Payment of Securities.............. 80
SECTION 10.05. When Distribution Must Be Paid Over................ 80
SECTION 10.06. Subrogation........................................ 80
SECTION 10.07. Relative Rights.................................... 80
SECTION 10.08. Subordination May Not Be Impaired by Company....... 80
SECTION 10.09. Rights of Trustee and Paying Agent................. 81
SECTION 10.10. Distribution or Notice to Representative........... 81
SECTION 10.11. Article 10 Not To Prevent Events of Default or Limit
Right To Accelerate............................. 81
SECTION 10.12. Trust Moneys Not Subordinated...................... 81
SECTION 10.13. Trustee Entitled To Rely........................... 82
SECTION 10.14. Trustee To Effectuate Subordination................ 82
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior Debt... 82
SECTION 10.16. Reliance by Holders of Senior Debt on Subordination
Provisions...................................... 83
ARTICLE 11
Subsidiary Guaranties
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SECTION 11.01. Guaranties......................................... 83
SECTION 11.02. Contribution....................................... 85
SECTION 11.03. Successors and Assigns............................. 86
SECTION 11.04. No Waiver.......................................... 86
SECTION 11.05. Modification....................................... 86
SECTION 11.06. Execution of Supplemental
Contents, p.5
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Indenture for Future Subsidiary Guarantors......... 86
ARTICLE 12
Subordination of Subsidiary Guaranties
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SECTION 12.01. Agreement To Subordinate........................... 87
SECTION 12.02. Liquidation, Dissolution, Bankruptcy............... 87
SECTION 12.03. Default on Senior Debt of Subsidiary Guarantor..... 88
SECTION 12.04. Demand for Payment................................. 88
SECTION 12.05. When Distribution Must Be Paid Over................ 88
SECTION 12.06. Subrogation........................................ 89
SECTION 12.07. Relative Rights.................................... 89
SECTION 12.08. Subordination May Not Be Impaired by Subsidiary
Guarantor....................................... 89
SECTION 12.09. Rights of Trustee and Paying Agent................. 89
SECTION 12.10. Distribution or Notice to Representative........... 90
SECTION 12.11. Article 12 Not To Prevent Defaults Under a Subsidiary
Guaranty or Limit Right To Demand Payment....... 90
SECTION 12.12. Trustee Entitled To Rely........................... 90
SECTION 12.13. Trustee To Effectuate Subordination................ 91
SECTION 12.14. Trustee Not Fiduciary for Holders of Senior Debt of
Subsidiary Guarantor........................... 91
SECTION 12.15. Reliance by Holders of Senior Debt on Subordination
Provisions..................................... 91
ARTICLE 13
Miscellaneous
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SECTION 13.01. Trust Indenture Act Controls....................... 92
SECTION 13.02. Notices............................................ 92
SECTION 13.03. Communication by Holders with Other Holders........ 93
SECTION 13.04. Certificate and Opinion as to Conditions Precedent. 93
SECTION 13.05. Statements Required in Certificate or Opinion...... 94
SECTION 13.06. When Securities Disregarded; Acts
Contents, p.6
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of Holder...................................... 95
SECTION 13.07. Rules by Trustee, Paying Agent and Registrar....... 95
SECTION 13.08. Legal Holidays..................................... 95
SECTION 13.09. Governing Law...................................... 95
SECTION 13.10. No Recourse Against Others......................... 95
SECTION 13.11. Successors......................................... 96
SECTION 13.12. Multiple Originals................................. 96
SECTION 13.13. Table of Contents; Headings........................ 96
Appendix A Provisions Relating to Initial Securities and Exchange
Securities
Exhibit 1 to
Appendix A Form of Initial Security
Exhibit A Form of Exchange Security
Exhibit B Form of Supplemental Indenture
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
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310(a)(1).................................... 7.10
(a)(2)....................................... 7.10
(a)(3)....................................... N.A.
(a)(4)....................................... N.A.
(b).......................................... 7.08; 7.10
(c).......................................... N.A.
311(a)....................................... 7.11
(b).......................................... 7.11
(c).......................................... N.A.
312(a)....................................... 2.06
(b).......................................... 13.03
(c).......................................... 13.03
313(a)....................................... 7.06
(b)(1)....................................... N.A.
(b)(2)....................................... 7.06
(c).......................................... 13.02
(d).......................................... 7.06
314(a)....................................... 4.02; 4.12; 13.02
(b).......................................... N.A.
(c)(1)....................................... 13.04
(c)(2)....................................... 13.04
(c)(3)....................................... N.A.
(d).......................................... N.A.
(e).......................................... 13.05
(f).......................................... 4.12
315(a)....................................... 7.01
(b).......................................... 7.05; 13.02
(c).......................................... 7.01
(d).......................................... 7.01
(e).......................................... 6.11
316(a)
(last
sentence).................................... 13.06
(a)(1)(A).................................... 6.05
(a)(1)(B).................................... 6.04
(a)(2)....................................... N.A.
(b).......................................... 6.07
317(a)(1).................................... 6.08
(a)(2)....................................... 6.09
(b).......................................... 2.05
318(a)....................................... 13.01
N.A. Means Not Applicable.
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Note: This Cross-Reference Table shall not, for any purposes, be deemed to be
part of this Indenture.
INDENTURE dated as of April 7, 1998, among XXXXXX
RESPIRATORY CARE INC., a California corporation (the "Company"),
RIVER HOLDING CORP., a Delaware corporation ("Holding") and
UNITED STATES TRUST COMPANY OF NEW YORK, as Trustee (the
"Trustee").
Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders of the Company's 9 1/8% Senior
Subordinated Notes due 2008 (the "Initial Securities") and, if and when issued
pursuant to a registered or private exchange for the Initial Securities, the
Company's 9 1/8% Senior Subordinated Notes due 2008 (the "Exchange Securities"
and, together with the Initial Securities, the "Securities"):
ARTICLE 1
Definitions and Incorporation by Reference
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SECTION 1.01. Definitions.
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"Additional Assets" means (a) any Property (other than cash, cash
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equivalents and securities) to be owned by the Company or any Restricted
Subsidiary and used in a Related Business; or (b) Capital Stock of a Person that
becomes a Restricted Subsidiary as a result of the acquisition of such Capital
Stock by the Company or another Restricted Subsidiary from any Person other than
an Affiliate of the Company; provided, however, that, in the case of clause (b),
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such Restricted Subsidiary is primarily engaged in a Related Business.
"Affiliate" of any specified Person means (a) any other Person
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directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person or (b) any other Person who is a
director or officer of (i) such specified Person, (ii) any Subsidiary of such
specified Person or (iii) any Person described in clause (a) above. For the
purposes of this definition, "control" when used with respect to any Person
means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing. For purposes of Section 4.07, Section 4.08 and
the definition of "Additional Assets" only, "Affiliate" shall also mean any
beneficial owner of shares representing 5% or more of the total voting power of
the
2
Voting Stock (on a fully diluted basis) of the Company or of rights or warrants
to purchase such Voting Stock (whether or not currently exercisable) and any
Person who would be an Affiliate of any such beneficial owner pursuant to the
first sentence hereof.
"Agent Member" means any member of, or participant in, the Depository.
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"Applicable Procedures" means, with respect to any transfer or
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transaction involving a Temporary Regulation S Global Note or beneficial
interest therein, the rules and procedures of the Depository, Euroclear and
Cedel for such Global Note, in each case to the extent applicable to such
transaction and as in effect from time to time.
"Asset Sale" means any sale, lease, transfer, issuance or other
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disposition (or series of related sales, leases, transfers, issuances or
dispositions) by the Company or any Restricted Subsidiary, including any
disposition by means of a merger, consolidation or similar transaction (each
referred to for the purposes of this definition as a "disposition"), of (a) any
shares of Capital Stock of a Restricted Subsidiary (other than directors'
qualifying shares) or (b) any other assets of the Company or any Restricted
Subsidiary outside of the ordinary course of business of the Company or such
Restricted Subsidiary other than, in the case of clauses (a) and (b) above, (i)
any disposition by a Restricted Subsidiary to the Company or by the Company or a
Restricted Subsidiary to a Wholly Owned Subsidiary, (ii) for purposes of Section
4.07 only, any disposition that constitutes a Permitted Investment or Restricted
Payment permitted by Section 4.05, (iii) any disposition effected in compliance
with Section 5.01(a), (iv) any Sale and Leaseback Transaction completed within
180 days following the original acquisition of the subject assets where such
Sale and Leaseback Transaction represents the intended financing of Property
acquired after the Issue Date and (v) any disposition or series of related
dispositions of assets having a Fair Market Value and sale price of less than
$500,000.
"Attributable Debt" in respect of a Sale and Leaseback Transaction
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means, at the time of determination, the present value (discounted at the rate
of interest implicit in such transaction, determined in accordance with GAAP) of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in such Sale and Leaseback Transaction (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended).
3
"Average Life" means, as of any date of determination, with respect
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to any Debt or Preferred Stock, the quotient obtained by dividing (a) the sum of
the product of the numbers of years (rounded to the nearest one-twelfth of one
year) from the date of determination to the dates of each successive scheduled
principal payment of such Debt or redemption or similar payment with respect to
such Preferred Stock multiplied by the amount of such payment by (b) the sum of
all such payments.
"Board of Directors" means the Board of Directors of the Company or
------------------
any committee thereof duly authorized to act on behalf of such Board.
"Business Day" means each day which is not a Legal Holiday.
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"Capital Lease Obligations" means any obligation under a lease that is
-------------------------
required to be capitalized for financial reporting purposes in accordance with
GAAP; and the amount of Debt represented by such obligation shall be the
capitalized amount of such obligations determined in accordance with GAAP; and
the Stated Maturity thereof shall be the date of the last payment of rent or any
other amount due under such lease prior to the first date upon which such lease
may be terminated by the lessee without payment of a penalty. For purposes of
Section 4.11, a Capital Lease Obligation shall be deemed secured by a Lien on
the Property being leased.
"Capital Stock" means, with respect to any Person, any shares or other
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equivalents (however designated) of corporate stock, partnership interests or
any other participations, rights, warrants, options or other interests in the
nature of an equity interest in such Person, including Preferred Stock, but
excluding any debt security convertible or exchangeable into such equity
interest.
"Capital Stock Sale Proceeds" means the aggregate cash proceeds
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received by the Company from the issuance or sale (other than to a Subsidiary of
the Company or an employee stock ownership plan or trust established by the
Company or any of its Subsidiaries for the benefit of their employees) by the
Company of any class of its Capital Stock (other than Disqualified Stock) after
the Issue Date, net of attorneys' fees, accountants' fees, underwriters' or
placement agents' fees, discounts or commissions and brokerage, consultant and
other fees actually incurred in connection with such issuance or sale and net of
taxes paid or payable as a result thereof.
4
"Change of Control" means the occurrence of any of the following
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events:
(a) prior to the first Public Equity Offering, the Permitted Holders
cease to be the "beneficial owners" (as defined in Rule 13d-3 under the
Exchange Act, except that a Person will be deemed to have "beneficial
ownership" of all shares that any such Person has the right to acquire,
whether such right is exercisable immediately or only after the passage of
time), directly or indirectly, of a majority of the voting power of the
Voting Stock of the Company, whether as a result of the issuance of
securities of the Company, any merger, consolidation, liquidation or
dissolution of the Company, any direct or indirect transfer of securities
by the Permitted Holders or otherwise (for purposes of this clause (a), the
Permitted Holders will be deemed to beneficially own any Voting Stock of a
corporation (the "specified corporation") held by any other corporation
(the "parent corporation") so long as the Permitted Holders beneficially
own, directly or indirectly, in the aggregate a majority of the voting
power of the Voting Stock of such parent corporation); or
(b) after the first Public Equity Offering, any "Person" or "group"
(as such terms are used in Sections 13(d)(3) and 14(d)(2) of the Exchange
Act or any successor provisions to either of the foregoing), including any
group acting for the purpose of acquiring, holding, voting or disposing of
securities within the meaning of Rule 13d-5(b)(1) under the Exchange Act,
other than any one or more of the Permitted Holders, becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act, except
that a Person will be deemed to have "beneficial ownership" of all shares
that any such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of 35% or more of the voting power of the Voting Stock of the
Company; provided, however, that the Permitted Holders are the "beneficial
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owners" (as defined in Rule 13d-3 under the Exchange Act, except that a
Person will be deemed to have "beneficial ownership" of all shares that any
such Person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, in
the aggregate of a lesser percentage of the total voting power of all
classes of the Voting Stock of the Company than such other Person or group
(for purposes of this clause (b),
5
such Person or group shall be deemed to beneficially own any Voting Stock
of a specified corporation held by a parent corporation so long as such
Person or group beneficially owns, directly or indirectly, in the aggregate
a majority of the voting power of the Voting Stock of such parent
corporation); or
(c) the sale, transfer, assignment, lease, conveyance or other
disposition, directly or indirectly, of all or substantially all the assets
of the Company and the Restricted Subsidiaries, considered as a whole
(other than a disposition of such assets as an entirety or virtually as an
entirety to a Wholly Owned Subsidiary or one or more Permitted Holders)
shall have occurred, or the Company merges, consolidates or amalgamates
with or into any other Person (other than one or more Permitted Holders) or
any other Person (other than one or more Permitted Holders) merges,
consolidates or amalgamates with or into the Company, in any such event
pursuant to a transaction in which the outstanding Voting Stock of the
Company is reclassified into or exchanged for cash, securities or other
Property, other than any such transaction where (i) the outstanding Voting
Stock of the Company is reclassified into or exchanged for Voting Stock of
the surviving corporation and (ii) the holders of the Voting Stock of the
Company immediately prior to such transaction own, directly or indirectly,
not less than a majority of the Voting Stock of the surviving corporation
immediately after such transaction and in substantially the same proportion
as before the transaction; or
(d) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors (together with
any new directors whose election or appointment by such Board or whose
nomination for election by the shareholders of the Company was approved by
a vote of 66 2/3% of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason to constitute
a majority of the members of the Board of Directors then in office; or
(e) the shareholders of the Company shall have approved any plan of
liquidation or dissolution of the Company.
6
"Code" means the Internal Revenue Code of 1986, as amended.
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"Consolidated Interest Coverage Ratio" means, as of any date of
------------------------------------
determination, the ratio of (a) the aggregate amount of EBITDA for the most
recent four consecutive fiscal quarters ending at least 45 days prior to such
determination date to (b) Consolidated Interest Expense for such four fiscal
quarters; provided, however, that (i) if the Company or any Restricted
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Subsidiary has Incurred any Debt since the beginning of such period that remains
outstanding or if the transaction giving rise to the need to calculate the
Consolidated Interest Coverage Ratio is an Incurrence of Debt, or both,
Consolidated Interest Expense for such period shall be calculated after giving
effect on a pro forma basis to such Debt as if such Debt had been Incurred on
the first day of such period and the discharge of any other Debt repaid,
repurchased, defeased or otherwise discharged with the proceeds of such new Debt
as if such discharge had occurred on the first day of such period, (ii) if since
the beginning of such period the Company or any Restricted Subsidiary shall have
repaid, repurchased, legally defeased or otherwise discharged any Debt with
Capital Stock Sale Proceeds, Consolidated Interest Expense for such period shall
be calculated after giving effect on a pro forma basis to such discharge as if
such discharge had occurred on the first day of such period, (iii) if since the
beginning of such period the Company or any Restricted Subsidiary shall have
made any Asset Sale or if the transaction giving rise to the need to calculate
the Consolidated Interest Coverage Ratio is an Asset Sale, or both, EBITDA for
such period shall be reduced by an amount equal to the EBITDA (if positive)
directly attributable to the Property which is the subject of such Asset Sale
for such period, or increased by an amount equal to the EBITDA (if negative)
directly attributable thereto for such period, in either case as if such Asset
Sale had occurred on the first day of such period and Consolidated Interest
Expense for such period shall be reduced by an amount equal to the Consolidated
Interest Expense directly attributable to any Debt of the Company or any
Restricted Subsidiary repaid, repurchased, defeased or otherwise discharged with
respect to the Company and its continuing Restricted Subsidiaries in connection
with such Asset Sale, as if such Asset Sale had occurred on the first day of
such period (or, if the Capital Stock of any Restricted Subsidiary is sold, by
an amount equal to the Consolidated Interest Expense for such period directly
attributable to the Debt of such Restricted Subsidiary to the extent the Company
and its continuing Restricted Subsidiaries are no longer liable for such Debt
after such sale), (iv) if since the beginning of such period the
7
Company or any Restricted Subsidiary (by merger or otherwise) shall have made an
Investment in any Restricted Subsidiary (or any Person which becomes a
Restricted Subsidiary) or an acquisition of Property, including any acquisition
of Property occurring in connection with a transaction causing a calculation to
be made hereunder, which constitutes all or substantially all of an operating
unit of a business, EBITDA and Consolidated Interest Expense for such period
shall be calculated after giving pro forma effect thereto (including the
Incurrence of any Debt) as if such Investment or acquisition occurred on the
first day of such period and (v) if since the beginning of such period any
Person (that subsequently became a Restricted Subsidiary or was merged with or
into the Company or any Restricted Subsidiary since the beginning of such
period) shall have made any Asset Sale, Investment or acquisition of Property
that would have required an adjustment pursuant to clause (iii) or (iv) above if
made by the Company or a Restricted Subsidiary during such period, EBITDA and
Consolidated Interest Expense for such period shall be calculated after giving
pro forma effect thereto as if such Asset Sale, Investment or acquisition
occurred on the first day of such period. For purposes of this definition, pro
forma calculations shall be determined in good faith by a responsible financial
or accounting Officer of the Company and as further contemplated by the
definition of the term "pro forma". If any Debt bears a floating rate of
interest and is being given pro forma effect, the interest expense on such Debt
shall be calculated as if the rate in effect on the date of determination had
been the applicable rate for the entire period (taking into account any Interest
Rate Agreement applicable to such Debt if such Interest Rate Agreement has a
remaining term in excess of 12 months).
"Consolidated Interest Expense" means, for any period, the total
-----------------------------
interest expense of the Company and its consolidated Restricted Subsidiaries,
plus, to the extent not included in such total interest expense, and to the
extent Incurred by the Company or its Restricted Subsidiaries, (a) interest
expense attributable to capital leases, (b) amortization of debt discount and
debt issuance cost, including commitment fees, other than with respect to Debt
Incurred in connection with the Recapitalization, (c) capitalized interest, (d)
non-cash interest expenses, (e) commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance
financing, (f) net costs associated with Hedging Obligations (including
amortization of fees), (g) Disqualified Dividends other than Disqualified
Dividends paid with shares of Capital Stock of the Company which is not
Disqualified Stock, (h) Preferred Stock dividends in respect of all
8
Preferred Stock of Restricted Subsidiaries held by Persons other than the
Company or a Wholly Owned Subsidiary, (i) interest Incurred in connection with
Investments in discontinued operations, (j) interest accruing on any Debt of any
other Person to the extent such Debt is Guaranteed by the Company or any
Restricted Subsidiary and (k) the cash contributions to any employee stock
ownership plan or similar trust to the extent such contributions are used by
such plan or trust to pay interest or fees to any Person (other than the
Company) in connection with Debt Incurred by such plan or trust.
"Consolidated Net Income" means, for any period, the net income (loss)
-----------------------
of the Company and its consolidated Subsidiaries; provided, however, that there
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shall not be included in such Consolidated Net Income (a) any net income (loss)
of any Person (other than the Company) if such Person is not a Restricted
Subsidiary, except that (i) subject to the exclusion contained in clause (d)
below, the Company's equity in the net income of any such Person for such period
shall be included in such Consolidated Net Income up to the aggregate amount of
cash distributed by such Person during such period to the Company or a
Restricted Subsidiary as a dividend or other distribution (subject, in the case
of a dividend or other distribution to a Restricted Subsidiary, to the
limitations contained in clause (c) below) and (ii) the Company's equity in a
net loss of any such Person other than an Unrestricted Subsidiary for such
period shall be included in determining such Consolidated Net Income, (b) for
the purposes of Section 4.05 only, any net income (loss) of any Person acquired
by the Company or any of its consolidated Subsidiaries in a pooling of interests
transaction for any period prior to the date of such acquisition, (c) any net
income (but not loss) of any Restricted Subsidiary if such Restricted Subsidiary
is subject to restrictions, directly or indirectly, on the payment of dividends
or the making of distributions, directly or indirectly, to the Company, except
that subject to the exclusion contained in clause (d) below, the Company's
equity in the net income of any such Restricted Subsidiary for such period shall
be included in such Consolidated Net Income up to the aggregate amount of cash
distributed by such Restricted Subsidiary during such period to the Company or
another Restricted Subsidiary as a dividend or other distribution (subject, in
the case of a dividend or other distribution to another Restricted Subsidiary,
to the limitation contained in this clause), (d) any gain (or, for purposes of
Section 4.03 and Section 5.01 only, loss) realized upon the sale or other
disposition of any Property of the Company or any of its consolidated
Subsidiaries (including pursuant to any Sale
9
and Leaseback Transaction) which is not sold or otherwise disposed of in the
ordinary course of business, provided, that any tax benefit or tax liability
--------
resulting therefrom shall be excluded in such Consolidated Net Income, (e) any
extraordinary gain or loss, provided, that any tax benefit or tax liability
--------
resulting therefrom shall be excluded in such Consolidated Net Income, (f) the
cumulative effect of a change in accounting principles and (g) (i) any non-cash
compensation expense realized for grants of performance shares, stock options or
other stock awards to officers, directors and employees of the Company or any
Restricted Subsidiary or (ii) compensation expense realized with respect to
periods prior to the Issue Date in respect of payments under the Company's 1994
Amended and Restated Equity Participation Plan or compensation expense, to the
extent accrued in 1998, related to contingent payments to existing managers of
the Company pursuant to the Merger Agreement in an aggregate amount not in
excess of $2.4 million. Notwithstanding the foregoing, for the purposes of
Section 4.05 only, there shall be excluded from Consolidated Net Income any
dividends, repayments of loans or advances or other transfers of assets from
Unrestricted Subsidiaries to the Company or a Restricted Subsidiary to the
extent such dividends, repayments or transfers increase the amount of Restricted
Payments permitted under such Section pursuant to clause (a)(iii)(D) thereof.
"Credit Facility" means, with respect to the Company or any Restricted
---------------
Subsidiary, one or more debt or commercial paper facilities with banks or other
institutional lenders (including the New Credit Facility) providing for
revolving credit loans, term loans, receivables or inventory financing
(including through the sale of receivables or inventory to such lenders or to
special purpose, bankruptcy remote entities formed to borrow from such lenders
against such receivables or inventory) or trade letters of credit, in each case
together with any amendments, supplements, modifications (including by any
extension of the maturity thereof), refinancings or replacements thereof by a
lender or syndicate of lenders in one or more successive transactions (including
any such transaction that changes the amount available thereunder, replaces such
agreement or document, or provides for other agents or lenders).
"Currency Exchange Protection Agreement" means, in respect of a
--------------------------------------
Person, any foreign exchange contract, currency swap agreement, currency option
or other similar agreement or arrangement designed to protect such Person
against fluctuations in currency exchange rates.
10
"Debt" means, with respect to any Person on any date of determination
----
(without duplication), (a) the principal of and premium (if any) in respect of
(i) debt of such Person for money borrowed and (ii) debt evidenced by notes,
debentures, bonds or other similar instruments for the payment of which such
Person is responsible or liable; (b) all Capital Lease Obligations of such
Person and all Attributable Debt in respect of Sale and Leaseback Transactions
entered into by such Person; (c) all obligations of such Person issued or
assumed as the deferred purchase price of Property, all conditional sale
obligations of such Person and all obligations of such Person under any title
retention agreement (but excluding trade accounts payable arising in the
ordinary course of business); (d) all obligations of such Person for the
reimbursement of any obligor on any letter of credit, banker's acceptance or
similar credit transaction (other than obligations with respect to letters of
credit securing obligations (other than obligations described in (a) through (c)
above) entered into in the ordinary course of business of such Person to the
extent such letters of credit are not drawn upon or, if and to the extent drawn
upon, such drawing is reimbursed no later than the third Business Day following
receipt by such Person of a demand for reimbursement following payment on the
letter of credit); (e) the amount of all obligations of such Person with respect
to the redemption, repayment or other repurchase of any Disqualified Stock or,
with respect to any Subsidiary of such Person, any Preferred Stock (but
excluding, in each case, any accrued dividends); (f) all obligations of the type
referred to in clauses (a) through (e) of other Persons and all dividends of
other Persons for the payment of which, in either case, such Person is
responsible or liable, directly or indirectly, as obligor, guarantor or
otherwise, including by means of any Guarantee; (g) all obligations of the type
referred to in clauses (a) through (f) of other Persons secured by any Lien on
any Property of such Person (whether or not such obligation is assumed by such
Person), the amount of such obligation being deemed to be the lesser of the
value of such Property or the amount of the obligation so secured; and (h) to
the extent not otherwise included in this definition, Hedging Obliga tions of
such Person. The amount of Debt of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations at such date; provided
--------
that the amount outstanding at any time of any Debt issued with original issue
discount is the face amount of such Debt less the remaining unamortized portion
of the original issue discount of such Debt at such time as determined in
accordance with GAAP.
11
"Default" means any event which is, or after notice or passage of time
-------
or both would be, an Event of Default.
"Designated Senior Debt" means any Senior Debt which has, at the time
----------------------
of determination, an aggregate principal amount outstanding of at least $10.0
million (including the amount of all undrawn commitments and matured and
contingent reimbursement obligations pursuant to letters of credit thereunder)
that is specifically designated in the instrument evidencing such Senior Debt
and is designated in a notice delivered by the Company to the holders or a
Representative of the holders of such Senior Debt and in an Officers'
Certificate delivered to the Trustee as "Designated Senior Debt" of the Company
for purposes of this Indenture; provided that the New Credit Facility shall be
--------
deemed to be Designated Senior Debt under this Indenture.
"Disqualified Dividends" means, for any dividend with respect to
----------------------
Disqualified Stock, the quotient of the dividend divided by the difference
between one and the maximum statutory federal income tax rate (expressed as a
decimal number between 1 and 0) then applicable to the issuer of such
Disqualified Stock.
"Disqualified Stock" means, with respect to any Person, Redeemable
------------------
Stock of such Person as to which (i) the maturity, (ii) mandatory redemption or
(iii) redemption, repurchase, conversion or exchange at the option of the holder
thereof occurs, or may occur, on or prior to the first anniversary of the Stated
Maturity of the Securities; provided, however, that Redeemable Stock of such
-------- -------
Person that would not otherwise be characterized as Disqualified Stock under
this definition shall not constitute Disqualified Stock (a) if such Redeemable
Stock is convertible or exchangeable into Debt or Disqualified Stock solely at
the option of the issuer thereof or (b) solely as a result of provisions thereof
giving holders thereof the right to require such Person to repurchase or redeem
such Redeemable Stock upon the occurrence of a "change of control" occurring
prior to the first anniversary of the Stated Maturity of the Securities, if (x)
such repurchase obligation may not be triggered in respect of such Redeemable
Stock unless a corresponding obligation also arises with respect to the
Securities and (y) no such repurchase or redemption is permitted to be
consummated unless and until such Person shall have satisfied all repurchase or
redemption obligations with respect to any required purchase offer made with
respect to the Securities.
12
"Domestic Restricted Subsidiary" means any Restricted Subsidiary other
------------------------------
than (a) a Foreign Restricted Subsidiary or (b) a Subsidiary of a Foreign
Restricted Subsidiary.
"EBITDA" means, for any period, an amount equal to, for the Company
------
and its consolidated Restricted Subsidiaries, (a) the sum of Consolidated Net
Income for such period, plus the following to the extent reducing Consolidated
Net Income for such period: (i) the provision for taxes based on income or
profits or utilized in computing net loss, (ii) Consolidated Interest Expense,
(iii) depreciation, (iv) amortization expense and (v) any other non-cash items
(other than any such non-cash item to the extent that it represents an accrual
of or reserve for cash expenditures in any future period), minus (b) all non-
cash items increasing Consolidated Net Income for such period (other than any
such non-cash item to the extent that it will result in the receipt of cash
payments in any future period). Notwithstanding the foregoing, the provision
for taxes based on the income or profits of, and the depreciation and
amortization of, a Restricted Subsidiary shall be added to Consolidated Net
Income to compute EBITDA only to the extent (and in the same proportion) that
the net income of such Restricted Subsidiary was included in calculating
Consolidated Net Income and only if a corresponding amount would be permitted at
the date of determination to be dividended to the Company by such Restricted
Subsidiary without prior approval (that has not been obtained), pursuant to the
terms of its charter and all agreements, instruments, judgments, decrees,
orders, statutes, rules and governmental regulations applicable to such
Restricted Subsidiary or its shareholders.
"Employee Notes" means promissory notes of employees of the Company,
--------------
Holding or any of their Subsidiaries payable to the Company or Holding and
received in connection with the substantially concurrent purchase of common
stock of the Company or Holding by such employees.
"Event of Default" has the meaning set forth in Section 6.01.
----------------
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
------------
"Fair Market Value" means, with respect to any Property, the price
-----------------
which could be negotiated in an arm's-length free market transaction, for cash,
between a willing seller and a willing buyer, neither of whom is under undue
pressure or compulsion to complete the transaction. Fair
13
Market Value will be determined, except as otherwise provided, (a) if such
--------
Property has a Fair Market Value equal to or less than $2.5 million, by any
Officer of the Company or (b) if such Property has a Fair Market Value in excess
of $2.5 million, by a majority of the Board of Directors and evidenced by a
Board Resolution, dated within 30 days of the relevant transaction, delivered to
the Trustee.
"Foreign Restricted Subsidiary" means any Restricted Subsidiary which
-----------------------------
is not organized under the laws of the United States of America or any State
thereof or the District of Columbia.
"GAAP" means United States generally accepted accounting principles as
----
in effect on the Issue Date, including those set forth (a) in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants, (b) in the statements and pronouncements of the
Financial Accounting Standards Board, (c) in such other statements by such other
entity as approved by a significant segment of the accounting profession and (d)
the rules and regulations of the Commission governing the inclusion of financial
statements (including pro forma financial statements) in periodic reports
required to be filed pursuant to Section 13 of the Exchange Act, including
opinions and pronouncements in staff accounting bulletins and similar written
statements from the accounting staff of the Commission.
"Guarantee" means any obligation, contingent or otherwise, of any
---------
Person directly or indirectly guaranteeing any Debt of any other Person and any
obligation, direct or indirect, contingent or otherwise, of such Person (a) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt of such other Person (whether arising by virtue of partnership
arrangements, or by agreements to keep-well, to purchase assets, goods,
securities or services, to take-or-pay or to maintain financial statement
conditions or otherwise) or (b) entered into for the purpose of assuring in any
other manner the obligee against loss in respect thereof (in whole or in part);
provided, however, that the term "Guarantee" shall not include endorsements for
-------- -------
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning. The term "Guarantor" shall mean any
Person Guaranteeing any obligation.
"Hedging Obligation" of any Person means any obligation of such Person
------------------
pursuant to any Interest Rate Agreement, Currency Exchange Protection Agreement
or any other similar agreement or arrangement.
14
"Holder" or "Securityholder" means the Person in whose name a Security
------ --------------
is registered on the Security Register.
"Holding" means River Holding Corp., the corporate parent of the
-------
Company, and any successor thereto.
"Incur" means, with respect to any Debt or other obligation of any
-----
Person, to create, issue, incur (by merger, conversion, exchange or otherwise),
extend, assume, Guarantee or become liable in respect of such Debt or other
obligation or the recording, as required pursuant to GAAP or otherwise, of any
such Debt or obligation on the balance sheet of such Person (and "Incurrence"
and "Incurred" shall have meanings correlative to the foregoing); provided,
--------
however, that a change in GAAP that results in an obligation of such Person that
-------
exists at such time, and is not thereto fore classified as Debt, becoming Debt
shall not be deemed an Incurrence of such Debt; provided further, however, that
-------- ------- -------
solely for purposes of determining compliance with Section 4.03 and Section
4.04, amortization of debt discount shall not be deemed to be the Incurrence of
Debt, provided that in the case of Debt sold at a discount, the amount of such
--------
Debt Incurred shall at all times be the aggregate principal amount at Stated
Maturity.
"Indenture" means this Indenture as amended or supplemented from time
---------
to time.
"Industrias Xxxxxx" means Industrias Xxxxxx X.X. de C.V.
-----------------
"Independent Appraiser" means an investment banking firm of national
---------------------
standing or any third party appraiser of national standing, provided that such
--------
firm or appraiser is not an Affiliate of the Company.
"Interest Rate Agreement" means, for any Person, any interest rate
-----------------------
swap agreement, interest rate cap agreement, interest rate collar agreement or
other similar agreement designed to protect against fluctuations in interest
rates.
"Investment" by any Person means any direct or indirect loan (other
----------
than advances to customers in the ordinary course of business that are recorded
as accounts receivable on the balance sheet of such Person), advance or other
extension of credit or capital contribution (by means of transfers of cash or
other Property to others or payments for Property or services for the account or
use of others, or otherwise) to, or Incurrence of a Guarantee of any
15
obligation of, or purchase or acquisition of Capital Stock, bonds, notes,
debentures or other securities or evidence of Debt issued by, any other Person.
For purposes of Section 4.05, Section 4.15 and the definition of "Restricted
Payment", "Investment" shall include the portion (proportionate to the
Company's equity interest in such Subsidiary) of the Fair Market Value of the
net assets of any Subsidiary of the Company at the time that such Subsidiary is
designated an Unrestricted Subsidiary; provided, however, that upon a
-------- -------
redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall
be deemed to continue to have a permanent "Investment" in an Unrestricted
Subsidiary equal to an amount (if positive) equal to (a) the Company's
"Investment" in such Subsidiary at the time of such redesignation less (b) the
portion (proportionate to the Company's equity interest in such Subsidiary) of
the Fair Market Value of the net assets of such Subsidiary at the time of such
redesignation. In determining the amount of any Investment made by transfer of
any Property other than cash, such Property shall be valued at its Fair Market
Value at the time of such Investment.
"Issue Date" means the date on which the Initial Securities are
----------
issued.
"Lien" means, with respect to any Property of any Person, any mortgage
----
or deed of trust, pledge, hypothecation, assignment, deposit arrangement,
security interest, lien, charge, easement (other than any easement not
materially impairing usefulness or marketability), encumbrance, preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever on or with respect to such Property (including any Capital
Lease Obligation, conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing or any Sale and
Leaseback Transaction).
"Merger" means the merger of River Acquisition Corp. with and into the
------
Company pursuant to the Merger Agreement.
"Merger Agreement" means the Amended and Restated Merger Agreement
----------------
between Holding, River Acquisition Corp., the Company and shareholders of the
Company dated as of March 15, 1998, as in effect on the Issue Date.
"Mirror Preferred Stock" means the 11-1/2% Senior PIK Preferred Stock
----------------------
due 2010 of the Company.
"Moody's" means Xxxxx'x Investors Service, Inc. or any successor to
-------
the rating agency business thereof.
16
"Net Available Cash" from any Asset Sale means cash payments received
------------------
therefrom (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only as
and when received, but excluding any other consideration received in the form of
assumption by the acquiring Person of Debt or other obligations relating to the
Property that is the subject of such Asset Sale or received in any other noncash
form), in each case net of (a) all legal, title and recording tax expenses,
commissions and other fees and expenses incurred, and all Federal, state,
provincial, foreign and local taxes required to be accrued as a liability under
GAAP, as a consequence of such Asset Sale, (b) all payments made on any Debt
which is secured by any Property subject to such Asset Sale, in accordance with
the terms of any Lien upon or other security agreement of any kind with respect
to such Property, or which must by its terms, or in order to obtain a necessary
consent to such Asset Sale, or by applicable law, be repaid out of the proceeds
from such Asset Sale, (c) all distributions and other payments required to be
made to minority interest holders in Subsidiaries or joint ventures as a result
of such Asset Sale and (d) the deduction of appropriate amounts provided by the
seller as a reserve, in accordance with GAAP, against any liabilities associated
with the Property disposed in such Asset Sale and retained by the Company or any
Restricted Subsidiary after such Asset Sale.
"New Credit Facility" means the credit facilities made available
-------------------
pursuant to the Credit Agreement dated as of the Issue Date among the Company,
Holding, the lenders party thereto, Xxxxxxx Xxxxx Xxxxxx Inc, as Arranger,
Advisor and Syndication Agent and Bankers Trust Company, as Administrative
Agent.
"Officer" means the Chief Executive Officer, the President, the Chief
-------
Financial Officer or any Executive Vice President of the Company.
"Officers' Certificate" means a certificate signed by two Officers of
---------------------
the Company, at least one of whom shall be the principal executive officer or
principal financial officer of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion from legal counsel who is
------------------
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee.
17
"Permitted Debt" means:
--------------
(a) Debt evidenced by the Securities and of Subsidiary Guarantors
evidenced by Subsidiary Guaranties;
(b) (i) Debt under the Credit Facility; provided that the aggregate
--------
principal amount of all such Debt under the Credit Facility comprised of
(A) term loans at any one time outstanding shall not exceed $40.0 million
minus all principal amounts repaid in respect of such term loans and (B)
revolving credit loans or obligations at any one time outstanding shall not
exceed the greater of (x) $60.0 million, which amount shall be permanently
reduced by the amount of Net Available Cash used to repay Debt under the
Credit Facility, and not subsequently reinvested in Additional Assets or
used to purchase Securities pursuant to Section 4.07 and (y) the sum of the
amounts equal to (1) 60% of the net book value of the inventory of the
Company and the Restricted Subsidiaries and (2) 85% of the net book value
of the accounts receivable of the Company and the Restricted Subsidiaries,
in each case as of the most recent fiscal quarter ending at least 45 days
prior to the date of determination and (ii) subject to the proviso
contained in clause (iii) of Section 4.04, Guarantees of Debt under the
Credit Facility;
(c) Debt in respect of Capital Lease Obligations and Purchase Money
Debt; provided that (i) the aggregate principal amount of such Debt does
--------
not exceed the Fair Market Value (on the date of the Incurrence thereof) of
the Property acquired, constructed or leased (including costs of
installation, taxes and delivery charges with respect to such acquisition,
construction or lease) and (ii) the aggregate principal amount of all Debt
Incurred and then outstanding pursuant to this clause (c) (together with
all Permitted Refinancing Debt Incurred in respect of Debt previously
Incurred pursuant to this clause (c) and then outstanding) does not exceed
$15.0 million;
(d) Debt of the Company owing to and held by any Wholly Owned
Subsidiary and Debt of a Wholly Owned Subsidiary owing to and held by the
Company or any Wholly Owned Subsidiary; provided, however, that any
-------- -------
subsequent issue or transfer of Capital Stock or other event that results
in any such Wholly Owned Subsidiary ceasing to be a Wholly Owned Subsidiary
or any subsequent transfer of any such Debt (except to the
18
Company or a Wholly Owned Subsidiary) shall be deemed, in each case, to
constitute the Incurrence of such Debt by the issuer thereof;
(e) Debt of a Wholly Owned Subsidiary Incurred and outstanding on or
prior to the date on which such Wholly Owned Restricted Subsidiary was
acquired by the Company or otherwise became a Restricted Subsidiary (other
than Debt Incurred as consideration in, or to provide all or any portion of
the funds or credit support utilized to consummate, the transaction or
series of transactions pursuant to which such Wholly Owned Restricted
Subsidiary became a Subsidiary of the Company or was otherwise acquired by
the Company); provided that at the time such Wholly Owned Restricted
--------
Subsidiary was acquired by the Company or otherwise became a Restricted
Subsidiary and after giving pro forma effect to the Incurrence of such
Debt, the Company would have been able to Incur $1.00 of additional Debt
pursuant to clause (a) in the first paragraph of Section 4.03;
(f) Debt under Interest Rate Agreements entered into by the Company or
a Restricted Subsidiary for the purpose of limiting interest rate risk in
the ordinary course of the financial management of the Company or such
Restricted Subsidiary and not for speculative purposes, provided that the
--------
obligations under such agreements are directly related to payment
obligations on Debt otherwise permitted by the terms of Section 4.03;
(g) Debt under Currency Exchange Protection Agreements entered into by
the Company or a Restricted Subsidiary for the purpose of limiting currency
exchange rate risks directly related to transactions entered into by the
Company or such Restricted Subsidiary in the ordinary course of business
and not for speculative purposes;
(h) Debt in connection with one or more standby letters of credit or
performance bonds issued for the account of the Company or a Restricted
Subsidiary in the ordinary course of business or pursuant to self-insurance
obligations and not in connection with the borrowing of money or the
obtaining of advances;
(i) Debt outstanding on the Issue Date not otherwise described in
clauses (a) through (h) above;
19
(j) Debt not otherwise described in clauses (a) through (i) above in
an aggregate principal amount outstanding at any one time not to exceed
$15.0 million; and
(k) Permitted Refinancing Debt Incurred in respect of Debt Incurred
pursuant to clause (a) of the first paragraph of Section 4.03 and clauses
(a), (c), (e) and (i) above, subject, in the case of clause (c) above, to
the limitations set forth in the proviso thereto.
"Permitted Holders" means Xxxxx Xxxxxx Xxxxxx, any member of the
-----------------
senior management of the Company or Holding on the Issue Date and Xxxxxxx Xxxxxx
& Co. Incorporated or any successor entity thereof controlled by the principals
of Xxxxxxx Xxxxxx & Co. Incorporated or any entity controlled by, or under
common control with, Xxxxxxx Xxxxxx & Co. Incorporated.
"Permitted Investment" means any Investment by the Company or a
--------------------
Restricted Subsidiary in (a) any Restricted Subsidiary or any Person that will,
upon the making of such Investment, become a Restricted Subsidiary; provided
--------
that the primary business of such Restricted Subsidiary is a Related Business;
(b) any Person if as a result of such Investment such Person is merged or
consolidated with or into, or transfers or conveys all or substantially all its
Property to, the Company or a Restricted Subsidiary; provided that such Person's
--------
primary business is a Related Business; (c) Temporary Cash Investments; (d)
receivables owing to the Company or a Restricted Subsidiary, if created or
acquired in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms; provided, however, that such trade terms
-------- -------
may include such concessionary trade terms as the Company or such Restricted
Subsidiary deems reasonable under the circumstances; (e) payroll, travel and
similar advances to cover matters that are expected at the time of such advances
ultimately to be treated as expenses for accounting purposes and that are made
in the ordinary course of business; (f) (i) loans and advances to employees made
in the ordinary course of business consistent with past practices of the Company
or such Restricted Subsidiary, as the case may be; provided that such loans and
--------
advances do not exceed $1.0 million at any one time outstanding and (ii) loans
and advances to, or the receipt of Employee Notes from, employees of Holding,
the Company or any of their Subsidiaries made or received in connection with the
substantially concurrent purchase of common stock of Holding or the Company by
such employees; provided that the aggregate principal amount of such loans,
--------
advances and notes payable shall not exceed $1.0 million at
20
any one time outstanding; (g) stock, obligations or other securities received in
settlement of debts created in the ordinary course of business and owing to the
Company or a Restricted Subsidiary or in satisfaction of judgments; (h) any
Person to the extent such Investment represents the non-cash portion of the
consideration received in connection with an Asset Sale consummated in
compliance with Section 4.07; and (i) Investments in Persons engaged in a
Related Business not to exceed $10.0 million at any one time outstanding (it
being agreed that an Investment shall cease to be outstanding to the extent of
dividends, repayments of loans or advances or other transfers of Property
received by the Company or any Restricted Subsidiary from such Persons, provided
--------
that such amounts do not increase the amount of Restricted Payments which the
Company and the Restricted Subsidiaries may make pursuant to clause
(a)(iii)(D)(1) of Section 4.05).
"Permitted Liens" means:
---------------
(a) Liens securing Senior Debt of the Company or any Subsidiary
Guarantor;
(b) Liens for taxes, assessments or governmental charges or levies on
the Property of the Company or any Restricted Subsidiary if the same shall
not at the time be delinquent or thereafter can be paid without penalty, or
are being contested in good faith and by appropriate proceedings;
(c) Liens imposed by law, such as carriers', warehousemen's and
mechanics' Liens, on the Property of the Company or any Restricted
Subsidiary arising in the ordinary course of business and securing payment
of obligations which are not more than 60 days past due or are being
contested in good faith and by appropriate proceedings;
(d) Liens on the Property of the Company or any Restricted Subsidiary
Incurred in the ordinary course of business to secure performance of
obligations with respect to statutory or regulatory requirements,
performance or return-of-money bonds, surety or indemnity bonds or other
obligations of a like nature and Incurred in a manner consistent with
industry practice, in each case which are not Incurred in connection with
the borrowing of money, the obtaining of advances or credit or the payment
of the deferred purchase price of Property and which do not in the
aggregate impair in any material respect the use of Property in the
operation of the business of the
21
Company and the Restricted Subsidiaries taken as a whole;
(e) Liens on Property at the time the Company or any Restricted
Subsidiary acquired such Property, including any acquisition by means of a
merger or consolidation with or into the Company or any Restricted
Subsidiary; provided, however, that any such Lien may not extend to any
-------- -------
other Property of the Company or any Restricted Subsidiary; provided
--------
further, however, that such Liens shall not have been Incurred in
------- -------
anticipation of or in connection with the transaction or series of
transactions pursuant to which such Property was acquired by the Company or
any Restricted Subsidiary;
(f) Liens on the Property of a Person at the time such Person becomes
a Restricted Subsidiary; provided, however, that any such Lien may not
-------- -------
extend to any other Property of the Company or any other Restricted
Subsidiary which is not a direct Subsidiary of such Person; provided
--------
further, however, that any such Lien was not Incurred in anticipation of or
------- -------
in connection with the transaction or series of transactions pursuant to
which such Person became a Restricted Subsidiary;
(g) pledges or deposits by the Company or any Restricted Subsidiary
under worker's compensation laws, unemployment insurance laws or similar
legislation, or good faith deposits in connection with bids, tenders,
contracts (other than for the payment of Debt) or leases to which the
Company or any Restricted Subsidiary is party, or deposits to secure public
or statutory obligations of the Company, or deposits for the payment of
rent, in each case Incurred in the ordinary course of business;
(h) utility easements, building restrictions and such other
encumbrances or charges against real Property as are of a nature generally
existing with respect to properties of a similar character;
(i) judgment and attachment Liens in connection with (A) judgments
that do not constitute an Event of Default so long as the judgment creditor
is not seeking enforcement thereof and reserves have been established to
the extent required by GAAP as in effect at such time and (B) litigation
and legal proceedings that are being contested in good faith by appropriate
proceedings (or as to which the Company or Restricted Subsidiary, as the
case may be, is preparing to
22
promptly initiate appropriate proceedings) so long as reserves have been
established to the extent required by GAAP as in effect at such time and so
long as such Liens do not encumber assets by an aggregate amount (together
with the amount of any unstayed judgments against the Company or any
Restricted Subsidiary) in excess of $7.5 million;
(j) Liens existing on the Issue Date not otherwise described in
clauses (a) through (i) above; and
(k) Liens on the Property of the Company or any Restricted Subsidiary
to secure any Refinancing, in whole or in part, of any Debt secured by
Liens referred to in clause (a), (e), (f) or (j) above; provided, however,
-------- -------
that any such Lien shall be limited to all or part of the same Property
that secured the original Lien (together with improvements and accessions
to such Property) and the aggregate principal amount of Debt that is
secured by such Lien shall not be increased to an amount greater than the
sum of (i) the outstanding principal amount, or, if greater, the committed
amount, of the Debt secured by Liens described under clause (a), (e), (f)
or (j) above, as the case may be, at the time the original Lien became a
Permitted Lien under this Indenture and (ii) an amount necessary to pay any
fees and expenses, including premiums and defeasance costs, Incurred by the
Company or such Restricted Subsidiary in connection with such Refinancing.
"Permitted Refinancing Debt" means any Debt that Refinances any other
--------------------------
Debt, including any successive Refinancings, so long as (a) such Debt is in an
aggregate principal amount (or if Incurred with original issue discount, an
aggregate issue price) not in excess of the sum of (i) the aggregate principal
amount (or if Incurred with original issue discount, the aggregate accreted
value) then outstanding of the Debt being Refinanced and (ii) an amount
necessary to pay any fees and expenses, including premiums and defeasance costs,
related to such Refinancing, (b) the Average Life of such Debt is equal to or
greater than the Average Life of the Debt being Refinanced, (c) the Stated
Maturity of such Debt is no earlier than the Stated Maturity of the Debt being
Refinanced and (d) such Debt is subordinated in right of payment to Senior
Debt and the Securities to at least the same extent, if any, as the Debt being
Refinanced; provided, however, that Permitted Refinancing Debt shall not include
-------- -------
(x) Debt of a Subsidiary that Refinances Debt of the Company or (y) Debt of the
23
Company or a Restricted Subsidiary that Refinances Debt of an Unrestricted
Subsidiary.
"Person" means any individual, corporation, company (including any
------
limited liability company), partnership, joint venture, trust, unincorporated
organization, government or any agency or political subdivision thereof or any
other entity.
"Preferred Stock" means any Capital Stock of a Person, however
---------------
designated, which entitles the holder thereof to a preference with respect to
the payment of dividends, or as to the distribution of assets upon any voluntary
or involuntary liquidation or dissolution of such Person, over shares of any
other class of Capital Stock issued by such Person.
"principal" of any Debt (including the Securities) means the principal
---------
amount of such Debt plus the premium, if any, on such Debt.
"pro forma" means, with respect to any calculation made or required to
---------
be made pursuant to the terms hereof, a calculation performed in accordance with
Article 11 of Regulation S-X promulgated under the Securities Act, as
interpreted in good faith by the Board of Directors after consultation with the
independent certified public accountants of the Company, or otherwise a
calculation made in good faith by the Board of Directors after consultation with
the independent certified public accountants of the Company, as the case may be.
"Property" means, with respect to any Person, any interest of such
--------
Person in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible, including Capital Stock in, and other securities of, any
other Person.
"Public Equity Offering" means an underwritten public offering of
----------------------
common stock of the Company pursuant to an effective registration statement
under the Securities Act.
"Purchase Money Debt" means Debt (a) consisting of the deferred
-------------------
purchase price of property, conditional sale obligations, obligations under any
title retention agreement, other purchase money obligations and obligations in
respect of industrial revenue bonds, in each case where the maturity of such
Debt does not exceed the anticipated useful life of the asset being financed,
and (b) Incurred to finance the acquisition or construction by the Company or a
24
Restricted Subsidiary of such asset, including remodeling thereof and additions
and improvements thereto; provided, however, that such Debt is Incurred within
-------- -------
180 days after such acquisition of such asset by the Company or a Restricted
Subsidiary or completion of such construction, remodeling, addition or
improvement, as the case may be.
"Recapitalization" means the recapitalization of the Company to be
----------------
effected on the Issue Date, as described in the Offering Memorandum of the
Company dated April 7, 1998, including the Merger.
"Redeemable Stock" means, with respect to any Person, 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, in either case at the option of the
holder thereof) or otherwise (a) matures or is mandatorily redeemable pursuant
to a sinking fund obligation or otherwise, (b) is or may become redeemable or
repurchaseable at the option of the holder thereof, in whole or in part, or (c)
is convertible or exchangeable, in either case at the option of the holder
thereof, for Debt or Disqualified Stock.
"Refinance" means, in respect of any Debt, to refinance, extend,
---------
renew, refund, repay, prepay, redeem, defease or retire, or to issue other Debt,
in exchange or replacement for, such Debt. "Refinanced" and "Refinancing" shall
have correlative meanings.
"Related Business" means any business that is related, ancillary or
----------------
complementary to the businesses of the Company and the Restricted Subsidiaries
on the Issue Date.
"Representative" means the trustee, agent or representative expressly
--------------
authorized to act in such capacity, if any, for an issue of Senior Debt.
"Restricted Payment" means (a) any dividend or distribution (whether
------------------
made in cash, securities or other Property) declared or paid on or with respect
to any shares of Capital Stock of the Company or any Restricted Subsidiary
(including any payment in connection with any merger or consolidation with or
into the Company or any Restricted Subsidiary), except for any dividend or
distribution which is made solely to the Company or a Restricted Subsidiary
(and, if such Restricted Subsidiary is not a Wholly Owned Subsidiary, to the
other shareholders of such Restricted Subsidiary on a pro rata basis or on a
basis that results in the receipt by the Company or a Restricted Subsidiary of
dividends or distributions of greater value than it would
25
receive on a pro rata basis) or any dividend or distribution payable solely in
shares of Capital Stock (other than Disqualified Stock) of the Company; (b) the
purchase, repurchase, redemption, acquisition or retirement for value of any
Capital Stock of the Company or any Affiliate of the Company (other than from
the Company or a Restricted Subsidiary) or any securities exchangeable for or
convertible into any such Capital Stock, including the exercise of any option to
exchange any Capital Stock (other than for or into Capital Stock of the Company
that is not Disqualified Stock); (c) the purchase, repurchase, redemption,
acquisition or retirement for value, prior to any scheduled maturity, scheduled
sinking fund or mandatory redemption payment, any Subordinated Obligation (other
than the purchase, repurchase or other acquisition of any Subordinated
Obligation purchased in anticipation of satisfying a sinking fund obligation,
principal installment or final maturity, in each case due within one year of the
date of acquisition); or (d) any Investment (other than Permitted Investments)
in any Person.
"Restricted Subsidiary" means (a) any Subsidiary of the Company unless
---------------------
such Subsidiary shall have been designated an Unrestricted Subsidiary as
permitted or required pursuant to Section 4.15 and (b) an Unrestricted
Subsidiary which is redesignated as a Restricted Subsidiary as permitted
pursuant to Section 4.15.
"S&P" means Standard & Poor's Ratings Service or any successor to the
---
rating agency business thereof.
"Sale and Leaseback Transaction" means any arrangement relating to
------------------------------
Property now owned or hereafter acquired whereby the Company or a Restricted
Subsidiary transfers such Property to another Person and the Company or a
Restricted Subsidiary leases it from such Person.
"Securities Act" means the Securities Act of 1933, as amended.
--------------
"Senior Debt" of the Company means (a) all obligations consisting of
-----------
the principal, premium, if any, and accrued and unpaid interest (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company to the extent post-filing interest is
allowed in such proceeding) in respect of (i) Debt of the Company for borrowed
money and (ii) Debt of the Company evidenced by notes, debentures, bonds or
other similar instruments permitted under this Indenture for the payment of
which the Company is responsible or liable; (b) all Capital Lease Obligations of
the Company; (c) all
26
obligations of the Company (i) for the reimbursement of any obligor on any
letter of credit, bankers' acceptance or similar credit transaction, (ii) under
Hedging Obligations or (iii) issued or assumed as the deferred purchase price of
Property and all conditional sale obligations of the Company and all obligations
under any title retention agreement permitted under this Indenture; and (d) all
obligations of other Persons of the type referred to in clauses (a), (b) and (c)
for the payment of which the Company is responsible or liable as Guarantor;
provided, however, that Senior Debt shall not include (A) Debt of the Company
-------- -------
that is by its terms subordinate or pari passu in right of payment to the
Securities, including any Senior Subordinated Debt or any Subordinated
Obligations; (B) any Debt Incurred in violation of the provisions of this
Indenture; (C) accounts payable or any other obligations of the Company to trade
creditors created or assumed by the Company in the ordinary course of business
in connection with the obtaining of materials or services (including Guarantees
thereof or instruments evidencing such liabilities); (D) any liability for
Federal, state, local or other taxes owed or owing by the Company; (E) any
obligation of the Company to any Subsidiary; or (F) any obligations with respect
to any Capital Stock. "Senior Debt" of any Subsidiary Guarantor has a
correlative meaning.
"Senior Subordinated Debt" of the Company means the Securities and any
------------------------
other subordinated Debt of the Company that specifically provides that such Debt
is to rank pari passu with the Securities and is not subordinated by its terms
to any other subordinated Debt or other obligation of the Company which is not
Senior Debt. "Senior Subordinated Debt" of any "Subsidiary Guarantor" has a
correlative meaning.
"Significant Subsidiary" means any Subsidiary that would be a
----------------------
"Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the Commission.
"Stated Maturity" means, with respect to any security, the date
---------------
specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision providing for the repurchase
of such security at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has
occurred).
27
"Subordinated Obligation" means any Debt of the Company or any
-----------------------
Subsidiary Guarantor (whether outstanding on the Issue Date or thereafter
Incurred) which is subordinate or junior in right of payment to the Securities
or the applicable Subsidiary Guarantee pursuant to a written agreement to that
effect.
"Subsidiary" means, in respect of any Person, any corporation,
----------
company, association, partnership, joint venture or other business entity of
which more than 50% of the total voting power of shares of Capital Stock or
other interests (including partnership interests) entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled directly or
indirectly, by (a) such Person, (b) such Person and one or more Subsidiaries of
such Person or (c) one or more Subsidiaries of such Person.
"Subsidiary Guarantor" means each Domestic Restricted Subsidiary that
--------------------
becomes a Subsidiary Guarantor pursuant to Section 4.04.
"Subsidiary Guaranty" means a Guarantee on the terms set forth in this
-------------------
Indenture by a Subsidiary Guarantor of the Company's obligations with respect to
the Securities.
"Temporary Cash Investments" means any of the following: (a)
--------------------------
Investments in U.S. Government Obligations; (b) Investments in time deposit
accounts, certificates of deposit and money market deposits maturing within 90
days of the date of acquisition thereof issued by a bank or trust company which
is organized under the laws of the United States of America or any state thereof
having capital, surplus and undivided profits aggregating in excess of $500.0
million and whose long-term debt is rate "A-3" or "A-" or higher according to
Xxxxx'x or S&P (or such similar equivalent rating by at least one "nationally
recognized statistical rating organization" (as defined in Rule 436 under the
Securities Act); (c) repurchase obligations with a term of not more than 30 days
for underlying securities of the types described in clause (a) entered into with
a bank meeting the qualifications described in clause (b) above; (d) Investments
in commercial paper, maturing not more than 90 days after the date of
acquisition, issued by a corporation (other than an Affiliate of the Company)
organized and in existence under the laws of the United States of America with a
rating at the time as of which any Investment therein is made of "P-1" (or
higher) according to Xxxxx'x or "A-1" (or higher) according to S&P (or such
similar equivalent rating by at least one
28
"nationally recognized statistical rating organization" (as defined in Rule 436
under the Securities Act); (e) direct obligations (or certificates representing
an ownership interest in such obligations) of any state of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of such state is pledged and which are not
callable or redeemable at the issuer's option, provided that (i) the long-term
--------
debt of such state is rated "A-3" or "A-" or higher according to Xxxxx'x or S&P
(or such similar equivalent rating by at least one "nationally recognized
statistical rating organization" (as defined in Rule 436 under the Securities
Act)) and (ii) such obligations mature within 180 days of the date of
acquisition thereof; and (f) investments in money market funds which invest
substantially all their assets in securities of the types described in clauses
(a) through (e) above.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-
--- ------
77bbbb) as in effect on the date of this Indenture except as required by Section
9.03 hereof; provided that in the event the Trust Indenture Act of 1939 is
--------
amended after such date, "Trust Indenture Act" means, to the extent required by
-------------------
any such amendment, the Trust Indenture Act of 1939, as so amended.
"Trustee" means the party named as such in this Indenture until a
-------
successor replaces it and, thereafter, means the successor.
"Trust Officer" means the Chairman of the Board, the President or any
-------------
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"Uniform Commercial Code" means the New York Uniform Commercial Code
-----------------------
as in effect from time to time.
"Unrestricted Subsidiary" means (a) any Subsidiary of the Company in
-----------------------
existence on the Issue Date that is not a Restricted Subsidiary; (b) any
Subsidiary of an Unrestricted Subsidiary; and (c) any Subsidiary of the Company
that is designated after the Issue Date as an Unrestricted Subsidiary as
permitted or required pursuant to Section 4.15 and not thereafter redesignated
as a Restricted Subsidiary as permitted pursuant thereto.
"U.S. Government Obligations" means direct obligations (or
---------------------------
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof)
29
for the payment of which the full faith and credit of the United States of
America is pledged and which are not callable or redeemable at the issuer's
option.
"Voting Stock" of a corporation means all classes of Capital Stock of
------------
such corporation then outstanding and normally entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof.
"Wholly Owned Subsidiary" means, at any time, a Restricted Subsidiary
-----------------------
all the Voting Stock of which (except directors' qualifying shares) is at such
time owned, directly or indirectly, by the Company and its other Wholly Owned
Subsidiaries.
SECTION 1.02. Other Definitions.
------------------
Term Section
---- -------
"Bankruptcy Law"............................ 6.01
"Change of Control Offer"................... 4.10
"Change of Control Purchase Price".......... 4.10
"Claiming Guarantor"........................ 11.02
"Contributing Party"........................ 11.02
"covenant defeasance option"................ 8.01(b)
"Custodian"................................. 6.01
"Event of Default".......................... 6.01
"Excess Proceeds"........................... 4.07
"Global Security"........................... Appendix A
"legal defeasance option"................... 8.01(b)
"Legal Holiday"............................. 13.08
"Obligations"............................... 11.01
"Offer Amount".............................. 4.07
"Offer Period".............................. 4.07
"pay its Subsidiary Guaranty"............... 12.03
"pay the Securities"........................ 10.03
"Paying Agent".............................. 2.04
"Payment Blockage Notice"................... 10.03
"Payment Blockage Period"................... 10.03
"Prepayment Offer".......................... 4.07
"Prepayment Offer Notice"................... 4.07
"Purchase Date"............................. 4.07
30
"Registrar".................................. 2.04
"Successor Company".......................... 5.01
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
--------------------------------------------------
This Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company, each
Subsidiary Guarantor and any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION 1.04. Rules of Construction. Unless the context otherwise
----------------------
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) unsecured Debt shall not be deemed to be subordinate or junior to
secured Debt merely by virtue of its nature as unsecured Debt;
31
(7) the principal amount of any noninterest bearing or other discount
security at any date shall be the principal amount thereof that would be
shown on a balance sheet of the issuer dated such date prepared in
accordance with GAAP; and
(8) the principal amount of any Preferred Stock shall be the greater
of (i) the maximum liquidation value of such Preferred Stock or (ii) the
maximum mandatory redemption or mandatory repurchase price with respect to
such Preferred Stock.
ARTICLE 2
The Securities
--------------
SECTION 2.01. Amount of Securities; Issuable in Series. The
-----------------------------------------
aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is $115,000,000.
Subject to Section 2.03, the Trustee shall authenticate Initial
Securities for original issue on the Issue Date in the aggregate principal
amount of $115,000,000.
SECTION 2.02. Form and Dating. (a) Provisions relating to the
----------------
Initial Securities and the Exchange Securities are set forth in Appendix A,
which is hereby incorporated in and expressly made a part of this Indenture. The
Initial Securities of each series and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit 1 to Appendix A
which is hereby incorporated in and expressly made a part of this Indenture.
The Exchange Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A, which is hereby incorporated in and
expressly made a part of this Indenture. The Securities may have notations,
legends or endorsements required by law, stock exchange rule, agreements to
which the Company is subject, if any, or usage, provided that any such notation,
--------
legend or endorsement is in a form reasonably acceptable to the Company. Each
Security shall be dated the date of its authentication. The terms of the
Securities set forth in Exhibit 1 to Appendix A and Exhibit A are part of the
terms of this Indenture.
(b) Upon their original issuance, Rule 144A Securities shall be
issued in the form of one or more Global Notes registered in the name of the
Depository or its
32
nominee and deposited with the Trustee, as custodian for the Depository, duly
executed by the Company and authenticated by the Trustee, for credit by the
Depository to the respective accounts of beneficial owners of the Securities
represented thereby (or such other accounts as they may direct). Such Global
Notes are collectively herein called the "Rule 144A Global Note". Upon their
original issuance, Regulation S Securities shall be issued in the form of one or
more temporary Global Notes registered in the name of the Depository or its
nominee and deposited with the Trustee as custodian for the Depository, duly
executed by the Company and authenticated by the Trustee, for credit to the
Agent Member accounts at the Depository of Euroclear and/or Cedel for further
credit by Euroclear and Cedel, as the case may be, to the respective accounts of
the beneficial owners of the Securities represented thereby (or such other
accounts as they may direct) (the "Temporary Regulation S Global Notes").
Interests in the Temporary Regulation S Global Notes may only be held by the
Agent Members of the Depository for Euroclear and Cedel.
SECTION 2.03. Execution and Authentication. Two Officers shall sign
-----------------------------
the Securities for the Company by manual or facsimile signature.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall
be valid nevertheless.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a written order of the
Company signed by two Officers or by an Officer and either an Assistant
Treasurer or an Assistant Secretary of the Company for the authentication and
delivery of such Securities, and the Trustee in accordance with such written
order of the Company shall authenticate and deliver such Securities.
A Security shall not be valid until an authorized officer or signatory
of the Trustee manually signs the certificate of authentication on the Security.
The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate the Securities. Unless limited by the terms of
such appointment, an authenticating agent may authenticate Securities
33
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authen tication by such agent. An
authenticating agent has the same rights as any Registrar, Paying Agent or agent
for service of notices and demands.
SECTION 2.04. Registrar and Paying Agent. The Company shall maintain
---------------------------
in the Borough of Manhattan, the City of New York, an office or agency where
Securities may be presented for registration of transfer or for exchange (the
"Registrar") and an office or agency where Securities may be presented for
payment (the "Paying Agent"). The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Company may have one or
more co-registrars and one or more additional paying agents. The term "Paying
Agent" includes any additional paying agent.
The Company may also from time to time designate one or more other
offices or agencies (in or outside the Borough of Manhattan, the City of Mew
York) where the Securities 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 recision shall in any manner relieve the Company of
its obligation to maintain an office or agency in the Borough of Manhattan, the
City of New York, for such purposes. The Company will give written notice to
the Trustee of any such designation or recision and of any change in the
location of any such other office or agency.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall
be entitled to appropriate compensation therefor pursuant to Section 7.07. The
Company or any of its domestically incorporated Wholly Owned Subsidiaries may
act as Paying Agent, Registrar, co-registrar or transfer agent. The Company may
change any Paying Agent or Registrar upon notice to the Trustee but without
notice to any Holder.
The Company initially appoints the Trustee as Registrar and Paying
Agent in connection with the Securities.
SECTION 2.05. Paying Agent To Hold Money in Trust. No later than
------------------------------------
11:00 a.m., New York City time, on
34
each due date of the principal and interest on any Security, the Company shall
deposit with the Paying Agent a sum sufficient to pay such principal and
interest then so becoming due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold in
trust for the benefit of Securityholders or the Trustee all money held by the
Paying Agent for the payment of principal of or interest on the Securities and
shall notify the Trustee of any default by the Company in making any such
payment. If the Company or a Wholly Owned Subsidiary acts as Paying Agent, it
shall segregate the money held by it as Paying Agent and hold it as a separate
trust fund. The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee and to account for any funds disbursed by the Paying
Agent. Upon complying with this Section, the Paying Agent shall have no further
liability for the money delivered to the Trustee.
SECTION 2.06. Securityholder Lists. The Trustee shall preserve in as
---------------------
current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee, in writing at least five
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Securityholders.
SECTION 2.07. Replacement Securities. If a mutilated Security is
-----------------------
surrendered to the Registrar or if the Holder of a Security claims that such
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements of
Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies
any other reasonable requirements of the Trustee and the Company. If required
by the Trustee or the Company, such Holder shall furnish an indemnity bond
sufficient in the judgment of the Company and the Trustee to protect the
Company, the Trustee, the Paying Agent, the Registrar and any co-registrar from
any loss which any of them may suffer if a Security is replaced. The Company
and the Trustee may charge the Holder for their expenses in replacing a
Security.
Every replacement Security is an additional obligation of the Company.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and
35
remedies with respect to the replacement of mutilated, lost, destroyed or
wrongfully taken Securities.
SECTION 2.08. Outstanding Securities. Securities outstanding at any
-----------------------
time are all Securities authenticated by the Trustee except for those canceled
by it, those delivered to it for cancelation and those described in this Section
as not outstanding. A Security does not cease to be outstanding because the
Company or an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money sufficient to pay
all principal and interest payable on that date with respect to the Securities
(or portions thereof) to be redeemed or maturing, as the case may be, and the
Paying Agent is not prohibited from paying such money to the Securityholders on
that date pursuant to the terms of this Indenture, then on and after that date
such Securities (or portions thereof) cease to be outstanding and interest on
them ceases to accrue.
SECTION 2.09. Temporary Securities. Until definitive Securities are
---------------------
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form
of definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Every such temporary Security shall be
authenticated upon the same conditions and in substantially the same manner,
and with the same effect, as the definitive Securities. Without unreasonable
delay, the Company shall prepare and the Trustee shall authenticate definitive
Securities and deliver them in exchange for temporary Securities. Such exchange
shall be made by the Company at its own expense and without any charge therefor.
Until so exchanged, the temporary Securities shall in all respects be entitled
to the same rights, privileges and benefits under this Indenture as definitive
Securities authenticated and delivered hereunder.
SECTION 2.10. Cancelation. The Company at any time may deliver
------------
Securities to the Trustee for cancelation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one
36
else shall cancel and destroy (subject to the record retention requirements of
the Exchange Act) all Securities surrendered for registration of transfer,
exchange, payment or cancelation and deliver a certificate of such destruction
to the Company, unless the Company directs the Trustee to deliver canceled
Securities to the Company. If the Company shall acquire any of the Securities,
such acquisition shall not operate as a redemption or satisfaction of the Debt
represented by such Securities unless and until the same are delivered to the
Trustee for cancelation. The Company may not issue new Securities to replace
Securities it has redeemed, paid or delivered to the Trustee for cancelation.
SECTION 2.11. Defaulted Interest. If the Company defaults on a
-------------------
payment of interest on the Securities, the Company shall pay defaulted interest
(plus interest on such defaulted interest to the extent lawful) in any lawful
manner. The Company may pay the defaulted interest to the persons who are
Securityholders on a subsequent special record date. The Company shall fix or
cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail to each
Securityholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid. Notwithstanding the foregoing,
any interest which is paid prior to the expiration of the grace period provided
for in Section 6.01(1) hereof shall be paid to the Holders of the Securities as
of the regular record date for which interest has not been paid.
SECTION 2.12. CUSIP Numbers. The Company in issuing the Securities
--------------
may use "CUSIP" numbers (if then generally in use) and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided, however, that any such notice may state that no representation is made
-------- -------
as to the correctness of such numbers either as printed on the Securities or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.
ARTICLE 3
Redemption
----------
SECTION 3.01. Notices to Trustee. If the Company redeems Securities
-------------------
pursuant to paragraph 5 of the Securities, it shall notify the Trustee in
writing of the redemption date, the principal amount of Securities to be
37
redeemed and whether such redemption is being made pursuant to paragraph 5(a) or
5(b) of the Securities.
In the event of a redemption pursuant to paragraph 5(a) of the
Securities, the Company shall give each notice to the Trustee provided for in
this Section at least 45 days before the redemption date unless the Trustee
consents to a shorter period. In the event of a redemption pursuant to
paragraph 5(b) of the Securities, the Company shall give the notice to the
Trustee provided for in this Section no later than 5:00 p.m., New York City
time, on April 10, 1998. Any notice pursuant to this Section shall be
transmitted by facsimile and confirmed with a Trust Officer by telephone. Such
notice shall be accompanied by an Officers' Certificate and an Opinion of
Counsel from the Company to the effect that such redemption will comply with the
conditions herein. Such Officers' Certificate shall, in addition, specify the
redemption price of the Securities.
SECTION 3.02. Selection of Securities To Be Redeemed. If less than
---------------------------------------
all the Securities are to be redeemed at any time, selection of Securities for
redemption may be made by the Trustee in compliance with the requirements of
the principal national securities exchange, if any, on which the Securities are
listed, or, if the Securities are not so listed, on a pro rata basis, by lot or
by such other method that the Trustee shall deem fair and appropriate (and in
a manner that complies with applicable legal requirements, if any). The Trustee
shall make the selection from outstanding Securities not previously called for
redemption. The Trustee may select for redemption portions of the principal of
Securities that have denominations larger than $1,000. Securities and portions
of them the Trustee selects shall be in amounts of $1,000 or a whole multiple of
$1,000. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption. The
Trustee shall notify the Company and, unless the Trustee is acting as such, the
Registrar, promptly of the Securities or portions of Securities to be redeemed.
SECTION 3.03. Notice of Redemption. The Company shall mail a notice
---------------------
of redemption by first-class mail to each Holder of Securities to be redeemed
(i) in the case of a redemption under paragraph 5(a) of the Securities, at least
30 days but not more than 60 days before a date for redemption of Securities,
and (ii) in the case of a redemption under paragraph 5(b) of the Securities, on
April 10, 1998.
38
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price, or the calculation thereof described in
paragraph 5 of the Securities;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be redeemed,
the identification and principal amounts of the particular Securities to be
redeemed;
(6) that, unless the Company defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment
pursuant to the terms of this Indenture, interest on Securities (or portion
thereof) called for redemption ceases to accrue on and after the redemption
date; and
(7) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the
Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section.
In the event of a redemption pursuant to paragraph 5(b) of the
Securities, the Company will, on April 10, 1998, cause a notice of such
redemption to be sent at least once to the Dow Xxxxx News Service or similar
business news service in the United States.
SECTION 3.04. Effect of Notice of Redemption. Once notice of
-------------------------------
redemption is mailed, Securities called for redemption become due and payable on
the redemption date and at the redemption price stated in the notice, and from
and after such redemption date (unless the Company shall default on the payment
of the redemption price and accrued interest) such Securities shall cease to
bear interest. Upon surrender to the Paying Agent, such Securities shall be
paid at the redemption price stated in the notice, plus accrued interest to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive
39
interest due on the relevant interest payment date that is on or prior to the
date of redemption). Failure to give notice or any defect in the notice to any
Holder shall not affect the validity of the notice to any other Holder.
SECTION 3.05. Deposit of Redemption Price. No later than 11:00 a.m.,
----------------------------
New York City time, on the redemption date, the Company shall deposit with the
Paying Agent (or, if the Company or a Wholly Owned Subsidiary is the Paying
Agent, shall segregate and hold in trust) money sufficient to pay the redemption
price of and accrued interest (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date that is on or prior to the date of redemption) on all Securities to be
redeemed on that date other than Securities or portions of Securities called for
redemption which have been delivered by the Company to the Trustee for
cancelation. All money earned on funds held in trust by the Trustee or any
Paying Agent and any excess or remaining funds shall be remitted to the Company.
In the event of a redemption pursuant to paragraph 5(b) of the Securities,
Holding will, on April 10, 1998, irrevocably deposit with the Trustee (or a
paying agent designated by the Trustee) money sufficient to pay the redemption
price. The Trustee (or the paying agent) will invest such funds in cash or
Temporary Cash Investments as directed in writing by the Company pending
distribution to Holders on April 24, 1998. The Trustee (or the paying agent)
shall not be accountable or liable for any losses resulting from the sale or
depreciation in value of such investments.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of the redemption price of and accrued interest, if any, on the
Securities that remains unclaimed for two years or if then held by the Company
or a Wholly Owned Subsidiary in trust for the payment thereof, shall be
discharged from such trust, and, thereafter, Securityholders entitled to the
money must look to the Company for payment as general creditors; provided,
--------
however, that the Trustee or such Paying Agent before being required to make any
-------
such repayment shall at the expense of the Company cause to be mailed to each
such Holder a notice that said moneys have not been so applied and that after a
date named therein any unclaimed balance of said moneys then remaining will be
returned to the Company.
SECTION 3.06. Securities Redeemed in Part. Upon surrender of a
----------------------------
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate for
40
the Holder (at the Company's expense) a new Security equal in principal amount
to the unredeemed portion of the Security surrendered.
ARTICLE 4
Covenants
---------
SECTION 4.01. Payment of Securities. The Company shall promptly pay
----------------------
the principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal and interest shall
be considered paid on the date due if on such date the Trustee or the Paying
Agent holds in accordance with this Indenture money sufficient to pay all
principal and interest then due and the Trustee or the Paying Agent, as the case
may be, is not prohibited from paying such money to the Securityholders on that
date pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION 4.02. SEC Reports. Notwithstanding that the Company may not
------------
be subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, the Company shall file with the Commission and provide the Trustee, Holders
of Securities and, upon request, security analysts of prospective holders of the
Securities with such annual reports and such information, documents and other
reports as are specified in Sections 13 and 15(d) of the Exchange Act and
applicable to a U.S. corporation subject to such Sections, such information,
documents and reports to be so filed and provided at the times specified for the
filing of such information, documents and reports under such Sections; provided,
--------
however, that the Company shall not be so obligated to file such information,
-------
documents and reports with the Commission if the Commission does not permit such
filings. The Company shall file with the Commission and provide the Trustee,
Holders of Securities and, upon request, security analysts of prospective
Holders of the Securities with the information, documents and reports described
herein whether or not the Exchange Offer Registration Statement has been filed
or declared effective.
SECTION 4.03. Limitation on Company and Subsidiary Guarantor Debt.
----------------------------------------------------
The Company shall not, and shall not permit any Subsidiary Guarantor to, Incur,
directly or
41
indirectly, any Debt unless, after giving pro forma effect to the application of
the proceeds thereof, no Default or Event of Default would occur as a
consequence of such Incurrence or be continuing following such Incurrence and
either (a) after giving effect to the Incurrence of such Debt and the
application of the proceeds thereof, the Consolidated Interest Coverage Ratio
would be greater than 1.75 to 1.00 if such Debt is Incurred from the Issue Date
through April 15, 2000, and 2.00 to 1.00 if such Debt is Incurred thereafter or
(b) such Debt is Permitted Debt.
Notwithstanding paragraphs (j) and (k) of the definition of "Permitted
Debt", (a) the Company shall not, and shall not permit any Subsidiary Guarantor
to, Incur any Debt pursuant to such paragraphs if the proceeds thereof are used,
directly or indirectly, to Refinance (i) any Subordinated Obligations unless
such Debt shall be subordinated to the Securities and the Subsidiary Guaranties,
as applicable, to at least the same extent as such Subordinated Obligations or
(ii) any Senior Subordinated Debt unless such Debt shall be Senior Subordinated
Debt or shall be subordinated to the Securities and the Subsidiary Guaranties,
as applicable and (b) the Company shall not permit any Restricted Subsidiary to
Incur any Debt pursuant to such paragraphs if the proceeds thereof are used,
directly or indirectly, to Refinance any Subordinated Obligations or Senior
Subordinated Debt.
SECTION 4.04. Limitation on Non-Guarantor Subsidiary Debt. The
--------------------------------------------
Company shall not permit any Restricted Subsidiary which is not a Subsidiary
Guarantor to, directly or indirectly, Incur any Debt except: (i) Debt
outstanding on the Issue Date and any Permitted Refinancing Debt with respect
thereto; (ii) Debt described in clauses (e) or (h) of the definition of
Permitted Debt; provided, however, that Industrias Xxxxxx may Incur Debt in an
-------- -------
aggregate principal amount outstanding at any one time not to exceed $5.0
million; and (iii) Guarantees of the Company's obligations under the New Credit
Facility; provided that any Restricted Subsidiary which Incurs any such
--------
Guarantee shall concurrently therewith execute and deliver to the Trustee a
Subsidiary Guaranty.
SECTION 4.05. Limitation on Restricted Payments. (a) The Company
----------------------------------
shall not make, and shall not permit any Restricted Subsidiary to make, directly
or indirectly, any Restricted Payment if at the time of, and after giving pro
forma effect to, such proposed Restricted Payment,
(i) a Default or Event of Default shall have occurred and be
continuing,
42
(ii) the Company could not Incur at least $1.00 of additional Debt
pursuant to clause (a) of the first paragraph of Section 4.03, or
(iii) the aggregate amount of such Restricted Payment and all other
Restricted Payments declared or made since the Issue Date (the amount of
any Restricted Payment, if made other than in cash, to be based upon Fair
Market Value) would exceed an amount equal to the sum of:
(A) 50% of the aggregate amount of Consolidated Net Income
accrued during the period (treated as one accounting period) from the
beginning of the fiscal quarter during which the Issue Date occurs to
the end of the most recent fiscal quarter ending at least 45 days
prior to the date of such Restricted Payment (or if the aggregate
amount of Consolidated Net Income for such period shall be a deficit,
minus 100% of such deficit),
(B) Capital Stock Sale Proceeds,
(C) the amount by which Debt of the Company Incurred after the
Issue Date is reduced on the Company's balance sheet upon the
conversion or exchange (other than by the Company or a Subsidiary of
the Company) subsequent to the Issue Date of any Debt (other than
Subordinated Obligations) of the Company for Capital Stock (other
than Disqualified Stock) of the Company (less the amount of any cash
or other Property distributed by the Company or any Restricted
Subsidiary upon such conversion or exchange), and
(D) an amount equal to the sum of (1) the net reduction in
Investments in any Person other than the Company or a Restricted
Subsidiary resulting from dividends, repayments of loans or advances
or other transfers of Property, in each case to the Company or any
Restricted Subsidiary from such Person, to the extent such dividends,
repayments or transfers do not increase the amount of Permitted
Investments permitted to be made pursuant to clause (i) of the
definition thereof and (2) the portion (proportionate to the Company's
equity interest in such Unrestricted Subsidiary) of the Fair Market
Value of the net assets of an Unrestricted Subsidiary at the time such
Unrestricted Subsidiary is designated a
43
Restricted Subsidiary; provided, however, that the foregoing sum shall
-------- -------
not exceed, in the case of any Person, the amount of Investments
previously made (and treated as a Restricted Payment) by the Company
or any Restricted Subsidiary in such Person, and
(E) $7.5 million.
(b) Notwithstanding the foregoing limitation, the Company may:
(i) pay dividends on its Capital Stock within 60 days of the
declaration thereof if, on said declaration date, such dividends could have
been paid in compliance with this Indenture; provided, however, that at the
-------- -------
time of such payment of such dividend, no other Default or Event of Default
shall have occurred and be continuing (or result therefrom); provided
--------
further, however, that such dividend shall be included in the calculation
------- -------
of the amount of Restricted Payments;
(ii) purchase, repurchase, redeem, legally defease, acquire or retire
for value Capital Stock of the Company or Subordinated Obligations in
exchange for, or in an amount not in excess of the proceeds of the
substantially concurrent sale of, Capital Stock of the Company (other than
Disqualified Stock and other than Capital Stock issued or sold to a
Subsidiary of the Company or an employee stock ownership plan or trust
established by the Company or any of its Subsidiaries for the benefit of
their employees); provided, however, that (A) such purchase, repurchase,
-------- -------
redemption, legal defeasance, acquisition or retirement shall be excluded
in the calculation of the amount of Restricted Payments and (B) the Capital
Stock Sale Proceeds from such exchange or sale shall be excluded from the
calculation pursuant to clause (a)(iii)(B) above;
(iii) purchase, repurchase, redeem, legally defease, acquire or retire
for value any Subordinated Obligations in exchange for, or in an amount not
in excess of the proceeds of the substantially concurrent sale of,
Permitted Refinancing Debt; provided, however, that such purchase,
-------- -------
repurchase, redemption, legal defeasance, acquisition or retirement shall
be excluded in the calculation of the amount of Restricted Payments;
44
(iv) purchase, repurchase, redeem, legally defease, acquire or retire
for value, or pay dividends or make loans to Holding to enable Holding
substantially concurrently therewith to purchase, repurchase, redeem,
legally defease, acquire or retire for value, shares of, or options to
purchase shares of, common stock of the Company or Holding from employees
or former employees of the Company, Holding or any of their Subsidiaries
(or their estates or beneficiaries thereof) upon death, disability,
retirement or termination pursuant to the terms of the agreements
(including employment agreements) or plans (or amendments thereto) approved
by the Board or Directors or the board of directors of Holding, as the case
may be, under which such individuals purchase or sell, or are granted the
option to purchase or sell, shares of such common stock; provided, however,
-------- -------
that (A) the aggregate amount of such purchases, repurchases, redemptions,
defeasances, acquisitions or retirements shall not exceed $1.0 million in
any year or $5.0 million during the term of the Securities, except that (1)
such amounts shall be increased by the aggregate net amount of cash
received by the Company after the Issue Date from the sale of such shares
to, or the exercise of options to purchase such shares by, employees of the
Company, Holding or any of their Subsidiaries and (2) the Company may
forgive or return Employee Notes without regard to the limitation set forth
in clause (b)(iv)(A) above and such forgiveness or return shall not be
treated as a Restricted Payment for purpose of determining compliance with
such clause (b)(iv)(A) and (B) such purchases, repurchases, defeasances,
acquisitions or retirements (but not forgiveness or return of Employee
Notes) shall be included in the calculation of the amount of Restricted
Payments;
(v) purchase or redeem Subordinated Obligations pursuant to asset sale
or change of control provisions contained in the governing instrument
relating thereto; provided, however, that (i) no offer or purchase
-------- -------
obligation may be triggered in respect of any such Subordinated Obligation
unless a corresponding obligation also arises with respect to the
Securities and (ii) in any event, no repurchase or redemption of any such
Subordinated Obligation may be consummated unless and until the Company
shall have satisfied all repurchase obligations with respect to any
required purchase offer made with respect to the Securities; provided,
--------
however, that such purchases or redemptions
-------
45
shall be included in the calculation of the amount of Restricted Payments;
and
(vi) make payments to Xxxxx Xxxxxx Xxxxxx pursuant to the Merger
Agreement in an aggregate amount not to exceed $1.1 million in any fiscal
year or $3.3 million during the term of the Securities (plus, in each case,
interest due on the unpaid portion of such required payments in accordance
with the Merger Agreement); provided, however, that such payments shall be
-------- -------
excluded in the calculation of the amount of Restricted Payments.
(c) In computing Consolidated Net Income of the Company under
paragraph (a) above, (1) the Company shall use audited financial statements for
the portions of the relevant period for which audited financial statements are
available on the date of determination and unaudited financial statements and
other current financial data based on the books and records of the Company for
the remaining portion of such period and (2) the Company shall be permitted to
rely in good faith on the financial statements and other financial data derived
from the books and records of the Company that are available on the date of
determination. If the Company makes a Restricted Payment which, at the time
of the making of such Restricted Payment, would in the good faith determination
of the Company be permitted under the requirements of this Indenture, such
Restricted Payment shall be deemed to have been made in compliance with this
Indenture notwithstanding any subsequent adjustments made in good faith to the
Company's financial statements affecting Consolidated Net Income of the Company
for any period.
SECTION 4.06. Limitation on Restrictions on Distributions from
------------------------------------------------
Restricted Subsidiaries. The Company shall not, and shall not permit any
------------------------
Restricted Subsidiary to, directly or indirectly, create or otherwise cause or
suffer to exist any consensual restriction on the right of any Restricted
Subsidiary to (a) pay dividends, in cash or otherwise, or make any other
distributions on or in respect of its Capital Stock, or pay any Debt or other
obligation owed, to the Company or any other Restricted Subsidiary (except, with
respect to restrictions on dividends of non-cash Property, as permitted pursuant
to clause (ii) of the next sentence), (b) make any loans or advances to the
Company or any other Restricted Subsidiary or (c) transfer any of its Property
to the Company or any other Restricted Subsidiary. The foregoing limitations
will not apply (i) with respect to clauses (a), (b) and (c), to restrictions (A)
in effect on the Issue Date, (B) relating
46
to Debt of a Restricted Subsidiary and existing at the time it became a
Restricted Subsidiary if such restriction was not created in connection with or
in anticipation of the transaction or series of transactions pursuant to which
such Restricted Subsidiary became a Restricted Subsidiary or was acquired by the
Company or (C) which result from the Refinancing of Debt Incurred pursuant to an
agreement referred to in clause (i)(A) or (B) above or in clause (ii)(A) or (B)
below, provided such restriction is no less favorable to the holders of
--------
Securities than those under the agreement evidencing the Debt so Refinanced, and
(ii) with respect to clause (c) only, to restrictions (A) relating to Debt that
is permitted to be Incurred and secured without also securing the Securities or
the applicable Subsidiary Guaranty without equal and ratable treatment pursuant
to Section 4.03 and Section 4.11 that limit the right of the debtor to dispose
of the Property securing such Debt, (B) encumbering Property at the time such
Property was acquired by the Company or any Restricted Subsidiary, so long as
such restriction relates solely to the Property so acquired and was not created
in connection with or in anticipation of such acquisition, (C) resulting from
customary provisions restricting subletting or assignment of leases or customary
provisions in other agreements that restrict assignment of such agreements or
rights thereunder or (D) customary restrictions contained in asset sale
agreements limiting the transfer of such Property pending the closing of such
sale.
SECTION 4.07. Limitation on Asset Sales. (a) The Company shall not,
--------------------------
and shall not permit any Restricted Subsidiary to, directly or indirectly,
consummate any Asset Sale unless (i) the Company or such Restricted Subsidiary
receives consideration at the time of such Asset Sale at least equal to the Fair
Market Value of the Property subject to such Asset Sale; (ii) at least 75% of
the consideration paid to the Company or such Restricted Subsidiary in
connection with such Asset Sale is in the form of cash or cash equivalents or
the assumption by the purchaser of liabilities of the Company or any Restricted
Subsidiary (other than liabilities that are by their terms subordinated to the
Securities or the applicable Subsidiary Guaranty) as a result of which the
Company and the Restricted Subsidiaries are no longer obligated with respect to
such liabilities; and (iii) the Company delivers an Officers' Certificate to the
Trustee certifying that such Asset Sale complies with the foregoing clauses (i)
and (ii).
(b) The Net Available Cash (or any portion thereof) from Asset Sales
may be applied by the Company or a Restricted Subsidiary, to the extent the
Company or such
47
Restricted Subsidiary elects (or is required by the terms of any Debt): (i) to
prepay, repay, legally defease or purchase Senior Debt of the Company or any
Subsidiary Guarantor or Debt of any Restricted Subsidiary that is not a
Subsidiary Guarantor (excluding, in any such case, Disqualified Stock and Debt
owed to the Company or an Affiliate of the Company); or (ii) to reinvest in
Additional Assets (including by means of an Investment in Additional Assets by a
Restricted Subsidiary with Net Available Cash received by the Company or another
Restricted Subsidiary): provided, however, that in connection with any
-------- -------
prepayment, repayment, legal defeasance or purchase of Debt pursuant to clause
(i) above, the Company or such Subsidiary Guarantor or other Restricted
Subsidiary shall retire such Debt and shall cause the related loan commitment
(if any) to be permanently reduced by an amount equal to the principal amount so
prepaid, repaid, legally defeased or purchased.
(c) Any Net Available Cash from an Asset Sale not applied in
accordance with the preceding paragraph within twelve months from the date of
the receipt of such Net Available Cash shall constitute "Excess Proceeds". When
the aggregate amount of Excess Proceeds exceeds $10.0 million (taking into
account income earned on such Excess Proceeds, if any), the Company will be
required to make an offer to purchase (the "Prepayment Offer") the Securities
which offer shall be in the amount of the Excess Proceeds, on a pro rata basis
according to principal amount, at a purchase price equal to 100% of the
principal amount thereof plus accrued and unpaid interest thereon, if any, to
the purchase date (subject to the right of holders of record on the relevant
record date to receive interest due on the relevant interest payment date) in
accordance with the procedures (including prorating in the event of
oversubscription) set forth in this Indenture. To the extent that any portion of
the amount of Net Available Cash remains after compliance with the preceding
sentence and provided that all holders of Securities have been given the
opportunity to tender their Securities for purchase in accordance with this
Indenture, the Company or such Restricted Subsidiary may use such remaining
amount for any purpose permitted by this Indenture and the amount of Excess
Proceeds will be reset to zero.
(d)(1) Within five business days after the Company is obligated to
make a Prepayment Offer as described in the preceding paragraph, the Company
shall send a written notice, by first-class mail, to the Trustee and the Holders
of Securities (the "Prepayment Offer Notice"), accompanied by such information
regarding the Company and its Subsidiaries as the Company in good faith
believes will enable such Holders to make an informed decision with respect to
48
such Prepayment Offer. The Prepayment Offer Notice shall state (i) that the
Company is offering to purchase Securities pursuant to the provisions of this
Indenture, (ii) that any Security (or any portion thereof) accepted for payment
(and duly paid on the Purchase Date) pursuant to the Prepayment Offer shall
cease to accrue interest on the Purchase Date, (iii) that any Securities (or
portions thereof) not properly tendered shall continue to accrue interest, (iv)
the purchase price and purchase date, which shall be, subject to any contrary
requirements of applicable law, a Business Day no earlier than 30 days nor later
than 60 days after the date the Prepayment Offer Notice is mailed (the "Purchase
Date"), (v) the aggregate principal amount of Securities to be purchased, (vi) a
description of the procedures which Holders of Securities must follow in order
to tender their Securities and the procedures that Holders of Securities must
follow in order to withdraw an election to tender their Securities for payment
and (vii) all other instructions and materials necessary to enable Holders to
tender Securities pursuant to the Prepayment Offer.
(2) Not later than the date upon which written notice of a Prepayment
Offer is delivered to the Trustee as provided above, the Company shall deliver
to the Trustee an Officers' Certificate as to (i) the amount of the Prepayment
Offer (the "Offer Amount"), (ii) the allocation of the Net Available Cash from
the Asset Sales pursuant to which such Prepayment Offer is being made and (iii)
the compliance of such allocation with the provisions of Section 4.07(a). On
such date or prior to the Purchase Date, the Company shall also irrevocably
deposit with the Trustee or with the Paying Agent (or, if the Company or a
Wholly Owned Subsidiary is the Paying Agent, shall segregate and hold in trust)
in cash or Temporary Cash Investments, maturing on the last day prior to the
Purchase Date or on the Purchase Date if funds are immediately available by open
of business, an amount equal to the Offer Amount to be held for payment in
accordance with the provisions of this Section. Upon the expiration of the
period for which the Prepayment Offer remains open (the "Offer Period"), the
Company shall deliver to the Trustee for cancelation the Securities or portions
thereof which have been properly tendered to and are to be accepted by the
Company. The Trustee or the Paying Agent shall, on the Purchase Date, mail or
deliver payment to each tendering Holder in the amount of the purchase price.
In the event that the aggregate purchase price of the Securities delivered by
the Company to the Trustee is less than the Offer Amount, the Trustee or the
Paying Agent shall deliver the excess to the Company immediately after the
expiration of the Offer Period for application in accordance with this Section.
49
(3) Holders electing to have a Security purchased shall be required
to surrender the Security, with an appropriate form duly completed, to the
Company or its agent at the address specified in the notice at least three
Business Days prior to the Purchase Date. Holders shall be entitled to withdraw
their election if the Trustee or the Company receives not later than one
Business Day prior to the Purchase Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Security which was delivered for purchase by the Holder and a
statement that such Holder is withdrawing his election to have such Security
purchased. If at the expiration of the Offer Period the aggregate principal
amount of Securities surrendered by Holders exceeds the Offer Amount, the
Company shall select the Securities to be purchased on a pro rata basis (with
such adjustments as may be deemed appropriate by the Company so that only
Securities in denominations of $1,000, or integral multiples thereof, shall be
purchased). Holders whose Securities are purchased only in part shall be issued
new Securities equal in principal amount to the unpurchased portion of the
Securities surrendered.
(4) At the time the Company delivers Securities to the Trustee which
are to be accepted for purchase, the Company shall also deliver an Officers'
Certificate stating that such Securities are to be accepted by the Company
pursuant to and in accordance with the terms of this Section 4.07. A Security
shall be deemed to have been accepted for purchase at the time the Trustee or
the Paying Agent mails or delivers payment therefor to the surrendering Holder.
(e) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities as described
above. To the extent that the provisions of any securities laws or regulations
conflict with the provisions relating to the Prepayment Offer, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations described above by virtue thereof.
SECTION 4.08. Limitation on Transactions with Affiliates. (a) The
-------------------------------------------
Company shall not, and shall not permit any Restricted Subsidiary to, directly
or indirectly, conduct any business or enter into or suffer to exist any
transaction or series of transactions (including the purchase, sale, transfer,
assignment, lease, conveyance or exchange of any Property or the rendering of
any service)
50
with, or for the benefit of, any Affiliate of the Company (an "Affiliate
Transaction"), unless (a) the terms of such Affiliate Transaction are (i) set
forth in writing, (ii) in the interest of the Company or such Restricted
Subsidiary, as the case may be, and (iii) no less favorable to the Company or
such Restricted Subsidiary, as the case may be, than those that could be
obtained in a comparable arm's-length transaction with a Person that is not an
Affiliate of the Company, (b) if such Affiliate Transaction involves aggregate
payments or value in excess of $2.5 million, the Board of Directors (including a
majority of the disinterested members of the Board of Directors, if any)
approves such Affiliate Transaction and, in its good faith judgment, believes
that such Affiliate Transaction complies with clauses (a)(ii) and (iii) of this
paragraph as evidenced by a Board Resolution promptly delivered to the Trustee
and (c) if such Affiliate Transaction involves aggregate payments or value in
excess of $5.0 million, the Company obtains a written opinion from an
Independent Appraiser to the effect that the consideration to be paid or
received in connection with such Affiliate Transaction is fair, from a financial
point of view, to the Company or such Restricted Subsidiary, as the case may be
and a copy of the written opinion is delivered to the Trustee.
(b) Notwithstanding the foregoing limitation, the Company or any
Restricted Subsidiary may enter into or suffer to exist the following:
(i) any transaction or series of transactions between the Company
and one or more Restricted Subsidiaries or between two or more Restricted
Subsidiaries in the ordinary course of business, provided that no more than
--------
5% of the total voting power of the Voting Stock (on a fully diluted basis)
of any such Restricted Subsidiary is owned by an Affiliate of the Company
(other than a Restricted Subsidiary);
(ii) any Restricted Payment permitted to be made pursuant to Section
4.05;
(iii) the payment of compensation (including amounts paid pursuant to
employee benefit plans) for the personal services of officers, directors
and employees of the Company or any of the Restricted Subsidiaries, so long
as the Board of Directors in good faith shall have approved the terms
thereof and deemed the services theretofore or thereafter to be performed
for such compensation to be fair consideration therefor;
51
(iv) loans and advances to employees made in the ordinary course of
business and consistent with the past practices of the Company or such
Restricted Subsidiary, as the case may be; provided that such loans and
--------
advances do not exceed $1.0 million in the aggregate at any one time
outstanding;
(v) the payment of fees and expenses in connection with the
Recapitalization pursuant to written agreements in effect on the Issue
Date;
(vi) the sale of common stock of the Company for cash; provided,
--------
that the Company may receive Employee Notes in an aggregate principal
amount not in excess of $1.0 million at any one time outstanding;
(vii) the payment of dividends in kind in respect of (i) the Mirror
Preferred Stock or (ii) any other Preferred Stock issued in compliance with
this Section; and
(viii) a proportionate split of, or a common stock dividend payable
on, the common stock of the Company.
SECTION 4.09. Limitation on Issuance or Sale of Capital Stock of
--------------------------------------------------
Restricted Subsidiaries. The Company shall not (a) sell, pledge, hypothecate or
------------------------
otherwise dispose of any shares of Capital Stock of a Restricted Subsidiary or
(b) permit any Restricted Subsidiary to, directly or indirectly, issue or sell
or otherwise dispose of any shares of its Capital Stock, other than (i)
directors' qualifying shares, (ii) to the Company or a Wholly Owned Subsidiary
or (iii) a disposition of 100% of the shares of Capital Stock of a Restricted
Subsidiary that complies with Section 4.07; provided, however, that, in the case
-------- -------
of this clause (iii), upon consummation of such disposition, any such Restricted
Subsidiary shall be released from all its obligations under its Subsidiary
Guaranty.
SECTION 4.10. Repurchase at the Option of Holders Upon a Change of
----------------------------------------------------
Control. (a) Upon the occurrence of a Change of Control, each holder of
--------
Securities shall have the right to require the Company to repurchase all or any
part of such holder's Securities pursuant to the offer described below (the
"Change of Control Offer") at a purchase price (the "Change of Control Purchase
Price") equal to 101% of the principal amount thereof, plus accrued and unpaid
interest thereon, if any, to the purchase date (subject to the right of holders
of record on the relevant record date to receive interest due on the relevant
interest payment date).
52
(b) Within 30 days following any Change of Control, the Company shall
(a) cause a notice of the Change of Control Offer to be sent at least once to
the Dow Xxxxx News Service or similar business news service in the United States
and (b) send, by first-class mail, with a copy to the Trustee, to each holder of
Securities, at such holder's address appearing in the Security Register, a
notice stating: (i) that a Change of Control has occurred and a Change of
Control Offer is being made pursuant to this Section and that all Securities
timely tendered will be accepted for payment; (ii) the Change of Control
Purchase Price and the purchase date, which shall be, subject to any contrary
requirements of applicable law, a business day no earlier than 30 days nor later
than 60 days from the date such notice is mailed; (iii) the circumstances and
relevant facts regarding the Change of Control (including information with
respect to pro forma historical income, cash flow and capitalization after
giving effect to the Change of Control); (iv) that any Security (or portion
thereof) accepted for payment (and duly paid on the Change of Control Payment
Date) pursuant to the Change of Control Offer shall cease to accrue interest on
the Change of Control Payment Date; (v) that any Securities (or portions
thereof) not properly tendered shall continue to accrue interest; (vi) the
procedures that Holders of Securities must follow in order to tender their
Securities (or portions thereof) for payment and the procedures that Holders of
Securities must follow in order to withdraw an election to tender Securities (or
portions thereof) for payment; and (vii) all other instructions and materials
necessary to enable Holders to tender Securities pursuant to the Change of
Control Offer.
(c) Holders electing to have a Security purchased shall be required
to surrender the Security, with an appropriate form duly completed, to the
Company or its agent at the address specified in the notice at least three
Business Days prior to the Change of Control Payment Date. Holders shall be
entitled to withdraw their election if the Trustee or the Company receives not
later than one Business Day prior to the Change of Control Payment Date, a
telegram, telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Security which was delivered for purchase by
the Holder and a statement that such Holder is withdrawing his election to have
such Security purchased. Holders whose Securities are purchased only in part
shall be issued new Securities equal in principal amount to the unpurchased
portion of the Securities surrendered.
53
(d) On or prior to the Change of Control Payment Date, the Company
shall irrevocably deposit with the Trustee or with the Paying Agent (or, if the
Company or any of its Wholly Owned Subsidiaries is acting as the Paying Agent,
segregate and hold in trust) in cash an amount equal to the Change of Control
Payment payable to the Holders entitled thereto, to be held for payment in
accordance with the provisions of this Section.
(e) On the Change of Control Payment Date, the Company shall deliver
to the Trustee the Securities or portions thereof which have been properly
tendered to and are to be accepted by the Company for payment. The Trustee or
the Paying Agent shall, on the Change of Control Payment Date, mail or deliver
payment to each tendering Holder of the Change of Control Payment. In the event
that the aggregate Change of Control Payment is less than the amount delivered
by the Company to the Trustee or the Paying Agent, the Trustee or the Paying
Agent, as the case may be, shall deliver the excess to the Company immediately
after the Change of Control Payment Date.
(f) At the time the Company delivers Securities to the Trustee which
are to be accepted for purchase, the Company shall also deliver an Officers'
Certificate stating that such Securities are to be accepted by the Company
pursuant to and in accordance with the terms of this Section. A Security shall
be deemed to have been accepted for purchase at the time the Trustee or the
Paying Agent mails or delivers payment therefor to the surrendering Holder.
Unless the Company defaults in the payment of the Change of Control Payment,
each Security accepted for payment pursuant to the Change of Control Offer shall
cease to accrue interest on and after the Change of Control Payment Date.
(g) The Company shall comply, to the extent applicable, with the
requirements of Rule 14(e) under the Exchange Act and any other securities laws
or regulations thereunder in connection with the purchase of Securities pursuant
to this Section. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under this Sec tion by virtue thereof.
SECTION 4.11. Limitation on Liens. The Company shall not, and shall
--------------------
not permit any Restricted Subsidiary to, directly or indirectly, Incur or suffer
to exist, any Lien (other than Permitted Liens) upon any of its Property
54
(including Capital Stock of a Restricted Subsidiary), whether owned at the Issue
Date or thereafter acquired, or any interest therein or any income or profits
therefrom, unless (i) if such Lien secures Senior Subordinated Debt, the
Securities or the applicable Subsidiary Guaranty are secured on an equal and
ratable basis with such Debt and (ii) if such Lien secures Subordinated
Obligations, such Lien shall be subordinated to a Lien securing the Securities
or the applicable Subsidiary Guaranty in the same Property as that securing such
Lien to the same extent as such Subordinated Obligations are subordinated to the
Securities and the Subsidiary Guaranties.
SECTION 4.12. Compliance Certificate. The Company shall deliver to
-----------------------
the Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or proposes to take
with respect thereto. The Company also shall comply with TIA (S) 314(a)(4).
SECTION 4.13. Further Instruments and Acts. Upon request of the
-----------------------------
Trustee, the Company shall execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 4.14. Limitation on Layered Debt. The Company shall not, and
---------------------------
shall not permit any Subsidiary Guarantor to, Incur, directly or indirectly, any
Debt which is subordinate or junior in right of payment to any Debt unless such
Debt is Senior Subordinated Debt or is expressly subordinated in right of
payment to Senior Subordinated Debt. In addition, no Subsidiary Guarantor shall
Guarantee, directly or indirectly, any Debt of the Company that is subordinate
or junior in right of payment to any Senior Debt unless such Guarantee is
expressly subordinate in right of payment to, or ranks pari passu with, the
---- -----
Subsidiary Guaranty of such Subsidiary Guarantor.
SECTION 4.15. Designation of Restricted and Unrestricted
------------------------------------------
Subsidiaries. The Board of Directors may designate any Subsidiary of the
-------------
Company (other than Industrias Xxxxxx) to be an Unrestricted Subsidiary if (a)
the Subsidiary to be so designated does not own any Capital Stock or Debt of, or
own or hold any Lien on any Property of, the Company or any other Restricted
Subsidiary,
55
(b) the Subsidiary to be so designated is not obligated under any Debt, Lien or
other obligation that, if in default, would result (with the passage of time or
notice or otherwise) in a default on any Debt of the Company or of any
Restricted Subsidiary and (c) either (i) the Subsidiary to be so designated has
total assets of $1,000 or less or (ii) such designation is effective immediately
upon such entity becoming a Subsidiary of the Company. Unless so designated as
an Unrestricted Subsidiary, any Person that becomes a Subsidiary of the Company
will be classified as a Restricted Subsidiary; provided, however, that such
-------- -------
Subsidiary shall not be designated a Restricted Subsidiary and shall be
automatically classified as an Unrestricted Subsidiary if either of the
requirements set forth in clauses (x) and (y) of the immediately following
paragraph will not be satisfied after giving pro forma effect to such
classification. Except as provided in the first sentence of this paragraph, no
Restricted Subsidiary may be redesignated as an Unrestricted Subsidiary. Upon
designation of a Restricted Subsidiary as an Unrestricted Subsidiary in
compliance with this Section, such Restricted Subsidiary will, by delivery of a
supplemental indenture in form satisfactory to the Trustee, be released from any
Subsidiary Guaranty previously made by such Subsidiary.
The Board of Directors may designate any Unrestricted Subsidiary to be
a Restricted Subsidiary if, immediately after giving pro forma effect to such
designation, (x) the Company could Incur at least $1.00 of additional Debt
pursuant to clause (a) of the first paragraph of Section 4.03 and (y) no Default
or Event of Default shall have occurred and be continuing or would result
therefrom. Any such designation or redesignation by the Board of Directors will
be evidenced to the Trustee by filing with the Trustee a Board Resolution giving
effect to such designation or redesignation and an Officers' Certificate (a)
certifying that such designation or redesignation complies with the foregoing
provisions and (b) giving the effective date of such designation or
redesignation, such filing with the Trustee to occur within 45 days after the
end of the fiscal quarter of the Company in which such designation or
redesignation is made (or, in the case of a designation or redesignation made
during the last fiscal quarter of the Company's fiscal year, within 90 days
after the end of such fiscal year).
SECTION 4.16. Limitation on Holding's Business. Holding shall not,
---------------------------------
directly or indirectly, engage in any business or activity other than the
ownership of Capital Stock of the Company and business activities incidental
thereto.
56
ARTICLE 5
Successor Company
-----------------
SECTION 5.01. When Company May Merge or Transfer Assets. (a) The
------------------------------------------
Company shall not merge, consolidate or amalgamate with or into any other Person
(other than a merger of a Wholly Owned Subsidiary into the Company) or sell,
transfer, assign, lease, convey or otherwise dispose of all or substantially all
its Property in any one transaction or series of transactions unless: (i) the
Company shall be the surviving Person (the "Surviving Person") or the Surviving
Person (if other than the Company) formed by such merger, consolidation or
amalgamation or to which such sale, transfer, assignment, lease, conveyance or
disposition is made shall be a corporation organized and existing under the laws
of the United States of America, any State thereof or the District of Columbia;
(ii) the Surviving Person (if other than the Company) expressly assumes, by
supplemental indenture in form satisfactory to the Trustee, executed and
delivered to the Trustee by such Surviving Person, the due and punctual payment
of the principal of, and premium, if any, and interest on, all the Securities,
according to their tenor, and the due and punctual performance and observance of
all the covenants and conditions of this Indenture to be performed by the
Company; (iii) in the case of a sale, transfer, assignment, lease, conveyance or
other disposition of all or substantially all the Property of the Company, such
Property shall have been transferred as an entirety or virtually as an entirety
to one Person; (iv) immediately before and after giving effect to such
transaction or series of transactions on a pro forma basis (and treating, for
purposes of this clause (iv) and clauses (v) and (vi) below, any Debt which
becomes, or is anticipated to become, an obligation of the Surviving Person or
any Restricted Subsidiary as a result of such transaction or series of
transactions as having been Incurred by the Surviving Person or such Restricted
Subsidiary at the time of such transaction or series of transactions), no
Default or Event of Default shall have occurred and be continuing; (v)
immediately after giving effect to such transaction or series of transactions on
a pro forma basis, the Company or the Surviving Person, as the case may be,
would be able to Incur at least $1.00 of additional Debt under clause (a) of the
first paragraph of Section 4.03; provided, however, that this clause (v) shall
-------- -------
not apply to a merger between the Company and a Wholly Owned Subsidiary of the
Company or Holding incorporated in another state of the United States solely for
the purpose of reincorporating the Company as long as the total amount of Debt
of the Company and its
57
Restricted Subsidiaries is not increased as a result thereof; and (vi) the
Company shall deliver, or cause to be delivered, to the Trustee, in form and
substance reasonably satisfactory to the Trustee, an Officers' Certificate and
an Opinion of Counsel, each stating that such transaction and the supplemental
indenture, if any, in respect thereto comply with this Section and that all
conditions precedent herein provided for relating to such transaction have been
satisfied and that the supplemental indenture, if any, has been duly authorized,
executed and delivered and is enforceable against the Surviving Person.
(b) The Surviving Person shall succeed to, and be substituted for,
and may exercise every right and power of the Company under this Indenture, but
the predecessor Company in the case of a sale, transfer, assignment, lease,
conveyance or other disposition shall not be released from the obligation to pay
the principal of, and premium, if any, and interest on, the Securities.
ARTICLE 6
Defaults and Remedies
---------------------
SECTION 6.01. Events of Default. The following events shall be
------------------
"Events of Default":
(1) the Company defaults in any payment of inter est on the
Securities when the same becomes due and payable, whether or not such
payment shall be prohibited by Article 10, and such default continues for a
period of 30 days;
(2) the failure to make the payment of any principal of or premium, if
any, on any of the Securities when the same become due and payable at its
Stated Maturity, upon acceleration, redemption, optional redemption, upon
required repurchase or otherwise, whether or not such payment shall be
prohibited by Article 10;
(3) the Company or any Subsidiary Guarantor fails to comply with
Article 5;
(4) the Company fails to comply with any other covenant or agreement
in the Securities or in this Indenture (other than a failure which is the
subject of the foregoing clause (1), (2) or (3)) and continuance of such
failure for a period of 30 days after the notice specified below;
58
(5) default by the Company or any Restricted Subsidiary under any Debt
of the Company or any Restricted Subsidiary which results in acceleration
of the stated maturity of such Debt, or the failure to pay such Debt at
final maturity, in an aggregate amount greater than $7.5 million or its
foreign currency equivalent at the time;
(6) any judgment or judgments for the payment of money in an aggregate
amount in excess of $7.5 million (or its foreign currency equivalent at the
time) shall be rendered against the Company or any Restricted Subsidiary
and shall not be waived, satisfied or discharged for any period of 30
consecutive days during which a stay of enforcement shall not be in effect;
(7) 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 any
substantial part of its property; or
(D) makes a general assignment for the benefit of its creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(8) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any Significant
Subsidiary or for any substantial part of its property;
(C) orders the winding up or liquidation of the Company or any
Significant Subsidiary; or
(D) grants any similar relief under any foreign laws;
59
and in each such case the order or decree remains unstayed and in effect
for 60 days; or
(9) the Subsidiary Guaranty of any Significant Subsidiary or, if
issued, Industrias Xxxxxx ceases to be in full force and effect (other than
in accordance with the terms thereof) or any Significant Subsidiary or, if
applicable, Industrias Xxxxxx denies or disaffirms its obligations under
its Subsidiary Guaranty.
The foregoing shall constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code, or any
------------------
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
A Default under clause (4) is not an Event of Default until the
Trustee or the Holders of at least 25% in aggregate principal amount of the
outstanding Securities notify the Company (and in the case of such notice by
Holders, the Trustee) in writing of such Default and the Company does not cure
such Default within the time specified after receipt of such notice. Such
notice must specify the Default, demand that it be remedied and state that such
notice is a "Notice of Default."
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default and event which with the giving of notice or the lapse of
time would become an Event of Default, its status and what action the Company is
taking or proposes to take with respect thereto.
SECTION 6.02. Acceleration. If an Event of Default (other than an
-------------
Event of Default specified in Section 6.01(7) or (8)) occurs and is continuing,
the Trustee by notice to the Company, or the Holders of at least 25% in
aggregate principal amount of the Securities then outstanding by notice to the
Company and the Trustee, may declare the principal amount of all the Securities
then outstanding, plus accrued but unpaid interest to be due and payable. Upon
such a declaration, such principal shall be
60
due and payable immediately. If an Event of Default specified in Section 6.01(7)
or (8) occurs, the principal of the Securities shall automatically and without
any action by the Trustee or any Holder, become immediately due and payable. The
Holders of a majority in aggregate principal amount of the outstanding
Securities by notice to the Trustee and the Company may rescind and annul any
declaration of acceleration if the rescission would not conflict with any
judgment or decree, and if all existing Events of Default have been cured or
waived except nonpayment of principal, premium or interest that has become due
solely because of the acceleration. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is
---------------
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04. Waiver of Defaults. The Holders of a majority in
-------------------
aggregate principal amount of the Securities by notice to the Trustee may waive,
on behalf of the Holders of all outstanding Securities, a past or an existing
Default and its consequences or compliance with any provision of this Indenture
or the Securities except (i) a Default in the payment of the principal of or
interest on a Security or (ii) a Default in respect of a provision that under
Section 9.02 cannot be amended without the consent of each Securityholder
affected. When a Default is waived, it is deemed cured and not to have occurred
for every purpose of this Indenture and the Securities, but no such waiver shall
extend to any subsequent or other Default or impair any consequent right.
SECTION 6.05. Control by Majority. The Holders of a majority in
--------------------
aggregate principal amount of the Securities may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee with respect to the
Securities. However, the
61
Trustee may refuse to follow any direction that conflicts with law or this
Indenture or, subject to Section 7.01, that the Trustee determines is unduly
prejudicial to the rights of other Securityholders or would involve the Trustee
in personal liability; provided, however, that the Trustee may take any other
-------- -------
action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall be entitled
to reasonable indemnity against all losses and expenses caused by taking or not
taking such action.
SECTION 6.06. Limitation on Suits. A Security holder may not pursue
--------------------
any remedy with respect to this Indenture or the Securities unless:
(1) such Holder shall have previously given to the Trustee written
notice of a continuing Event of Default;
(2) the Holders of at least 25% in aggregate principal amount of the
Securities then outstanding shall have made a written request, and such
Holder of or Holders shall have offered reasonable indemnity, to the
Trustee to pursue such proceeding as trustee; and
(3) the Trustee has failed to institute such proceeding and has not
received from the Holders of at least a majority in aggregate principal
amount of the Securities outstanding a direction inconsistent with such
request, within 60 days after such notice, request and offer.
The foregoing limitations on the pursuit of remedies by a
Securityholder shall not apply to a suit instituted by a Holder of Securities
for the enforcement of payment of the principal of or interest on such Security
on or after the applicable due date specified in such Security. A Securityholder
may not use this Indenture to prejudice the rights of another Securityholder or
to obtain a preference or priority over another Securityholder.
SECTION 6.07. Rights of Holders To Receive Payment. Notwithstanding
-------------------------------------
any other provision of this Indenture, the right of any Holder to receive
payment of principal of and interest on the Securities held by such Holder, on
or after the respective due dates expressed in this Securities, or to bring suit
for the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such Holder.
62
SECTION 6.08. Collection Suit by Trustee. If an Event of Default
---------------------------
specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section
7.07.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file
---------------------------------
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property and, unless prohibited by law or applicable regulations, may vote
on behalf of the Holders in any election of a trustee in bankruptcy or other
Person performing similar functions, is empowered to participate as a member,
voting or otherwise, of any official committee of creditors appointed in such
matter, and any Custodian in any such judicial proceeding is hereby authorized
by each Holder to make payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and its counsel, and any
other amounts due the Trustee under Section 7.07.
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 Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 6.10. Priorities. If the Trustee collects any money or
-----------
property pursuant to this Article 6, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to holders of Senior Debt of the Company to the extent
required by Article 10;
THIRD: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
63
FOURTH: to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section. At least 15 days before such record
date, the Company shall mail to each Securityholder and the Trustee a notice
that states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement
----------------------
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, the Company, a suit by a Holder pursuant to Section 6.07 or a suit by
Holders of more than 10% in aggregate principal amount of the Securities.
SECTION 6.12. Waiver of Stay or Extension Laws. The Company (to the
---------------------------------
extent it may lawfully do so) shall not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and shall not hinder, delay or impede the execution
of any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law had been enacted.
ARTICLE 7
Trustee
-------
SECTION 7.01. Duties of Trustee. (a) If an Event of Default has
------------------
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs.
64
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture, but
shall not be obligated 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 wilful misconduct,
except that:
(1) this paragraph does not limit the effect of paragraph (b) of this
Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise
65
incur financial liability in the performance of any of its duties hereunder or
in the exercise of any of its rights or powers, if it shall have reasonable
grounds to believe that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
SECTION 7.02. Rights of Trustee. (a) The Trustee may rely on any
------------------
document reasonably believed by it to be genuine and to have been signed or
presented by the proper person. The Trustee need not investigate any fact or
matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on the
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent (other than an agent who is an
employee of the Trustee) appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it reasonably believes to be authorized or within
its rights or powers; provided, however, that the Trustee's conduct does not
-------- -------
constitute wilful misconduct or negligence.
(e) The Trustee may consult with counsel, and the written advice or
written opinion of counsel with respect to legal matters relating to this
Indenture and the Securities shall be full and complete authorization and
protection from liability in respect to any action taken, omitted or suffered by
it hereunder in good faith and in accordance with such advice or opinion of such
counsel.
(f) Unless otherwise specifically provided herein, any demand,
request, direction or notice from the Company shall be sufficient if signed by
an Officer of the Company.
(g) The Company, the Paying Agent, the Registrar, the Trustee and any
agent of the Company, the Paying Agent, the Registrar or the Trustee may deem
and treat the Person in whose name any Security is registered as the absolute
66
owner of such Security for the purpose of receiving payment of or on account of
the principal of and, subject to the provisions of this Indenture, interest on
such Security and for all other purposes; and neither the Company, the Paying
Agent, the Registrar nor the Trustee nor any agent of the Company, the Paying
Agent, the Registrar or the Trustee shall be affected by any notice to the
contrary.
SECTION 7.03. Individual Rights of Trustee. The Trustee in its
-----------------------------
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar or co-
registrar may do the same with like rights. However, the Trustee must comply
with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
---------------------
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company or any Subsidiary Guarantor in this Indenture or in any
document issued in connection with the sale of the Securities or in the
Securities other than the Trustee's certificate of authentication.
SECTION 7.05. Notice of Defaults. If a Default occurs and is
-------------------
continuing and if it is known to the employees of the Trustee with
responsibility for the Securities, the Trustee shall mail to each Securityholder
notice of the Default within 90 days after it is known to such employees of the
Trustee or written notice of it is received by the Trustee. Except in the case
of a Default in payment of principal of or interest on any Security, 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 interests of
Securityholders.
SECTION 7.06. Reports by Trustee to Holders. As promptly as
------------------------------
practicable after each May 15 beginning with May 15, 1999, and in any event
prior to July 15 in each year, the Trustee shall mail to each Securityholder a
brief report dated as of May 15 each year that complies with TIA (S) 313(a), if
and to the extent required by said subsection. The Trustee also shall comply
with TIA (S) 313(b).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange (if any) on which the
Securities are listed.
67
The Company agrees to notify promptly the Trustee whenever the Securities become
listed on any stock exchange and of any delisting thereof.
SECTION 7.07. Compensation and Indemnity. The Company shall pay to
---------------------------
the Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services.
Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Company shall indemnify the Trustee against any and all loss,
liability or expense (including reasonable attorneys' fees, but excluding any
franchise taxes imposed on the Trustee and any taxes based on the income of the
Trustee) incurred by it in connection with the acceptance and administration of
this trust, including the reasonable costs and expenses of enforcing this
Indenture against the Company (including Section 7.07) and of defending itself
against any claim (whether asserted by any Holder, the Company or any Subsidiary
Guarantor) and the performance of its duties hereunder. 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, except to the extent such failure shall have
materially prejudiced the Company. The Company shall defend the claim and the
Trustee shall cooperate in the defense. If the Trustee is advised by counsel in
writing that it may have available to it defenses which are in conflict with the
defenses available to the Company, then the Trustee may have separate counsel
and the Company shall pay the reasonable fees and expenses of such counsel. The
Company need not reimburse any expense or indemnify against any loss, liability
or expense incurred by the Trustee or any of its agents, counsel, accountants or
experts which is judicially determined to be the result of the Trustee's or any
such agent's, counsel's, accountant's or expert's own wilful misconduct,
negligence or bad faith. The Company need not pay for any settlement made by the
Trustee without the Company's consent, such consent not to be unreasonably
withheld or delayed.
The Trustee's right to receive payment of any amounts due under this
Section 7.07 shall not be subordinated to any other liability or indebtedness of
the Company (even though the Securities may be so subordinated).
68
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Securities.
The Company's payment obligations pursuant to this Section shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.01(7) or (8), the expenses
are intended to constitute expenses of administration under the Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. The Trustee may resign at any
-----------------------
time by so notifying the Company. The Holders of a majority in aggregate
principal amount of the Securities may remove the Trustee by so notifying the
Trustee and may appoint a successor Trustee. The Company shall remove the
Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of
a majority in aggregate principal amount of the Securities and such Holders do
not reasonably promptly appoint a successor Trustee, or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Company shall promptly appoint a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed,
69
the retiring Trustee, the Company or the Holders of 10% in aggregate principal
amount of the Securities may petition any court of competent jurisdiction for
the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
who has been a bona fide Holder of a Security for at least six months may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee
----------------------------
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation or banking
association without any further act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Securities shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of
any predecessor trustee, and deliver such Securities so authenticated; and in
case at that time any of the Securities shall not have been authenticated, any
such successor to the Trustee may authenticate such Securities either in the
name of any predecessor hereunder or in the name of the successor to the
Trustee; and in all such cases such certificates shall have the full force which
it is anywhere in the Securities or in this Indenture provided that the
certificate of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at
------------------------------
all times satisfy the requirements of TIA (S) 310(a). The Trustee shall
have a combined capital and surplus of at least $50,000,000 as set forth in its
most recent published annual report of condition. The Trustee shall comply with
TIA (S) 310(b), subject to the penultimate paragraph thereof; provided, however,
-------- -------
that there shall be excluded from the operation of TIA (S) 310(b)(1) any
indenture or indentures under which other securities or certificates of interest
or participation in other securities of the Company are outstanding if the
requirements for such exclusion set forth in TIA (S) 310(b)(1) are met.
70
SECTION 7.11. Preferential Collection of Claims Against Company. The
--------------------------------------------------
Trustee shall comply with TIA (S) 311(a), excluding any creditor relationship
listed in TIA (S) 311(b). A Trustee who has resigned or been removed shall be
subject to TIA (S) 311(a) to the extent indicated.
ARTICLE 8
Discharge of Indenture; Defeasance
----------------------------------
SECTION 8.01. Discharge of Liability on Securities; Defeasance. (a)
-------------------------------------------------
When (i) the Company delivers to the Trustee all outstanding Securities (other
than Securities replaced pursuant to Section 2.07) for cancelation or (ii) all
outstanding Securities have become due and payable, whether at maturity or as a
result of the mailing of a notice of redemption pursuant to Article 3 and the
Company irrevocably deposits with the Trustee funds sufficient to pay at
maturity or upon redemption all outstanding Securities, including interest
thereon to maturity or such redemption date (other than Securities replaced
pursuant to Section 2.07), and if in either case the Company pays all other sums
payable hereunder by the Company, then this Indenture shall, subject to Sections
8.01(c), cease to be of further effect. The Trustee shall acknowledge
satisfaction and discharge of this Indenture on demand of the Company
accompanied by an Officers' Certificate and an Opinion of Counsel and at the
cost and expense of the Company.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any time may
terminate (i) all its obligations under the Securities and this Indenture
("legal defeasance option") or (ii) its obligations under Sections 4.02, 4.03,
4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.14, 4.15 and 4.16 the
operation of Sections 6.01(4) (to the extent relating to such other Sections),
6.01(5), 6.01(6), 6.01(7), 6.01(8) and 6.01(9) (but, in the case of Sections
6.01(6) and (7), with respect only to Significant Subsidiaries), its obligations
under Sections 5.01(a)(iv), 5.01(a)(v) and the related operation of Section
6.01(3) ("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
Securities may not be accelerated because of an Event of Default with respect
thereto. If the Company exercises its covenant defeasance option, payment of
the Securities may not be accelerated because of an Event of Default specified
in Sections 6.01(3) and 6.01(4) (with
71
respect to the provisions of Articles 4 and 5 referred to in the immediately
preceding paragraph) and Sections 6.01(5), 6.01(6), 6.01(7), 6.01(8) and 6.01(9)
(but, in the case of Sections 6.01(6) and (7), with respect only to Significant
Subsidiaries). If the Company exercises its legal defeasance option or its
covenant defeasance option, each Subsidiary Guarantor, if any, shall be released
from all its obligations under its Subsidiary Guaranty.
Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.04, 2.05, 2.06, 2.07, 7.07, 7.08, 8.05 and 8.06 and
Appendix A shall survive until the Securities have been paid in full.
Thereafter, the Company's obligations in Sections 7.07 and 8.05 shall survive.
SECTION 8.02. Conditions to Defeasance. The Company may exercise its
-------------------------
legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee money
or U.S. Government Obligations for the payment of principal of and interest
on the Securities to maturity or redemption, as the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and without
reinvestment on the deposited U.S. Government Obligations plus any
deposited money without investment will provide cash at such times and in
such amounts as will be sufficient to pay principal and interest when due
on all the Securities to maturity or redemption, as the case may be;
(3) 123 days pass after the deposit is made and during the 123-day
period no Default specified in Section 6.01(6) or (7) with respect to the
Company occurs which is continuing at the end of the period;
(4) the deposit does not constitute a default under any other material
agreement binding on the Company and is not prohibited by Article 10;
72
(5) 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;
(6) in the case of the legal defeasance option, the Company shall have
delivered to the Trustee an Opinion of Counsel stating that (i) the Company
has received from, or there has been published by, the Internal Revenue
Service a ruling, or (ii) since the date of this Indenture there has been a
change in the applicable Federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel shall confirm that,
the Securityholders will not recognize income, gain or loss for Federal
income tax purposes as a result of such defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such defeasance had not occurred;
(7) in the case of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Securityholders will not recognize income, gain or loss for Federal income
tax purposes as a result of such covenant defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such covenant defeasance had not
occurred; and
(8) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent to the
defeasance and discharge of the Securities as contemplated by this Article
8 have been complied with.
Opinions of Counsel required to be delivered to the Trustee may have
assumptions customary for opinions of the type required and counsel delivering
such Opinions of Counsel may rely on certificates of the Company or government
or other officials customary for opinions of the type required, including
certificates certifying as to matters of fact, including that various financial
covenants have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.
73
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 and interest on the Securities. Money and securities
so held in trust are not subject to Article 10.
SECTION 8.04. Repayment to Company. The Trustee and the Paying Agent
---------------------
shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal or interest that remains unclaimed for two years (or if
then held by the Company or a Wholly Owned Subsidiary in trust for the payment
thereof) shall be discharged from such trust, and, thereafter, Securityholders
entitled to the money must look to the Company for payment as general creditors;
provided, however, that the Trustee or such Paying Agent before being required
-------- -------
to make any such repayment, may at the expense of the Company cause to be mailed
to each such Holder a notice that said moneys have not been so applied and that
after a date named therein any unclaimed balance of said moneys then remaining
will be returned to the Company.
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 Securities 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 interest on or principal of any Securities
because of the reinstatement of its obligations, the Company shall be
74
subrogated to the rights of the Holders of such Securities to receive such
payment from the money or U.S. Government Obligations held by the Trustee or
Paying Agent.
ARTICLE 9
Amendments
----------
SECTION 9.01. Without Consent of Holders. The Company and the
---------------------------
Trustee may amend this Indenture or the Securities without notice to or consent
of any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities (provided that the uncertificated
Securities are issued in registered form for purposes of Section 163(f) of
the Code, or in a manner such that the uncertificated Securities are
described in Section 163(f)(2)(B) of the Code);
(4) to make any change in Article 10 or Article 12 that would limit or
terminate the benefits available to any holder of Senior Debt of the
Company or any Subsidiary Guarantor (or Representatives therefor) under
Article 10 or Article 12, respectively;
(5) to add or to remove Subsidiary Guarantors when permitted by the
terms hereof, or to secure the Securities;
(6) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company;
(7) to comply with any requirements of the SEC in connection with
qualifying, or maintaining the qualification of, this Indenture under the
TIA; or
(8) to make any change that does not adversely affect the rights of
any Securityholder in any material respect.
An amendment under this Section may not make any change that adversely
affects the rights under Article 10 or
75
Article 12 of any holder of Senior Debt then outstanding unless the holders of
such Senior Debt (or their Representative) consent in writing to such change, it
being understood that any amendment the purpose of which is to permit the
Incurrence of additional Debt shall not be construed as impairing the rights of
the holders of Senior Debt pursuant to such subordination provisions.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.02. With Consent of Holders. The Company and the Trustee
------------------------
may amend this Indenture or the Securities without notice to any Securityholder
but with the written consent of the Holders of at least a majority in aggregate
principal amount of the Securities. However, without the consent of each Holder
of an outstanding Security affected thereby an amendment or waiver may not:
(1) reduce the amount of Securities whose holders must consent to an
amendment or waiver,
(2) reduce the rate of or extend the time for payment of interest on
any Security,
(3) reduce the principal of or extend the Stated Maturity of any
Security,
(4) make any Security payable in money other than that stated in the
Security,
(5) impair the right of any holder of the Securities to receive
payment of principal of and interest on such holder's Securities on or
after the due dates therefor or to institute suit for the enforcement of
any payment on or with respect to such holder's Securities or any
Subsidiary Guaranty,
(6) release any security interest that may have been granted in favor
of the holders of the Securities,
(7) reduce the premium payable upon the redemption or repurchase of
any Security, or change the time at which any Security may be redeemed, as
described under Article 3,
76
(8) reduce the premium payable upon a Change of Control or, at any
time after a Change of Control or Asset Sale has occurred, change the time
at which the Change of Control Offer or Prepayment Offer relating thereto
must be made or at which the Securities must be repurchased pursuant to
such Change of Control Offer, or
(9) make any change to the subordination provisions of this Indenture
that would adversely affect the holders of the Securities or make any
change in any Subsidiary Guaranty that would adversely affect the holders
of the Securities.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent approves the substance thereof.
An amendment under this Section may not make any change that adversely
affects the rights under Article 10 or Article 12 of any holder of Senior Debt
then outstanding unless the holders of such Senior Debt (or their
Representative) consent in writing to such change, it being understood that any
amendment the purpose of which is to permit the Incurrence of additional Debt
shall not be construed as impairing the rights of the holders of Senior Debt
pursuant to such subordination provisions.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.03. Compliance with Trust Indenture Act. Every amendment
------------------------------------
to this Indenture or the Securities shall comply with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents and Waivers. A
----------------------------------------------
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any
such Holder or subsequent Holder may revoke the consent or waiver as to such
Holder's Security or portion of the Security if the Trustee receives the notice
of revocation before the date the amendment or waiver becomes effective. After
an amendment
77
or waiver becomes effective, it shall form a part of this Indenture for all
purposes and shall bind every Securityholder. An amendment or waiver becomes
effective upon the execution of such amendment or waiver by the Trustee.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Securityholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Securityholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than 120
days after such record date.
SECTION 9.05. Notation on or Exchange of Securities. If an
--------------------------------------
amendment changes the terms of a Security, the Trustee may require the Holder of
the Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 9.06. Trustee To Sign Amendments. The Trustee shall sign any
---------------------------
amendment authorized pursuant to this Article 9 if such amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.01) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture.
SECTION 9.07. Payment for Consent. Neither the Company nor any
--------------------
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Securities unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend in
78
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
ARTICLE 10
Subordination
-------------
SECTION 10.01. Agreement To Subordinate. The Company agrees, and
-------------------------
each Securityholder by accepting a Security agrees, that the Securities are
senior subordinated obligations of the Company and that the Debt evidenced by
the Securities is subordinated in right of payment, to the extent and in the
manner provided in this Article 10, to the payment when due of all Senior Debt
of the Company and that the subordination is for the benefit of and enforceable
by the holders of such Senior Debt. The Securities shall in all respects rank
pari passu in right of payment with any future Senior Subordinated Debt of the
---- -----
Company and senior to any future Subordinated Obligations of the Company, and
only Senior Debt of the Company shall rank senior to the Securities in
accordance with the provisions set forth herein. All provisions of this Article
10 shall be subject to Section 10.12.
SECTION 10.02. Liquidation, Dissolution, Bankruptcy. Upon any
-------------------------------------
payment or distribution of the assets of the Company upon a total or partial
liquidation, dissolution or winding up of the Company or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to the
Company or its property:
(1) holders of Senior Debt of the Company shall be entitled to receive
payment in full in cash of such Senior Debt before Securityholders shall be
entitled to receive any payment of principal of or interest on the
Securities, except that Holders of Securities may receive and retain shares
of stock and any debt securities that are subordinated to Senior Debt to at
least the same extent as the Securities; and
(2) until such Senior Debt is paid in full in cash, any distribution
to which Securityholders would be entitled but for this Article 10 shall be
made to holders of such Senior Debt as their interests may appear.
SECTION 10.03. Default on Senior Debt. The Company may not pay the
-----------------------
principal of or interest on the Securities or make any deposit pursuant to
Section 8.01 and may not repurchase, redeem or otherwise retire any
79
Securities (collectively, "pay the Securities") if (a) any principal, premium or
interest in respect of any Senior Debt is not paid within any applicable grace
period (including at maturity) or (b) any other default on Senior Debt occurs
and the maturity of such Senior Debt is accelerated in accordance with its
terms unless, in either case, (i) the default has been cured or waived and any
such acceleration has been rescinded or (ii) such Senior Debt has been paid in
full in cash; provided, however, that the Company may pay the Securities without
-------- -------
regard to the foregoing if the Company and the Trustee receive written notice
approving such payment from the Representative of each issue of Designated
Senior Debt. During the continuance of any default (other than a default
described in clause (a) or (b) of the preceding sentence) with respect to any
Designated Senior Debt pursuant to which the maturity thereof may be accelerated
immediately without further notice (except notice required to effect the
acceleration) or the expiration of any applicable grace period, the Company may
not pay the Securities for a period (a "Payment Blockage Period") commencing
upon the receipt by the Company and the Trustee of written notice of such
default from the Representative of the holders of such Designated Senior Debt
specifying an election to effect a Payment Blockage Period (a "Payment Blockage
Notice") and ending 179 days thereafter (unless such Payment Blockage Period is
earlier terminated (a) by written notice to the Trustee and the Company from the
Representative which gave such Payment Blockage Notice, (b) because such default
is no longer continuing or (c) because such Designated Senior Debt has been
repaid in full in cash). Unless the holders of such Designated Senior Debt or
the Representative of such holders have accelerated the maturity of such
Designated Senior Debt and not rescinded such acceleration, the Company may
(unless otherwise prohibited as described in the first sentence of this
paragraph) resume payments on the Securities after the end of such Payment
Blockage Period. Not more than one Payment Blockage Notice with respect to all
issues of Designated Senior Debt may be given in any consecutive 360-day period,
irrespective of the number of defaults with respect to one or more issues of
Designated Senior Debt during such period.
SECTION 10.04. Acceleration of Payment of Securities. If payment of
--------------------------------------
the Securities is accelerated because of an Event of Default, the Company or the
Trustee shall promptly notify the holders of the Designated Senior Debt (or
their Representatives) of the acceleration. If payment of the Securities is
accelerated when any Designated Senior Debt is outstanding, the Company may not
pay the Securities until three Business Days after the
80
Representatives of all issues of Designated Senior Debt receive notice of such
acceleration and, thereafter, may pay the Securities only if this Indenture
otherwise permits payment at that time.
SECTION 10.05. When Distribution Must Be Paid Over. If a
------------------------------------
distribution is made to Securityholders that because of this Article 10 should
not have been made to them, the Securityholders who receive the distribution
shall hold it in trust for holders of Senior Debt of the Company and pay it over
to them as their interests may appear.
SECTION 10.06. Subrogation. After all Senior Debt of the Company is
------------
paid in full in cash and until the Securities are paid in full, Securityholders
shall be subrogated to the rights of holders of such Senior Debt to receive
distributions applicable to such Senior Debt. A distribution made under this
Article 10 to holders of such Senior Debt which otherwise would have been made
to Securityholders is not, as between the Company and Securityholders, a payment
by the Company on such Senior Debt.
SECTION 10.07. Relative Rights. This Article 10 defines the relative
----------------
rights of Securityholders and holders of Senior Debt of the Company. Nothing in
this Indenture shall:
(1) impair, as between the Company and Securityholders, the obligation
of the Company, which is absolute and unconditional, to pay principal of
and interest on the Securities in accordance with their terms; or
(2) prevent the Trustee or any Securityholder from exercising its
available remedies upon a Default or an Event of Default, subject to the
rights of holders of Senior Debt of the Company to receive distributions
otherwise payable to Securityholders.
SECTION 10.08. Subordination May Not Be Impaired by Company. No
---------------------------------------------
right of any holder of Senior Debt of the Company to enforce the subordination
of the Debt evidenced by the Securities shall be impaired by any act or failure
to act by the Company or by its failure to comply with this Indenture.
SECTION 10.09. Rights of Trustee and Paying Agent. Notwithstanding
-----------------------------------
Section 10.03, the Trustee or Paying Agent may continue to make payments on the
Securities and shall not be charged with knowledge of the existence of
81
facts that would prohibit the making of any such payments unless, not less than
two Business Days prior to the date of such payment, a Trust Officer receives
notice satisfactory to it that payments may not be made under this Article 10.
The Company, the Registrar or co-registrar, the Paying Agent, a Representative
or a holder of Senior Debt may give the notice; provided, however, that, if an
-------- -------
issue of Senior Debt of the Company has a Representative, only the
Representative may give the notice.
The Trustee in its individual or any other capacity may hold Senior
Debt of the Company with the same rights it would have if it were not Trustee.
The Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article 10 with respect to any Senior Debt of the Company which may at any time
be held by it, to the same extent as any other holder of such Senior Debt; and
nothing in Article 7 shall deprive the Trustee of any of its rights as such
holder. Nothing in this Article 10 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 7.07.
SECTION 10.10. Distribution or Notice to Representative. Whenever a
-----------------------------------------
distribution is to be made or a notice given to holders of Senior Debt of the
Company, the distribution may be made and the notice given to their
Representative (if any).
SECTION 10.11. Article 10 Not To Prevent Events of Default or Limit
----------------------------------------------------
Right To Accelerate. The failure to make a payment pursuant to the Securities
--------------------
by reason of any provision in this Article 10 shall not be construed as
preventing the occurrence of a Default. Nothing in this Article 10 shall have
any effect on the right of the Securityholders or the Trustee to accelerate the
maturity of the Securities.
SECTION 10.12. Trust Moneys Not Subordinated. Notwithstanding
------------------------------
anything contained herein to the contrary, payments from money or the proceeds
of U.S. Government Obligations held in trust under Article 8 by the Trustee for
the payment of principal of and interest on the Securities shall not be
subordinated to the prior payment of any Senior Debt or subject to the
restrictions set forth in this Article 10, and none of the Securityholders shall
be obligated to pay over any such amount to the Company or any holder of Senior
Debt of the Company or any other creditor of the Company.
82
SECTION 10.13. Trustee Entitled To Rely. Upon any payment or
-------------------------
distribution pursuant to this Article 10, the Trustee and the Securityholders
shall be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section
10.02 are pending, (ii) upon a certificate of the liquidating trustee or agent
or other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representatives for the holders of Senior
Debt of the Company for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of such Senior Debt and
other Debt of the Company, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto or to
this Article 10. In the event that the Trustee determines, in good faith, that
evidence is required with respect to the right of any Person as a holder of
Senior Debt of the Company to participate in any payment or distribution
pursuant to this Article 10, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of such
Senior Debt held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and other facts pertinent to the
rights of such Person under this Article 10, and, if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment. The
provisions of Sections 7.01 and 7.02 shall be applicable to all actions or
omissions of actions by the Trustee pursuant to this Article 10.
SECTION 10.14. Trustee To Effectuate Subordination. Each
------------------------------------
Securityholder by accepting a Security authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Securityholders and the holders of
Senior Debt of the Company as provided in this Article 10 and appoints the
Trustee as attorney-in-fact for any and all such purposes.
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior Debt. The
-------------------------------------------------
Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior
Debt and shall not be liable to any such holders if it shall mistakenly pay over
or distribute to Securityholders or the Company or any other Person, money or
assets to which any holders of Senior Debt of the Company shall be entitled by
virtue of this Article 10 or otherwise.
SECTION 10.16. Reliance by Holders of Senior Debt on Subordination
---------------------------------------------------
Provisions. Each Securityholder by accept-
-----------
83
ing a Security acknowledges and agrees that the foregoing subordination
provisions are, and are intended to be, an inducement and a consideration to
each holder of any Senior Debt of the Company, whether such Senior Debt was
created or acquired before or after the issuance of the Securities, to acquire
and continue to hold, or to continue to hold, such Senior Debt and such holder
of such Senior Debt shall be deemed conclusively to have relied on such
subordination provisions in acquiring and continuing to hold, or in continuing
to hold, such Senior Debt.
ARTICLE 11
Subsidiary Guaranties
---------------------
SECTION 11.01. Guaranties. Subject to the provisions of this Article
-----------
11, each Subsidiary Guarantor hereby unconditionally guarantees on a senior
subordinated basis, jointly and severally, to each Holder and to the Trustee, on
behalf of the Holders, and its successors and assigns (a) the full and punctual
payment of principal of and interest, within any applicable grace period, on the
Securities when due, whether at maturity, by acceleration, by redemption or
otherwise, and all other monetary obligations of the Company under this
Indenture and the Securities and (b) the full and punctual performance within
applicable grace periods of all other obligations of the Company under this
Indenture and the Securities (all the foregoing being hereinafter collectively
called the "Obligations"). Each Subsidiary Guarantor further agrees that the
Obligations may be extended or renewed, in whole or in part, without notice or
further assent from such Subsidiary Guarantor and that such Subsidiary Guarantor
will remain bound under this Article 11 notwithstanding any extension or renewal
of any Obligation.
Each Subsidiary Guarantor waives presentation to, demand of, payment
from and protest to the Company of any of the Obligations and also waives notice
of protest for nonpayment. Each Subsidiary Guarantor waives notice of any
default under the Securities or the Obligations. The obligations of each
Subsidiary Guarantor hereunder shall not be affected by (a) the failure of any
Holder or the Trustee to assert any claim or demand or to enforce any right or
remedy against the Company or any other Person under this Indenture, the
Securities or any other agreement or otherwise; (b) any extension or renewal of
any thereof; (c) any rescission, waiver, amendment or modification of any of the
terms or provisions of this Indenture, the Securities or any other agreement;
(d) the release of any security held
84
by any Holder or the Trustee for the Obligations or any of them; (e) the failure
of any Holder or the Trustee to exercise any right or remedy against any other
guarantor of the Obligations; or (f) any change in the ownership of such
Subsidiary Guarantor.
Each Subsidiary Guarantor further agrees that its Subsidiary Guaranty
herein constitutes a guarantee of payment, performance and compliance when due
(and not a guarantee of collection) and waives any right to require that any
resort be had by any Holder or the Trustee to any security held for payment of
the Obligations.
Each Subsidiary Guaranty is, to the extent and in the manner set forth
in Article 12, subordinated and subject in right of payment to the prior payment
in full in cash of all Senior Debt of the Subsidiary Guarantor giving such
Subsidiary Guaranty and each Subsidiary Guaranty is made subject to such
provisions of this Indenture.
Except as expressly set forth in Sections 4.09, 4.15, 5.01 and
8.01(b), the obligations of each Subsidiary Guarantor hereunder shall not be
subject to any reduction, limitation, impairment or termination for any reason,
including any claim of waiver, release, surrender, alteration or compromise, and
shall not be subject to any defense of setoff, counterclaim, recoupment or
termination whatsoever or by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of each Subsidiary Guarantor herein
shall not be discharged or impaired or otherwise affected by the failure of any
Holder or the Trustee to assert any claim or demand or to enforce any remedy
under this Indenture, the Securities or any other agreement, by any waiver or
modification of any thereof, by any default, failure or delay, willful or
otherwise, in the performance of the obligations, or by any other act or thing
or omission or delay to do any other act or thing which may or might in any
manner or to any extent vary the risk of such Subsidiary Guarantor or would
otherwise operate as a discharge of such Subsidiary Guarantor as a matter of law
or equity.
Each Subsidiary Guarantor further agrees that its Subsidiary Guaranty
herein shall continue to be effective or be reinstated, as the case may be, if
at any time payment, or any part thereof, of principal of or interest on any
Obligation is rescinded or must otherwise be restored by any Holder or the
Trustee upon the bankruptcy or reorganization of the Company or otherwise.
85
In furtherance of the foregoing and not in limitation of any other
right which any Holder or the Trustee has at law or in equity against any
Subsidiary Guarantor by virtue hereof, upon the failure of the Company to pay
the principal of or interest on any Obligation when and as the same shall become
due, whether at maturity, by acceleration, by redemption or otherwise, or to
perform or comply with any other Obligation, each Subsidiary Guarantor hereby
promises to and will, upon receipt of written demand by the Trustee, forthwith
pay, or cause to be paid, in cash, to the Holders or the Trustee an amount equal
to the sum of (i) the unpaid amount of such Obligations, (ii) accrued and unpaid
interest on such Obligations (but only to the extent not prohibited by law) and
(iii) all other monetary Obligations of the Company to the Holders and the
Trustee.
Each Subsidiary Guarantor agrees that it shall not be entitled to any
right of subrogation in respect of any Obligations guaranteed hereby until
payment in full in cash of all Obligations and all obligations to which the
Obligations are subordinated as provided in Article 12. Each Subsidiary
Guarantor further agrees that, as between it, on the one hand, and the Holders
and the Trustee, on the other hand, (x) the maturity of the Obligations
guaranteed hereby may be accelerated as provided in Article 6 for the purposes
of such Subsidiary Guarantor's Subsidiary Guaranty herein, notwithstanding any
stay, injunction or other prohibition preventing such acceleration in respect of
the Obligations guaranteed hereby, and (y) in the event of any declaration of
acceleration of such obligations as provided in Article 6, such Obligations
(whether or not due and payable) shall forthwith become due and payable by such
Subsidiary Guarantor for the purposes of this Section.
Each Subsidiary Guarantor also agrees to pay any and all reasonable
costs and expenses (including reasonable attorneys' fees) incurred by the
Trustee or any Holder in enforcing any rights under this Section.
SECTION 11.02. Contribution. Each of the Company and any Subsidiary
-------------
Guarantor (a "Contributing Party") agrees (subject to Articles 10 and 12) that,
in the event a payment shall be made by any other Subsidiary Guarantor under any
Subsidiary Guaranty (the "Claiming Guarantor"), the Contributing Party shall
indemnify the Claiming Guarantor in an amount equal to the amount of such
payment multiplied by a fraction, the numerator of which shall be the net worth
of the Contributing Party on the date of such payment and the denominator of
which shall be the aggregate net worth of the Company and all the Subsidiary
Guarantors on the date of such payment.
86
SECTION 11.03. Successors and Assigns. This Article 11 shall be
-----------------------
binding upon each Subsidiary Guarantor and its successors and assigns and shall
enure to the benefit of the successors and assigns of the Trustee and the
Holders and, in the event of any transfer or assignment of rights by any Holder
or the Trustee, the rights and privileges conferred upon that party in this
Indenture and in the Securities shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions of this
Indenture.
SECTION 11.04. No Waiver. Neither a failure nor a delay on the part
----------
of either the Trustee or the Holders in exercising any right, power or privilege
under this Article 11 shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise of any right,
power or privilege. The rights, remedies and benefits of the Trustee and the
Holders herein expressly specified are cumulative and not exclusive of any other
rights, remedies or benefits which either may have under this Article 11 at law,
in equity, by statute or otherwise.
SECTION 11.05. Modification. No modification, amendment or waiver of
-------------
any provision of this Article 11, nor the consent to any departure by any
Subsidiary Guarantor therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Trustee, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice to or demand on any Subsidiary Guarantor in any case shall
entitle such Subsidiary Guarantor to any other or further notice or demand in
the same, similar or other circumstances.
SECTION 11.06. Execution of Supplemental Indenture for Future
----------------------------------------------
Subsidiary Guarantors. Each Subsidiary which is required to become a Subsidiary
----------------------
Guarantor shall promptly execute and deliver to the Trustee a supplemental
indenture in the form of Exhibit B hereto pursuant to which such Subsidiary
shall become a Subsidiary Guarantor under this Article 11 and shall guarantee
the Obligations. Concurrently with the execution and delivery of such
supplemental indenture, the Company shall deliver to the Trustee an Opinion of
Counsel to the effect that such supplemental indenture has been duly authorized,
executed and delivered by such Subsidiary and that, subject to the application
of bankruptcy, insolvency, moratorium, fraudulent conveyance or transfer and
other similar laws relating to creditors' rights generally and to the principles
of equity, whether considered in a proceeding at
87
law or in equity, the Subsidiary Guaranty of such Subsidiary Guarantor is a
legal, valid and binding obligation of such Subsidiary Guarantor, enforceable
against such Subsidiary Guarantor in accordance with its terms.
ARTICLE 12
Subordination of Subsidiary Guaranties
--------------------------------------
SECTION 12.01. Agreement To Subordinate. Each Subsidiary Guarantor
-------------------------
agrees, and each Securityholder by accepting a Security agrees, that the
Subsidiary Guarantees are senior subordinated obligations of the Subsidiary
Guarantor and that the Obligations of such Subsidiary Guarantor are subordinated
in right of payment, to the extent and in the manner provided in this Article
12, to the payment when due of all Senior Debt of such Subsidiary Guarantor and
that the subordination is for the benefit of and enforceable by the holders of
such Senior Debt. The Obligations of a Subsidiary Guarantor shall in all
respects rank pari passu in right of payment with any future Senor Subordinated
---- -----
Debt of such Subsidiary Guarantor and senior to any future Subordinated
Obligations of such Subsidiary Guarantor.
SECTION 12.02. Liquidation, Dissolution, Bankruptcy. Upon any
-------------------------------------
payment or distribution of the assets of any Subsidiary Guarantor upon a total
or partial liquidation, dissolution or winding up of such Subsidiary Guarantor
or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to such Subsidiary Guarantor or its property:
(1) holders of Senior Debt of such Subsidiary Guarantor shall be
entitled to receive payment in full in cash of such Senior Debt before
Securityholders shall be entitled to receive any payment pursuant to any
Obligations of such Subsidiary Guarantor , except that Securityholders may
receive shares of stock and any debt securities of such Subsidiary
Guarantor that are subordinated to Senior Debt of such Subsidiary Guarantor
to at least the same extent as the Obligations of such Subsidiary Guarantor
are subordinated to Senior Debt of such Subsidiary Guarantor; and
(2) until the Senior Debt of any Subsidiary Guarantor is paid in full
in cash, any distribution to which Securityholders would be entitled but
for this Article 12 shall be made to holders of such Senior Debt as their
interests may appear.
88
SECTION 12.03. Default on Senior Debt of Subsidiary Guarantor. No
-----------------------------------------------
Subsidiary Guarantor may make any payment pursuant to any of its Obligations or
repurchase, redeem or otherwise retire or defease any Securities or other
Obligations (collectively, "pay its Subsidiary Guaranty") if (i) any principal,
premium or interest in respect of Senior Debt of such Subsidiary Guarantor is
not paid within any applicable grace period (including at maturity) or (ii) any
other default on Senior Debt of such Subsidiary Guarantor occurs and the
maturity of such Senior Debt is accelerated in accordance with its terms unless,
in either case, (x) the default has been cured or waived and any such
acceleration has been rescinded or (y) such Senior Debt has been paid in full in
cash; provided, however, that any Subsidiary Guarantor may pay its Subsidiary
-------- -------
Guaranty without regard to the foregoing if such Subsidiary Guarantor and the
Trustee receive written notice approving such payment from the Representatives
of each issue of Senior Debt of such Subsidiary Guarantor. No Subsidiary
Guarantor may pay its Subsidiary Guaranty during the continuance of any Payment
Blockage Period commencing upon the receipt by the Company and the Trustee of a
Payment Blockage Notice under Section 10.03. Unless the holders of Designated
Senior Debt giving such Payment Blockage Notice or the Representative of such
holders shall have accelerated the maturity of such Designated Senior Debt and
not rescinded such acceleration, any Subsidiary Guarantor may resume (unless
otherwise prohibited as described in the first sentence of this paragraph)
payments pursuant to its Subsidiary Guaranty after the end of such Payment
Blockage Period.
SECTION 12.04. Demand for Payment. If a demand for payment is made
-------------------
on a Subsidiary Guarantor pursuant to Article 11, the Trustee shall promptly
notify the holders of the Designated Senior Debt (or their Representatives) of
such demand.
SECTION 12.05. When Distribution Must Be Paid Over. If a
------------------------------------
distribution is made to Securityholders that because of this Article 12 should
not have been made to them, the Securityholders who receive the distribution
shall hold it in trust for holders of the relevant Senior Debt and pay it over
to them or their Representatives as their interests may appear.
SECTION 12.06. Subrogation. After all Senior Debt of a Subsidiary
------------
Guarantor is paid in full in cash and until the Securities are paid in full,
Securityholders shall be subrogated to the rights of holders of such Senior Debt
to receive distributions applicable to such Senior Debt. A
89
distribution made under this Article 12 to holders of such Senior Debt which
otherwise would have been made to Securityholders is not, as between the
relevant Subsidiary Guarantor and Securityholders, a payment by such Subsidiary
Guarantor on such Senior Debt.
SECTION 12.07. Relative Rights. This Article 12 defines the relative
----------------
rights of Securityholders and holders of Senior Debt of a Subsidiary Guarantor.
Nothing in this Indenture shall:
(1) impair, as between a Subsidiary Guarantor and Securityholders, the
obligation of such Subsidiary Guarantor, which is absolute and
unconditional, to pay the Obligations to the extent set forth in Article 11
or the relevant Subsidiary Guaranty; or
(2) prevent the Trustee or any Securityholder from exercising its
available remedies upon a default by such Subsidiary Guarantor under the
Obligations, subject to the rights of holders of Senior Debt of such
Subsidiary Guarantor to receive distributions otherwise payable to
Securityholders.
SECTION 12.08. Subordination May Not Be Impaired by Subsidiary
-----------------------------------------------
Guarantor. No right of any holder of Senior Debt of any Subsidiary Guarantor to
----------
enforce the subordination of the Obligations of such Subsidiary Guarantor shall
be impaired by any act or failure to act by such Subsidiary Guarantor or by its
failure to comply with this Indenture.
SECTION 12.09. Rights of Trustee and Paying Agent. Notwithstanding
-----------------------------------
Section 12.03, the Trustee or Paying Agent may continue to make payments on any
Subsidiary Guaranty and shall not be charged with knowledge of the existence of
facts that would prohibit the making of any such payments unless, not less than
two Business Days prior to the date of such payment, a Trust Officer receives
written notice satisfactory to it that payments may not be made under this
Article 12. The Company, the relevant Subsidiary Guarantor, the Registrar or
co-registrar, the Paying Agent, a Representative or a holder of Senior Debt of
any Subsidiary Guarantor may give the notice; provided, however, that, if an
-------- -------
issue of Senior Debt of any Subsidiary Guarantor has a Representative, only the
Representative may give the notice.
The Trustee in its individual or any other capacity may hold Senior
Debt of any Subsidiary Guarantor with the same rights it would have if it were
not the Trustee.
90
The Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article 12 with respect to any Senior Debt of any Subsidiary Guarantor which may
at any time be held by it, to the same extent as any other holder of such Senior
Debt; and nothing in Article 7 shall deprive the Trustee of any of its rights as
such holder. Nothing in this Article 12 shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 7.07.
SECTION 12.10. Distribution or Notice to Representative. Whenever a
-----------------------------------------
distribution is to be made or a notice given to holders of Senior Debt of any
Subsidiary Guarantor, the distribution may be made and the notice given to their
Representative (if any).
SECTION 12.11. Article 12 Not To Prevent Defaults Under a Subsidiary
-----------------------------------------------------
Guaranty or Limit Right To Demand Payment. The failure to make a payment
------------------------------------------
pursuant to a Subsidiary Guaranty by reason of any provision in this Article 12
shall not be construed as preventing the occurrence of a default under such
Subsidiary Guaranty. Nothing in this Article 12 shall have any effect on the
right of the Securityholders or the Trustee to make a demand for payment on any
Subsidiary Guarantor pursuant to Article 11 or the relevant Subsidiary Guaranty.
SECTION 12.12. Trustee Entitled To Rely. Upon any payment or
-------------------------
distribution pursuant to this Article 12, the Trustee and the Securityholders
shall be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 12.02
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representatives for the holders of Senior Debt
of any Subsidiary Guarantor for the purpose of ascertaining the Persons entitled
to participate in such payment or distribution, the holders of such Senior Debt
and other Debt of such Subsidiary Guarantor, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article 12. In the event that the Trustee
determines, in good faith, that evidence is required with respect to the right
of any Person as a holder of Senior Debt of any Subsidiary Guarantor to
participate in any payment or distribution pursuant to this Article 12, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Debt of such Subsidiary
Guarantor held by such Person, the extent to which such Person is entitled to
participate in such
91
payment or distribution and other facts pertinent to the rights of such Person
under this Article 12, and, if such evidence is not furnished, the Trustee may
defer any payment to such Person pending judicial determination as to the right
of such Person to receive such payment. The provisions of Sections 7.01 and 7.02
shall be applicable to all actions or omissions of actions by the Trustee
pursuant to this Article 12.
SECTION 12.13. Trustee To Effectuate Subordination. Each
------------------------------------
Securityholder by accepting a Security authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Securityholders and the holders of
Senior Debt of any Subsidiary Guarantor as provided in this Article 12 and
appoints the Trustee as attorney-in-fact for any and all such purposes.
SECTION 12.14. Trustee Not Fiduciary for Holders of Senior Debt of
---------------------------------------------------
Subsidiary Guarantor. The Trustee shall not be deemed to owe any fiduciary duty
---------------------
to the holders of Senior Debt of any Subsidiary Guarantor and shall not be
liable to any such holders if it shall mistakenly pay over or distribute to
Securityholders or the Company or any other Person, money or assets to which any
holders of such Senior Debt shall be entitled by virtue of this Article 12 or
otherwise.
SECTION 12.15. Reliance by Holders of Senior Debt on Subordination
---------------------------------------------------
Provisions. Each Securityholder by accepting a Security acknowledges and
-----------
agrees that the foregoing subordination provisions are, and are intended to be,
an inducement and a consideration to each holder of any Senior Debt of any
Subsidiary Guarantor, whether such Senior Debt was created or acquired before or
after the issuance of the Securities, to acquire and continue to hold, or to
continue to hold, such Senior Debt and such holder of Senior Debt shall be
deemed conclusively to have relied on such subordination provisions in acquiring
and continuing to hold, or in continuing to hold, such Senior Debt.
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ARTICLE 13
Miscellaneous
-------------
SECTION 13.01. Trust Indenture Act Controls. If any provision of
-----------------------------
this Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control. If any provision of this Indenture modifies or excludes any
provision of the TIA that may be so modified or excluded, the latter provision
shall be deemed to apply to this Indenture as so modified or to be excluded, as
the case may be.
SECTION 13.02. Notices. Any notice or communication shall be in
--------
writing and delivered in person or mailed by first-class mail or recognized
overnight courier or sent by facsimile (with a hard copy delivered in person or
by mail promptly thereafter) and addressed as follows:
if to the Company or any Subsidiary Guarantor:
Xxxxxx Respiratory Care Inc.
00000 Xxxx Xxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxx X. Xxxxx
if to the Trustee:
(1) for payment, registration, transfer, exchange and tender of the
Securities:
By Hand:
-------
United States Trust Company of New York
000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust Window Lower Level
By Mail:
-------
United States Trust Company of New York
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust Services
Telephone No.: (000) 000-0000
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(2) for all other communications relating to the Securities:
United States Trust Company of New York
Attention: Corporate Trust Administration -
Xxxxxx RCI
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
The Company or any Subsidiary Guarantor, on the one hand, or the
Trustee, on the other hand, by notice to the other may designate additional or
different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be mailed
to the Securityholder at the Securityholder's address as it appears on the
registration books of the Registrar and shall be sufficiently given if so mailed
within the time prescribed.
All such notices and communications shall be deemed to have been duly
received: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail with first-class postage prepaid, if
mailed; when receipt acknowledged, if sent by facsimile; and the next Business
Day after timely delivery to the courier, if sent by recognized overnight
courier guaranteeing next-day delivery. Notices to the Trustee will be deemed
effective only upon actual receipt.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. Notices to the Trustee shall be effective only upon receipt.
SECTION 13.03. Communication by Holders with Other Holders.
--------------------------------------------
Securityholders may communicate pursuant to TIA (S) 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA (S) 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.
---------------------------------------------------
Upon any request or application by the Company to the Trustee to take or refrain
from taking
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any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
SECTION 13.05. Statements Required in Certificate or Opinion. Each
----------------------------------------------
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
Any certificate or opinion of an Officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such Officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous, and provided that any such certificate or opinion names the Trustee
as an addressee and is furnished to the Trustee at the time of delivery of such
certificate or opinion. Any such certificate or Opinion of Counsel may be
based, insofar as it relates to factual matters, upon a certificate or opinion
of, or representations by, an officer
95
or officers of the Company stating that the information with respect to such
factual matters is in the possession of the Company, unless such counsel knows,
or in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are erroneous. Opinions
of Counsel required to be delivered to the Trustee may have qualifications
customary for opinions of the type required and counsel delivering such Opinions
of Counsel may rely on certificates of the Company or government or other
officials customary for opinions of the type required, including certificates
certifying as to matters of fact, including that various financial covenants
have been complied with.
SECTION 13.06. When Securities Disregarded; Acts of Holder. In
--------------------------------------------
determining whether the Holders of the required principal amount of Securities
have concurred in any direction, waiver or consent, Securities owned by the
Company or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company shall be disregarded
and deemed not to be outstanding, except that, for the purpose of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Securities which the Trustee knows are so owned shall be so
disregarded. Also, subject to the foregoing, only Securities outstanding at the
time shall be considered in any such determination.
SECTION 13.07. Rules by Trustee, Paying Agent and Registrar. The
---------------------------------------------
Trustee may make reasonable rules for action by or a meeting of Securityholders.
The Registrar, the Paying Agent and any co-registrar may make reasonable rules
for their functions.
SECTION 13.08. Legal Holidays. A "Legal Holiday" is a Saturday, a
---------------
Sunday or a day on which banking institutions are not required to be open in New
York City and Los Angeles. If a payment date is a Legal Holiday, payment shall
be made on the next succeeding day that is not a Legal Holiday, and no interest
shall accrue for the intervening period. If a regular record date is a Legal
Holiday, the record date shall not be affected.
SECTION 13.09. Governing Law. THIS INDENTURE AND THE SECURITIES
--------------
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW.
SECTION 13.10. No Recourse Against Others. A director, officer,
---------------------------
employee or stockholder, as such, of the Company or any Subsidiary Guarantor
shall not have any
96
liability for any obligations of the Company under the Securities or this
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Securityholder
shall waive and release all such liability. The waiver and release shall be part
of the consideration for the issue of the Securities.
SECTION 13.11. Successors. All agreements of the Company and any
-----------
Subsidiary Guarantors in this Indenture and the Securities shall bind their
successors. All agreements of the Trustee in this Indenture shall bind its
successors.
SECTION 13.12. Multiple Originals. The parties may sign any number
-------------------
of copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture.
SECTION 13.13. Table of Contents; Headings. The table of contents,
----------------------------
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
SECTION 13.14. Separability Clause. In case any provision of this
--------------------
Indenture or in the Securities 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 13.15. Benefits of Indenture. Nothing in this Indenture or
----------------------
in the Securities, express or implied, shall give to any Person, other than the
parties hereto, the holders of Senior Debt (subject to Articles 10 and 12
hereof) and the Holders of the Securities and their successors, any benefit or
any legal or equitable right, remedy or claim under this Indenture or the
Securities.
97
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
XXXXXX RESPIRATORY CARE INC.,
by /s/ Xxxxxxx X. Xxxxxxxx
___________________________________
Name: Xxxxxxx X. Xxxxxxxx
Title: President and Chief Executive
Officer
by /s/ Xxx X. Xxxxx
___________________________________
Name: Xxx X. Xxxxx
Title: Chief Financial Officer
RIVER HOLDING CORP.,
by /s/ Xxxxxxx X. Xxxxxxx
___________________________________
Name: Xxxxxxx X. Xxxxxxx
Title: President
by /s/ Xxxxxx X. Xxxxx
___________________________________
Name: Xxxxxx X. Xxxxx
Title: Assistant Secretary
UNITED STATES TRUST COMPANY
OF NEW YORK,
by /s/ Xxxxx X. Xxxxx
___________________________________
Name: Xxxxx X. Xxxxx
Title: Vice President
