1
EXHIBIT 4.1
KINETIC CONCEPTS, INC.
as Issuer
and
The GUARANTORS named herein
and
MARINE MIDLAND BANK
as Trustee
-------------------------
INDENTURE
Dated as of November 5, 1997
----------------------
up to $300,000,000
9 5/8% Senior Subordinated Notes due 2007, Series A
9 5/8% Senior Subordinated Notes due 2007, Series B
2
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
------- ---------
310(a)(1)....................................... 7.10
(a)(2)...................................... 7.10
(a)(3)...................................... N.A.
(a)(4)...................................... N.A.
(a)(5)...................................... 7.10; 7.11
(b)......................................... 7.08; 7.10; 11.02
(c)......................................... N.A.
311(a).......................................... 7.11
(b)......................................... 7.11
(c)......................................... N.A.
312(a).......................................... 2.05
(b)......................................... 11.03
(c)......................................... 11.03
313(a).......................................... 7.06
(b)(1)...................................... 7.06
(b)(2)...................................... 7.06
(c)......................................... 7.06; 11.02
(d)......................................... 7.06
314(a).......................................... 4.06; 4.08; 11.02
(b)......................................... N.A.
(c)(1)...................................... 7.02; 11.04
(c)(2)...................................... 7.02; 11.04
(c)(3)...................................... N.A.
(d)......................................... N.A.
(e)......................................... 11.05
(f)......................................... N.A.
315(a).......................................... 7.01(b)
(b)......................................... 7.05; 11.02
(c)......................................... 7.01(a)
(d)......................................... 6.05; 7.01(c)
(e)......................................... 6.11
316(a)(last sentence)........................... 2.09
(a)(1)(A)................................... 6.05
(a)(1)(B)................................... 6.04
(a)(2)...................................... N.A.
(b)......................................... 6.07
(c)......................................... 9.04
317(a)(1)....................................... 6.08
(a)(2)...................................... 6.09
(b)......................................... 2.04
318(a).......................................... 11.01
(c)......................................... 11.01
----------------------
N.A. means Not Applicable
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to
be a part of the Indenture.
- i -
3
TABLE OF CONTENTS
Page
----
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions..............................................1
SECTION 1.02. Incorporation by Reference of TIA.......................35
SECTION 1.03. Rules of Construction...................................36
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating.........................................37
SECTION 2.02. Execution and Authentication; Aggregate
Principal Amount.....................................38
SECTION 2.03. Registrar and Paying Agent..............................40
SECTION 2.04. Paying Agent To Hold Assets in Trust....................41
SECTION 2.05. Holder Lists............................................42
SECTION 2.06. Transfer and Exchange...................................42
SECTION 2.07. Replacement Notes.......................................43
SECTION 2.08. Outstanding Notes.......................................43
SECTION 2.09. Treasury Notes..........................................44
SECTION 2.10. Temporary Notes.........................................44
SECTION 2.11. Cancellation............................................45
SECTION 2.12. Defaulted Interest......................................45
SECTION 2.13. CUSIP Number............................................47
SECTION 2.14. Deposit of Monies.......................................47
SECTION 2.15. Restrictive Legends.....................................47
SECTION 2.16. Book-Entry Provisions for Global Note...................48
SECTION 2.17. Registration of Transfers and Exchanges.................50
SECTION 2.18. Liquidated Damages Under Registration Rights
Agreement............................................57
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee......................................57
SECTION 3.02. Selection of Notes To Be Redeemed.......................58
SECTION 3.03. Optional Redemption.....................................58
SECTION 3.04. Notice of Redemption....................................59
SECTION 3.05. Effect of Notice of Redemption..........................61
SECTION 3.06. Deposit of Redemption Price.............................61
- ii -
4
Page
----
SECTION 3.07. Notes Redeemed in Part..................................62
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes........................................62
SECTION 4.02. Maintenance of Office or Agency.........................63
SECTION 4.03. Corporate Existence.....................................63
SECTION 4.04. Payment of Taxes and Other Claims.......................64
SECTION 4.05. Maintenance of Properties and Insurance.................64
SECTION 4.06. Compliance Certificate; Notice of Default...............65
SECTION 4.07. Compliance with Laws....................................66
SECTION 4.08. Reports to Holders......................................67
SECTION 4.09. Waiver of Stay, Extension or Usury Laws.................67
SECTION 4.10. Limitation on Restricted Payments.......................68
SECTION 4.11. Limitation on Transactions with Affiliates..............71
SECTION 4.12. Limitation on Incurrence of Additional
Indebtedness.........................................72
SECTION 4.13. Limitation on Dividend and Other Payment
Restrictions Affecting Restricted
Subsidiaries.........................................73
SECTION 4.14. Limitation on Restricted and Unrestricted
Subsidiaries.........................................75
SECTION 4.15. Change of Control.......................................76
SECTION 4.16. Limitation on Asset Sales...............................79
SECTION 4.17. Limitation on Preferred Stock of Restricted
Subsidiaries.........................................84
SECTION 4.18. Limitation on Liens.....................................85
SECTION 4.19. Conduct of Business.....................................85
SECTION 4.20. Additional Subsidiary Guarantees........................86
SECTION 4.21. Prohibition on Incurrence of Senior
Subordinated Debt....................................87
SECTION 4.22. Deposit of Proceeds with Escrow Agent...................87
SECTION 4.23. Prepayment of Credit Agreement..........................90
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Merger, Consolidation and Sale of Assets................91
SECTION 5.02. Successor Corporation Substituted.......................93
- iii -
5
Page
----
ARTICLE SIX
REMEDIES
SECTION 6.01. Events of Default.......................................94
SECTION 6.02. Acceleration............................................96
SECTION 6.03. Other Remedies..........................................97
SECTION 6.04. Waiver of Past Defaults.................................98
SECTION 6.05. Control by Majority.....................................98
SECTION 6.06. Limitation on Suits.....................................99
SECTION 6.07. Right of Holders To Receive Payment.....................99
SECTION 6.08. Collection Suit by Trustee.............................100
SECTION 6.09. Trustee May File Proofs of Claim.......................100
SECTION 6.10. Priorities.............................................101
SECTION 6.11. Undertaking for Costs..................................101
SECTION 6.12. Restoration of Rights and Remedies.....................102
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee......................................102
SECTION 7.02. Rights of Trustee......................................104
SECTION 7.03. Individual Rights of Trustee...........................106
SECTION 7.04. Trustee's Disclaimer...................................106
SECTION 7.05. Notice of Default......................................107
SECTION 7.06. Reports by Trustee to Holders..........................107
SECTION 7.07. Compensation and Indemnity.............................108
SECTION 7.08. Replacement of Trustee.................................109
SECTION 7.09. Successor Trustee by Merger, Etc.......................111
SECTION 7.10. Eligibility; Disqualification..........................111
SECTION 7.11. Preferential Collection of Claims Against the
Company.............................................112
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Termination of Company's Obligations...................112
SECTION 8.02. Application of Trust Money.............................115
SECTION 8.03. Repayment to the Company...............................116
SECTION 8.04. Reinstatement..........................................116
SECTION 8.05. Acknowledgment of Discharge by Trustee.................117
- iv -
6
Page
----
ARTICLE NINE
MODIFICATION OF THIS INDENTURE
SECTION 9.01. Without Consent of Holders.............................117
SECTION 9.02. With Consent of Holders................................118
SECTION 9.03. Compliance with TIA....................................119
SECTION 9.04. Revocation and Effect of Consents......................119
SECTION 9.05. Notation on or Exchange of Notes.......................120
SECTION 9.06. Trustee To Sign Amendments, Etc........................120
ARTICLE TEN
SUBORDINATION
SECTION 10.01. Notes Subordinated to Senior Debt......................121
SECTION 10.02. Suspension of Payment When Senior Debt Is in
Default.............................................121
SECTION 10.03. Notes Subordinated to Prior Payment of All
Senior Debt on Dissolution, Liquidation or
Reorganization of Company...........................123
SECTION 10.04. Holders To Be Subrogated to Rights of Holders
of Senior Debt......................................125
SECTION 10.05. Obligations of the Company Unconditional...............126
SECTION 10.06. Trustee Entitled to Assume Payments Not
Prohibited in Absence of Notice.....................127
SECTION 10.07. Application by Trustee of Assets Deposited with
It..................................................128
SECTION 10.08. No Waiver of Subordination Provisions..................128
SECTION 10.09. Holders Authorize Trustee To Effectuate
Subordination of Notes..............................129
SECTION 10.10. Right of Trustee to Hold Senior Debt...................130
SECTION 10.11. This Article Ten Not To Prevent Events of
Default.............................................130
SECTION 10.12. No Fiduciary Duty of Trustee to Holders of
Senior Debt.........................................131
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. TIA Controls...........................................131
SECTION 11.02. Notices................................................132
SECTION 11.03. Communications by Holders with Other Holders...........134
SECTION 11.04. Certificate and Opinion as to Conditions
Precedent...........................................134
- v -
7
Page
----
SECTION 11.05. Statements Required in Certificate or Opinion..........135
SECTION 11.06. Rules by Trustee, Paying Agent, Registrar..............136
SECTION 11.07. Legal Holidays.........................................136
SECTION 11.08. Governing Law..........................................136
SECTION 11.09. No Adverse Interpretation of Other Agreements..........137
SECTION 11.10. No Personal Liability..................................137
SECTION 11.11. Successors.............................................137
SECTION 11.12. Duplicate Originals....................................137
SECTION 11.13. Severability...........................................138
ARTICLE TWELVE
GUARANTEE OF NOTES
SECTION 12.01. Unconditional Guarantee................................138
SECTION 12.02. Limitations on Guarantees..............................140
SECTION 12.03. Execution and Delivery of Guarantee....................140
SECTION 12.04. Release of a Guarantor.................................141
SECTION 12.05. Waiver of Subrogation..................................142
SECTION 12.06. No Set-Off.............................................143
SECTION 12.07. Obligations Absolute...................................143
SECTION 12.08. Obligations Continuing.................................144
SECTION 12.09. Obligations Not Reduced................................144
SECTION 12.10. Obligations Reinstated.................................144
SECTION 12.11. Obligations Not Affected...............................145
SECTION 12.12. Waiver.................................................147
SECTION 12.13. No Obligation To Take Action Against the
Company.............................................147
SECTION 12.14. Dealing with the Company and Others....................148
SECTION 12.15. Default and Enforcement................................149
SECTION 12.16. Amendment, Etc.........................................149
SECTION 12.17. Acknowledgment.........................................149
SECTION 12.18. Costs and Expenses.....................................149
SECTION 12.19. No Merger or Waiver; Cumulative Remedies...............150
SECTION 12.20. Survival of Obligations................................150
SECTION 12.21. Guarantee in Addition to Other Obligations.............151
SECTION 12.22. Severability...........................................151
SECTION 12.23. Successors and Assigns.................................151
- vi -
8
Page
----
ARTICLE THIRTEEN
SUBORDINATION OF GUARANTEE
SECTION 13.01. Obligations of Guarantors Subordinated to
Guarantor Senior Debt...............................152
SECTION 13.02. Suspension of Guarantee Obligations When
Guarantor Senior Debt Is in Default.................153
SECTION 13.03. Guarantee Obligations Subordinated to Prior
Payment of All Guarantor Senior Debt on
Dissolution, Liquidation or Reorganization
of Such Guarantor...................................155
SECTION 13.04. Holders of Guarantee Obligations To Be
Subrogated to Rights of Holders of Guarantor
Senior Debt.........................................157
SECTION 13.05. Obligations of the Guarantors Unconditional............158
SECTION 13.06. Trustee Entitled To Assume Payments Not
Prohibited in Absence of Notice.....................159
SECTION 13.07. Application by Trustee of Assets Deposited with
It..................................................160
SECTION 13.08. No Waiver of Subordination Provisions..................161
SECTION 13.09. Holders Authorize Trustee To Effectuate
Subordination of Guarantee Obligations..............162
SECTION 13.10. Right of Trustee To Hold Guarantor Senior Debt.........162
SECTION 13.11. No Suspension of Remedies..............................163
SECTION 13.12. No Fiduciary Duty of Trustee to Holders of
Guarantor Senior Debt...............................163
SIGNATURES...........................................................140
Exhibit A - Form of Series A Note.....................................A-1
Exhibit B - Form of Series B Note.....................................B-1
Exhibit C - Form of Legend for Global Notes...........................C-1
Exhibit D - Form of Certificate To Be Delivered in
Connection with Transfers to Non-QIB
Accredited Investors......................................D-1
Exhibit E - Form of Certificate To Be Delivered in
Connection with Transfers Pursuant to
Regulation S..............................................E-1
Exhibit F - Form of Guarantee.........................................F-1
- vii -
9
- 1 -
INDENTURE, dated as of November 5, 1997, among Kinetic Concepts,
Inc., a Texas corporation (the "Company"), each of the Guarantors named herein,
as guarantors, and Marine Midland Bank, as Trustee (the "Trustee").
The Company has duly authorized the creation of an issue of 9 5/8%
Senior Subordinated Notes due 2007, Series A, and 9 5/8% Senior Subordinated
Notes due 2007, Series B, to be issued in exchange for the 9 5/8% Senior
Subordinated Notes due 2007, Series A, pursuant to the Registration Rights
Agreement (as defined herein) and, to provide therefor, the Company has duly
authorized the execution and delivery of this Indenture. All things necessary to
make the Notes (as defined), when duly issued and executed by the Company, and
authenticated and delivered hereunder, the valid obligations of the Company, and
to make this Indenture a valid and binding agreement of the Company and each of
the Guarantors, have been done.
Each party hereto agrees as follows for the benefit of the other
parties and for the equal and ratable benefit of the Holders (as defined) of the
Company's 9 5/8% Senior Subordinated Notes due 2007, Series A and Series B.
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acquired Indebtedness" means Indebtedness of a Person or any of its
Subsidiaries (i) existing at the time such Person becomes a Restricted
Subsidiary of such Company or at the time it merges or consolidates with the
Company or any of its Restricted Subsidiaries or (ii) which becomes Indebtedness
of the Company or a Restricted Subsidiary in connection with the acquisition of
assets from such Person, and in each case not incurred by such Person or its
Subsidiary in connection with, or in anticipation or contemplation of, such
Person becoming a Restricted Subsidiary of the Company or such acquisition,
merger or consolidation.
"Additional Interest" shall have the meaning set forth in the
Registration Rights Agreement.
"Affiliate" means, with respect to any specified Person, any other
Person who directly or indirectly through one or
10
- 2 -
more intermediaries controls, or is controlled by, or is under common control
with, such specified Person. The term "control" means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative of the foregoing. Notwithstanding the foregoing, no Person
(other than the Company or any Subsidiary of the Company) who makes an
Investment in connection with a Securitization Entity shall be deemed an
Affiliate of the Company or any of its Subsidiaries solely by reason of such
Investment.
"Affiliate Transaction" has the meaning provided in Section 4.11.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Agent Members" has the meaning provided in Section 2.16.
"Asset Acquisition" means (a) an Investment by the Company or any
Restricted Subsidiary of the Company in any other Person pursuant to which such
Person shall become a Restricted Subsidiary of the Company or any Restricted
Subsidiary of the Company, or shall be merged with or into the Company or any
Restricted Subsidiary of the Company, or (b) the acquisition by the Company or
any Restricted Subsidiary of the Company of the assets of any Person (other than
a Restricted Subsidiary of the Company) which constitute all or substantially
all of the assets of such Person or comprises any division or line of business
of such Person or any other properties or assets of such Person other than in
the ordinary course of business.
"Asset Sale" means any direct or indirect sale, issuance,
conveyance, transfer, lease (other than operating leases entered into in the
ordinary course of business), assignment or other transfer for value by the
Company or any of its Restricted Subsidiaries (including any Sale and Leaseback
Transaction) to any Person other than the Company or a Restricted Subsidiary of
the Company of (a) any Capital Stock of any Restricted Subsidiary of the
Company; or (b) any other property or assets of the Company or any Restricted
Subsidiary of the Company other than in the ordinary course of business;
provided, however, that Asset Sales shall not include (i) a transaction or
series of related transactions for which the Company or its Restricted
Subsidiaries receive aggregate consideration
11
- 3 -
of less than $1.0 million, (ii) the sale, lease, conveyance, disposition or
other transfer of all or substantially all of the assets of the Company as
permitted under Section 5.01 or any such disposition that constitutes a Change
of Control, (iii) sales of accounts receivable, equipment and related assets
(including contract rights) of the type specified in the definition of
"Qualified Securitization Transaction" to a Securitization Entity for the fair
market value thereof, including cash in an amount at least equal to 75% of the
fair market value thereof, and (iv) transfers of accounts receivable, equipment
and related assets (including contract rights) of the type specified in the
definition of "Qualified Securitization Transaction" (or a fractional undivided
interest therein) by a Securitization Entity in a Qualified Securitization
Transaction. For the purposes of clause (iii), Purchase Money Notes shall be
deemed to be cash.
"Authenticating Agent" has the meaning provided in Section 2.02.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal,
state or foreign law for the relief of debtors.
"Blockage Period" has the meaning provided in Section 10.02.
"Board of Directors" means, as to any Person, the board of directors
of such Person or any duly authorized committee thereof.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means any day other than a Saturday, Sunday or any
other day on which banking institutions in the city of New York are required or
authorized by law or other governmental action to be closed.
"Capitalized Lease Obligation" means, as to any Person, the
obligations of such Person under a lease that are required to be classified and
accounted for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations at any date shall be the capitalized
12
- 4 -
amount of such obligations at such date, determined in accordance with GAAP.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether voting or nonvoting) of corporate stock,
including each class of Common Stock and Preferred Stock of such Person and (ii)
with respect to any Person that is not a corporation, any and all partnership or
other equity interests of such Person.
"Cash Equivalents" means (i) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or issued by
any agency thereof and backed by the full faith and credit of the United States,
in each case maturing within one year from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the four highest ratings
obtainable from either Standard & Poor's Corporation ("S&P") or Xxxxx'x
Investors Service, Inc. ("Moody's"); (iii) commercial paper maturing no more
than one year from the date of creation thereof and, at the time of acquisition,
having a rating of at least A-1 from S&P or at least P-1 from Moody's; (iv)
certificates of deposit or bankers' acceptances maturing within one year from
the date of acquisition thereof issued by any bank organized under the laws of
the United States of America or any state thereof or the District of Columbia or
any U.S. branch of a foreign bank having at the date of acquisition thereof
combined capital and surplus of not less than $100.0 million; (v) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (iv) above; (vi) investments in money market
funds which invest substantially all their assets in securities of the types
described in clauses (i) through (v) above; and (vii) investments made by
Foreign Subsidiaries in local currencies in instruments issued by or with
entities of such jurisdiction having correlative attributes to the foregoing.
"Change of Control" means the occurrence of one or more of the
following events: (i) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the assets of the Company to any Person or group of related Persons for purposes
13
- 5 -
of Section 13(d) of the Exchange Act (a "Group"), together with any Affiliates
thereof (whether or not otherwise in compliance with the provisions of this
Indenture); (ii) the approval by the holders of Capital Stock of the Company of
any plan or proposal for the liquidation or dissolution of the Company (whether
or not otherwise in compliance with the provisions of this Indenture); (iii) any
Person or Group (other than any of the Permitted Holders(s)) shall become the
owner, directly or indirectly, beneficially or of record, of shares representing
more than 50% of the aggregate ordinary voting power represented by the issued
and outstanding Capital Stock of the Company; or (iv) the first day on which a
majority of the members of the Board of Directors of the Company are not
Continuing Directors.
"Change of Control Offer" has the meaning provided in Section 4.15.
"Change of Control Payment Date" has the meaning provided in Section
4.15.
"Collateral" means (i) the Escrow Account, (ii) the Proceeds and all
other cash or Cash Equivalents deposited in the Escrow Account from time to time
pursuant to Section 4.22, (iii) all of the Company's and the Guarantors' rights,
title, interest and privileges with respect to the Escrow Account and such cash
and Cash Equivalents, (iv) all dividends, interest and other payments and
distributions made on or with respect to such Cash Equivalents or the Escrow
Account and (v) all proceeds of any of the foregoing.
"Commission" means the Securities and Exchange Commission.
"Common Stock" of any Person means any and all shares, interests or
other participations in, and other equivalents (however designated and whether
voting or non-voting) of such Person's common stock, whether outstanding on the
Issue Date or issued after the Issue Date, and includes, without limitation, all
series and classes of such common stock.
"Company" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means such
successor and also includes for the purposes of any provision contained herein
and required by the TIA any other obligor on the Notes.
14
- 6 -
"Consolidated EBITDA" means, with respect to any Person, for any
period, the sum (without duplication) of (i) Consolidated Net Income and (ii) to
the extent Consolidated Net Income has been reduced thereby, (A) all income
taxes of such Person and its Restricted Subsidiaries paid or accrued in
accordance with GAAP for such period (other than income taxes attributable to
extraordinary, unusual or nonrecurring gains or losses or taxes attributable to
sales or dispositions outside the ordinary course of business), (B) Consolidated
Interest Expense, (C) the aggregate depreciation and amortization (including
amortization of goodwill and other intangibles) of such Person and its
Restricted Subsidiaries for such period, and (D) other non-cash charges of such
Person and its Restricted Subsidiaries for such period, less any non-cash
charges increasing Consolidated Net Income during such period and less the
amount of all cash payments made by such Person or any of its Restricted
Subsidiaries during such period to the extent such payments relate to non-cash
charges that were added back in determining Consolidated EBITDA for such period
or any prior period, all as determined on a consolidated basis for such Person
and its Restricted Subsidiaries in accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to
any Person, the ratio of Consolidated EBITDA of such Person during the four full
fiscal quarters (the "Four Quarter Period") ending on or prior to the date of
the transaction giving rise to the need to calculate the Consolidated Fixed
Charge Coverage Ratio (the "Transaction Date") to Consolidated Fixed Charges of
such Person for the Four Quarter Period. In addition to and without limitation
of the foregoing, for purposes of this definition, "Consolidated EBITDA" and
"Consolidated Fixed Charges" shall be calculated after giving effect on a pro
forma basis for the period of such calculation to (i) the incurrence or
repayment of any Indebtedness of such Person or any of its Restricted
Subsidiaries (and the application of the proceeds thereof) giving rise to the
need to make such calculation and any incurrence or repayment of other
Indebtedness (and the application of the proceeds thereof), other than the
incurrence or repayment of Indebtedness in the ordinary course of business for
working capital purposes pursuant to working capital facilities, occurring
during the Four Quarter Period or at any time subsequent to the last day of the
Four Quarter Period and on or prior to the Transaction Date, as if such
incurrence or repayment, as the case may be (and the application of the proceeds
thereof), occurred on the first day of the Four Quarter Period and (ii) any
Asset Sales or Asset Acquisitions (including, without limitation, any Asset
Acquisi-
15
- 7 -
tion giving rise to the need to make such calculation as a result of such Person
or one of its Restricted Subsidiaries (including any Person who becomes a
Restricted Subsidiary as a result of the Asset Acquisition) incurring, assuming
or otherwise being liable for Acquired Indebtedness and also including any
Consolidated EBITDA (provided that such Consolidated EBITDA shall be included
only to the extent includable pursuant to the definition of "Consolidated Net
Income") attributable to the assets which are the subject of the Asset
Acquisition or Asset Sale during the Four Quarter Period) occurring during the
Four Quarter Period or at any time subsequent to the last day of the Four
Quarter Period and on or prior to the Transaction Date, as if such Asset Sale,
Asset Acquisition (including the incurrence, assumption or liability for any
such Acquired Indebtedness) occurred on the first day of the Four Quarter
Period. If such Person or any of its Restricted Subsidiaries directly or
indirectly guarantees Indebtedness of a third Person, the preceding sentence
shall give effect to the incurrence of such guaranteed Indebtedness as if such
Person or any Restricted Subsidiary of such Person had directly incurred or
otherwise assumed such guaranteed Indebtedness. Furthermore, in calculating
"Consolidated Fixed Charges" for purposes of determining the denominator (but
not the numerator) of this "Consolidated Fixed Charge Coverage Ratio," (1)
interest on outstanding Indebtedness determined on a fluctuating basis as of the
Transaction Date and which will continue to be so determined thereafter shall be
deemed to have accrued at a fixed rate per annum equal to the rate of interest
on such Indebtedness in effect on the Transaction Date; (2) if interest on any
Indebtedness actually incurred on the Transaction Date may optionally be
determined at an interest rate based upon a factor of a prime or similar rate, a
eurocurrency interbank offered rate, or other rates, then the interest rate in
effect on the Transaction Date will be deemed to have been in effect during the
Four Quarter Period; and (3) notwithstanding clause (1) above, interest on
Indebtedness determined on a fluctuating basis, to the extent such interest is
covered by agreements relating to Interest Swap Obligations, shall be deemed to
accrue at the rate per annum resulting after giving effect to the operation of
such agreements.
"Consolidated Fixed Charges" means, with respect to any Person for
any period, the sum, without duplication, of (i) Consolidated Interest Expense,
plus (ii) the product of (x) the amount of all dividend payments on any series
of Preferred Stock of such Person (other than dividends paid in Qualified
Capital Stock) paid, accrued or scheduled to be paid or accrued during such
period times (y) a fraction, the numerator of which
16
- 8 -
is one and the denominator of which is one minus the then current effective
consolidated federal, state and local tax rate of such Person, expressed as a
decimal.
"Consolidated Interest Expense" means, with respect to any Person
for any period, the sum of, without duplication: (i) the aggregate of the
interest expense of such Person and its Restricted Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP, including without
limitation, (a) any amortization of debt discount, (b) the net costs under
Interest Swap Obligations, (c) all capitalized interest and (d) the interest
portion of any deferred payment obligation, but excluding amortization or
write-off of deferred financing costs; and (ii) the interest component of
Capitalized Lease Obligations paid, accrued and/or scheduled to be paid or
accrued by such Person and its Restricted Subsidiaries during such period as
determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, with respect to any Person, for any
period, the aggregate net income (or loss) of such Person and its Restricted
Subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP; provided that there shall be excluded therefrom (a) after-tax gains
from Asset Sales or abandonments or reserves relating thereto, (b) after-tax
items classified as extraordinary or nonrecurring gains, (c) the net income of
any Person acquired in a "pooling of interests" transaction accrued prior to the
date it becomes a Restricted Subsidiary of the referent Person or is merged or
consolidated with the referent Person or any Restricted Subsidiary of the
referent Person, (d) the net income (but not loss) of any Restricted Subsidiary
of the referent Person to the extent that the declaration of dividends or
similar distributions by that Restricted Subsidiary of that income is restricted
by a contract, operation of law or otherwise, (e) the net income of any Person
in which the referant Person has an interest, other than a Restricted Subsidiary
of the referent Person, except to the extent of cash dividends or distributions
paid to the referent Person or to a Restricted Subsidiary of the referent Person
by such Person, (f) any restoration to income of any contingency reserve in
accordance with GAAP, except to the extent that provision for such reserve was
made out of Consolidated Net Income accrued at any time following the Issue
Date, (g) income or loss attributable to discontinued operations (including,
without limitation, operations disposed of during such period whether or not
such operations were classified as discontinued), and (h) in the case of a
successor to the referent Person by consolidation or merger
17
- 9 -
or as a transferee of the referent Person's assets, any earnings of the
successor corporation prior to such consolidation, merger or transfer of assets.
"consolidation" means, with respect to any Person, the consolidation
of the accounts of the Restricted Subsidiaries of such Person with those of such
Person, all in accordance with GAAP; provided, however, that "consolidation"
will not include consolidation of the accounts of any Unrestricted Subsidiary of
such Person with the accounts of such Person. The term "consolidated" has a
correlative meaning to the foregoing.
"Continuing Directors" means, as of the date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the date of this Indenture or (ii) was nominated for
election or elected to such Board of Directors with the approval of a majority
of the Continuing Directors who were members of such Board at the time of such
nomination or election.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Indenture is located
at 000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
"Covenant Defeasance" has the meaning set forth in Section 8.01.
"Credit Agreement" means the Credit Agreement dated as of November 3, 1997,
among the Company, certain subsidiary borrowers from time to time parties
thereto, the lenders party thereto in their capacities as lenders thereunder and
Bank of America National Trust and Savings Association, as Administrative Agent,
and Bankers Trust Company, as Syndication Agent, together with the related
documents thereto (including, without limitation, any guarantee agreements and
security documents), in each case as such agreements may be amended (including
any amendment and restatement thereof), supplemented, replaced, restated or
otherwise modified from time to time, including any agreement (and related
documents) extending the maturity of, refinancing, replacing or otherwise
restructuring (including increasing the amount of available borrowings
thereunder (provided that such increase in borrowings is permitted by Section
4.12) or adding Restricted Subsidiaries of the Company as additional borrowers
or guarantors thereunder) all or any portion of the Indebtedness under such
agreement (and related documents) or any successor or replacement agreement (and
re-
18
- 10 -
lated documents) and whether with the same or any other agent, lender or group
of lenders.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement designed to protect the
Company or any Restricted Subsidiary of the Company against fluctuations in
currency values.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means an event or condition the occurrence of which is, or
with the lapse of time or the giving of notice or both would be, an Event of
Default.
"Depository" means The Depository Trust Company, its nominees and
successors.
"Designated Guarantor Senior Debt" means (i) Indebtedness of any
Guarantor under the Credit Agreement and (ii) any other Indebtedness
constituting Guarantor Senior Debt which, at the time of determination, has an
aggregate principal amount of at least $25.0 million and is specifically
designated in the instrument evidencing such Guarantor Senior Debt as
"Designated Guarantor Senior Debt" by the Guarantor incurring said Guarantor
Senior Debt.
"Designated Senior Debt" means (i) Indebtedness under the Credit
Agreement and (ii) any other Indebtedness constituting Senior Debt which, at the
time of determination, has an aggregate principal amount of at least $25.0
million and is specifically designated in the instrument evidencing such Senior
Debt as "Designated Senior Debt" by the Company.
"Disqualified Capital Stock" means that portion of any Capital Stock
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the sole option of the holder
thereof on or prior to the final maturity date of the Notes.
"Eligible Investments" has the meaning set forth in Section 4.22.
19
- 11 -
"Equity Offering" has the meaning provided in Section 3.03 of this
Indenture.
"Escrow Account" has the meaning set forth in Section 4.22.
"Escrow Agent" means Bankers Trust Company.
"Escrow Agreement" means the Escrow Agreement dated as of the
Closing Date among the Company, the Guarantors, the Initial Purchasers, the
Trustee and the Escrow Agent.
"Event of Default" has the meaning provided in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor statute or statutes thereto.
"Exchange Notes" means the 9 5/8% Senior Subordinated Notes due
2007, Series B to be issued in exchange for the Initial Notes pursuant to the
Registration Rights Agreement or, with respect to Initial Notes issued under
this Indenture subsequent to the Issue Date pursuant to Section 2.02, a
registration rights agreement substantially identical to the Registration Rights
Agreement.
"Exchange Offer" has the meaning provided in the Registration Rights
Agreement.
"fair market value" means, with respect to any asset or property,
the price which could be negotiated in an arm's-length, free market transaction,
for cash, between a willing seller and a willing and able buyer, neither of whom
is under undue pressure or compulsion to complete the transaction. Fair market
value shall be determined by the Board of Directors of the Company acting
reasonably and in good faith and shall be evidenced by a Board Resolution of the
Board of Directors of the Company delivered to the Trustee.
"Foreign Subsidiary" means any Restricted Subsidiary of the Company
which (i) is not organized under the laws of the United States, any state
thereof or the District of Columbia and (ii) conducts substantially all of its
business operations in a country other than the United States of America.
"Fremont" means Fremont Partners, L.P. and its Affiliates.
20
- 12 -
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States, as in effect from time to time.
"Global Note" has the meaning provided in Section 2.01.
"guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness or other obligation
of any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation of such other Person (whether arising by virtue
of partnership arrangements, or by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for purposes of assuring
in any other manner the obligee of such Indebtedness or other obligation of the
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part) (but if in part, only to the extent thereof); provided,
however, that the term "guarantee" shall not include (A) endorsements for
collection or deposit in the ordinary course of business and (B) guarantees
(other than guarantees of Indebtedness) by the Company in respect of assisting
one or more Subsidiaries in the ordinary course of their respective businesses,
including without limitation guarantees of trade obligations and operating
leases, on ordinary business terms. The term "guarantee" used as a verb has a
corresponding meaning.
"Guarantee" means the guarantee of the obligations under this
Indenture and the Notes by each of the Guarantors as set forth in Article
Twelve.
"Guarantor" means (i) the domestic Subsidiaries of the Company on
the Issue Date and (ii) each of the Company's Restricted Subsidiaries that in
the future executes a supplemental indenture in which such Restricted Subsidiary
agrees to be bound by the terms of this Indenture as a Guarantor; provided that
any Person constituting a Guarantor as described above shall cease to constitute
a Guarantor when its respective
21
- 13 -
Guarantee is released in accordance with the terms of this Indenture.
"Guarantor Senior Debt" means with respect to any Guarantor, (i) the
principal of, premium, if any, and interest (including any interest accruing
subsequent to the filing of a petition of bankruptcy or the commencement of any
bankruptcy, insolvency, reorganization, receivership or other similar proceeding
at the rate provided for in the documentation with respect thereto, whether or
not such interest is an allowed claim under applicable law) and fees and
expenses (including costs of collection), indemnity obligations on, and all
other amounts and obligations owing in respect of, any Indebtedness of a
Guarantor, whether outstanding on the Issue Date or thereafter created, incurred
or assumed, unless, in the case of any particular Indebtedness, the instrument
creating or evidencing the same or pursuant to which the same is outstanding
expressly provides that such Indebtedness shall not be senior in right of
payment to the Guarantee of such Guarantor. Without limiting the generality of
the foregoing, "Guarantor Senior Debt" shall also include the principal of,
premium, if any, interest (including any interest accruing subsequent to the
filing of a petition of bankruptcy or the commencement of any bankruptcy,
insolvency, reorganization, receivership or other similar proceeding at the rate
provided for in the documentation with respect thereto, whether or not such
interest is an allowed claim under applicable law) on, and all other amounts
owing in respect of, (x) all monetary obligations of every nature of the Company
or such Guarantor under the Credit Agreement, including, without limitation,
obligations to pay principal and interest, reimbursement obligations under
letters of credit, fees, commissions, expenses and indemnities, (y) all Interest
Swap Obligations of such Guarantor and (z) all obligations of such Guarantor
under Currency Agreements, in each case whether outstanding on the Issue Date or
thereafter incurred. Notwithstanding the foregoing, "Guarantor Senior Debt"
shall not include (i) any Indebtedness of such Guarantor to a Subsidiary of such
Guarantor or any Affiliate of such Guarantor or any of such Affiliate's
Subsidiaries, (ii) Indebtedness of such Guarantor to, or guaranteed by such
Guarantor on behalf of, any shareholder who holds more than ten percent of the
equity securities of the Company pursuant to Rule 13d-3 under the Securities
Act, director, officer or employee of such Guarantor or any Restricted
Subsidiary of such Guarantor (including, without limitation, amounts owed for
compensation), (iii) Indebtedness to trade creditors and other trade payables
incurred in connection with obtaining goods, materials or services, (iv)
Indebtedness represented by Disqualified Capital Stock,
22
- 14 -
(v) any liability for federal, state, local or other taxes owed or owing by such
Guarantor, (vi) Indebtedness incurred in violation of the Indenture provisions
set forth under Section 4.12 (but, as to any such obligation, no such violation
shall be deemed to exist for purposes of this clause (vi) if the holder(s) of
such Indebtedness or their representative and the Trustee shall have received an
officers' certificate of the Company to the effect that the incurrence of such
Indebtedness does not (or, in the case of revolving credit Indebtedness or other
Indebtedness available to be borrowed under the Credit Agreement after the date
of the initial borrowing thereunder, that the incurrence of the entire committed
amount thereof at the date on which the initial borrowing thereunder is made
would not) violate such provisions of this Indenture), (vii) Indebtedness which,
when incurred and without respect to any election under Section 1111(b) of Xxxxx
00, Xxxxxx Xxxxxx Code, is without recourse to the Company and (viii) any
Indebtedness which is, by its express terms, subordinated in right of payment to
any other Indebtedness of such Guarantor.
"Holder" means any holder of Notes.
"IAI Global Note" has the meaning provided in Section 2.01.
"incur" has the meaning set forth in Section 4.12.
"Indebtedness" means with respect to any Person, without
duplication, (i) all Obligations of such Person for borrowed money, (ii) all
Obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all Capitalized Lease Obligations of such Person,
(iv) all Obligations of such Person issued or assumed as the deferred purchase
price of property, all conditional sale obligations and all Obligations under
any title retention agreement (but excluding trade accounts payable and other
accrued liabilities arising in the ordinary course of business that are not
overdue by 90 days or more or are being contested in good faith by appropriate
proceedings), (v) all Obligations for the reimbursement of any obligor on any
letter of credit, banker's acceptance or similar credit transaction, (vi)
guarantees and other contingent obligations in respect of Indebtedness of other
Persons of the type referred to in clauses (i) through (v) above and clause
(viii) below, (vii) all Obligations of any other Person of the type referred to
in clauses (i) through (vi) which are secured by any Lien on any property or
asset of such Person, the amount of such Obligation being deemed to be
23
- 15 -
the lesser of the fair market value of such property or asset or the amount of
the Obligation so secured, (viii) all Obligations under Currency Agreements and
Interest Swap Obligations of such Person and (ix) all Disqualified Capital Stock
issued by such Person with the amount of Indebtedness represented by such
Disqualified Capital Stock being equal to the greater of its voluntary or
involuntary liquidation preference and its maximum fixed repurchase price, but
excluding accrued dividends, if any. For purposes hereof, the "maximum fixed
repurchase price" of any Disqualified Capital Stock which does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Disqualified Capital Stock as if such Disqualified Capital Stock were purchased
on any date on which Indebtedness shall be required to be determined pursuant to
this Indenture, and if such price is based upon, or measured by, the fair market
value of such Disqualified Capital Stock, such fair market value shall be
determined reasonably and in good faith by the Board of Directors of the issuer
of such Disqualified Capital Stock.
"Indenture" means this Indenture, as amended or supplemented from
time to time in accordance with the terms hereof.
"Independent Financial Advisor" means a firm (i) which does not, and
whose directors, officers and employees or Affiliates do not, have a direct or
indirect material financial interest in the Company and (ii) which, in the
judgment of the Board of Directors of the Company, is otherwise independent and
qualified to perform the task for which it is to be engaged, and may include a
commercial or investment banking, appraisal or accounting firm.
"Initial Notes" means, collectively, (i) the 9 5/8% Senior
Subordinated Notes due 2007, Series A, of the Company issued on the Issue Date
and (ii) one or more series of 9 5/8% Senior Subordinated Notes due 2007 that
are issued under this Indenture subsequent to the Issue Date pursuant to Section
2.02, in each case for so long as such securities constitute Restricted
Securities.
"Initial Purchasers" means BT Alex. Xxxxx Incorporated and
BancAmerica Xxxxxxxxx Xxxxxxxx.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
24
- 16 -
"interest" means, when used with respect to any Note, the amount of
all interest accruing on such Note, including any applicable defaulted interest
pursuant to Section 2.12 and any Additional Interest pursuant to the
Registration Rights Agreement.
"Interest Payment Date" means the stated maturity of an installment
of interest on the Notes.
"Interest Swap Obligations" means the obligations of any Person
pursuant to any arrangement with any other Person, whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such other
Person calculated by applying a fixed or a floating rate of interest on the same
notional amount and shall include, without limitation, interest rate swaps,
caps, floors, collars and similar agreements.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter.
"Investment" means, with respect to any Person, any direct or
indirect loan or other extension of credit (including, without limitation, a
guarantee) or capital contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for the account or
use of others), or any purchase or acquisition by such Person of any Capital
Stock, bonds, notes, debentures or other securities or evidences of Indebtedness
issued by, any other Person. "Investment" shall exclude extensions of trade
credit by the Company and its Restricted Subsidiaries on commercially reasonable
terms in accordance with normal trade practices of the Company or such
Restricted Subsidiary, as the case may be. If the Company or any Restricted
Subsidiary of the Company sells or otherwise disposes of any Common Stock of any
direct or indirect Restricted Subsidiary of the Company such that, after giving
effect to any such sale or disposition, it ceases to be a Subsidiary of the
Company, the Company shall be deemed to have made an Investment on the date of
any such sale or disposition equal to the fair market value of the Capital Stock
of such Restricted Subsidiary not sold or disposed of.
"Investors" means Fremont II, Inc. and RCBA Purchaser I, L.P.
25
- 17 -
"Issue Date" means November 5, 1997.
"Legal Defeasance" has the meaning set forth in Section 8.01.
"Legal Holiday" has the meaning provided in Section 11.07.
"Lien" means any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof and any
agreement to give any security interest).
"Management Agreement" means a management agreement to be entered
into among the Company, Fremont and RCBA and which provides for the payment or
accrual of not more than $2,000,000 of compensation annually beginning on
November 1 and ending on October 31 of the following year.
"Maturity Date" means November 1, 2007.
"Merger" means the merger of the Investors with and into the Company
pursuant to the Transaction Agreement with the Company as the surviving
corporation of the merger.
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds in the form of cash or Cash Equivalents including payments in respect
of deferred payment obligations when received in the form of cash or Cash
Equivalents (other than the portion of any such deferred payment constituting
interest) received by the Company or any of its Restricted Subsidiaries from
such Asset Sale net of (a) reasonable out-of-pocket expenses and fees relating
to such Asset Sale (including, without limitation, legal, accounting and
investment banking fees and sales commissions), (b) taxes paid or payable after
taking into account any reduction in consolidated tax liability due to available
tax credits or deductions and any tax sharing arrangements, (c) repayment of
Indebtedness that is required to be repaid in connection with such Asset Sale
and (d) appropriate amounts (determined by the Company in good faith) to be
provided by the Company or any Restricted Subsidiary, as the case may be, as a
reserve, against any post closing adjustments or liabilities associated with
such Asset Sale and retained by the Company or any Restricted Subsidiary, as the
case may be, after such Asset Sale, including, without limitation, pension and
other post-employment benefit liabilities, liabilities related to environmental
matters and liabili-
26
- 18 -
ties under any indemnification obligations associated with such Asset Sale.
"Net Proceeds Offer" has the meaning set forth in Section 4.16.
"Net Proceeds Offer Amount" has the meaning set forth in Section
4.16.
"Net Proceeds Offer Payment Date" has the meaning set forth in
Section 4.16.
"Net Proceeds Offer Trigger Date" has the meaning set forth in
Section 4.16.
"Non-U.S. Person" means a person who is not a U.S. person, as
defined in Regulation S.
"Non-Recourse Indebtedness" means Indebtedness secured only by an
asset and which is expressly stated to be without recourse to the Company or its
Restricted Subsidiaries from the date of incurrence of such Indebtedness.
"Notes" means, collectively, the Initial Notes, the Private Exchange
Notes, if any, and the Unrestricted Notes, treated as a single class of
securities, as amended or supplemented from time to time in accordance with the
terms of this Indenture, that are issued pursuant to this Indenture.
"Obligations" means all obligations for principal, premium,
interest, penalties, fees, commissions, indemnifications, reimbursements,
damages and other liabilities payable under the documentation governing any
Indebtedness.
"Offer to Purchase" means the offer to purchase of the Company dated
October 8, 1997.
"Officer" means, with respect to any Person, the Chairman of the
Board of Directors, the Chief Executive Officer, the President, any Vice
President, the Chief Financial Officer, the Treasurer, the Controller, or the
Secretary of such Person, or any other officer designated by the Board of
Directors serving in a similar capacity and with respect to the Trustee or any
agent of the Trustee, a Trust Officer.
"Officers' Certificate" means a certificate signed by two Officers
of the Company.
27
- 19 -
"Opinion of Counsel" means a written opinion from legal counsel who
is reasonably acceptable to the Trustee complying with the requirements of
Sections 11.04 and 11.05, as they relate to the giving of an Opinion of Counsel.
"Paying Agent" has the meaning provided in Section 2.03.
"Permitted Holder(s)" means RCBA and Fremont.
"Permitted Indebtedness" means, without duplication, each of the
following:
(i) Indebtedness under the Notes offered hereby and the Guarantees
thereof;
(ii) Indebtedness incurred pursuant to the Credit Agreement in an
aggregate principal amount at any time outstanding not to exceed $400.0
million, less (x) the aggregate amount of any Indebtedness of
Securitization Entities in Qualified Securitization Transactions incurred
at a time that the Company is not able to incur at least $1.00 of
additional Indebtedness (other than Permitted Indebtedness) pursuant to
Section 4.12, provided that the Company may elect in writing to the
Trustee to have the amount of said reduction resulting from such
Indebtedness incurred in connection with a Qualified Securitization
Transaction to be reduced by an amount (the "Transferred Reduction
Amount") up to the then remaining amount of Permitted Indebtedness that
could be incurred pursuant to clause (xiii) below, and in the event of
such election, the amount of Permitted Indebtedness that can be incurred
pursuant to clause (xiii) will be reduced by the Transferred Reduction
Amount, (y) the amount of all scheduled principal payments actually made
by the Company and (z) the amount of all required permanent prepayments of
Indebtedness under the Credit Agreement actually made with the proceeds of
an Asset Sale;
(iii) Indebtedness incurred by Foreign Subsidiaries not to exceed
$20.0 million (or the equivalent amount thereof, at the time of
incurrence, in other foreign currencies);
(iv) other Indebtedness of the Company and its Restricted
Subsidiaries outstanding on the Issue Date reduced by the amount of any
scheduled amortization payments
28
- 20 -
or permanent mandatory prepayments when actually paid or permanent
reductions thereon;
(v) Interest Swap Obligations of the Company covering Indebtedness
of the Company or any of its Restricted Subsidiaries and Interest Swap
Obligations of any Restricted Subsidiary of the Company covering
Indebtedness of such Restricted Subsidiary; provided, however, that such
Interest Swap Obligations are entered into to protect the Company and its
Restricted Subsidiaries from fluctuations in interest rates on
Indebtedness incurred in accordance with this Indenture to the extent the
notional principal amount of such Interest Swap Obligation does not exceed
the principal amount of the Indebtedness to which such Interest Swap
Obligation relates;
(vi) Indebtedness under Currency Agreements; provided that such
Currency Agreements do not increase the Indebtedness of the Company and
its Restricted Subsidiaries outstanding other than as a result of
fluctuations in foreign currency exchange rates or by reason of fees,
indemnities and compensation payable thereunder;
(vii) Indebtedness of a Restricted Subsidiary of the Company to the
Company or to a Restricted Subsidiary of the Company for so long as such
Indebtedness is held by the Company or a Restricted Subsidiary of the
Company, in each case subject to no Lien (other than a Lien in connection
with the Credit Agreement and Permitted Liens which are not consensual)
held by a Person other than the Company or a Restricted Subsidiary of the
Company; provided that if as of any date any Person other than the Company
or a Restricted Subsidiary of the Company owns or holds any such
Indebtedness or holds a Lien in respect of such Indebtedness (other than a
Lien in connection with the Credit Agreement and Permitted Liens which are
not consensual), such date shall be deemed the incurrence of Indebtedness
not constituting Permitted Indebtedness by the issuer of such
Indebtedness;
(viii) Indebtedness of the Company to a Restricted Subsidiary of the
Company for so long as such Indebtedness is held by a Restricted
Subsidiary of the Company, in each case subject to no Lien (other than a
Lien in connection with the Credit Agreement and Permitted Liens which are
not consensual); provided that (a) any Indebtedness of the Company to any
Restricted Subsidiary of the Company (other than a Restricted Subsidiary
which is a Guarantor) is un-
29
- 21 -
secured and subordinated, pursuant to a written agreement, to the
Company's obligations under this Indenture and the Notes and (b) if as of
any date any Person other than a Restricted Subsidiary of the Company owns
or holds any such Indebtedness or any Person holds a Lien in respect of
such Indebtedness (other than a Lien in connection with the Credit
Agreement and Permitted Liens which are not consensual), such date shall
be deemed the incurrence of Indebtedness not constituting Permitted
Indebtedness by the Company;
(ix) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business; provided, however,
that such Indebtedness is extinguished within five business days of
incurrence;
(x) Indebtedness of the Company or any Restricted Subsidiary
represented by performance bonds, warranty or contractual service
obligations, standby letters of credit or appeal bonds, in each case to
the extent incurred in the ordinary course of business of the Company or
such Restricted Subsidiary in accordance with customary industry
practices, in amounts and for the purposes customary in the Company's
industry;
(xi) the incurrence by a Securitization Entity of Indebtedness in a
Qualified Securitization Transaction that is not recourse to the Company
or any Subsidiary of the Company (except for Standard Securitization
Undertakings);
(xii) Refinancing Indebtedness; and
(xiii) additional Indebtedness of the Company and its Restricted
Subsidiaries in an aggregate principal amount not to exceed $75.0 million
at any one time outstanding (which may be Indebtedness under the Credit
Agreement in addition to that permitted by clause (ii)).
"Permitted Investments" means (i) Investments by the Company or any
Restricted Subsidiary of the Company in any Person that is or will become
immediately after such Investment a Restricted Subsidiary of the Company or that
will merge or consolidate into the Company or a Restricted Subsidiary of the
Company, (ii) Investments in the Company by any Restricted Subsidiary of the
Company; provided that any Indebtedness evidenc-
30
- 22 -
ing such Investment is unsecured and subordinated, pursuant to a written
agreement, to the Company's obligations under the Notes and this Indenture;
(iii) investments in cash and Cash Equivalents; (iv) loans and advances to
employees and officers of the Company and its Restricted Subsidiaries in the
ordinary course of business for bona fide business purposes not in excess of
$5.0 million at any one time outstanding; (v) Currency Agreements and Interest
Swap Obligations entered into in the ordinary course of the Company's or its
Restricted Subsidiaries' businesses and otherwise in compliance with this
Indenture; (vi) Investments in Unrestricted Subsidiaries not to exceed $10.0
million at any one time outstanding; (vii) Investments in securities of trade
creditors or customers received pursuant to any plan of reorganization or
similar arrangement upon the bankruptcy or insolvency of such trade creditors or
customers; (viii) Investments made by the Company or its Restricted Subsidiaries
as a result of consideration received in connection with an Asset Sale made in
compliance with Section 4.16; (ix) Investments existing on the date of this
Indenture; (x) accounts receivable, advances, loans, guarantees or extensions of
credit created or acquired in the ordinary course of business, consistent with
past or industry practice; (xi) any Investment by the Company or a Wholly Owned
Restricted Subsidiary of the Company in a Securitization Entity or any
Investment by a Securitization Entity in any other Person in connection with a
Qualified Securitization Transaction; provided that any Investment in a
Securitization Entity is in the form of a Purchase Money Note or an equity
interest; and (xii) Investments committed to by the Company or its Restricted
Subsidiaries on the Issue Date not to exceed $1.5 million in the aggregate.
"Permitted Liens" means the following types of Liens:
(i) Liens for taxes, assessments or governmental charges or claims
either (a) not delinquent or (b) contested in good faith by appropriate
proceedings and as to which the Company or its Restricted Subsidiaries
shall have set aside on its books such reserves as may be required
pursuant to GAAP;
(ii) statutory, contractual and common law Liens of landlords to
secure rent payments and Liens of carriers, warehousemen, mechanics,
suppliers, materialmen, repairmen and other Liens imposed by law incurred
in the ordinary course of business for sums not yet delinquent or being
contested in good faith, if such reserve or other appropriate provision,
if any, as shall be required by GAAP shall have been made in respect
thereof;
31
- 23 -
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, including any Lien securing letters of
credit issued in the ordinary course of business consistent with past
practice in connection therewith, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money);
(iv) judgment Liens securing judgments not giving rise to an Event
of Default;
(v) easements, rights-of-way, zoning restrictions, restrictive
covenants, minor imperfections in title and other similar charges or
encumbrances in respect of real property not interfering in any material
respect with the ordinary conduct of the business of the Company or any of
its Restricted Subsidiaries;
(vi) any interest or title of a lessor under any Capitalized Lease
Obligation; provided that such Liens do not extend to any property or
assets which is not leased property subject to such Capitalized Lease
Obligation;
(vii) purchase money Liens to finance property or assets (including
the cost of construction) of the Company or any Restricted Subsidiary of
the Company acquired in the ordinary course of business; provided,
however, that (A) the related purchase money Indebtedness shall not exceed
the cost of such property or assets and shall not be secured by any
property or assets of the Company or any Restricted Subsidiary of the
Company other than the property and assets so acquired or constructed and
(B) the Lien securing such Indebtedness shall be created within 180 days
of such acquisition or construction;
(viii) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or other
goods;
(ix) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber
32
- 24 -
documents and other property relating to such letters of credit and
products and proceeds thereof;
(x) Liens encumbering deposits made to secure obligations arising
from statutory, regulatory, contractual, or warranty requirements of the
Company or any of its Restricted Subsidiaries, including rights of offset
and set-off;
(xi) Liens securing Interest Swap Obligations which Interest Swap
Obligations relate to Indebtedness that is otherwise permitted under this
Indenture;
(xii) Liens securing Indebtedness under Currency Agreements;
(xiii) Liens securing Acquired Indebtedness incurred in accordance
with Section 4.12; provided that (A) such Liens secured such Acquired
Indebtedness at the time of and prior to the incurrence of such Acquired
Indebtedness by the Company or a Restricted Subsidiary of the Company and
were not granted in connection with, or in anticipation of, the incurrence
of such Acquired Indebtedness by the Company or a Restricted Subsidiary of
the Company and (B) such Liens do not extend to or cover any property or
assets of the Company or of any of its Restricted Subsidiaries other than
the property or assets that secured the Acquired Indebtedness prior to the
time such Indebtedness became Acquired Indebtedness of the Company or a
Restricted Subsidiary of the Company and are no more favorable to the
lienholders than those securing the Acquired Indebtedness prior to the
incurrence of such Acquired Indebtedness by the Company or a Restricted
Subsidiary of the Company;
(xiv) Liens arising under this Indenture;
(xv) leases or subleases granted to others that do not materially
interfere with the business of the Company and its Restricted
Subsidiaries;
(xvi) Liens in connection with any filing of Uniform Commercial Code
financing statements regarding leases;
(xvii) Liens securing Non-Recourse Indebtedness incurred pursuant to
this Indenture;
33
- 25 -
(xviii) Liens arising from a bank or financial institution honoring
a check or draft inadvertently drawn against insufficient funds in the
ordinary course of business; and
(xix) Liens on assets transferred to a Securitization Entity or on
assets of a Securitization Entity, in either case incurred in connection
with a Qualified Securitization Transaction.
"Person" means an individual, partnership, corporation,
unincorporated organization, limited liability company, trust or joint venture,
or a governmental agency or political subdivision thereof.
"Physical Notes" has the meaning provided in Section 2.01.
"Preferred Stock" of any Person means any Capital Stock of such
Person that has preferential rights to any other Capital Stock of such Person
with respect to dividends or redemptions or upon liquidation.
"principal" of any Indebtedness (including the Notes) means the
principal amount of such Indebtedness plus the premium, if any, on such
Indebtedness.
"Private Exchange Notes" shall have the meaning provided in the
Registration Rights Agreement.
"Private Placement Legend" means the legend initially set forth on
the Initial Notes in the form set forth in Exhibit A.
"Proceeds" has the meaning set forth in Section 4.22.
"pro forma" means, with respect to any calculation made or required
to be made pursuant to the terms of this Indenture, a calculation in accordance
with Article 11 of Regulation S-X under the Securities Act.
"Property" means, with respect to any Person, any interests of such
Person in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible, including, without limitation, Capital Stock,
partnership interests and other equity or ownership interests in any other
Person.
34
- 26 -
"Purchase Money Indebtedness" means Indebtedness the net proceeds of
which are used to finance the cost (including the cost of construction) of
property or assets acquired in the normal course of business by the Person
incurring such Indebtedness.
"Purchase Money Note" means a promissory note of a Securitization
Entity evidencing a line of credit, which may be irrevocable, from the Company
or any Subsidiary of the Company in connection with a Qualified Securitization
Transaction to a Securitization Entity, which note shall be repaid from cash
available to the Securitization Entity, other than amounts required to be
established as reserves pursuant to agreements, amounts paid to investors in
respect of interest, principal and other amounts owing to such investors,
amounts paid in connection with the purchase of newly generated receivables or
newly acquired equipment and amounts paid for administrative costs in the
ordinary course of business.
"QIB Global Note" has the meaning provided in Section 2.01.
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock.
"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A.
"Qualified Securitization Transaction" means any transaction or
series of transactions that may be entered into by the Company or any of its
Subsidiaries pursuant to which the Company or any or its Subsidiaries may sell,
convey or otherwise transfer to (a) a Securitization Entity (in the case of a
transfer by the Company or any of its Subsidiaries) and (b) any other Person (in
the case of a transfer by a Securitization Entity), or may grant a security
interest in, any accounts receivable or equipment (whether now existing or
arising or acquired in the future) of the Company or any of its Subsidiaries,
and any assets related thereto including, without limitation, all collateral
securing such accounts receivable and equipment, all contracts and contract
rights and all guarantees or other obligations in respect of such accounts
receivable and equipment, proceeds of such accounts receivable and equipment and
other assets (including contract rights) which are customarily transferred or in
respect of which security interests are customarily granted in connection with
asset securitization transactions involving accounts receivable and equipment.
35
- 27 -
"RCBA" means Xxxxxxx X. Xxxx Associates, Inc. and its Affiliates.
"Receivables" means any right of payment from or on behalf of any
obligor, whether constituting an account, chattel paper, instrument, general
intangible or otherwise, arising from the financing by the Company or any
Restricted Subsidiary of the Company of merchandise or services, and monies due
thereunder, security in the merchandise and services financed thereby, records
related thereto, and the right to payment of any interest or finance charges and
other obligations with respect thereto, proceeds from claims on insurance
policies related thereto, any other proceeds related thereto, and any other
related rights.
"Record Date" means the Record Dates specified in the Notes.
"Redemption Date" means, when used with respect to any Note to be
redeemed, the date fixed for such redemption pursuant to this Indenture and the
Notes.
"Redemption Price" means, when used with respect to any Note to be
redeemed, the price fixed for such redemption, including principal and premium,
if any, pursuant to this Indenture and the Notes.
"Reference Date" has the meaning set forth in Section 4.08.
"Refinance" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "Refinanced" and "Refinancing"
shall have correlative meanings.
"Refinancing Indebtedness" means any Refinancing by the Company or
any Restricted Subsidiary of the Company of Indebtedness incurred in accordance
with Section 4.12 (other than pursuant to clause (ii), (iii), (v), (vi), (vii),
(viii), (ix), (x), (xi) or (xiii) of the definition of Permitted Indebtedness),
in each case that does not (1) result in an increase in the aggregate principal
amount of Indebtedness of such Person as of the date of such proposed
Refinancing (plus the amount of any premium required to be paid under the terms
of the instrument governing such Indebtedness or the amount of any premium
reasonably determined to be necessary to accomplish such refi-
36
- 28 -
nancing and plus the amount of reasonable expenses incurred by the Company and
any Restricted Subsidiary in connection with such Refinancing) or (2) create
Indebtedness with (A) a Weighted Average Life to Maturity that is less than the
Weighted Average Life to Maturity of the Indebtedness being Refinanced or (B) a
final maturity earlier than the final maturity of the Indebtedness being
Refinanced; provided that (x) if such Indebtedness being Refinanced is
Indebtedness solely of the Company or any Restricted Subsidiary or is
Indebtedness solely of the Company and any Restricted Subsidiary or Restricted
Subsidiaries, then such Refinancing Indebtedness shall be Indebtedness solely of
the Company or such Restricted Subsidiary or the Company and such Restricted
Subsidiary or Restricted Subsidiaries, as the case may be, and (y) if such
Indebtedness being Refinanced is subordinate or junior to the Notes, then such
Refinancing Indebtedness shall be subordinate to the Notes at least to the same
extent and in the same manner as the Indebtedness being Refinanced.
"Registrar" has the meaning provided in Section 2.03.
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of the Issue Date among the Company, the Guarantors and the
Initial Purchasers.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Global Note" has the meaning provided in Section 2.01.
"Related Person" means, with respect to any Person, any other Person
directly or indirectly owning 10% or more of the outstanding voting Common Stock
of such Person (or, in the case of a Person that is not a corporation, 10% or
more of the equity interest in such Person).
"Remaining Proceeds" has the meaning set forth in Section 4.22.
"Replacement Assets" shall have the meaning set forth in Section
4.16.
"Representative" means the indenture trustee or other trustee, agent
or representative in respect of any Designated Senior Debt; provided that (a)
if, and for so long as, any Designated Senior Debt lacks such a representative,
then the Representative for such Designated Senior Debt shall at all times
37
- 29 -
constitute the holders of a majority of such Designated Senior Debt and (b) the
administrative agent (or any successor thereto) shall be a Representative of the
lenders under the Credit Agreement.
"Restricted Payment" shall have the meaning set forth in Section
4.10.
"Restricted Security" has the meaning assigned to such term in Rule
144(a)(3) under the Securities Act; provided, however, that the Trustee shall be
entitled to request and conclusively rely on an Opinion of Counsel with respect
to whether any Note constitutes a Restricted Security.
"Restricted Subsidiary" of any Person means any Subsidiary of such
Person which at the time of determination is not an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
"Sale and Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a party, providing
for the leasing to the Company or a Restricted Subsidiary of any property,
whether owned by the Company or any Restricted Subsidiary at the Issue Date or
later acquired, which has been or is to be sold or transferred by the Company or
such Restricted Subsidiary to such Person or to any other Person from whom funds
have been or are to be advanced by such Person on the security of such Property.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Securitization Entity" means a Wholly Owned Restricted Subsidiary
of the Company (or another Person in which the Company or any Subsidiary of the
Company makes an Investment and to which the Company or any Subsidiary of the
Company transfer accounts receivable or equipment and related assets) which
engages in no activities other than in connection with the financing of accounts
receivable or equipment and which is designated by the Board of Directors of the
Company (as provided below) as a Securitization Entity (a) no portion of the
Indebtedness or any other Obligations (contingent or otherwise) of which (i) is
guaranteed by the Company or any Subsidiary of the Company (excluding guarantees
of Obligations (other than the principal of, and interest on, Indebtedness)
pursuant to Standard Securitization Undertakings), (ii) is recourse to or
38
- 30 -
obligates the Company or any Subsidiary of the Company in any way other than
pursuant to Standard Securitization Undertakings or (iii) subjects any property
or asset of the Company or any Subsidiary of the Company, directly or
indirectly, contingently or otherwise, to the satisfaction thereof, other than
pursuant to Standard Securitization Undertakings, (b) with which neither the
Company nor any Subsidiary of the Company has any material contract, agreement,
arrangement or understanding other than on terms no less favorable to the
Company or such Subsidiary than those that might be obtained at the time from
Persons that are not Affiliates of the Company, other than fees payable in the
ordinary course of business in connection with servicing receivables of such
entity, and (c) to which neither the Company nor any Subsidiary of the Company
has any obligation to maintain or preserve such entity's financial condition or
cause such entity to achieve certain levels of operating results. Any such
designation by the Board of Directors of the Company shall be evidenced to the
Trustee by filing with the Trustee a certified copy of the resolution of the
Board of Directors of the Company giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing conditions.
"Senior Debt" means the principal of, premium, if any, and interest
(including any interest accruing subsequent to the filing of a petition of
bankruptcy or the commencement of any bankruptcy, insolvency, reorganization,
receivership or other similar proceeding at the rate provided for in the
documentation with respect thereto, whether or not such interest is an allowed
claim under applicable law) and fees and expenses (including costs of
collection), indemnity obligations on, and all other amounts and obligations
owing in respect of, any Indebtedness of the Company, whether outstanding on the
Issue Date or thereafter created, incurred or assumed, unless, in the case of
any particular Indebtedness, the instrument creating or evidencing the same or
pursuant to which the same is outstanding expressly provides that such
Indebtedness shall not be senior in right of payment to the Notes. Without
limiting the generality of the foregoing, "Senior Debt" shall also include the
principal of, premium, if any, interest (including any interest accruing
subsequent to the filing of a petition of bankruptcy or the commencement of any
bankruptcy, insolvency, reorganization, receivership or other similar proceeding
at the rate provided for in the documentation with respect thereto, whether or
not such interest is an allowed claim under applicable law) on, and all other
amounts owing in respect of, (x) all monetary obligations of every nature of the
Company under the Credit Agreement, including, without limitation, obligations
to
39
- 31 -
pay principal and interest, reimbursement obligations under letters of credit,
guaranteed obligations, fees, commissions, expenses and indemnities, (y) all
Interest Swap Obligations and (z) all obligations under Currency Agreements, in
each case whether outstanding on the Issue Date or thereafter incurred.
Notwithstanding the foregoing, "Senior Debt" shall not include (i) any
Indebtedness of the Company to a Subsidiary of the Company or any Affiliate of
the Company or any of such Affiliate's Subsidiaries, (ii) Indebtedness of the
Company to, or guaranteed by the Company on behalf of, any shareholder who holds
more than ten percent of the equity securities of the Company pursuant to Rule
13d-3 under the Securities Act, director, officer or employee of the Company or
any Subsidiary of the Company (including, without limitation, amounts owed for
compensation), (iii) Indebtedness to trade creditors and other trade payables
incurred in connection with obtaining goods, materials or services, (iv)
Indebtedness represented by Disqualified Capital Stock, (v) any liability for
federal, state, local or other taxes owed or owing by the Company, (vi)
Indebtedness incurred in violation of this Indenture provisions set forth under
Section 4.12 (but, as to any such obligation, no such violation shall be deemed
to exist for purposes of this clause (vi) if the holder(s) of such Indebtedness
or their representative and the Trustee shall have received an officers'
certificate of the Company to the effect that the incurrence of such
Indebtedness does not (or, in the case of revolving credit Indebtedness or other
Indebtedness available to be borrowed under the Credit Agreement after the date
of the initial borrowing thereunder, that the incurrence of the entire committed
amount thereof at the date on which the initial borrowing thereunder is made
would not) violate such provisions of this Indenture), (vii) Indebtedness which,
when incurred and without respect to any election under Section 1111(b) of Xxxxx
00, Xxxxxx Xxxxxx Code, is without recourse to the Company and (viii) any
Indebtedness which is, by its express terms, subordinated in right of payment to
any other Indebtedness of the Company.
"Significant Subsidiary" shall have the meaning set forth in Rule
1.02(w) of Regulation S-X under the Securities Act.
"Special Redemption" has the meaning set forth in Section 4.22.
"Special Redemption Date" has the meaning set forth in Section 4.22.
40
- 32 -
"Special Redemption Notice" has the meaning set forth in Section
4.22.
"Standard Securitization Undertakings" means representations,
warranties, covenants and indemnities entered into by the Company or any
Subsidiary of the Company which are reasonably customary in an accounts
receivable or equipment securitization transaction.
"Subsidiary," with respect to any Person, means (i) any corporation
of which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the election of directors under ordinary circumstances
shall at the time be owned, directly or indirectly, by such Person or (ii) any
other Person of which at least a majority of the voting interest under ordinary
circumstances is at the time, directly or indirectly, owned by such Person.
"Surviving Entity" shall have the meaning set forth in Section 5.01.
"Tender Offer" means the offer to purchase all of the Common Stock
of the Company, pursuant to the Transaction Agreement and the Offer to Purchase.
"Tender Offer Officers' Certificate" has the meaning set forth in
Section 4.22.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb), as amended, as in effect on the date of this
Indenture, except as otherwise provided in Section 9.03.
"Transaction Agreement" means the Transaction Agreement dated as of
October 2, 1997 among Fremont Purchaser II, Inc., RCBA Purchaser I, L.P. and the
Company as in effect on the Issue Date.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"Trust Officer" means any officer or assistant officer of the
Trustee assigned by the Trustee to administer this Indenture, or in the case of
a successor trustee, an officer assigned to the department, division or group
performing the
41
- 33 -
corporation trust work of such successor and assigned to administer this
Indenture.
"U.S. Government Obligations" means direct obligations of, and
obligations guaranteed by, the United States of America for the payment of which
the full faith and credit of the United States of America is pledged.
"U.S. Legal Tender" means such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts.
"Unrestricted Notes" means one or more Notes that do not and are not
required to bear the Private Placement legend in the form set forth in Exhibit
A, including, without limitation, the Exchange Notes.
"Unrestricted Subsidiary" means any Subsidiary of the Company
designated as such pursuant to and in compliance with Section 4.14. Any such
designation may be revoked by a Board Resolution of the Company delivered to the
Trustee, subject to the provisions of Section 4.14.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the sum of
the total of the products obtained by multiplying (i) the amount of each then
remaining installment, sinking fund, serial maturity or other required payment
of principal, including payment at final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
"Wholly Owned Restricted Subsidiary" of any Person means any
Restricted Subsidiary of such Person of which all the outstanding voting
securities (other than, in the case of a foreign Restricted Subsidiary,
directors' qualifying shares or an immaterial amount of shares required to be
owned by other Persons pursuant to applicable law) are owned by such Person or
any Wholly Owned Restricted Subsidiary of such Person.
SECTION 1.02. Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in, and made a part of, this Indenture.
The following TIA terms used in this Indenture have the following meanings:
42
- 34 -
"indenture securities" means the Notes.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the Indenture securities means the Company or any other
obligor on the Notes.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission rule
and not otherwise defined herein have the meanings assigned to them therein.
SECTION 1.03. 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 of any date of determination;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the
plural include the singular;
(5) "herein," "hereof" and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section or
other subdivision; and
(6) any reference to a statute, law or regulation means that
statute, law or regulation as amended and in effect from time to time and
includes any successor statute, law or regulation; provided, however, that
any reference to the Bankruptcy Law shall mean the Bankruptcy Law as
applicable to the relevant case.
43
- 35 -
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating.
The Initial Notes, the notation thereon relating to the Guarantees,
if any, and the Trustee's certificate of authentication relating thereto shall
be substantially in the form of Exhibit A hereto, provided, that any Initial
Notes issued in a public offering shall be substantially in the form of Exhibit
B hereto. The Exchange Notes, the notation thereon relating to the Guarantees,
if any, and the Trustee's certificate of authentication relating thereto shall
be substantially in the form of Exhibit B hereto. The Notes may have notations,
legends or endorsements required by law, stock exchange rule or depository rule
or usage. The Company and the Trustee shall approve the form of the Notes and
any notation, legend or endorsement on them. Each Note shall be dated the date
of its issuance and shall show the date of its authentication. Each Note shall
have an executed Guarantee endorsed thereon substantially in the form of Exhibit
F hereto.
The terms and provisions contained in the Notes and the Guarantees,
if any, annexed hereto as Exhibits A, B and F, shall constitute, and are hereby
expressly made, a part of this Indenture and, to the extent applicable, the
Company, the Guarantors, if any, and the Trustee, by their execution and
delivery of this Indenture, expressly agree to such terms and provisions and to
be bound thereby.
Notes offered and sold (i) in reliance on Rule 144A, (ii) to
Institutional Accredited Investors or (iii) in reliance on Regulation S shall,
unless the applicable Holder requests Notes in the form of Certificated Notes in
registered form ("Physical Notes"), which shall be in substantially the form set
forth in Exhibit A, be issued initially in the form of one or more permanent
global Notes in registered form, substantially in the form set forth in Exhibit
A (the "Global Note"), deposited with the Trustee, as custodian for the
Depository, duly executed by the Company (and having an executed Guarantee
endorsed thereon) and authenticated by the Trustee as hereinafter provided, and
shall bear the legend set forth in Exhibit C. One or more separate Global Notes
shall be issued to represent Notes held by (i) Qualified Institutional Buyers (a
"QIB Global Note"), (ii) Institutional Accredited Investors (an "IAI Global
Note") and (iii) Persons acquiring Notes in reliance on Regula-
44
- 36 -
tion S (a "Regulation S Global Note"). The Company shall cause the QIB Global
Notes, IAI Global Notes and Regulation S Global Notes to have separate CUSIP
numbers. The aggregate principal amount of any Global Note may from time to time
be increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depository, as hereinafter provided.
All Notes offered and sold in reliance on Regulation S shall remain
in the form of a Global Note until the consummation of the Exchange Offer
pursuant to the Registration Rights Agreement; provided, however, that all of
the time periods specified in the Registration Rights Agreement to be complied
with by the Company and the Guarantors have been so complied with.
SECTION 2.02. Execution and Authentication; Aggregate Principal
Amount.
Two Officers, or an Officer and an Assistant Secretary of the
Company and each Guarantor, shall sign, or one Officer shall sign and one
Officer or an Assistant Secretary (each of whom shall, in each case, have been
duly authorized by all requisite corporate actions) shall attest to, the Notes
for the Company and the Guarantees for the Guarantors by manual or facsimile
signature.
If an Officer or Assistant Secretary whose signature is on a Note or
a Guarantee was an Officer or Assistant Secretary at the time of such execution
but no longer holds that office or position at the time the Trustee
authenticates the Note, the Note shall nevertheless be valid.
A Note shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Note. The
signature shall be conclusive evidence that the Note has been authenticated
under this Indenture.
The Trustee shall authenticate (i) Initial Notes for original issue
in the aggregate principal amount not to exceed $300,000,000 in one or more
series (of which no more than $100,000,000 may be issued after the Issue Date,
provided that such subsequent issuance complies with Section 4.12 (other than
clause (i) of the definition of Permitted Indebtedness) and no Default or Event
of Default exists under this Indenture at the time of such subsequent issuance
or will result therefrom), (ii) Private Exchange Notes from time to time for
issue only in exchange for a like principal amount of Initial Notes, and (iii)
Unrestricted Notes from time to time only (A) in exchange
45
- 37 -
for a like principal amount of Initial Notes or (B) in an aggregate principal
amount of not more than the excess of $300,000,000 over the sum of the aggregate
principal amount of (x) Initial Notes then outstanding, (y) Private Exchange
Notes then outstanding and (z) Unrestricted Notes issued in accordance with
(iii)(A) above, in each case upon a written order of the Company in the form of
an Officers' Certificate of the Company. Each such written order shall specify
the amount of Notes to be authenticated and the date on which the Notes are to
be authenticated, whether the Notes are to be Initial Notes, Private Exchange
Notes or Unrestricted Notes and whether the Notes are to be issued as Physical
Notes or Global Notes or such other information as the Trustee may reasonably
request. The aggregate principal amount of Notes outstanding at any time may not
exceed $300,000,000, except as provided in Section 2.07.
In the event that the Company shall issue and the Trustee shall
authenticate any Notes issued under this Indenture subsequent to the Issue Date
pursuant to clauses (i) and (iii) of the first sentence of the immediately
preceding paragraph, the Company shall use its reasonable efforts to obtain the
same "CUSIP" number for such Notes as is printed on the Notes outstanding at
such time; provided, however, that if any series of Notes issued under this
Indenture subsequent to the Issue Date is determined, pursuant to an Opinion of
Counsel of the Company in a form reasonably satisfactory to the Trustee to be a
different class of security than the Notes outstanding at such time for federal
income tax purposes, the Company may obtain a "CUSIP" number for such Notes that
is different than the "CUSIP" number printed on the Notes then outstanding.
Notwithstanding the foregoing, all Notes issued under this Indenture shall vote
and consent together on all matters as one class and no series of Notes will
have the right to vote or consent as a separate class on any matter.
The Trustee may appoint an authenticating agent (the "Authenticating
Agent") reasonably acceptable to the Company to authenticate Notes. Unless
otherwise provided in the appointment, an Authenticating Agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such Authenticating
Agent. An Authenticating Agent has the same rights as an Agent to deal with the
Company or with any Affiliate of the Company.
46
- 38 -
The Notes shall be issuable in fully registered form only, without
coupons, in denominations of $1,000 and any integral multiple thereof.
The Trustee is authorized to enter into a letter of representation
with the Depository in the form provided to the Trustee by the Company and to
act in accordance with such letter. The Trustee is authorized to enter into the
Escrow Agreement and to act in accordance therewith.
SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency (which shall be
located in the Borough of Manhattan in the City of New York, State of New York)
where (a) Notes may be presented or surrendered for registration of transfer or
for exchange ("Registrar"), (b) Notes may be presented or surrendered for
payment ("Paying Agent") and (c) notices and demands to or upon the Company in
respect of the Notes and this Indenture may be served. The Registrar shall keep
a register of the Notes and of their transfer and exchange. The Company may have
one or more Co-Registrars and one or more additional Paying Agents reasonably
acceptable to the Trustee. The term "Paying Agent" or "Registrar" includes any
additional Paying Agent or Registrar, as the case may be. The Company may act as
its own Paying Agent, except that for the purposes of payments on the Notes
pursuant to Sections 4.15 and 4.16, neither the Company nor any Affiliate of the
Company may act as Paying Agent.
The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture, which agreement shall incorporate the
provisions of the TIA and implement the provisions of this Indenture that relate
to such Agent. The Company shall notify the Trustee of the name and address of
any such Agent. If the Company shall fail to maintain a Registrar or Paying
Agent the Trustee shall act as such.
The Company initially appoints the Trustee as Registrar, Paying
Agent and agent for service of demands and notices in connection with the Notes,
until such time as the Trustee has resigned or a successor has been appointed.
Any of the Registrar, the Paying Agent or any other agent may resign upon 30
days' notice to the Company. The Company may change any Paying Agent and
Registrar without notice to the Holders.
47
- 39 -
SECTION 2.04. Paying Agent To Hold Assets in Trust.
The Company shall require each Paying Agent other than the Trustee
to agree in writing that such Paying Agent shall hold in trust for the benefit
of the Holders or the Trustee all assets held by the Paying Agent for the
payment of principal of, premium, if any, or interest on, the Notes (whether
such assets have been distributed to it by the Company or any other obligor on
the Notes), and the Company and the Paying Agent shall notify the Trustee of any
Default by the Company (or any other obligor on the Notes) in making any such
payment. The Company at any time may require a Paying Agent to distribute all
assets held by it to the Trustee and account for any assets disbursed and the
Trustee may at any time during the continuance of any payment Default, upon
written request to a Paying Agent, require such Paying Agent to distribute all
assets held by it to the Trustee and to account for any assets distributed. Upon
distribution to the Trustee of all assets that shall have been delivered by the
Company to the Paying Agent, the Paying Agent shall have no further liability
for such assets.
SECTION 2.05. Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company shall furnish or cause the Registrar to
furnish to the Trustee three (3) Business Days (or such shorter period as the
Trustee may expressly agree to) before each Record Date and at such other times
as the Trustee may request in writing a list as of such date and in such form as
the Trustee may reasonably require of the names and addresses of the Holders,
which list may be conclusively relied upon by the Trustee, and the Company shall
otherwise comply with TIA Section 312(a).
SECTION 2.06. Transfer and Exchange.
Subject to Sections 2.16 and 2.17, when Notes are presented to the
Registrar or a Co-Registrar with a request to register the transfer of such
Notes or to exchange such Notes for an equal principal amount of Notes or other
authorized denominations, the Registrar or Co-Registrar shall register the
transfer or make the exchange as requested if its requirements for such
transaction are met; provided, however, that the Notes presented or surrendered
for registration of transfer or exchange shall be duly endorsed or accompanied
by a written in-
48
- 40 -
strument of transfer in form satisfactory to the Company, the Trustee and the
Registrar or Co-Registrar, duly executed by the Holder thereof or his attorney
duly authorized in writing. To permit registration of transfers and exchanges,
the Company shall execute and the Trustee shall authenticate Notes and the
Guarantors shall execute Guarantees thereon at the Registrar's or Co-Registrar's
request. No service charge shall be made for any registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
transfer tax, fee or similar governmental charge payable in connection therewith
(other than any such transfer taxes or similar governmental charge payable upon
exchanges or transfers pursuant to Section 2.10, 3.07, 4.15, 4.16 or 9.05, in
which event the Company shall be responsible for the payment of such taxes).
The Registrar or Co-Registrar shall not be required to register the
transfer of or exchange of any Note (i) during a period beginning at the opening
of business on the day which is 15 days before the mailing of a notice of
redemption of Notes and ending at the close of business on the day of such
mailing and (ii) selected for redemption in whole or in part pursuant to Article
Three, except the unredeemed portion of any Note being redeemed in part.
Any Holder of a beneficial interest in a Global Note shall, by
acceptance of such Global Note, agree that transfers of beneficial interests in
such Global Notes may be effected only through a book entry system maintained by
the Holder of such Global Note (or its agent), and that ownership of a
beneficial interest in the Note shall be required to be reflected in a book
entry system.
SECTION 2.07. Replacement Notes.
If a mutilated Note is surrendered to the Trustee or if the Holder
of a Note claims that the Note has been lost, destroyed or wrongfully taken, the
Company shall issue and the Trustee shall authenticate a replacement Note and
the Guarantors shall execute a Guarantee thereon if the Trustee's requirements
are met. If required by the Trustee or the Company, such Holder must provide an
indemnity bond or other indemnity of reasonable tenor, sufficient in the
reasonable judgment of the Company, the Guarantors and the Trustee, to protect
the Company, the Guarantors, the Trustee or any Agent from any loss which any of
them may suffer if a Note is replaced. Every replacement Note shall constitute
an additional obligation of the Company and the Guarantors.
49
- 41 -
SECTION 2.08. Outstanding Notes.
Notes outstanding at any time are all the Notes that have been
authenticated by the Trustee except those canceled by it, those delivered to it
for cancellation and those described in this Section as not outstanding. Subject
to the provisions of Section 2.09, a Note does not cease to be outstanding
because the Company or any of its Affiliates holds the Note.
If a Note is replaced pursuant to Section 2.07 (other than a
mutilated Note surrendered for replacement), it ceases to be outstanding unless
the Trustee receives proof satisfactory to it that the replaced Note is held by
a bona fide purchaser. A mutilated Note ceases to be outstanding upon surrender
of such Note and replacement thereof pursuant to Section 2.07.
If on a Redemption Date or the Maturity Date the Paying Agent holds
U.S. Legal Tender sufficient to pay all of the principal, premium, if any, and
interest due on the Notes payable on that date and is not prohibited from paying
such money to the Holders thereof pursuant to the terms of this Indenture, then
on and after that date such Notes shall be deemed not to be outstanding and
interest on them shall cease to accrue.
SECTION 2.09. Treasury Notes.
In determining whether the Holders of the required principal amount
of Notes have concurred in any direction, waiver, consent or notice, Notes owned
by the Company or an Affiliate of the Company shall be considered as though they
are not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes which a Trust Officer of the Trustee actually knows are so owned
shall be so considered. The Company shall notify the Trustee, in writing, when
either it or, to its knowledge, any of its Affiliates repurchases or otherwise
acquires Notes, of the aggregate principal amount of such Notes so repurchased
or otherwise acquired and such other information as the Trustee may reasonably
request and the Trustee shall be entitled to rely thereon.
SECTION 2.10. Temporary Notes.
Until definitive Notes are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Notes upon receipt of a
written order of the Company in the form of an Officers' Certificate. The
Officers' Certifi-
50
- 42 -
cate shall specify the amount of temporary Notes to be authenticated and the
date on which the temporary Notes are to be authenticated. Temporary Notes shall
be substantially in the form of definitive Notes but may have variations that
the Company consider appropriate for temporary Notes and so indicate in the
Officers' Certificate. Without unreasonable delay, the Company shall prepare,
the Trustee shall authenticate and the Guarantors shall execute Guarantees on,
upon receipt of a written order of the Company pursuant to Section 2.02,
definitive Notes in exchange for temporary Notes.
SECTION 2.11. Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Notes surrendered to them for transfer, exchange or payment. The Trustee, or
at the direction of the Trustee, the Registrar or the Paying Agent, and no one
else, shall cancel and, at the written direction of the Company, shall dispose,
in its customary manner, of all Notes surrendered for transfer, exchange,
payment or cancellation. Subject to Section 2.07, the Company may not issue new
Notes to replace Notes that it has paid for or delivered to the Trustee for
cancellation. If the Company shall acquire any of the Notes, such acquisition
shall not operate as a redemption or satisfaction of the Indebtedness
represented by such Notes unless and until the same are surrendered to the
Trustee for cancellation pursuant to this Section 2.11.
SECTION 2.12. Defaulted Interest.
The Company will pay interest on overdue principal from time to time
on demand at the rate of interest then borne by the Notes. The Company shall, to
the extent lawful, pay interest on overdue installments of interest (without
regard to any applicable grace periods) from time to time on demand at the rate
of interest then borne by the Notes. Interest will be computed on the basis of a
360-day year comprised of twelve 30-day months, and, in the case of a partial
month, the actual number of days elapsed.
If the Company defaults in a payment of interest on the Notes, it
shall pay the defaulted interest, plus (to the extent lawful) any interest
payable on the defaulted interest, to the Persons who are (i) Holders on a
subsequent special record date, if it so elects, which special record date shall
be the fifteenth day next preceding the date fixed by the Company for the
payment of defaulted interest or the next succeeding
51
- 43 -
Business Day if such date is not a Business Day, or (ii) if the Company does not
elect a special record date, Holders on the next Record Date, which payment
shall be made on the next regular Interest Payment Date. The Company shall
notify the Trustee in writing of the amount of defaulted interest proposed to be
paid on each Note and the date of the proposed payment (a "Default Interest
Payment Date"), and at the same time the Company shall deposit with the Trustee
an amount of money equal to the aggregate amount proposed to be paid in respect
of such defaulted interest or shall make arrangements satisfactory to the
Trustee for such deposit on or prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons entitled
to such defaulted interest as provided in this Section; provided, however, that
in no event shall the Company deposit monies proposed to be paid in respect of
defaulted interest later than 10:30 a.m. New York City time on the proposed
Default Interest Payment Date. At least 15 days before the subsequent special
record date, the Company shall mail (or cause to be mailed) to each Holder, as
of a recent date selected by the Company, with a copy to the Trustee, a notice
that states the subsequent special record date, the payment date and the amount
of defaulted interest, and interest payable on such defaulted interest, if any,
to be paid. Notwithstanding the foregoing, any interest which is paid prior to
the expiration of the 30-day period set forth in Section 6.01(i) shall be paid
to Holders as of the regular record date for the Interest Payment Date for which
interest has not been paid. Notwithstanding the foregoing, the Company may make
payment of any defaulted interest in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Notes may be
listed, and upon such notice as may be required by such exchange.
SECTION 2.13. CUSIP Number.
The Company in issuing the Notes may use a "CUSIP" number, and, if
so, the Trustee shall use the CUSIP number in notices of redemption or exchange
as a convenience to Holders; provided, however, that no representation is hereby
deemed to be made by the Trustee as to the correctness or accuracy of the CUSIP
number printed in the notice or on the Notes, and that reliance may be placed
only on the other identification numbers printed on the Notes. The Company shall
promptly notify the Trustee of any change in the CUSIP number.
52
- 44 -
SECTION 2.14. Deposit of Monies.
Prior to 10:30 a.m. New York City time on each Interest Payment
Date, Maturity Date, Redemption Date, Change of Control Payment Date and Net
Proceeds Offer Payment Date, the Company shall have deposited with the Paying
Agent in immediately available funds money sufficient to make cash payments, if
any, due on such Interest Payment Date, Maturity Date, Redemption Date, Change
of Control Payment Date and Net Proceeds Offer Payment Date, as the case may be,
in a timely manner which permits the Paying Agent to remit payment to the
Holders on such Interest Payment Date, Maturity Date, Redemption Date, Change of
Control Payment Date and Net Proceeds Offer Payment Date, as the case may be.
SECTION 2.15. Restrictive Legends.
Each Global Note and Physical Note that constitutes a Restricted
Security shall bear the legend (the "Private Placement Legend") as set forth in
Exhibit A on the face thereof until after the second anniversary of the later of
the Issue Date and the last date on which the Company or any Affiliate of the
Company was the owner of such Note (or any predecessor security) (or such
shorter period of time as permitted by Rule 144 under the Securities Act or any
successor provision thereunder, unless otherwise agreed by the Company and the
Holder thereof) (or such longer period of time as may be required under the
Securities Act or applicable state securities laws in the opinion of counsel for
the Company).
Each Global Note shall also bear the legend as set forth in Exhibit
C.
SECTION 2.16. Book-Entry Provisions for Global Note
(a) The Global Notes initially shall (i) be registered in the name
of the Depository or the nominee of such Depository, (ii) be delivered to the
Trustee as custodian for such Depository and (iii) bear the legend as set forth
in Exhibit C.
Members of, or participants in, the Depository ("Agent Members")
shall have no rights under this Indenture with respect to any Global Note held
on their behalf by the Depository, or the Trustee as its custodian, or under the
Global Notes, and the Depository may be treated by the Company, the Trustee and
any Agent of the Company or the Trustee as the ab-
53
- 45 -
solute owner of such Global Note for all purposes whatsoever. Notwithstanding
the foregoing, nothing herein shall prevent the Company, the Trustee or any
Agent of the Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depository or
impair, as between the Depository and its Agent Members, the operation of
customary practices governing the exercise of the rights of a Holder of any
Note.
(b) Transfers of a Global Note shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in a Global Note may be transferred or
exchanged for Physical Notes in accordance with the rules and procedures of the
Depository and the provisions of Section 2.17. In addition, Physical Notes shall
be transferred to all beneficial owners in exchange for their beneficial
interests in a Global Note if (i) the Depository notifies the Company that it is
unwilling or unable to continue as Depository for the Global Notes and a
successor depositary is not appointed by the Company within 90 days of such
notice or (ii) an Event of Default has occurred and is continuing and the
Registrar has received a written request from the Depository to issue Physical
Notes.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in a Global Note to beneficial owners pursuant to paragraph
(b), the Registrar shall (if one or more Physical Notes are to be issued)
reflect on its books and records the date and a decrease in the principal amount
of such Global Note in an amount equal to the principal amount of the beneficial
interest in the Global Note to be transferred, and the Company shall execute,
the Guarantors shall execute Guarantees on, and the Trustee shall authenticate
and deliver, one or more Physical Notes of like tenor and amount.
(d) In connection with the transfer of an entire Global Note to
beneficial owners pursuant to paragraph (b) of this Section 2.16, such Global
Note shall be deemed to be surrendered to the Trustee for cancellation, and the
Company shall execute, the Guarantors shall execute Guarantees on and the
Trustee shall authenticate and deliver, to each beneficial owner identified by
the Depository in exchange for its beneficial interest in the Global Note, an
equal aggregate principal amount of Physical Notes of authorized denominations.
(e) Any Physical Note constituting a Restricted Security delivered
in exchange for an interest in a Global Note
54
- 46 -
pursuant to paragraph (b) or (c) of this Section 2.16 shall, except as otherwise
provided by paragraphs (a)(i)(x) and (d) of Section 2.17, bear the Private
Placement Legend.
(f) The Holder of a Global Note may grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Notes.
SECTION 2.17. Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Physical Notes. When Physical Notes are
presented to the Registrar or Co-Registrar with a request:
(i) to register the transfer of the Physical Notes; or
(ii) to exchange such Physical Notes for an equal number of Physical
Notes of other authorized denominations,
the Registrar or Co-Registrar shall register the transfer or make the exchange
as requested if the requirements under this Indenture as set forth in this
Section 2.17 for such transactions are met; provided, however, that the Physical
Notes presented or surrendered for registration of transfer or exchange:
(I) shall be duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Registrar or Co-Registrar, duly
executed by the Holder thereof or his attorney-in-fact duly authorized in
writing; and
(II) in the case of Physical Notes the offer and sale of which have
not been registered under the Securities Act, such Physical Notes shall be
accompanied, in the sole discretion of the Company, by the following
additional information and documents, as applicable:
(A) if such Physical Note is being delivered to the Registrar or
Co-Registrar by a Holder for registration in the name of such
Holder, without transfer, a certification from such Holder to that
effect (substantially in the form of Exhibit G hereto); or
55
- 47 -
(B) if such Physical Note is being transferred to a Qualified
Institutional Buyer in accordance with Rule 144A, a certification to
that effect (substantially in the form of Exhibit G hereto); or
(C) if such Physical Note is being transferred to an Institutional
Accredited Investor, delivery of a certification to that effect
(substantially in the form of Exhibit G hereto) and a Transferee
Certificate for Institutional Accredited Investors substantially in
the form of Exhibit D hereto; or
(D) if such Physical Note is being transferred in reliance on Regulation
S, delivery of a certification to that effect (substantially in the
form of Exhibit G hereto) and a Transferee Certificate for
Regulation S Transfers substantially in the form of Exhibit E hereto
and an Opinion of Counsel reasonably satisfactory to the Company to
the effect that such transfer is in compliance with the Securities
Act; or
(E) if such Physical Note is being transferred in reliance on Rule 144
under the Securities Act, delivery of a certification to that effect
(substantially in the form of Exhibit G hereto) and an Opinion of
Counsel reasonably satisfactory to the Company to the effect that
such transfer is in compliance with the Securities Act; or
(F) if such Physical Note is being transferred in reliance on another
exemption from the registration requirements of the Securities Act,
a certification to that effect (substantially in the form of Exhibit
G hereto) and an Opinion of Counsel reasonably acceptable to the
Company to the effect that such transfer is in compliance with the
Securities Act.
(b) Restrictions on Transfer of a Physical Note for a Beneficial
Interest in a Global Note. Unless otherwise agreed to by the Company, a Physical
Note may not be exchanged for a beneficial interest in a Global Note except upon
satisfaction of the requirements set forth below. Upon receipt by the Registrar
or Co-Registrar of a Physical Note, duly endorsed or accompanied by appropriate
instruments of transfer, in form satisfactory to the Registrar or Co-Registrar,
together with:
(A) certification, substantially in the form of Exhibit G hereto, that
such Physical Note is being transferred
56
- 48 -
(I) to a Qualified Institutional Buyer, (II) to an Institutional
Accredited Investor or (III) in reliance on Regulation S and, in the
case of (II), a Transferee Certificate for Institutional Accredited
Investors substantially in the form of Exhibit D hereto and, in the
case of (III), a Transferee Certificate for Regulation S Transfers
substantially in the form of Exhibit E hereto and an Opinion of
Counsel reasonably satisfactory to the Company to the effect that
such transfer is in compliance with the Securities Act; and
(B) written instructions directing the Registrar or Co-Registrar to
make, or to direct the Depository to make, an endorsement on the
applicable Global Note to reflect an increase in the aggregate
amount of the Notes represented by the Global Note,
then the Registrar or Co-Registrar shall cancel such Physical Note and cause, or
direct the Depository to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Registrar or Co-Registrar,
the principal amount of Notes represented by the applicable Global Note to be
increased accordingly. If no Global Note representing Notes held by Qualified
Institutional Buyers, Institutional Accredited Investors or Persons acquiring
Notes in reliance on Regulation S, as the case may be, is then outstanding, the
Company shall issue and the Trustee shall, upon written instructions from the
Company in accordance with Section 2.02, authenticate such a Global Note in the
appropriate principal amount.
(c) Transfer and Exchange of Global Notes. The transfer and exchange
of Global Notes or beneficial interests therein shall be effected through the
Depository in accordance with this Indenture (including the restrictions on
transfer set forth herein) and the procedures of the Depository therefor. Upon
receipt by the Registrar or Co-Registrar of written instructions, or such other
instruction as is customary for the Depository, from the Depository or its
nominee, requesting the registration of transfer of an interest in a QIB Global
Note, an IAI Global Note or a Regulation S Global Note, as the case may be, to
another type of Global Note, together with the applicable Global Notes (or, if
the applicable type of Global Note required to represent the interest as
requested to be transferred is not then outstanding, only the Global Note
representing the interest being transferred), the Registrar or Co-Registrar
shall cause, or direct the Depository to cause, in accordance with the standing
instructions and procedures exist-
57
- 49 -
ing between the Depository and the Registrar or Co-Registrar, the principal
amount of Notes represented by the applicable Global Notes involved in such
transfer or exchange to be adjusted accordingly to reflect the applicable
increase and decrease of the principal amount of Notes represented by such types
of Global Notes, giving effect to such transfer. If the applicable type of
Global Note required to represent the interest as requested to be transferred is
not outstanding at the time of such request, the Company shall issue and the
Trustee shall, upon written instructions from the Company in accordance with
Section 2.02, authenticate a new Global Note of such type in principal amount
equal to the principal amount of the interest requested to be transferred. Any
such transfer or exchange of Global Notes or beneficial interests therein shall
be effected through the Depository in accordance with this Indenture (including
the restrictions on transfer as contemplated herein) and the procedure of the
Depository therefor. Unless otherwise agreed to by the Company, any request for
the registration of the transfer of an interest in a QIB Global Note, an IAI
Global Note or a Regulation S Global Note to another type of Global Note must be
accompanied by a certificate from the transferor, substantially in the form of
Exhibit G hereto, that the transferee is either (i) a Qualified Institutional
Buyer in accordance with Rule 144A, (ii) an Institutional Accredited Investor,
or (iii) relying on Regulation S, and in the case of (ii), a Transferee
Certificate for Institutional Accredited Investors substantially in the form of
Exhibit D hereto and, in the case of (iii), a Transferee Certificate for
Regulation S Transfers substantially in the form of Exhibit E hereto and an
Opinion of Counsel reasonably satisfactory to the Company to the effect that
such transfer is in compliance with the Securities Act.
(d) Transfer of a Beneficial Interest in a Global Note for a
Physical Note.
(i) Any Person having a beneficial interest in a Global Note
may upon request exchange such beneficial interest for a
Physical Note. Upon receipt by the Registrar or
Co-Registrar of written instructions, or such other form
of instructions as is customary for the Depository, from
the Depository or its nominee on behalf of any Person
having a beneficial interest in a Global Note and upon
receipt by the Trustee of a written order or such other
form of instructions as is customary for the Depository
or the Person designated by the Depository as having
such a beneficial interest containing registration
in-
58
- 50 -
structions and, in the case of any such transfer or exchange
of a beneficial interest in Notes the offer and sale of which
have not been registered under the Securities Act, the
following additional information and documents:
(A) if such beneficial interest is being transferred to the
Person designated by the Depository as being the
beneficial owner, a certification from such Person to
that effect (substantially in the form of Exhibit G
hereto); or
(B) if such beneficial interest is being transferred to a
Qualified Institutional Buyer in accordance with Rule
l44A, a certification to that effect (substantially in
the form of Exhibit G hereto); or
(C) if such beneficial interest is being transferred to an
Institutional Accredited Investor, delivery of a
certification to that effect (substantially in the form
of Exhibit G hereto) and a Certificate for Institutional
Accredited Investors substantially in the form of
Exhibit D hereto; or
(D) if such beneficial interest is being transferred in
reliance on Regulation S, delivery of a certification to
that effect (substantially in the form of Exhibit G
hereto) and a Transferee Certificate for Regulation S
Transfers substantially in the form of Exhibit E hereto
and an Opinion of Counsel reasonably satisfactory to the
Company to the effect that such transfer is in
compliance with the Securities Act; or
(E) if such beneficial interest is being transferred in
reliance on Rule 144 under the Securities Act, delivery
of a certification to that effect (substantially in the
form of Exhibit G hereto) and an Opinion of Counsel
reasonably satisfactory to the Company to the effect
that such transfer is in compliance with the Securities
Act; or
59
- 51 -
(F) if such beneficial interest is being transferred in
reliance on another exemption from the registration
requirements of the Securities Act, a certification to
that effect (substantially in the form of Exhibit G
hereto) and an Opinion of Counsel reasonably
satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act,
then the Registrar or Co-Registrar will cause, in accordance with
the standing instructions and procedures existing between the
Depository and the Registrar or Co-Registrar, the aggregate
principal amount of the applicable Global Note to be reduced and,
following such reduction, the Company will execute and, upon receipt
of an authentication order in the form of an Officers' Certificate
in accordance with Section 2.02, the Trustee will authenticate and
deliver to the transferee a Physical Note.
(ii) Notes issued in exchange for a beneficial interest in a
Global Note pursuant to this Section 2.17(d) shall be
registered in such names and in such authorized
denominations as the Depository, pursuant to
instructions from its direct or indirect participants or
otherwise, shall instruct the Registrar or Co-Registrar
in writing. The Registrar or Co-Registrar shall deliver
such Physical Notes to the Persons in whose names such
Physical Notes are so registered.
(e) Restrictions on Transfer and Exchange of Global Notes.
Notwithstanding any other provisions of this Indenture, a Global Note may not be
transferred as a whole except by the Depository to a nominee of the Depository
or by a nominee of the Depository to the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
(f) Private Placement Legend. Upon the transfer, exchange or
replacement of Notes not bearing the Private Placement Legend, the Registrar or
Co-Registrar shall deliver Notes that do not bear the Private Placement Legend.
Upon the transfer, exchange or replacement of Notes bearing the Private
Placement Legend, the Registrar or Co-Registrar shall deliver only Notes that
bear the Private Placement Legend unless (i) the requested transfer is after the
second anniversary of the Issue Date (provided, however, that neither the
Company nor
60
- 52 -
any Affiliate of the Company has held any beneficial interest in such Note, or
portion thereof, at any time prior to or on the second anniversary of the Issue
Date unless otherwise agreed by the Company), or (ii) there is delivered to the
Registrar or Co-Registrar a certificate and/or, if requested, an Opinion of
Counsel, each reasonably satisfactory to the Company and the Trustee to the
effect that neither such legend nor the related restrictions on transfer are
required in order to maintain compliance with the provisions of the Securities
Act.
(g) General. By its acceptance of any Note bearing the Private
Placement Legend, each Holder of such a Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private Placement
Legend and agrees that it will transfer such Note only as provided in this
Indenture.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.16 or this Section 2.17.
The Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time during the
Registrar's normal business hours upon the giving of reasonable written notice
to the Registrar.
(h) Transfers of Notes Held by Affiliates. Any certificate (i)
evidencing a Note that has been transferred to an Affiliate of the Company
within two years after the Issue Date, as evidenced by a notation on the
Assignment Form for such transfer or in the representation letter delivered in
respect thereof or (ii) evidencing a Note that has been acquired from an
Affiliate (other than by an Affiliate) in a transaction or a chain of
transactions not involving any public offering, shall, until two years after the
last date on which the Company or any Affiliate of the Company was an owner of
such Note, in each case, bear the Private Placement Legend, unless otherwise
agreed by the Company (with written notice thereof to the Trustee).
SECTION 2.18. Liquidated Damages Under Registration Rights
Agreement.
Under certain circumstances, the Company shall be obligated to pay
certain liquidated damages to the Holders, all as set forth in Section 5 of the
Registration Rights Agreement. The terms thereof are hereby incorporated herein
by reference.
61
- 53 -
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
If the Company elects to redeem Notes pursuant to Paragraph 6 of the
Notes, it shall notify the Trustee and the Paying Agent in writing of the
Redemption Date and the principal amount of the Notes to be redeemed.
The Company shall give each notice to the Trustee provided for in
this Section 3.01 45 days before the Redemption Date (unless a shorter notice
period shall be satisfactory to the Trustee), together with an Officers'
Certificate stating that such redemption shall comply with the conditions
contained herein and in the Notes. Any such notice may be cancelled at any time
prior to notice of such redemption being mailed to any Holder and shall thereby
be void and of no effect.
The Company shall give notice of a redemption pursuant to Paragraph
5 of the Notes ("Special Redemption") to the Paying Agent and the Trustee at
least ten days before the Redemption Date with respect to the Special Redemption
(unless a shorter notice period shall be agreed to by the Trustee in writing),
together with an Officers' Certificate stating that such redemption will comply
with the conditions contained herein.
SECTION 3.02. Selection of Notes To Be Redeemed.
In the event that less than all of the Notes are to be redeemed at
any time, selection of such Notes, or portions thereof, for redemption will be
made by the Trustee in compliance with the requirements of the principal
national securities exchange, if any, on which such Notes are listed or, if such
Notes are not then listed on a national securities exchange, on a pro rata
basis, by lot or by such method as the Trustee shall deem fair and appropriate;
provided, however, that no Notes of a principal amount of $1,000 or less shall
be redeemed in part; provided, further, that if a partial redemption is made
with the proceeds of an Equity Offering, selection of the Notes or portions
thereof for redemption shall be made by the Trustee only on a pro rata basis or
on as nearly a pro rata basis as is practicable (subject to DTC procedures),
unless such method is otherwise prohibited. Notice of redemption shall be mailed
by first-class mail at least 30 but not more than 60 days before
62
- 54 -
the Redemption Date to each Holder of Notes to be redeemed at its registered
address. If any Note is to be redeemed in part only, the notice of redemption
that relates to such Note shall state the portion of the principal amount
thereof to be redeemed. A new Note in a principal amount equal to the unredeemed
portion thereof will be issued in the name of the Holder thereof upon
cancellation of the original Note. On and after the Redemption Date, interest
will cease to accrue on Notes or portions thereof called for redemption as long
as the Company has deposited with the Paying Agent funds in satisfaction of the
applicable Redemption Price pursuant to this Indenture.
SECTION 3.03. Optional Redemption.
The Notes will be redeemable, at the Company's option, in whole at
any time or in part from time to time, on and after November 1, 2002, upon not
less than 30 nor more than 60 days' notice, at the following Redemption Prices
(expressed as percentages of the principal amount thereof) if redeemed during
the twelve-month period commencing on November 1 of the year set forth below,
plus, in each case, accrued and unpaid interest thereon, if any, to the date of
redemption:
Year Percentage
---- ----------
2002 104.813%
2003 103.208%
2004 101.604%
2005 and thereafter 100.000%
Optional Redemption upon Equity Offerings. At any time, or from time
to time, on or prior to November 1, 2000, the Company may, at its option, on one
or more occasions use all or a portion of the net cash proceeds of one or more
Equity Offerings (as defined below) to redeem the Notes issued under this
Indenture at a Redemption Price equal to 109.625% of the principal amount
thereof plus accrued and unpaid interest thereon, if any, to the date of
redemption; provided that at least 65% of the principal amount of Notes
originally issued remains outstanding immediately after any such redemption. In
order to effect the foregoing redemption with the proceeds of any Equity
Offering, the Company shall make such redemption not more than 120 days after
the consummation of any such Equity Offering.
As used in the preceding paragraph, "Equity Offering" means any
offering of Qualified Capital Stock of the Company.
63
- 55 -
SECTION 3.04. Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption Date
(other than with respect to a Special Redemption), the Company shall mail or
cause to be mailed a notice of redemption by first class mail to each Holder of
Notes to be redeemed at its registered address, with a copy to the Trustee and
any Paying Agent. At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. The Company shall
provide such notices of redemption to the Trustee at least five days before the
intended mailing date (unless a shorter period shall be satisfactory to the
Trustee) (other than with respect to a Special Redemption).
Each notice of redemption shall identify (including the CUSIP
number) the Notes to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price and the amount of accrued interest,
if any, to be paid;
(3) the name and address of the Paying Agent;
(4) the subparagraph of the Notes pursuant to which such
redemption is being made;
(5) that Notes called for redemption must be surrendered to
the Paying Agent to collect the Redemption Price plus accrued interest, if
any;
(6) that, unless the Company defaults in making the redemption
payment, interest on Notes or applicable portions thereof called for
redemption ceases to accrue on and after the Redemption Date, and the only
remaining right of the Holders of such Notes is to receive payment of the
Redemption Price plus accrued interest as of the Redemption Date, if any,
upon surrender to the Paying Agent of the Notes redeemed;
(7) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
Redemption Date, and upon surrender of such Note, a new Note or Notes in
the aggregate principal amount equal to the unredeemed portion thereof
will be issued; and
64
- 56 -
(8) if fewer than all the Notes are to be redeemed, the
identification of the particular Notes of such Holder (or portion thereof)
to be redeemed, as well as the aggregate principal amount of Notes to be
redeemed and the aggregate principal amount of Notes to be outstanding
after such partial redemption.
The Company will comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the purchase
of Notes.
SECTION 3.05. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.04,
such notice of redemption shall be irrevocable and Notes called for redemption
become due and payable on the Redemption Date and at the Redemption Price plus
accrued interest as of such date, if any. Upon surrender to the Trustee or
Paying Agent, such Notes called for redemption shall be paid at the Redemption
Price plus accrued interest thereon to the Redemption Date, but installments of
interest, the maturity of which is on or prior to the Redemption Date, shall be
payable to Holders of record at the close of business on the relevant record
dates referred to in the Notes. Interest shall accrue on or after the Redemption
Date and shall be payable only if the Company defaults in payment of the
Redemption Price.
SECTION 3.06. Deposit of Redemption Price.
On or before the Redemption Date and in accordance with Section
2.14, the Company shall deposit with the Paying Agent U.S. Legal Tender
sufficient to pay the Redemption Price plus accrued interest, if any, of all
Notes to be redeemed on that date. The Paying Agent shall promptly return to the
Company any U.S. Legal Tender so deposited which is not required for that
purpose, except with respect to monies owed as obligations to the Trustee
pursuant to Article Seven.
Unless the Company fails to comply with the preceding paragraph and
defaults in the payment of such Redemption Price plus accrued interest, if any,
interest on the Notes to be redeemed will cease to accrue on and after the
applicable Redemption Date, whether or not such Notes are presented for payment.
65
- 57 -
SECTION 3.07. Notes Redeemed in Part.
Upon surrender of a Note that is to be redeemed in part, the Trustee
shall authenticate for the Holder a new Note or Notes equal in principal amount
to the unredeemed portion of the Note surrendered.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes.
(a) The Company shall pay the principal of, premium, if any, and
interest on the Notes on the dates and in the manner provided in the Notes and
in this Indenture.
(b) An installment of principal of or interest on the Notes shall be
considered paid on the date it is due if the Trustee or Paying Agent (other than
the Company or any of its Affiliates) holds, prior to 10:30 a.m. New York City
time on that date, U.S. Legal Tender designated for and sufficient to pay the
installment in full and is not prohibited from paying such money to the Holders
pursuant to the terms of this Indenture or the Notes.
(c) Notwithstanding anything to the contrary contained in this
Indenture, the Company may, to the extent it is required to do so by law, deduct
or withhold income or other similar taxes imposed by the United States of
America from principal or interest payments hereunder.
SECTION 4.02. Maintenance of Office or Agency.
The Company shall maintain the office or agency required under
Section 2.03. The Company shall give prior written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee set forth in Section 11.02.
66
- 58 -
SECTION 4.03. Corporate Existence.
Except as otherwise permitted by Article Five, the Company shall do
or cause to be done, at its own cost and expense, all things necessary to
preserve and keep in full force and effect its corporate existence and the
corporate existence of each of its Restricted Subsidiaries in accordance with
the respective organizational documents of each such Restricted Subsidiary and
the material rights (charter and statutory) and franchises of the Company and
each such Restricted Subsidiary; provided, however, that the Company shall not
be required to preserve, with respect to itself, any material right or franchise
and, with respect to any of its Restricted Subsidiaries, any such existence,
material right or franchise, if the Board of Directors of the Company (or if
such existence is with respect to any Restricted Subsidiary which is not a
Significant Subsidiary, by the appropriate officers of the Company) shall
determine in good faith that the preservation thereof is no longer desirable in
the conduct of the business of the Company and its Subsidiaries, taken as a
whole.
SECTION 4.04. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (i) all material taxes,
assessments and governmental charges (including withholding taxes and any
penalties, interest and additions to taxes) levied or imposed upon it or any of
its Restricted Subsidiaries or properties of it or any of its Restricted
Subsidiaries and (ii) all material lawful claims for labor, materials and
supplies that, if unpaid, might by law become a Lien upon the property of the
Company or any of its Restricted Subsidiaries; provided, however, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate negotiations or
proceedings properly instituted and conducted for which adequate reserves, to
the extent required under GAAP, have been taken.
SECTION 4.05. Maintenance of Properties and Insurance.
(a) The Company shall, and shall cause each of the Restricted
Subsidiaries to, maintain all properties used or useful in the conduct of its
business in good working order and condition (subject to ordinary wear and tear)
and make all necessary repairs, renewals, replacements, additions, betterments
67
- 59 -
and improvements thereto and actively conduct and carry on its business;
provided, however, that nothing in this Section 4.05 shall prevent the Company
or any of the Restricted Subsidiaries of the Company from discontinuing the
operation and maintenance of any of its properties, if such discontinuance is
(i) in the ordinary course of business pursuant to customary business terms or
(ii) in the good faith judgment of the respective Boards of Directors or other
governing body of the Company or Restricted Subsidiary, as the case may be,
desirable in the conduct of their respective businesses and is not
disadvantageous in any material respect to the Holders.
(b) The Company shall provide or cause to be provided, for itself
and each of the Restricted Subsidiaries of the Company, insurance (including
appropriate self-insurance) against loss or damage of the kinds that, in the
good faith judgment of the Company, are adequate and appropriate for the conduct
of the business of the Company and its Restricted Subsidiaries in a prudent
manner, with reputable insurers or with the Government of the United States of
America or any agency or instrumentality thereof (if not through
self-insurance).
SECTION 4.06. Compliance Certificate; Notice of Default.
(a) The Company shall deliver to the Trustee, within 120 days after
the end of each of the Company's fiscal years, an Officers' Certificate
(provided, however, that one of the signatories to each such Officers'
Certificate shall be the Company's principal executive officer, principal
financial officer or principal accounting officer), as to such Officers'
knowledge, without independent investigation, of the Company's compliance with
all conditions and covenants under this Indenture (without regard to any period
of grace or requirement of notice provided hereunder) and in the event any
Default of the Company's exists, such Officers shall specify the nature of such
Default. Each such Officers' Certificate shall also notify the Trustee should
the Company elect to change the manner in which it fixes its fiscal year-end.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the annual financial
statements delivered pursuant to Section 4.08 shall be accompanied by a written
report of the Company's independent certified public accountants (who shall be a
firm of established national reputation) stating (A) that their audit
examination has included a review of the terms of this Indenture and the form of
the Notes as they relate to ac-
68
- 60 -
counting matters, and (B) whether, in connection with their audit examination,
any Default or Event of Default has come to their attention and if such a
Default or Event of Default has come to their attention, specifying the nature
and period of existence thereof; provided, however, that, without any
restriction as to the scope of the audit examination, such independent certified
public accountants shall not be liable by reason of any failure to obtain
knowledge of any such Default or Event of Default that would not be disclosed in
the course of an audit examination conducted in accordance with generally
accepted auditing standards.
(c) (i) If any Default or Event of Default has occurred and is
continuing or (ii) if any Holder seeks to exercise any remedy hereunder with
respect to a claimed Default under this Indenture or the Notes, the Company
shall deliver to the Trustee, at its address set forth in Section 11.02, by
registered or certified mail or by facsimile transmission followed by hard copy
by registered or certified mail an Officers' Certificate specifying such event,
notice or other action promptly upon its becoming aware of such occurrence.
SECTION 4.07. Compliance with Laws.
The Company shall comply, and shall cause each of its Subsidiaries
to comply, with all applicable statutes, rules, regulations, orders and
restrictions of the United States of America, all states and municipalities
thereof, and of any governmental department, commission, board, regulatory
authority, bureau, agency and instrumentality of the foregoing, in respect of
the conduct of their respective businesses and the ownership of their respective
properties, except for such noncompliances as could not singly or in the
aggregate reasonably be expected to have a material adverse effect on the
financial condition or results of operations of the Company and its Subsidiaries
taken as a whole.
SECTION 4.08. Reports to Holders.
The Company will deliver to the Trustee within 15 days after filing
of the same with the Commission, copies of the quarterly and annual reports and
of the information, documents and other reports, if any, which the Company is
required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act. Notwithstanding that the Company may not be subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company
will file with the Commission, to the extent permitted, and provide the Trustee
and Holders with
69
- 61 -
such annual reports and such information, documents and other reports specified
in Sections 13 and 15(d) of the Exchange Act. The Company will also comply with
the other provisions of Section 314(a) of the TIA.
SECTION 4.09. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law that would prohibit or forgive the Company from paying
all or any portion of the principal of or interest on the Notes as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture; and (to the extent
that it may lawfully do so) the Company hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
SECTION 4.10. Limitation on Restricted Payments.
The Company will not and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, (a) declare or pay any
dividend or make any distribution (other than dividends or distributions payable
in Qualified Capital Stock of the Company or warrants, options or other rights
to acquire Qualified Capital Stock (but excluding any debt security or
Disqualified Capital Stock convertible into, or exchangeable for, Qualified
Capital Stock)) on or in respect of shares of the Company's Capital Stock to
holders of such Capital Stock, (b) purchase, redeem or otherwise acquire or
retire for value any Capital Stock of the Company or any warrants, rights or
options to purchase or acquire shares of any class of such Capital Stock, (c)
make any principal payment on, purchase, defease, redeem, prepay, decrease or
otherwise acquire or retire for value, prior to any scheduled final maturity,
scheduled repayment or scheduled sinking fund payment, any Indebtedness of the
Company that is subordinate or junior in right of payment to the Notes, or (d)
make any Investment (other than Permitted Investments) (each of the foregoing
actions set forth in clauses (a), (b) (c) and (d) being referred to as a
"Restricted Payment"), if at the time of such Restricted Payment or immediately
after giving effect thereto, (i) a Default or an Event of Default shall have
occurred and be
70
- 62 -
continuing or (ii) the Company is not able to incur at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with Section 4.12
or (iii) the aggregate amount of Restricted Payments (including such proposed
Restricted Payment) made subsequent to the Issue Date (the amount expended for
such purposes, if other than in cash, being the fair market value of such
property as determined reasonably and in good faith by the Board of Directors of
the Company, whose determination shall be conclusive) shall exceed the sum,
without duplication, of: (u) 50% of the cumulative Consolidated Net Income (or
if cumulative Consolidated Net Income shall be a loss, minus 100% of such loss)
of the Company earned subsequent to the Issue Date and on or prior to the date
the Restricted Payment occurs (the "Reference Date") (treating such period as a
single accounting period); plus (v) 100% of the aggregate net cash proceeds
received by the Company from any Person (other than a Subsidiary of the Company)
from the issuance and sale subsequent to the Issue Date and on or prior to the
Reference Date of Qualified Capital Stock of the Company; plus (w) 100% of the
aggregate net cash proceeds received after the Issue Date by the Company from
the issuance or sale (other than to a Subsidiary of the Company) of debt
securities or Disqualified Capital Stock that have been converted into or
exchanged for Qualified Capital Stock of the Company, together with (without
duplication) any net cash proceeds received by the Company at the time of such
conversion or exchange; plus (x) to the extent not otherwise included in the
Consolidated Net Income of the Company, an amount equal to the net reduction in
Investments (other than reductions in Permitted Investments) in Unrestricted
Subsidiaries resulting from the payments in cash of interest on Indebtedness,
dividends, repayments of loans or advances or other transfers of assets, in each
case to the Company or a Restricted Subsidiary or from the redesignation of an
Unrestricted Subsidiary as a Restricted Subsidiary; plus (y) to the extent not
otherwise included in Consolidated Net Income, net cash proceeds from sale of
Investments which were treated as Restricted Payments, but not to exceed the
amounts so treated; plus (z) without duplication of any amounts included in
clause (iii)(v) above, 100% of the aggregate net cash proceeds of any equity
contribution received by the Company from a holder of the Company's Capital
Stock (excluding, in the case of clauses (iii)(v) and (z), any net cash proceeds
from an Equity Offering to the extent used to redeem the Notes); plus (aa) $15.0
million.
Notwithstanding the foregoing, the provisions set forth in the
immediately preceding paragraph do not prohibit: (1) the payment of any dividend
or redemption payment within 60
71
- 63 -
days after the date of declaration of such dividend or redemption payment if the
dividend or redemption payment would have been permitted on the date of
declaration; (2) if no Default or Event of Default shall have occurred and be
continuing, the acquisition of any shares of Capital Stock of the Company,
either (i) solely in exchange for shares of Qualified Capital Stock of the
Company (or warrants, options or other rights to acquire Qualified Capital Stock
of the Company (but excluding any debt security or Disqualified Capital Stock
convertible into, or exchangeable for, Qualified Capital Stock)) or (ii) through
the application of net proceeds of a substantially concurrent sale for cash
(other than to a Subsidiary of the Company) of shares of Qualified Capital Stock
of the Company (or warrants, options or other rights to acquire Qualified
Capital Stock of the Company (but excluding any debt security or Disqualified
Capital Stock convertible into, or exchangeable for, Qualified Capital Stock));
(3) if no Default or Event of Default shall have occurred and be continuing, the
acquisition of any Indebtedness of the Company or of any Guarantor that is
subordinate or junior in right of payment to the Notes or such Guarantor's
Guarantee, as the case may be, either (i) solely in exchange for shares of
Qualified Capital Stock of the Company (or warrants, options or other rights to
acquire Qualified Capital Stock of the Company (but excluding any debt security
or Disqualified Capital Stock convertible into, or exchangeable for, Qualified
Capital Stock)); or (ii) through the application of net proceeds of a
substantially concurrent sale for cash (other than to a Subsidiary of the
Company) of (A) shares of Qualified Capital Stock of the Company (or warrants,
options or other rights to acquire Qualified Capital Stock of the Company (but
excluding any debt security or Disqualified Capital Stock convertible into, or
exchangeable for, Qualified Capital Stock)); or (B) Refinancing Indebtedness;
(4) the purchase of any Subordinated Indebtedness at a purchase price not
greater than 101% of the principal amount thereof in the event of a Change of
Control in accordance with provisions similar to Section 4.15; provided that
prior to such purchase the Company has made the Change of Control Offer as
provided in Section 4.15 with respect to the Notes and has purchased all Notes
validly tendered for payment in connection with such Change of Control Offer and
that no Default or Event of Default is in existence prior to or as a result of
such purchase; (5) so long as no Default or Event of Default shall have occurred
and be continuing, repurchases by the Company of Common Stock of the Company
from employees of the Company or any of its Subsidiaries or their authorized
representatives upon the death, disability or termination of employment of such
employees, in an amount not to exceed $10.0 million in the aggregate; and (6)
the acquisition of
72
- 64 -
shares of Capital Stock (or warrants, rights or options to acquire Capital Stock
of the Company) of the Company in connection with the consummation of the
Merger. In determining the aggregate amount of Restricted Payments made
subsequent to the Issue Date in accordance with clause (iii) of the immediately
preceding paragraph, amounts expended pursuant to clauses (2)(ii) and (5) shall
be included in such calculation.
Not later than the date of making any Restricted Payment, the
Company shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment complies with this Indenture and setting forth in reasonable
detail the basis upon which the required calculations were computed, which
calculations may be based upon the Company's latest available internal quarterly
financial statements.
SECTION 4.11. Limitation on Transactions with Affiliates.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction or series of related transactions (including, without limitation,
the purchase, sale, lease or exchange of any property or the rendering of any
service) with, or for the benefit of, any of its Affiliates (each an "Affiliate
Transaction"), other than (x) Affiliate Transactions permitted under paragraph
(b) of this Section 4.11 and (y) Affiliate Transactions on terms that are no
less favorable than those that might reasonably have been obtained in a
comparable transaction at such time on an arm's-length basis from a Person that
is not an Affiliate of the Company or such Restricted Subsidiary. All Affiliate
Transactions (and each series of related Affiliate Transactions which are
similar or part of a common plan) involving aggregate payments or other property
with a fair market value in excess of $1.5 million shall be approved by the
Board of Directors of the Company or such Restricted Subsidiary, as the case may
be, such approval to be evidenced by a Board Resolution stating that such Board
of Directors has determined that such transaction complies with the foregoing
provisions. If the Company or any Restricted Subsidiary of the Company enters
into an Affiliate Transaction (or a series of related Affiliate Transactions
related to a common plan) that involves an aggregate fair market value of more
than $10.0 million, the Company or such Restricted Subsidiary, as the case may
be, shall, prior to the consummation thereof, obtain a favorable opinion as to
the fairness of such transaction or series of related transactions to the
Company or the relevant Restricted Subsidiary, as the case may be, from a
73
- 65 -
financial point of view, from an Independent Financial Advisor and file the same
with the Trustee.
(b) The restrictions set forth in clause (a) shall not apply to (i)
fees and compensation paid to and indemnity provided on behalf of, officers,
directors, employees or consultants of the Company or any Restricted Subsidiary
of the Company in the ordinary course of business of the Company or such
Restricted Subsidiary; (ii) transactions exclusively between or among the
Company and any of its Restricted Subsidiaries or exclusively between or among
such Restricted Subsidiaries, provided such transactions are not otherwise
prohibited hereunder; (iii) any agreement as in effect as of the Issue Date or
any amendment thereto or any transaction contemplated thereby (including
pursuant to any amendment thereto) in any replacement agreement thereto so long
as any such amendment or replacement agreement is not more disadvantageous to
the Holders in any material respect than the original agreement as in effect on
the Issue Date; (iv) so long as no Default or Event of Default has occurred and
is continuing, the payment of amounts owing pursuant to the Management
Agreement; (v) so long as no Default or Event of Default has occurred and is
continuing, the payment of amounts owing pursuant to the Transaction Agreement;
(vi) loans or advances to employees not to exceed $5.0 million at any time
outstanding; (vii) issuance of employee stock options approved by the Board of
Directors of the Company and the shareholders of the Company; (viii)
transactions effected as part of a Qualified Securitization Transaction; and
(ix) Restricted Payments permitted hereunder.
SECTION 4.12. Limitation on Incurrence of Additional Indebtedness.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume, guarantee,
acquire, become liable, contingently or otherwise, with respect to, or otherwise
become responsible for payment of (collectively, "incur") any Indebtedness
(other than Permitted Indebtedness); provided, however, that if no Default or
Event of Default shall have occurred and be continuing at the time of or as a
consequence of the incurrence of any such Indebtedness, the Company or any of
its Restricted Subsidiaries may incur Indebtedness (including, without
limitation, Acquired Indebtedness) if on the date of the incurrence of such
Indebtedness, after giving effect to the incurrence thereof, the Consolidated
Fixed Charge Coverage Ratio of the Company is greater than 2.0 to 1.0. No
Indebtedness incurred pursuant to the next preceding sentence shall be included
in calculating any limita-
74
- 66 -
tion set forth in the definition of Permitted Indebtedness. Upon the incurrence
or repayment of Indebtedness which may have been incurred pursuant to more than
one provision of this Indenture, the Company may, in its sole discretion,
designate which provision such Indebtedness shall have been incurred under.
For purposes of determining any particular amount of Indebtedness
under this Section 4.12, guarantees of Indebtedness otherwise included in the
determination of such amount shall not also be included.
Indebtedness of a Person existing at the time such Person becomes a
Restricted Subsidiary (whether by merger, consolidation, acquisition of Capital
Stock or otherwise) or is merged with or into the Company or any Restricted
Subsidiary or which is secured by a Lien on an asset acquired by the Company or
a Restricted Subsidiary (whether or not such Indebtedness is assumed by the
acquiring Person) shall be deemed incurred at the time the Person becomes a
Restricted Subsidiary or at the time of the asset acquisition, as the case may
be.
SECTION 4.13. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries.
The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
permit to exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary of the Company to (a) pay dividends or make
any other distributions on or in respect of its Capital Stock; (b) make loans or
advances or to pay any Indebtedness or other obligation owed to the Company or
any other Restricted Subsidiary of the Company; or (c) transfer any of its
property or assets to the Company or any other Restricted Subsidiary of the
Company, except for such encumbrances or restrictions existing under or by
reason of: (1) applicable law; (2) this Indenture; (3) customary non-assignment
provisions of any contract or any lease governing a leasehold interest of any
Restricted Subsidiary of the Company; (4) any instrument governing Acquired
Indebtedness, which encumbrance or restriction is not applicable to any
Restricted Subsidiaries, or the properties or assets of any Restricted
Subsidiaries, other than the Person or such Person's Subsidiaries or the
properties or assets of the Person so acquired or such Person's Subsidiaries;
(5) agreements existing on the Issue Date to the extent and in the manner such
agreements are in effect on the Issue Date; (6) any agreement to
75
- 67 -
sell assets or Capital Stock permitted under this Indenture to any Person
pending the closing of such sale; (7) any instrument governing a Permitted Lien,
to the extent and only to the extent such instrument restricts the transfer or
other disposition of assets subject to such Permitted Lien; (8) restrictions on
cash or other deposits imposed by customers under contracts entered into in the
ordinary course of business; (9) customary provisions in joint venture
agreements and other similar agreements; (10) the documentation relating to
Indebtedness of Foreign Subsidiaries incurred pursuant to the terms of this
Indenture provided that such encumbrances or restrictions are not more
restrictive than those contained in the Credit Agreement; (11) the Credit
Agreement; (12) the documentation relating to other Indebtedness permitted to be
incurred subsequent to the Issue Date pursuant to the provisions of the covenant
described under Section 4.12; provided that such encumbrances or restrictions
are not more restrictive than those contained in the Credit Agreement; (13) the
documentation relating to Indebtedness of a Securitization Entity in connection
with a Qualified Securitization Transaction; provided that such restrictions
apply only to such Securitization Entity; (14) an agreement governing
Indebtedness incurred to Refinance the Indebtedness issued, assumed or incurred
pursuant to an agreement referred to in clause (2), (4), (5) or (11) above;
provided, however, that the provisions relating to such encumbrance or
restriction contained in any such Indebtedness are no less favorable to the
Company in any material respect as determined by the Board of Directors of the
Company in their reasonable and good faith judgment than the provisions relating
to such encumbrance or restriction contained in agreements referred to in such
clause (2), (4), (5) or (11). Nothing contained in this Section 4.13 shall
prevent the Company or any Subsidiary of the Company from creating, incurring,
assuming or suffering to exist any Permitted Liens.
SECTION 4.14. Limitation on Restricted and Unrestricted
Subsidiaries.
(a) The Board of Directors may designate any Subsidiary (including
any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary
unless such Subsidiary owns any Capital Stock of, or owns or holds any Lien on
any property of, the Company or any Restricted Subsidiary of the Company that is
not a Subsidiary of the Subsidiary to be so designated; provided that (i) the
Company certifies to the Trustee that such designation complies with Section
4.10 and (ii) each Subsidiary to be so designated and each of its Subsidiaries
has not at the time of designation, and does not
76
- 68 -
thereafter, create, incur, issue, assume, guarantee or otherwise become directly
or indirectly liable with respect to any Indebtedness pursuant to which the
lender has recourse to any of the assets of the Company or any of its Restricted
Subsidiaries (other than the assets of such Restricted Subsidiary to be
designated an Unrestricted Subsidiary and its Subsidiaries).
(b) The Board of Directors may designate any Unrestricted Subsidiary
to be a Restricted Subsidiary only if (i) immediately after giving effect to
such designation, the Company is able to incur at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with Section 4.12
unless such designated Subsidiary shall, at the time of designation, have no
Indebtedness outstanding other than Permitted Indebtedness, and (ii) immediately
before and immediately after giving effect to such designation, no Default or
Event of Default shall have occurred and be continuing. Any such designation by
the Board of Directors shall be evidenced to the Trustee by promptly filing with
the Trustee a copy of the Board Resolution giving effect to such designation and
an Officers' Certificate certifying that such designation complied with the
foregoing provisions.
(c) For purposes of Section 4.10, (i) "Investment" shall include and
be valued at the fair market value of the net assets of any Restricted
Subsidiary at the time that such Restricted Subsidiary is designated an
Unrestricted Subsidiary (proportionate to the Company's equity interest in such
Subsidiary) and shall exclude, and the aggregate amount of all Restricted
Payments made as Investments since the Issue Date shall exclude and be reduced
by, the fair market value of the net assets of any Unrestricted Subsidiary
(proportionate to the Company's equity interest in such Subsidiary) at the time
that such Unrestricted Subsidiary is designated a Restricted Subsidiary, such
exclusion and reduction not to exceed the amount of Investments previously made
by the referant Person and its Restricted Subsidiaries and treated as Restricted
Payments, and (ii) the amount of any Investment shall be the original cost of
such Investment, without any adjustments for increases or decreases in value, or
write-ups, write-downs or write-offs with respect to such Investment, reduced by
the payment of dividends or distributions in connection with such Investment or
any other amounts received in respect of such Investment; provided that no such
payment of dividends or distributions or receipt of any such other amounts shall
reduce the amount of any Investment if such payment of dividend or distributions
or receipt of any such amounts would be included in Consolidated Net Income. If
the Company or any Restricted Subsidiary of the
77
- 69 -
Company sells or otherwise disposes of any Common Stock of any direct or
indirect Restricted Subsidiary of the Company such that, after giving effect to
any such sale or disposition, it ceases to be a Subsidiary of the Company, the
Company shall be deemed to have made an Investment on the date of any such sale
or disposition equal to the fair market value of the Capital Stock of such
Restricted Subsidiary not sold or disposed of.
(d) Subsidiaries of the Company that are not designated by the Board
of Directors of the Company as Restricted or Unrestricted Subsidiaries will be
deemed to be Restricted Subsidiaries of the Company. Notwithstanding any
provisions of this Section 4.14, all Subsidiaries of an Unrestricted Subsidiary
will be Unrestricted Subsidiaries.
SECTION 4.15. Change of Control.
(a) Upon the occurrence of a Change of Control, each Holder will
have the right to require that the Company purchase all or a portion of such
Holder's Notes pursuant to the offer described below (the "Change of Control
Offer"), at a purchase price equal to 101% of the principal amount thereof plus
accrued interest to the date of purchase.
(b) Prior to the mailing of the notice referred to below, but in any
event within 30 days following any Change of Control, the Company covenants to
(i) obtain the requisite consents under the Credit Agreement (so long as the
terms of which provide that a Change of Control would result in a default or
event of default or would otherwise require repayment) and all other Senior Debt
(the terms of which provide that a Change of Control would result in a default
or event of default or would otherwise require repayment) to permit the
repurchase of the Notes as provided below or (ii) in the event a consent is not
obtained with respect to such Credit Agreement or any such other Senior Debt,
repay in full and terminate all commitments under Indebtedness under such Credit
Agreement or such other Senior Debt, as the case may be, or offer to repay in
full and terminate all commitments under all Indebtedness under such Credit
Agreement or such other Senior Debt, as the case may be, and to repay the
Indebtedness owed to each lender which has accepted such offer. The Company
shall first comply with the covenant in the immediately preceding sentence
before it shall be required to repurchase Notes pursuant to the provisions
described below. The Company's failure to comply with the first sentence of this
paragraph shall be governed by Section 6.01(iii) and not Section 6.01(ii).
78
- 70 -
(c) Within 30 days following the date upon which a Change of Control
occurs, the Company must send, by first class mail, a notice to each Holder at
such Holder's last registered address, with a copy to the Trustee, which notice
shall govern the terms of the Change of Control Offer. The notice to the Holders
shall contain all instructions and materials necessary to enable such Holders to
tender Notes pursuant to the Change of Control Offer. Such notice shall state:
(i) that the Change of Control Offer is being made pursuant to this
Section 4.15, that all Notes tendered and not withdrawn will be accepted
for payment and that the Change of Control Offer shall remain open for a
period of 20 Business Days or such longer period as may be required by
law;
(ii) the purchase price (including the amount of accrued interest)
and the purchase date (which shall be no earlier than 30 days nor later
than 45 days from the date such notice is mailed, other than as may be
required by law) (the "Change of Control Payment Date");
(iii) that any Note not tendered will continue to accrue interest;
(iv) that, unless the Company defaults in making payment therefor,
any Note accepted for payment pursuant to the Change of Control Offer
shall cease to accrue interest after the Change of Control Payment Date;
(v) that Holders electing to have a Note purchased pursuant to a
Change of Control Offer will be required to surrender the Note, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Note completed, to the Paying Agent at the address specified in the notice
prior to the close of business on the third Business Day prior to the
Change of Control Payment Date;
(vi) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the second Business Day prior to the
Change of Control Payment Date, a telegram, telex, facsimile transmission
or letter setting forth the name of the Holder, the principal amount of
the Notes the Holder delivered for purchase and a statement that such
Holder is withdrawing its election to have such Notes purchased;
79
- 71 -
(vii) that Holders whose Notes are purchased only in part will be
issued new Notes in a principal amount equal to the unpurchased portion of
the Notes surrendered; provided, however, that each Note purchased and
each new Note issued shall be in an original principal amount of $1,000 or
integral multiples thereof; and
(viii) the circumstances and relevant facts regarding such Change of
Control.
On or before the Change of Control Payment Date, the Company shall
(i) accept for payment Notes or portions thereof tendered pursuant to the Change
of Control Offer, (ii) deposit with the Paying Agent in accordance with Section
2.14 U.S. Legal Tender sufficient to pay the purchase price plus accrued
interest, if any, of all Notes so tendered and (iii) deliver to the Trustee
Notes so accepted together with an Officers' Certificate stating the Notes or
portions thereof being purchased by the Company. Upon receipt by the Paying
Agent of the monies specified in clause (ii) above and a copy of the Officers'
Certificate specified in clause (iii) above, the Paying Agent shall promptly
mail to the Holders of Notes so accepted payment in an amount equal to the
purchase price plus accrued interest, if any, and the Trustee shall promptly
authenticate and mail to such Holders new Notes equal in principal amount to any
unpurchased portion of the Notes surrendered. For purposes of this Section 4.15,
the Trustee shall act as the Paying Agent.
Neither the Board of Directors of the Company nor the Trustee may
waive the provisions of this Section 4.15 relating to the Company's obligation
to make a Change of Control Offer.
The Company will comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to a Change of Control Offer. To the extent that
the provisions of any securities laws or regulations conflict with the
provisions of this Section 4.15, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under the provisions of this Section 4.15 by virtue thereof.
SECTION 4.16. Limitation on Asset Sales.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless (i) the Company or the
applicable Restricted Subsidiary, as the
80
- 72 -
case may be, receives consideration at the time of such Asset Sale at least
equal to the fair market value of the assets sold or otherwise disposed of (as
determined in good faith by the Company's Board of Directors), (ii) at least 75%
of the consideration received by the Company or the Restricted Subsidiary, as
the case may be, from such Asset Sale shall be in the form of cash or Cash
Equivalents and is received at the time of such disposition (provided that for
purposes of this provision, the amount of (x) any liabilities (as shown on the
most recent balance sheet of the Company or such Restricted Subsidiary or in the
notes thereto) of the Company or such Restricted Subsidiary that are assumed by
the transferee of any such assets (other than liabilities that are by their
terms pari passu with or subordinated to the Notes or the guarantee of the
Guarantors, as applicable) and (y) any securities or other obligations received
by the Company or any such Restricted Subsidiary from such transferee that are
immediately converted by the Company or such Restricted Subsidiary into cash or
Cash Equivalents (or as to which the Company or such Restricted Subsidiary has
received at or prior to the consummation of the Asset Sale a commitment (which
may be subject to customary conditions) from a nationally recognized investment,
merchant or commercial bank to convert into cash or Cash Equivalents within 180
days of the consummation of such Asset Sale and which are thereafter actually
converted into cash or Cash Equivalents within such 180-day period) will be
deemed to be cash or Cash Equivalents (and shall be deemed to be Net Cash
Proceeds for purposes of the following provisions as and when reduced to cash or
Cash Equivalents) to the extent of the net cash or Cash Equivalents realized
thereon), and (iii) upon the consummation of an Asset Sale, the Company shall
apply, or cause such Restricted Subsidiary to apply, the Net Cash Proceeds
relating to such Asset Sale within 365 days of receipt thereof either (A) to
repay or prepay any Senior Debt and, in the case of any Senior Debt under any
revolving credit facility, effect a permanent reduction in the availability
under such revolving credit facility, (B) to make an investment in properties
and assets that replace the properties and assets that were the subject of such
Asset Sale or in properties and assets that will be used in the business of the
Company and its Subsidiaries as existing on the Issue Date or in businesses
which are the same, similar or reasonably related or complementary to the
businesses in which the Company and its Restricted Subsidiaries are engaged on
the Issue Date ("Replacement Assets"), or (C) a combination of prepayment and
investment permitted by the foregoing clauses (iii)(A) and (iii)(B). On the
366th day after an Asset Sale or such earlier date, if any, as the Board of
Directors of the Company or of such Restricted Subsidiary determines not to
apply the Net Cash
81
- 73 -
Proceeds relating to such Asset Sale as set forth in clauses (iii)(A), (iii)(B)
and (iii)(C) of the next preceding sentence (each, a "Net Proceeds Offer Trigger
Date"), such aggregate amount of Net Cash Proceeds which have not been applied
on or before such Net Proceeds Offer Trigger Date as permitted in clauses
(iii)(A), (iii)(B) and (iii)(C) of the next preceding sentence (each a "Net
Proceeds Offer Amount") shall be applied by the Company or such Restricted
Subsidiary to make an offer to purchase (the "Net Proceeds Offer") on a date
(the "Net Proceeds Offer Payment Date") not less than 30 nor more than 45 days
following the applicable Net Proceeds Offer Trigger Date, from all Holders on a
pro rata basis, that amount of Notes equal to the Net Proceeds Offer Amount at a
price equal to 100% of the principal amount of the Notes to be purchased, plus
accrued and unpaid interest thereon, if any, to the date of purchase; provided,
however, that if at any time any non-cash consideration received by the Company
or any Restricted Subsidiary of the Company, as the case may be, in connection
with any Asset Sale is converted into or sold or otherwise disposed of for cash
(other than interest received with respect to any such non-cash consideration),
then such conversion or disposition shall be deemed to constitute an Asset Sale
hereunder and the Net Cash Proceeds thereof shall be applied in accordance with
this Section 4.16. The Company may defer the Net Proceeds Offer until there is
an aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $10.0
million resulting from one or more Asset Sales (at which time, the entire
unutilized Net Proceeds Offer Amount, and not just the amount in excess of $10.0
million, shall be applied as required pursuant to this paragraph).
In the event of the transfer of substantially all (but not all) of
the property and assets of the Company and its Restricted Subsidiaries as an
entirety to a Person in a transaction permitted under Section 5.01, the
successor corporation shall be deemed to have sold the properties and assets of
the Company and its Restricted Subsidiaries not so transferred for purposes of
this Section 4.16, and shall comply with the provisions of this Section 4.16
with respect to such deemed sale as if it were an Asset Sale. In addition, the
fair market value of such properties and assets of the Company or its Restricted
Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for
purposes of this Section 4.16.
(b) Notwithstanding the two immediately preceding paragraphs, the
Company and its Restricted Subsidiaries will be permitted to consummate an Asset
Sale without complying with such paragraphs to the extent (a) the consideration
for such
82
- 74 -
Asset Sale constitutes Replacement Assets and (b) such Asset Sale is for fair
market value.
(c) Each notice of a Net Proceeds Offer pursuant to this Section
4.16 shall be mailed or caused to be mailed, by first class mail, by the Company
not more than 25 days after the Net Proceeds Offer Trigger Date to all Holders
at their last registered addresses, with a copy to the Trustee. The notice shall
contain all instructions and materials necessary to enable such Holders to
tender Notes pursuant to the Net Proceeds Offer and shall state the following
terms:
(i) that the Net Proceeds Offer is being made pursuant to this
Section 4.16, that all Notes tendered will be accepted for payment;
provided, however, that if the aggregate principal amount of Notes
tendered in a Net Proceeds Offer plus accrued interest at the expiration
of such offer exceeds the aggregate amount of the Net Proceeds Offer, the
Company shall select the Notes to be purchased on a pro rata basis (with
such adjustments as may be deemed appropriate by the Company so that only
Notes in denominations of $1,000 or multiples thereof shall be purchased)
and that the Net Proceeds Offer shall remain open for a period of 20
Business Days or such longer period as may be required by law;
(ii) the purchase price (including the amount of accrued interest)
and the Net Proceeds Offer Payment Date (which shall be not less than 30
nor more than 45 days following the applicable Net Proceeds Offer Trigger
Date and which shall be at least three Business Days after the Trustee
receives notice thereof from the Company unless a shorter period shall be
agreed to by the Trustee);
(iii) that any Note not tendered will continue to accrue interest;
(iv) that, unless the Company defaults in making payment therefor,
any Note accepted for payment pursuant to the Net Proceeds Offer shall
cease to accrue interest after the Net Proceeds Offer Payment Date;
(v) that Holders electing to have a Note purchased pursuant to a Net
Proceeds Offer will be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, to the Paying Agent at the address specified in the notice
83
- 75 -
prior to the close of business on the third Business Day prior to the Net
Proceeds Offer Payment Date;
(vi) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the second Business Day prior to the
Net Proceeds Offer Payment Date, a telegram, telex, facsimile transmission
or letter setting forth the name of the Holder, the principal amount of
the Notes the Holder delivered for purchase and a statement that such
Holder is withdrawing its election to have such Note purchased; and
(vii) that Holders whose Notes are purchased only in part will be
issued new Notes in a principal amount equal to the unpurchased portion of
the Notes surrendered; provided, however, that each Note purchased and
each new Note issued shall be in an original principal amount of $1,000 or
integral multiples thereof.
On or before the Net Proceeds Offer Payment Date, the Company shall
(i) accept for payment Notes or portions thereof tendered pursuant to the Net
Proceeds Offer which are to be purchased in accordance with item (b)(i) above,
(ii) deposit with the Paying Agent in accordance with Section 2.14 U.S. Legal
Tender sufficient to pay the purchase price plus accrued interest, if any, of
all Notes to be purchased and (iii) deliver to the Trustee Notes so accepted
together with an Officers' Certificate stating the Notes or portions thereof
being purchased by the Company. The Paying Agent shall promptly mail to the
Holders of Notes so accepted payment in an amount equal to the purchase price
plus accrued interest, if any. For purposes of this Section 4.16, the Trustee
shall act as the Paying Agent. The Trustee shall promptly authenticate and mail
to such Holders new Notes equal in principal amount to any unpurchased portion
of the Notes surrendered. Upon the payment of the purchase price for the Notes
accepted for purchase, the Trustee shall either cancel the Notes or return the
Notes purchased to the Company for cancellation. Any monies remaining after the
purchase of Notes pursuant to a Net Proceeds Offer shall be returned within
three Business Days by the Trustee to the Company except with respect to monies
owed as obligations to the Trustee pursuant to Article Seven. For purposes of
this Section 4.16, the Trustee shall act as the Paying Agent.
To the extent the amount of Notes tendered pursuant to any Net
Proceeds Offer is less than the amount of Net Cash Proceeds subject to such Net
Proceeds Offer, the Company may use any remaining portion of such Net Cash
Proceeds not re-
84
- 76 -
quired to fund the repurchase of tendered Notes for general corporate purposes
and such Net Proceeds Offer Amount shall be reset to zero.
(d) The Company will comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to a Net Proceeds Offer. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
this Section 4.16, the Company shall comply with the applicable securities laws
and regulations and shall not be deemed to have breached its obligations under
the provisions of this Section 4.16 by virtue thereof.
SECTION 4.17. Limitation on Preferred Stock of Restricted
Subsidiaries.
The Company will not permit any of its Restricted Subsidiaries to
issue any Preferred Stock (other than to the Company or to a Wholly Owned
Restricted Subsidiary of the Company) or permit any Person (other than the
Company or a Wholly Owned Restricted Subsidiary of the Company) to own any
Preferred Stock of any Restricted Subsidiary of the Company.
SECTION 4.18. Limitation on Liens.
The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
permit or suffer to exist any Liens of any kind against or upon any property or
assets of the Company or any of its Restricted Subsidiaries whether owned on the
Issue Date or acquired after the Issue Date, or any proceeds therefrom, or
assign or otherwise convey any right to receive income or profits therefrom
unless (i) in the case of Liens securing Indebtedness that is expressly
subordinate or junior in right of payment to the Notes or any Guarantee, the
Notes and such Guarantee, as the case may be, are secured by a Lien on such
property, assets or proceeds that is senior in priority to such Liens and (ii)
in all other cases, the Notes and the Guarantees are equally and ratably
secured, except for (A) Liens existing as of the Issue Date to the extent and in
the manner such Liens are in effect on the Issue Date; (B) Liens securing the
Credit Agreement; (C) Liens securing Senior Debt and Liens securing Guarantor
Senior Debt; (D) Liens securing the Notes and the Guarantees; (E) Liens of the
Company or a Restricted Subsidiary of the Company on assets of any Subsidiary of
the Company; (F) Liens securing Refinancing Indebtedness which is
85
- 77 -
incurred to Refinance any Indebtedness which has been secured by a Lien
permitted under this Indenture and which has been incurred in accordance with
the provisions of this Indenture; provided, however, that such Liens (y) are no
less favorable to the Holders and are not more favorable to the lienholders with
respect to such Liens than the Liens in respect of the Indebtedness being
Refinanced and (z) do not extend to or cover any property or assets of the
Company or any of its Restricted Subsidiaries not securing the Indebtedness so
Refinanced; and (G) Permitted Liens.
SECTION 4.19. Conduct of Business.
The Company and its Restricted Subsidiaries will not engage in any
businesses which are not the same, similar or reasonably related or
complementary to the businesses in which the Company and its Restricted
Subsidiaries are engaged on the Issue Date.
SECTION 4.20. Additional Subsidiary Guarantees.
If the Company or any of its Restricted Subsidiaries transfers or
causes to be transferred, in one transaction or a series of related
transactions, any property to any Restricted Subsidiary (other than a Foreign
Subsidiary or Securitization Entity) that is not a Guarantor, or if the Company
or any of its Restricted Subsidiaries shall organize, acquire or otherwise
invest in another Restricted Subsidiary (other than a Foreign Subsidiary or
Securitization Entity) having total assets with a book value in excess of
$500,000, then such transferee or acquired or other Restricted Subsidiary shall
within 15 days of the end of the next succeeding fiscal quarter (unless the book
value of such Restricted Subsidiary is in excess of $5.0 million in which case,
contemporaneously with the organization, acquisition or other investment in such
Restricted Subsidiary, as the case may be) (i) execute and deliver to the
Trustee a supplemental indenture in form reasonably satisfactory to the Trustee
pursuant to which such Restricted Subsidiary shall unconditionally guarantee all
of the Company's obligations under the Notes and this Indenture on the terms set
forth in this Indenture and (ii) deliver to the Trustee an Opinion of Counsel
that such supplemental indenture has been duly authorized, executed and
delivered by such Restricted Subsidiary and constitutes a legal, valid, binding
and enforceable obligation of such Restricted Subsidiary. Thereafter, such
Restricted Subsidiary shall be a Guarantor for all purposes of this Indenture.
86
- 78 -
In the event that (i) a Restricted Subsidiary shall be required
pursuant to the preceding paragraph to deliver the documents described above in
clauses (i) and (ii) of the preceding paragraph (the "Additional Guarantee
Documents"), (ii) the Company would be required to publicly disclose separate
financial statements of such Restricted Subsidiary for the periods required by
Rules 3-01 and 3-02 of Regulation S-X under the Securities Act, (iii) such
Restricted Subsidiary is not a Significant Subsidiary of the Company, and (iv)
the Company shall be able to incur at least $1.00 of additional Indebtedness
(other than Permitted Indebtedness) pursuant to Section 4.12, then such
Restricted Subsidiary shall not be required to deliver the Additional Guarantee
Documents to the Trustee until the earlier of (x) one year and three months from
the date such Restricted Subsidiary would otherwise have had to deliver the
Additional Guarantee Documents and (y) the date such financial statements would
not be required to be publicly disclosed; provided that in no event shall more
than one such Restricted Subsidiary not be required to deliver the Additional
Guarantee Documents at any one time pursuant to this paragraph.
SECTION 4.21. Prohibition on Incurrence of Senior Subordinated Debt.
The Company will not, and will not permit any Guarantor to, incur or
suffer to exist Indebtedness that is senior in right of payment to the Notes or
any Guarantee, as the case may be, and expressly contractually subordinate in
right of payment to any other Indebtedness of the Company or such Guarantor, as
the case may be.
SECTION 4.22. Deposit of Proceeds with Escrow Agent.
(a) On the Closing Date, the Company shall deposit with the Escrow
Agent as hereinafter provided the net proceeds from the issuance of the Notes,
to wit: $191,684,793.92 (the "Proceeds").
(b) In order to secure the full and punctual payment and performance
of the Company's obligation to redeem the Notes upon a Special Redemption, if
any, the Company hereby grants to the Trustee, for the ratable benefit of the
Holders, a continuing perfected security interest in and to the Collateral,
whether now owned or existing or hereafter acquired or arising. The Company
shall be required to effect the Special Redemption upon the occurrence of an
event specified in subsection (f) below at a redemption price equal to 100% of
the principal amount
87
- 79 -
of the Notes to be redeemed plus accrued and unpaid interest thereon to the date
of redemption.
(c) At all times until the release of the proceeds in accordance
with this Section 4.22 and the Escrow Agreement, there shall be maintained with
the Escrow Agent an account (the "Escrow Account") designated "Kinetic Concepts,
Inc., Account Pledged to Marine Midland Bank as Trustee," which account shall be
under the sole dominion and control of the Escrow Agent. On the Closing Date,
the Company shall cause the Proceeds to be deposited in the Escrow Account.
Amounts on deposit in the Escrow Account shall be invested and reinvested from
time to time in (i) marketable direct obligations issued by, or unconditionally
guaranteed by, the United States Government or issued by any agency thereof and
backed by the full faith and credit of the United States, in each case maturing
within 30 days from the date of acquisition thereof; (ii) marketable direct
obligations issued by any state of the United States of America or any political
subdivision of any such state or any public instrumentality thereof maturing
within 30 days from the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings obtainable from either
Standard & Poor's Corporation ("S&P") or Xxxxx'x Investors Service, Inc.
("Moody's"); (iii) commercial paper maturing no more than 30 days from the date
of creation thereof and, at the time of acquisition, having a rating of at least
A-1 from S&P or at least P-1 from Moody's; (iv) certificates of deposit or
bankers' acceptances maturing within 30 days from the date of acquisition
thereof issued by any bank (including the Escrow Agent) organized under the laws
of the United States of America or any state thereof or the District of Columbia
or any U.S. branch of a foreign bank having at the date of acquisition thereof
combined capital and surplus of not less than $250,000,000; (v) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (iv) above; (vi) investments in money market
funds (including those of the Escrow Agent) which invest substantially all their
assets in securities of the types described in clauses (i) through (v) above
(with (i) through (vi) above being collectively referred to as "Eligible
Investments"), which Eligible Investments shall be held in the Escrow Account.
Any income, including any interest or capital gains received with respect to the
balance from time to time standing to the credit of the Escrow Account, shall
remain, or be deposited, in the Escrow Account. The Escrow Agent shall in no
event have any liability for any tax, fee, loss or other charge incurred in
connection with the Company's written instructions
88
- 80 -
to the Escrow Agent regarding any investment, reinvestment or liquidation of any
such investment.
(d) Upon the earlier to occur of (i) any Proceeds being released by
the Escrow Agent to be used in the Tender Offer and (ii) the Special Redemption
Date, the security interests in the Collateral shall automatically terminate.
(e) Upon receipt by the Escrow Agent on or prior to November 6, 1997
of a certificate signed by the President or any Vice President and any other
officer of the Company (the "Tender Offer Officers' Certificate") stating that
the Tender Offer is to be effected on the terms and conditions described in all
material respects in the Offer to Purchase on a date specified therein and
requesting the Escrow Agent to release the aggregate amount of Proceeds required
to effect the Tender Offer to the order of the Company to be used to purchase
Common Stock of the Company in the Tender Offer in accordance with the Offer to
Purchase (and such Officers' Certificate the Company may withdraw if the Tender
Offer is postponed), the Escrow Agent shall disburse all such Proceeds to, or at
the direction of, the Company on the closing date of the Tender Offer, which
shall be specified in such certificate.
(f) At 5:00 P.M., New York City time, on November 6, 1997, if the
Escrow Agent has not received the Tender Offer Officers' Certificate:
(i) The Escrow Agent shall notify the Trustee in writing that the
appropriate conditions have occurred. The Trustee is then authorized to
redeem the Notes in accordance with clause (ii) below and the terms of
this Indenture;
(ii) Within five days after the date of the notice referred to in
clause (i) above, the Trustee shall mail a notice (the "Special Redemption
Notice") to the Holders of the Notes stating that the Notes shall be
redeemed (the "Special Redemption") on the tenth day following the date of
such notice (or, if such day is not a Business Day, the first Business Day
thereafter) (the "Special Redemption Date"), at the redemption price set
forth in Section 5 of the Notes, and shall state that Notes must be
surrendered to the Trustee as paying agent in order to collect the
redemption price, it being acknowledged and agreed that the failure of the
Company to deliver the Tender Offer Officers' Certificate by 5:00 P.M.,
New York time, on November
00
- 00 -
0, 0000 xxxxx xx a request for the Trustee to give the Special Redemption
Notice to the Holders of the Notes;
(iii) By 10:30 A.M., New York City time, on the Special Redemption
Date, the Escrow Agent shall disburse all Proceeds to the Trustee as
paying agent in connection with the redemption of the Notes as specified
in this Indenture; and
(iv) The Company shall, at or prior to 10:30 A.M., New York City
time, on the Special Redemption Date, deposit with the Trustee as paying
agent an amount of funds such that on the Special Redemption Date the
Trustee shall have immediately available funds (including the Proceeds
disbursed pursuant to clause (iii) above) to pay the redemption price set
forth in Section 5 of the Notes for all outstanding Notes to be redeemed.
SECTION 4.23. Prepayment of Credit Agreement.
In the event the Merger is not consummated prior to the earlier of
the date set forth in Section 11(1)(i) of the Credit Agreement or May 31, 1998,
the Company shall permanently prepay Term Loans under the Credit Agreement and
reduce commitments by an amount equal to the net proceeds of the Notes less the
amount of such proceeds used to purchase shares of Common Stock of the Company
pursuant to the Transaction Agreement and related fees and expenses.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Merger, Consolidation and Sale of Assets.
(a) The Company will not, in a single transaction or series of
related transactions, consolidate or merge with or into any Person (other than
the Merger), or sell, assign, transfer, lease, convey or otherwise dispose of
(or cause or permit any Restricted Subsidiary of the Company to sell, assign,
transfer, lease, convey or otherwise dispose of) all or substantially all of the
Company's assets (determined on a consolidated basis for the Company and the
Company's Restricted Subsidiaries) whether as an entirety or substantially as an
entirety to any Person unless: (i) either (1) with respect to such a
consolidation or merger, the Company shall be the
90
- 82 -
surviving or continuing corporation or (2) the Person (if other than the
Company) formed by such consolidation or into which the Company is merged or the
Person which acquires by sale, assignment, transfer, lease, conveyance or other
disposition the properties and assets of the Company and of the Company's
Restricted Subsidiaries substantially as an entirety (the "Surviving Entity")
(x) shall be a corporation organized and validly existing under the laws of the
United States or any State thereof or the District of Columbia and (y) shall
expressly assume, by supplemental indenture (in form and substance satisfactory
to the Trustee), executed and delivered to the Trustee, the due and punctual
payment of the principal of, and premium, if any, and interest on all of the
Notes and the performance of every covenant of the Notes, this Indenture and the
Registration Rights Agreement on the part of the Company to be performed or
observed; (ii) immediately after giving effect to such transaction and the
assumption contemplated by clause (i)(2)(y) above (including giving effect to
any Indebtedness and Acquired Indebtedness incurred or anticipated to be
incurred in connection with or in respect of such transaction), the Company or
such Surviving Entity, as the case may be, shall be able to incur at least $1.00
of additional Indebtedness (other than Permitted Indebtedness) pursuant to
Section 4.12; (iii) immediately after giving effect to such transaction and the
assumption contemplated by clause (i)(2)(y) above (including, without
limitation, giving effect to any Indebtedness and Acquired Indebtedness incurred
or anticipated to be incurred and any Lien granted in connection with or in
respect of the transaction), no Default or Event of Default shall have occurred
or be continuing; and (iv) the Company or the Surviving Entity, as the case may
be, shall have delivered to the Trustee an Officers' Certificate and an Opinion
of Counsel, each stating that such consolidation, merger, sale, assignment,
transfer, lease, conveyance or other disposition and, if a supplemental
indenture is required in connection with such transaction, such supplemental
indenture comply with the applicable provisions of this Indenture and that all
conditions precedent in this Indenture relating to such transaction have been
satisfied.
(b) For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties or assets of one or
more Restricted Subsidiaries of the Company, the Capital Stock of which
constitutes all or substantially all of the properties and assets of the
Company, shall be deemed to be the transfer of all or substantially all of the
properties and assets of the Company.
00
- 00 -
(x) Xxxx Xxxxxxxxx (xxxxx than any Guarantor whose Guarantee is to
be released in accordance with the terms of the Guarantee and this Indenture in
connection with any transaction complying with the provisions of Section 4.16)
will not, and the Company will not cause or permit any Guarantor to, consolidate
with or merge with or into any Person other than the Company or any other
Guarantor unless: (i) the entity formed by or surviving any such consolidation
or merger (if other than the Guarantor) or to which such sale, lease, conveyance
or other disposition shall have been made is a corporation organized and
existing under the laws of the United States or any State thereof or the
District of Columbia; (ii) such entity assumes by supplemental indenture all of
the obligations of the Guarantor on the Guarantee; and (iii) immediately after
giving effect to such transaction, no Default or Event of Default shall have
occurred and be continuing. Any merger or consolidation of a Guarantor with and
into the Company (with the Company being the surviving entity) or another
Guarantor that is a Wholly Owned Restricted Subsidiary of the Company need only
comply with clause (iv) of the first paragraph of this Section 5.01.
SECTION 5.02. Successor Corporation Substituted.
Upon any consolidation, combination or merger or any transfer of all
or substantially all of the assets of the Company in accordance with Section
5.01, in which the Company is not the continuing corporation, the successor
Person formed by such consolidation or into which the Company is merged or to
which such conveyance, lease or transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture and the Notes with the same effect as if such successor had been
named as the Company herein and thereafter (except in the case of a sale,
assignment, transfer, lease, conveyance or other disposition) the predecessor
corporation will be relieved of all further obligations and covenants under this
Indenture and the Notes; provided that solely for purposes of computing the
amounts described in subclauses (u), (v) and (w) of Section 4.10, any successor
Person shall only be deemed to have succeeded to and be substituted for the
Company with respect to periods subsequent to the effective time of such merger,
consolidation or transfer of assets.
92
- 84 -
ARTICLE SIX
REMEDIES
SECTION 6.01. Events of Default.
An "Event of Default" means any of the following events:
(i) the failure to pay interest on any Notes when the same becomes
due and payable and the default continues for a period of 30 days (whether
or not such payment shall be prohibited by Article Ten of this Indenture);
(ii) the failure to pay the principal on any Notes, when such
principal becomes due and payable, at maturity, upon redemption or
otherwise (including the failure to make a payment to purchase Notes
tendered pursuant to a Change of Control Offer or a Net Proceeds Offer)
(whether or not such payment shall be prohibited by Article Ten of this
Indenture);
(iii) a default in the observance or performance of any other
covenant or agreement contained in this Indenture which default continues
for a period of 30 days after the Company receives written notice
specifying the default (and demanding that such default be remedied) from
the Trustee or the Holders of at least 25% of the outstanding principal
amount of the Notes (except in the case of a default with respect to
Section 5.01, which will constitute an Event of Default with such notice
requirement but without such passage of time requirement);
(iv) the failure to pay at final maturity (giving effect to any
applicable grace periods and any extensions thereof) the principal amount
of any Indebtedness of the Company or any Restricted Subsidiary of the
Company (other than a Securitization Entity) and such failure continues
for a period of 30 days or more, or the acceleration of the final stated
maturity of any such Indebtedness (which acceleration is not rescinded,
annulled or otherwise cured within 30 days of receipt by the Company or
such Restricted Subsidiary of notice of any such acceleration) if the
aggregate principal amount of such Indebtedness, together with the
principal amount of any other such Indebtedness in default for failure to
pay principal at final maturity or which has been accelerated, in each
case with
93
- 85 -
respect to which the 30-day period described above has passed, aggregates
$20.0 million or more at any time;
(v) one or more judgments which exceeds in the aggregate $20.0
million (excluding judgments to the extent covered by insurance by a
reputable insurer as to which the insurer has acknowledged coverage) shall
have been rendered against the Company or any of its Significant
Subsidiaries that is a Restricted Subsidiary of the Company and such
judgments remain undischarged, unvacated, unpaid or unstayed for a period
of 60 days after such judgment or judgments become final and
non-appealable;
(vi) the Company or any of its Significant Subsidiaries (A)
commences a voluntary case or proceeding under any Bankruptcy Law with
respect to itself, (B) consents to the entry of a judgment, decree or
order for relief against it in an involuntary case or proceeding under any
Bankruptcy Law, (C) consents to the appointment of a Custodian of it or
for substantially all of its property, (D) consents to or acquiesces in
the institution of a bankruptcy or an insolvency proceeding against it,
(E) makes a general assignment for the benefit of its creditors, or (F)
takes any corporate action to authorize or effect any of the foregoing;
(vii) a court of competent jurisdiction enters a judgment, decree or
order for relief in respect of the Company or any of its Significant
Subsidiaries in an involuntary case or proceeding under any Bankruptcy
Law, which shall (A) approve as properly filed a petition seeking
reorganization, arrangement, adjustment or composition in respect of the
Company or any of its Significant Subsidiaries, (B) appoint a Custodian of
the Company or any of its Significant Subsidiaries or for substantially
all of its property or (C) order the winding-up or liquidation of its
affairs; and such judgment, decree or order shall remain unstayed and in
effect for a period of 60 consecutive days;
(viii) any of the Guarantees ceases to be in full force and effect
or any of the Guarantees is declared to be null and void and unenforceable
or any of the Guarantees is found to be invalid or any of the Guarantors
denies its liability under its Guarantee (other than by reason of release
of a Guarantor in accordance with the terms of this Indenture).
94
- 86 -
SECTION 6.02. Acceleration.
(a) If an Event of Default (other than an Event of Default specified
in clause (vi) or (vii) of Section 6.01 with respect to the Company) shall occur
and be continuing, the Trustee or the Holders of at least 25% in principal
amount of outstanding Notes may declare the principal of and accrued interest on
all the Notes to be due and payable by notice in writing to the Company and the
Trustee specifying the respective Event of Default and that it is a "notice of
acceleration" (the "Acceleration Notice"), and the same (i) shall become
immediately due and payable or (ii) if there are any amounts outstanding under
the Credit Agreement, shall become immediately due and payable upon the first to
occur of an acceleration under the Credit Agreement or 5 Business Days after
receipt by the Company and the representative under the Credit Agreement of such
Acceleration Notice. If an Event of Default specified in clause (vi) or (vii) of
Section 6.01 with respect to the Company occurs and is continuing, then all
unpaid principal of, and premium, if any, and accrued and unpaid interest on all
of the outstanding Notes shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder.
(b) At any time after a declaration of acceleration with respect to
the Notes as described in the preceding paragraph, the Holders of a majority in
principal amount of the Notes may rescind and cancel such declaration and its
consequences (i) if the rescission would not conflict with any judgment or
decree, (ii) if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of the
acceleration, (iii) to the extent the payment of such interest is lawful,
interest on overdue installments of interest and overdue principal, which has
become due otherwise than by such declaration of acceleration, has been paid,
(iv) if the Company has paid the Trustee its reasonable compensation and
reimbursed the Trustee for its expenses, disbursements and advances and (v) in
the event of the cure or waiver of an Event of Default of the type described in
clause (vi) or (vii) of Section 6.01, the Trustee shall have received an
Officers' Certificate and an Opinion of Counsel that such Event of Default has
been cured or waived. No such rescission shall affect any subsequent Default or
impair any right consequent thereto.
95
- 87 -
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of the principal of, premium, if any, or interest on the Notes or to
enforce the performance of any provision of the Notes or this Indenture.
All rights of action and claims under this Indenture or the Notes
may be enforced by the Trustee even if it does not possess any of the Notes or
does not produce any of them in the proceeding. A delay or omission by the
Trustee or any Holder in exercising any right or remedy accruing upon an Event
of Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative to the extent permitted by law.
SECTION 6.04. Waiver of Past Defaults.
Prior to the declaration of acceleration of the Notes, the Holders
of not less than a majority in aggregate principal amount of the Notes then
outstanding by notice to the Trustee may, on behalf of the Holders of all the
Notes, waive any existing Default or Event of Default and its consequences under
this Indenture, except a Default or Event of Default specified in Section
6.01(i) or (ii) or in respect of any provision hereof which cannot be modified
or amended without the consent of the Holder so affected pursuant to Section
9.02. When a Default or Event of Default is so waived, it shall be deemed cured
and shall cease to exist. This Section 6.04 shall be in lieu of Section
316(a)(1)(B) of the TIA and such Section 316(a)(1)(B) of the TIA is hereby
expressly excluded from this Indenture and the Notes, as permitted by the TIA.
SECTION 6.05. Control by Majority.
Subject to Section 2.09, the Holders of the Notes may not enforce
this Indenture or the Notes except as provided in this Article Six and under the
TIA. The Holders of not less than a majority in aggregate principal amount of
the outstanding Notes shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, provided, however, that
the Trustee may refuse to follow any direction (a) that conflicts with any rule
of law or this Indenture, (b) that the Trustee determines may be unduly
prejudicial to the rights of another Holder, or (c) that may
96
- 88 -
expose the Trustee to personal liability for which reasonable indemnity provided
to the Trustee against such liability shall be inadequate; provided, further,
however, that the Trustee may take any other action deemed proper by the Trustee
that is not inconsistent with such direction or this Indenture. This Section
6.05 shall be in lieu of Section 316(a)(1)(A) of the TIA, and such Section
316(a)(1)(A) of the TIA is hereby expressly excluded from this Indenture and the
Notes, as permitted by the TIA.
SECTION 6.06. Limitation on Suits.
No Holder of any Notes shall have any right to institute any
proceeding with respect to this Indenture or the Notes or any remedy hereunder,
unless the Holders of at least 25% in aggregate principal amount of the
outstanding Notes have made written request, and offered reasonable indemnity,
to the Trustee to institute such proceeding as Trustee under the Notes and this
Indenture, the Trustee has failed to institute such proceeding within 45 days
after receipt of such notice, request and offer of indemnity and the Trustee,
within such 45-day period, has not received directions inconsistent with such
written request by Holders of not less than a majority in aggregate principal
amount of the outstanding Notes.
The foregoing limitations shall not apply to a suit instituted by a
Holder of a Note for the enforcement of the payment of the principal of,
premium, if any, or interest on, such Note on or after the respective due dates
expressed or provided for in such Note.
A Holder may not use this Indenture to prejudice the rights of any
other Holders or to obtain priority or preference over such other Holders.
SECTION 6.07. Right of Holders To Receive Payment.
Notwithstanding any other provision in this Indenture, the right of
any Holder of a Note to receive payment of the principal of, premium, if any,
and interest on such Note, on or after the respective due dates expressed or
provided for in such Note, or to bring suit for the enforcement of any such
payment on or after the respective due dates, is absolute and unconditional and
shall not be impaired or affected without the consent of the Holder.
97
- 89 -
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default specified in clause (i) or (ii) of Section
6.01 occurs and is continuing, the Trustee may recover judgment in its own name
and as trustee of an express trust against the Company, or any other obligor on
the Notes for the whole amount of the principal of, premium, if any, and accrued
interest remaining unpaid, together with interest on overdue principal and, to
the extent that payment of such interest is lawful, interest on overdue
installments of interest, in each case at the rate per annum provided for by the
Notes and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents, counsel, accountants and
experts) and the Holders allowed in any judicial proceedings relative to the
Company or Restricted Subsidiaries (or any other obligor upon the Notes), their
creditors or their property and shall be entitled and empowered to participate
as a member, voting or otherwise, of any official committee of creditors
appointed in such matter and to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same, and any
Custodian in any such judicial proceedings is hereby authorized by each Holder
to make such payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agent and counsel, and any other
amounts due the Trustee under Section 7.07. The Company's payment obligations
under this Section 6.09 shall be secured in accordance with the provisions of
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 Notes 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.
98
- 90 -
SECTION 6.10. Priorities.
If the Trustee collects any money pursuant to this Article Six it
shall pay out such money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Holders for interest accrued on the Notes, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Notes for interest;
Third: to Holders for the principal amounts (including any premium) owing
under the Notes, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for the principal
(including any premium); and
Fourth: the balance, if any, to the Company or any other obligor on the
Notes, as their interests may appear, or as a court of competent
jurisdiction may direct.
The Trustee, upon prior written notice to the Company, may fix a
record date and payment date for any payment to Holders pursuant to this Section
6.10.
SECTION 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court may in its discretion require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to any suit by the Trustee, any suit by a
Holder pursuant to Section 6.07, or a suit by a Holder or Holders of more than
10% in aggregate principal amount of the outstanding Notes.
SECTION 6.12. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture or any Note and such proceeding
has been discontinued or abandoned for any reason, or has been determined
adversely to the Trustee
99
- 91 -
or to such Holder, then and in every such case the Company, the Trustee and the
Holders shall, subject to any determination in such proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee may exercise such of the rights and powers vested in it by this
Indenture and shall use the same degree of care and skill in its exercise
thereof as a prudent person would exercise or use under the circumstances in the
conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties as are specifically
set forth in this Indenture and no duties, covenants or obligations of the
Trustee shall be implied in this Indenture.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture.
However, in the case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished to the Trustee,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture (but
need not conform or investigate the accuracy or mathematical calculations
or other facts stated therein or otherwise verify the contents thereof).
(c) Notwithstanding anything to the contrary herein contained, the
Trustee may not be relieved from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
100
- 92 -
(1) This paragraph does not limit the effect of paragraph (b) of
this Section 7.01.
(2) The Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.02, 6.04 or 6.05.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.01 and
Section 7.02.
(f) The Trustee shall not be liable for interest on any money or
assets received by it except as the Trustee may agree in writing with the
Company. Assets held in trust by the Trustee need not be segregated from other
assets except to the extent required by law.
(g) The Trustee may refuse to perform any duty or exercise any right
or power hereunder unless (i) it is provided adequate funds to enable it to do
so and (ii) it receives indemnity reasonably satisfactory to it against any
loss, liability, fee or expense.
SECTION 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may conclusively rely and shall be fully protected
in acting or refraining from acting upon any document believed by it to be
genuine and to have been signed or presented by the proper Person. The
Trustee need not and shall not be required to investigate any fact or
matter stated in the document.
101
- 93 -
(b) Before the Trustee acts or refrains from acting, it may consult
with counsel of its selection and may require an Officers' Certificate or
an Opinion of Counsel, or both, which shall conform to Sections 11.04 and
11.05. The Trustee shall not be liable for any action it takes or omits to
take in good faith in reliance on such Officers' Certificate or Opinion of
Counsel.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Trustee shall not be liable for any action that it takes or
omits to take in good faith which it reasonably believes to be authorized
or within its rights or powers.
(e) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled, upon reasonable
notice to the Company, to examine the books, records, and premises of the
Company, personally or by agent or attorney and to consult with the
officers and representatives of the Company, including the Company's
accountants and attorneys.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this
Indenture, unless such Holders shall have offered to the Trustee security
or indemnity reasonably satisfactory to the Trustee against the costs,
expenses and liabilities which may be incurred by it in compliance with
such request, order or direction.
(g) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
(h) Delivery of reports, information and documents to the Trustee
under Section 4.08 is for informational
102
- 94 -
purposes only and the Trustee's receipt of the foregoing shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of their covenants hereunder (as to which the Trustee
is entitled to rely exclusively on Officers' Certificates).
SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company, any of their
Subsidiaries, or their respective Affiliates with the same rights it would have
if it were not Trustee. Any Agent may do the same with like rights. However, the
Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Notes, and it shall not
be accountable for the Company's use of the proceeds from the Notes, and it
shall not be responsible for any statement of the Company in this Indenture or
any document entered into or issued in connection with the issuance and sale of
the Notes or any statement in the Notes other than the Trustee's certificate of
authentication.
SECTION 7.05. Notice of Default.
If a Default or an Event of Default occurs and is continuing and if
it is known to a Trust Officer, the Trustee shall mail to each Holder notice of
the uncured Default or Event of Default within 90 days after obtaining knowledge
thereof. Except in the case of a Default or an Event of Default in payment of
principal of, or interest on, any Note, including an accelerated payment, a
Default in payment on the Change of Control Payment Date pursuant to a Change of
Control Offer or on the Net Proceeds Offer Payment Date pursuant to a Net
Proceeds Offer and a Default in compliance with Article Five hereof, the Trustee
may withhold the notice if and so long as its Board of Directors, the executive
committee of its Board of Directors or a committee of its directors and/or Trust
Officers in good faith determines that withholding the notice is in the interest
of the Holders. The foregoing sentence of this Section 7.05 shall be in lieu of
the proviso to Section 315(b) of the TIA and such proviso to Section 315(b) of
the TIA is hereby
103
- 95 -
expressly excluded from this Indenture and the Notes, as permitted by the TIA.
SECTION 7.06. Reports by Trustee to Holders.
Within 60 days after September 15 of each year beginning with 1998,
the Trustee shall, to the extent that any of the events described in TIA Section
313(a) occurred within the previous twelve months, but not otherwise, mail to
each Holder a brief report dated as of such date that complies with TIA Section
313(a). The Trustee also shall comply with TIA Sections 313(b), (c) and
(d).
A copy of each report at the time of its mailing to Holders shall be
mailed to the Company and filed with the Commission and each stock exchange, if
any, on which the Notes are listed.
The Company shall promptly notify the Trustee if the Notes become
listed on any stock exchange and the Trustee shall comply with TIA Section
313(d).
SECTION 7.07. Compensation and Indemnity.
The Company and the Guarantors, jointly, shall pay to the Trustee
from time to time such compensation for its services as has been agreed to in
writing signed by the Company and the Trustee. The Trustee's compensation shall
not be limited by any law on compensation of a trustee of an express trust. The
Company and the Guarantors, jointly, shall reimburse the Trustee upon request
for all reasonable out-of-pocket disbursements, advances or expenses incurred or
made by it in connection with the performance of its duties under this
Indenture. Such expenses shall include the reasonable fees and expenses of the
Trustee's agents, counsel, accountants and experts.
The Company and the Guarantors, jointly, shall indemnify each of the
Trustee (or any predecessor Trustee) and its agents, employees, stockholders,
Affiliates and directors and officers for, and hold them each harmless against,
any and all loss, liability, damage, claim or expense (including reasonable fees
and expenses of counsel), including taxes (other than taxes based on the income
of the Trustee) incurred by any of them except for such actions to the extent
caused by any negligence, bad faith or willful misconduct on their part, arising
out of or in connection with the acceptance or administration of this trust
including the reasonable costs and expenses of defending themselves against any
claim or liability in connec-
104
- 96 -
tion with the exercise or performance of any of their rights, powers or duties
hereunder. The Trustee shall notify the Company and the Guarantors promptly of
any claim asserted against the Trustee for which it may seek indemnity,
provided, however, that failure to so notify the Company and the Guarantors
shall not release the Company and the Guarantors of its obligations hereunder
unless and to the extent such failure results in the forfeiture by the Company
and the Guarantors of substantial rights and defenses. At the Trustee's sole
discretion, the Company and the Guarantors shall defend the claim and the
Trustee shall cooperate and may participate in the defense; provided, however,
that any settlement of a claim shall be approved in writing by the Trustee if
such settlement would result in an admission of liability by the Trustee or if
such settlement would not be accompanied by a full release of the Trustee for
all liability arising out of the events giving rise to such claim.
Alternatively, the Trustee may at its option have separate counsel of its own
choosing and the Company shall pay the reasonable fees and expenses of such
counsel; provided that the Company will not be required to pay such fees and
expenses if it assumes the Trustee's defense and there is no conflict of
interest between the Company and the Trustee in connection with such defense as
reasonably determined by the Trustee. The Company need not pay for any
settlement made without its written consent, which consent will not be
unreasonably withheld. The Company need not reimburse any expense or indemnify
against any loss or liability to the extent incurred by the Trustee through its
negligence, bad faith or willful misconduct.
To secure the Company and the Guarantors' payment obligations in
this Section 7.07, the Trustee shall have a lien prior to the Notes on all
assets or money held or collected by the Trustee, in its capacity as Trustee,
except assets or money held in trust to pay principal of or premium, if any, or
interest on particular Notes.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(vi) or (vii) occurs, such expenses and the
compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law.
The provisions of this Section 7.07 shall survive the termination of
this Indenture.
105
- 97 -
SECTION 7.08. Replacement of Trustee.
The Trustee may resign at any time by so notifying the Company in
writing at least 30 days in advance of such resignation; provided, however, that
no such resignation shall be effective until a successor Trustee has accepted
its appointment pursuant to this Section 7.08. The Holders of a majority in
principal amount of the outstanding Notes may remove the Trustee and appoint a
successor Trustee with the Company's consent, by so notifying the Company and
the Trustee. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(3) a receiver or other public officer takes charge of the Trustee
or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall notify each Holder of such
event and shall promptly appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a majority in aggregate principal
amount of the outstanding Notes may appoint a successor Trustee to replace the
successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided in Section 7.07, the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail notice of such successor Trustee's
appointment to each Holder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in aggregate principal amount of the outstanding Notes
may peti-
106
- 98 -
tion any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding any resignation or replacement of the Trustee
pursuant to this Section 7.08, the Company's obligations under Section 7.07
shall continue for the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee; provided, however, that
such corporation shall be otherwise qualified and eligible under this Article
Seven.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirement of TIA Sections 310(a)(1), (2) and (5). The Trustee (or, in
the case of a Trustee that is a corporation included in a bank holding company
system, the related bank holding company) shall have a combined capital and
surplus of at least $100 million as set forth in its most recent published
annual report of condition, and have a Corporate Trust Office in the City of New
York. In addition, if the Trustee is a corporation included in a bank holding
company system, the Trustee, independently of such bank holding company, shall
meet the capital requirements of TIA Section 310(a)(2). The Trustee shall comply
with TIA Section 310(b); provided, however, that there shall be excluded from
the operation of TIA Section 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 Section 310(b)(1) are met. The provisions of TIA
Section 310 shall apply to the Company, as obligor of the Notes.
107
- 99 -
SECTION 7.11. Preferential Collection of Claims Against the Company.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein. The provisions of TIA Section 311 shall apply to the Company, as
obligor of the Notes.
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Termination of Company's Obligations.
This Indenture will be discharged and will cease to be of further
effect (except as to surviving rights of registration of transfer or exchange of
the Notes, as expressly provided for in this Indenture) as to all outstanding
Notes when (i) either (a) all Notes theretofore authenticated and delivered
(except lost, stolen or destroyed Notes which have been replaced or paid and
Notes for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to the Company
or discharged from such trust) have been delivered to the Trustee for
cancellation or (b) all Notes not theretofore delivered to the Trustee for
cancellation have become due and payable and the Company has irrevocably
deposited or caused to be deposited with the Trustee funds in an amount
sufficient to pay and discharge the entire Debt on the Notes not theretofore
delivered to the Trustee for cancellation, for principal of, premium, if any,
and interest on the Notes to the date of deposit together with irrevocable
instructions from the Company directing the Trustee to apply such funds to the
payment thereof at maturity or redemption, as the case may be; (ii) the Company
has paid all other sums payable under this Indenture by the Company; and (iii)
the Company has delivered to the Trustee an Officers' Certificate and an Opinion
of Counsel stating that all conditions precedent under this Indenture relating
to the satisfaction and discharge of this Indenture have been complied with;
provided, however, that such counsel may rely, as to matters of fact, on a
certificate or certificates of officers of the Company.
The Company may, at its option and at any time, elect to have its
obligations and the obligations of the Guarantors
108
- 100 -
discharged with respect to the outstanding Notes ("Legal Defeasance"). Such
Legal Defeasance means that the Company shall be deemed to have paid and
discharged the entire Debt represented by the outstanding Notes, and satisfied
all of their obligations with respect to the Notes, except for (i) the rights of
Holders to receive payments in respect of the principal of, premium, if any, and
interest on the Notes when such payments are due, (ii) the Company's obligations
with respect to the Notes concerning issuing temporary Notes, registration of
Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an
office or agency for payments, (iii) the rights, powers, trust, duties and
immunities of the Trustee and the Company's obligations in connection therewith
and (iv) the Legal Defeasance provisions of this Article Eight. In addition, the
Company may, at its option and at any time, elect to have the obligations of the
Company released with respect to covenants contained in Sections 4.04, 4.05,
4.06, 4.07, 4.08, 4.10 through 4.20 and Article Five ("Covenant Defeasance") and
thereafter any omission to comply with such obligations shall not constitute a
Default or Event of Default with respect to the Notes. In the event of Covenant
Defeasance, those events described under Section 6.01 (except those events
described in Section 6.01(i), (ii), (vi) and (vii)) will no longer constitute an
Event of Default with respect to the Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(i) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders cash in US dollars, non-callable U.S.
government obligations, or a combination thereof, in such amounts as will
be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium, if any,
and interest on the Notes on the stated date for payment thereof or on the
applicable Redemption Date, as the case may be;
(ii) in the case of Legal Defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that (A) the Company has
received from, or there has been published by, the Internal Revenue
Service a ruling or (B) 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 Holders will not recognize income, gain or loss for federal income
109
- 101 -
tax purposes as a result of such Legal Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Legal Defeasance had not
occurred;
(iii) in the case of Covenant Defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders will not
recognize income, gain or loss for federal income tax purposes as a result
of such 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;
(iv) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or insofar as Events of Default
under Section 6.01(vi) or (vii) are concerned, at any time in the period
ending on the 91st day after the date of deposit;
(v) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under this Indenture or
any other material agreement or instrument to which the Company or any of
its Restricted Subsidiaries is a party or by which the Company or any of
its Restricted Subsidiaries is bound;
(vi) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over any other creditors of the Company
or with the intent of defeating, hindering, delaying or defrauding any
other creditors of the Company or others;
(vii) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance, as the case may be, have been complied with; and
(viii) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that (A) the trust funds will not be subject to any
rights of holders of Senior Debt, including, without limitation, those
arising under this Indenture and (B) after the 91st day following the
deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorgani-
110
- 102 -
zation or similar laws affecting creditors' rights generally.
SECTION 8.02. Application of Trust Money.
The Trustee or Paying Agent shall hold in trust U.S. Legal Tender or
U.S. Government Obligations deposited with it pursuant to Section 8.01, and
shall apply the deposited U.S. Legal Tender and the money from U.S. Government
Obligations in accordance with this Indenture to the payment of the principal of
and interest on the Notes. The Trustee shall be under no obligation to invest
said U.S. Legal Tender or U.S. Government Obligations except as it may agree in
writing with the Company.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Legal Tender or U.S.
Government Obligations deposited pursuant to Section 8.01 or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of outstanding Notes.
SECTION 8.03. Repayment to the Company.
Subject to Section 8.01, the Trustee and the Paying Agent shall
promptly pay to the Company upon request any excess U.S. Legal Tender or U.S.
Government Obligations held by them at any time and thereupon shall be relieved
from all liability with respect to such money. The Trustee and the Paying Agent
shall pay to the Company upon request any money held by them for the payment of
principal or interest that remains unclaimed for one year; provided, however,
that the Trustee or such Paying Agent, before being required to make any
payment, may at the expense of the Company cause to be published once in a
newspaper of general circulation in the City of New York or mail to each Holder
entitled to such money notice that such money remains unclaimed and that after a
date specified therein which shall be at least 30 days from the date of such
publication or mailing any unclaimed balance of such money then remaining will
be repaid to the Company. After payment to the Company, Holders entitled to such
money must look to the Company for payment as general creditors unless an
applicable law designates another Person.
SECTION 8.04. Reinstatement.
If the Trustee or Paying Agent is unable to apply any U.S. Legal
Tender or U.S. Government Obligations in accordance
111
- 103 -
with Section 8.01 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 Notes shall be revived and reinstated as though no deposit had
occurred pursuant to Section 8.01 until such time as the Trustee or Paying Agent
is permitted to apply all such U.S. Legal Tender or U.S. Government Obligations
in accordance with Section 8.01; provided, however, that if the Company has made
any payment of interest on or principal of any Notes because of the
reinstatement of their obligations, the Company shall be subrogated to the
rights of the Holders of such Notes to receive such payment from the U.S. Legal
Tender or U.S. Government Obligations held by the Trustee or Paying Agent.
SECTION 8.05. Acknowledgment of Discharge by Trustee.
After the conditions of Section 8.01 have been satisfied, the
Trustee upon request shall acknowledge in writing the discharge of the Company's
obligations under this Indenture except for those surviving obligations
specified in Section 8.01; provided the legal counsel delivering such Opinion of
Counsel may rely as to matters of fact on one or more Officers' Certificates of
the Company.
ARTICLE NINE
MODIFICATION OF THIS INDENTURE
SECTION 9.01. Without Consent of Holders.
Notwithstanding Section 9.02, the Company, the Guarantors and the
Trustee may amend, waive or supplement this Indenture without notice to or
consent of any Holder: (a) to cure any ambiguity, defect or inconsistency; (b)
to comply with Article Five of this Indenture; (c) to provide for uncertificated
Notes in addition to certificated Notes; (d) to comply with any requirements of
the Commission in order to effect or maintain the qualification of this
Indenture under the TIA; (e) to make any change that would provide any
additional benefit or rights to the Holders or that does not adversely affect
the rights of any Holder in any material respect; or (f) to make any other
change that does not, in the opinion of the Trustee, adversely affect in any
material respect the rights of any Holder hereunder. Notwithstanding the
foregoing, the Trustee and the Com-
112
- 104 -
pany may not make any change that adversely affects the rights of any Holder
under this Indenture without the consent of such Holder. In formulating its
opinion on such matters, the Trustee will be entitled to rely on such evidence
as it deems appropriate, including, without limitation, solely on an Opinion of
Counsel; provided, however, that in delivering such Opinion of Counsel, such
counsel may rely as to matters of fact, on a certificate or certificates of
officers of the Company.
SECTION 9.02. With Consent of Holders.
All other modifications, waivers and amendments of this Indenture
may be made with the consent of the Holders of a majority in principal amount of
the then outstanding Notes, except that, without the consent of each Holder of
the Notes affected thereby, no amendment or waiver may: (i) reduce the amount of
Notes whose Holders must consent to an amendment; (ii) reduce the rate of or
change or have the effect of changing the time for payment of interest,
including defaulted interest, on any Notes; (iii) reduce the principal of or
change or have the effect of changing the fixed maturity of any Notes, or change
the date on which any Notes may be subject to redemption or repurchase, or
reduce the redemption or repurchase price therefor; (iv) make any Notes payable
in money other than that stated in the Notes; (v) make any change in provisions
of this Indenture protecting the right of each Holder to receive payment of
principal of and interest on such Note on or after the due date thereof or to
bring suit to enforce such payment, or permitting Holders of a majority in
principal amount of Notes to waive Defaults or Events of Default; (vi) amend,
change or modify in any material respect the obligation of the Company to make
and consummate a Change of Control Offer in the event a Change of Control has
occurred or make and consummate a Net Proceeds Offer with respect to any Asset
Sale that has been consummated, or, following the occurrence or consummation of
a Change of Control or Asset Sale, modify any of the provisions or definitions
with respect thereto; (vii) modify or change any provision of this Indenture or
the related definitions affecting the subordination or ranking of the Notes or
any Guarantee in a manner which adversely affects the Holders; or (viii) release
any Guarantor from any of its obligations under its Guarantee or this Indenture
otherwise than in accordance with the terms of this Indenture.
After an amendment, supplement or waiver under this Section 9.02
becomes effective (as provided in Section 9.04), the Company shall mail to the
Holders affected thereby a notice briefly describing the amendment, supplement
or waiver. Any
113
- 105 -
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amendment,
supplement or waiver.
SECTION 9.03. Compliance with TIA.
Every amendment, waiver or supplement of this Indenture or the Notes
shall comply with the TIA as then in effect; provided, however, that this
Section 9.03 shall not of itself require that this Indenture or the Trustee be
qualified under the TIA or constitute any admission or acknowledgment by any
party hereto that any such qualification is required prior to the time this
Indenture and the Trustee are required by the TIA to be so qualified.
SECTION 9.04. Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note, even if notation of the consent is not made on any
Note. Subject to the following paragraph, any such Holder or subsequent Holder
may revoke the consent as to such Holder's Note or portion of such Note by
notice to the Trustee or the Company received before the date on which the
Trustee receives an Officers' Certificate certifying that the Holders of the
requisite principal amount of Notes have consented (and not theretofore revoked
such consent) to the amendment, supplement or waiver. An amendment, supplement
or waiver becomes effective upon receipt by the Trustee of such Officers'
Certificate and evidence of consent by the Holders of the requisite percentage
in principal amount of outstanding Notes.
The Company may, but shall not be obligated to, fix a Record Date
for the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which Record Date shall be at least 30 days prior to the
first solicitation of such consent. If a Record Date is fixed, then
notwithstanding the second sentence of the immediately preceding paragraph,
those Persons who were Holders at such Record Date (or their duly designated
proxies), and only those Persons, shall be entitled to revoke any consent
previously given, whether or not such Persons continue to be Holders after such
Record Date. No such consent shall be valid or effective for more than 90 days
after such Record Date unless consents from Holders of the requisite percentage
in principal amount of outstanding Notes re-
114
- 106 -
quired hereunder for the effectiveness of such consents shall have also been
given and not revoked within such 90 day period.
SECTION 9.05. Notation on or Exchange of Notes.
If an amendment, supplement or waiver changes the terms of a Note,
the Trustee may require the Holder of such Note to deliver it to the Trustee.
The Trustee may place an appropriate notation on the Note about the changed
terms and return it to the Holder. Alternatively, if the Company or the Trustee
so determine, the Company in exchange for the Note shall issue and the Trustee
shall authenticate a new Note that reflects the changed terms.
SECTION 9.06. Trustee To Sign Amendments, Etc.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article Nine; provided, however, that the Trustee
may, but shall not be obligated to, execute any such amendment, supplement or
waiver which affects the Trustee's own rights, duties or immunities under this
Indenture. In executing such supplement or waiver the Trustee shall be entitled
to receive indemnity reasonably satisfactory to it, and shall be fully protected
in relying upon an Opinion of Counsel and an Officers' Certificate of the
Company, stating that no event of default shall occur as a result of such
amendment, supplement or waiver and that the execution of any amendment,
supplement or waiver authorized pursuant to this Article Nine is authorized or
permitted by this Indenture; provided the legal counsel delivering such Opinion
of Counsel may rely as to matters of fact on one or more Officers' Certificates
of the Company. Such Opinion of Counsel shall not be an expense of the Trustee.
ARTICLE TEN
SUBORDINATION
SECTION 10.01. Notes Subordinated to Senior Debt.
The Company covenants and agrees, and each Holder of the Notes, by
its acceptance thereof, likewise covenants and agrees, that all Notes shall be
issued subject to the provisions of this Article Ten; and each Person holding
any Note, whether upon original issue or upon transfer, assignment or exchange
thereof, accepts and agrees that the payment of all Ob-
115
- 107 -
ligations on the Notes by the Company shall, to the extent and in the manner
herein set forth, be subordinated and junior in right of payment to the prior
payment in full in cash or in Cash Equivalents (other than clause (vii) in the
definition of Cash Equivalents) of all Obligations on Senior Debt, including,
without limitation, the Company's obligations under the Credit Agreement; that
the subordination is for the benefit of, and shall be enforceable directly by,
the holders of Senior Debt, and that each holder of Senior Debt whether now
outstanding or hereafter created, incurred, assumed or guaranteed shall be
deemed to have acquired Senior Debt in reliance upon the covenants and
provisions contained in this Indenture and the Notes.
SECTION 10.02. Suspension of Payment When Senior Debt Is in Default.
(a) If any default occurs and is continuing in the payment when due,
whether at maturity, upon any redemption, by declaration or otherwise, of any
principal of, interest on, unpaid drawings for letters of credit issued in
respect of, or regularly accruing fees or commissions with respect to, any
Senior Debt, no payment or distribution of any kind or character shall be made
by or on behalf of the Company or any other Person on its or their behalf with
respect to any Obligations on the Notes or to acquire, repurchase, redeem or
defease any of the Notes for cash or property or otherwise. In addition, if any
other event of default occurs and is continuing with respect to any Designated
Senior Debt, as such event of default is defined in the instrument creating or
evidencing such Designated Senior Debt, permitting the holders of such
Designated Senior Debt then outstanding to accelerate the maturity thereof and
if the Representative for the respective issue of Designated Senior Debt gives
notice of the event of default to the Trustee (a "Default Notice"), then, unless
and until all events of default have been cured or waived or have ceased to
exist or the Trustee receives notice thereof from the Representative for the
respective issue of Designated Senior Debt terminating the Blockage Period (as
defined below), during the 180 days after the delivery of such Default Notice
(the "Blockage Period"), neither the Company nor any other Person on its behalf
shall (x) make any payment or distribution of any kind or character with respect
to any Obligations on the Notes or (y) acquire, repurchase, redeem or defease
any of the Notes for cash or property or otherwise. Notwithstanding anything
herein to the contrary, in no event will a Blockage Period extend beyond 180
days from the date the payment on the Notes was due and only one such Blockage
Period may be commenced within any 360 consecutive days. No event of default
which existed or was con-
116
- 108 -
tinuing on the date of the commencement of any Blockage Period with respect to
the Designated Senior Debt shall be, or be made, the basis for commencement of a
second Blockage Period by the Representative of such Designated Senior Debt
whether or not within a period of 360 consecutive days, unless such event of
default shall have been cured or waived for a period of not less than 90
consecutive days (it being acknowledged that any subsequent action, or any
breach of any financial covenants for a period commencing after the date of
commencement of such Blockage Period that, in either case, would give rise to an
event of default pursuant to any provisions under which an event of default
previously existed or was continuing shall constitute a new event of default for
this purpose).
(b) In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee or any Holder when such payment is prohibited
by Section 10.02(a), such payment shall be held for the benefit of, and shall be
paid over or delivered to, the holders of Senior Debt (pro rata to such holders
on the basis of the respective amount of Senior Debt held by such holders) or
their respective Representatives, as their respective interests may appear. The
Trustee shall be entitled to rely on information regarding amounts then due and
owing on the Senior Debt, if any, received from the holders of such Senior Debt
(or their Representatives) or, if such information is not received from such
holders or their Representatives after written request therefor, from the
Company and only amounts included in the information provided to the Trustee
shall be paid to the holders of Senior Debt.
Nothing contained in this Article Ten shall limit the right of the
Trustee or the Holders of Notes to take any action to accelerate the maturity of
the Notes pursuant to Section 6.02 or to pursue any rights or remedies
hereunder; provided that all Senior Debt thereafter due or declared to be due
shall first be paid in full in cash or in Cash Equivalents (other than clause
(vii) in the definition of Cash Equivalents) before the Holders are entitled to
receive any payment of any kind or character with respect to Obligations on the
Notes.
SECTION 10.03. Notes Subordinated to Prior Payment of All Senior
Debt on Dissolution, Liquidation or Reorganization of
Company.
(a) Upon any direct or indirect payment or distribution of assets of
the Company of any kind or character, whether in cash, property or securities,
to creditors upon any liquida-
117
- 109 -
tion, dissolution, winding-up, reorganization, assignment for the benefit of
creditors or marshaling of assets of the Company or in a bankruptcy,
reorganization, insolvency, receivership or other similar proceeding relating to
the Company or its property, whether voluntary or involuntary, all Obligations
due or to become due upon all Senior Debt shall first be paid in full in cash or
in Cash Equivalents (other than clause (vii) in the definition of Cash
Equivalents), or such payment duly provided for to the satisfaction of the
holders of Senior Debt, before any payment or distribution of any kind or
character is made on account of any Obligations on the Notes, or for the
acquisition, repurchase, redemption or defeasance of any of the Notes for cash
or property or otherwise. Upon any such dissolution, winding-up, liquidation,
reorganization, receivership or similar proceeding, any direct or indirect
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to which the Holders of the Notes or
the Trustee under this Indenture would be entitled, except for the provisions
hereof, shall be paid by the Company or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such payment or distribution,
or by the Holders or by the Trustee under this Indenture if received by them,
directly to the holders of Senior Debt (pro rata to such holders on the basis of
the respective amounts of Senior Debt held by such holders) or their respective
Representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Senior Debt may have been issued, as their respective
interests may appear, for application to the payment of Senior Debt remaining
unpaid until all such Senior Debt has been paid in full in cash or in Cash
Equivalents (other than clause (vii) in the definition of Cash Equivalents),
after giving effect to any concurrent payment, distribution or provision
therefor to or for the holders of Senior Debt.
(b) To the extent any payment of Senior Debt (whether by or on
behalf of the Company, as proceeds of security or enforcement of any right of
setoff or otherwise) is declared to be fraudulent or preferential, set aside or
required to be paid to any receiver, trustee in bankruptcy, liquidating trustee,
agent or other similar Person under any bankruptcy, insolvency, receivership,
fraudulent conveyance or similar law, then, if such payment is recovered by, or
paid over to, such receiver, trustee in bankruptcy, liquidating trustee, agent
or other similar Person, the Senior Debt or part thereof originally intended to
be satisfied shall be deemed to be reinstated and outstanding as if such payment
has not occurred.
118
- 110 -
(c) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, shall be received by any Holder when such payment or
distribution is prohibited by this Section 10.03(c), such payment or
distribution shall be held in trust for the benefit of, and shall be paid over
or delivered to, the holders of Senior Debt (pro rata to such holders on the
basis of the respective amount of Senior Debt held by such holders) or their
respective Representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Senior Debt may have been issued, as their
respective interests may appear, for application to the payment of Senior Debt
remaining unpaid until all such Senior Debt has been paid in full in cash or in
Cash Equivalents (other than clause (vii) in the definition of Cash
Equivalents), after giving effect to any concurrent payment, distribution or
provision therefor to or for the holders of such Senior Debt.
(d) The consolidation of the Company with, or the merger of the
Company with or into, another corporation or the liquidation or dissolution of
the Company following the conveyance or transfer of all or substantially all of
its assets, to another corporation upon the terms and conditions provided in
Article Five hereof and as long as permitted under the terms of the Senior Debt
shall not be deemed a dissolution, winding-up, liquidation or reorganization for
the purposes of this Section if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, assume the Company's obligations
hereunder in accordance with Article Five hereof.
SECTION 10.04. Holders To Be Subrogated to Rights of Holders of
Senior Debt.
Subject to the payment in full in cash or in Cash Equivalents (other
than clause (vii) in the definition of Cash Equivalents) of all Senior Debt, the
Holders of the Notes shall be subrogated to the rights of the holders of Senior
Debt to receive payments or distributions of cash, property or securities of the
Company applicable to the Senior Debt until the Notes shall be paid in full;
and, for the purposes of such subrogation, no such payments or distributions to
the holders of the Senior Debt by or on behalf of the Company or by or on behalf
of the Holders by virtue of this Article Ten which otherwise would have been
made to the Holders shall, as between the Company and the Holders of the Notes,
be deemed to be a payment by the Company to or on account of the Senior Debt, it
being understood that the provisions of this Article Ten are and are
119
- 111 -
intended solely for the purpose of defining the relative rights of the Holders
of the Notes, on the one hand, and the holders of the Senior Debt, on the other
hand.
Each Holder by purchasing or accepting a Note waives any and all
notice of the creation, modification, renewal, extension or accrual of any
Senior Debt of the Company and notice of or proof of reliance by any holder or
owner of Senior Debt of the Company upon this Article Ten and the Senior Debt of
the Company shall conclusively be deemed to have been created, contracted or
incurred in reliance upon this Article Ten, and all dealings between the Company
and the holders and owners of the Senior Debt of the Company shall be deemed to
have been consummated in reliance upon this Article Ten.
SECTION 10.05. Obligations of the Company Unconditional.
Nothing contained in this Article Ten or elsewhere in this Indenture
or in the Notes is intended to or shall impair, as between the Company and the
Holders, the obligation of the Company, which is absolute and unconditional, to
pay to the Holders the principal of and interest on the Notes as and when the
same shall become due and payable in accordance with their terms, or is intended
to or shall affect the relative rights of the Holders and creditors of the
Company other than the holders of the Senior Debt, nor shall anything herein or
therein prevent the Trustee or any Holder from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article Ten of the holders of Senior Debt in respect
of cash, property or Notes of the Company received upon the exercise of any such
remedy. Upon any payment or distribution of assets or securities of the Company
referred to in this Article Ten, the Trustee, subject to the provisions of
Sections 7.01 and 7.02, and the Holders shall be entitled to rely upon any order
or decree made by any court of competent jurisdiction in which any liquidation,
dissolution, winding-up or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidating trustee or agent
or other Person making any payment or distribution to the Trustee or to the
Holders for the purpose of ascertaining the Persons entitled to participate in
such payment or distribution, the holders of Senior Debt and other Indebtedness
of the Company, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this
Article Ten. Nothing in this Article Ten shall apply to the claims of, or
payments to, the Trustee under or pursuant to Section 7.07.
120
- 112 -
The Trustee shall be entitled to rely on the delivery to it of a written notice
by a Person representing himself or itself to be a holder of any Senior Debt (or
a trustee on behalf of, or other representative of, such holder) to establish
that such notice has been given by a holder of such Senior Debt or a trustee or
representative on behalf of any such holder.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Senior Debt to participate in any payment or distribution pursuant to this
Article Ten, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Debt held by
such Person, the extent to which such person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article Ten, and if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
SECTION 10.06. Trustee Entitled to Assume Payments Not Prohibited in
Absence of Notice.
The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Notes pursuant to the provisions of this
Article Ten. Regardless of anything to the contrary contained in this Article
Ten or elsewhere in this Indenture, the Trustee shall not be charged with
knowledge of the existence of any default or event of default with respect to
any Senior Debt or of any other facts which would prohibit the making of any
payment to or by the Trustee unless and until the Trustee shall have received
notice in writing from the Company, or from a holder of Senior Debt or a
Representative therefor, together with proof satisfactory to the Trustee of such
holding of Senior Debt or of the authority of such Representative, and, prior to
the receipt of any such written notice, the Trustee shall be entitled to assume
(in the absence of actual knowledge to the contrary) that no such facts exist.
SECTION 10.07. Application by Trustee of Assets Deposited with It.
U.S. Legal Tender or U.S. Government Obligations deposited in trust
with the Trustee pursuant to and in accordance with Sections 8.01 and 8.02 shall
be for the sole benefit of the Holders of the Notes and, to the extent allocated
for the
121
- 113 -
payment of Notes, shall not from and after the time of such deposit be subject
to the subordination provisions of this Article Ten. Otherwise, any deposit of
assets or securities by or on behalf of the Company with the Trustee or any
Paying Agent (whether or not in trust) for the payment of principal of or
interest on any Notes shall be subject to the provisions of this Article Ten;
provided, however, that if prior to the second Business Day preceding the date
on which by the terms of this Indenture any such assets may become distributable
for any purpose (including, without limitation, the payment of either principal
of or interest on any Note) the Trustee or such Paying Agent shall not have
received with respect to such assets any notice provided for in Section 10.06,
then the Trustee or such Paying Agent shall have full power and authority to
receive such assets and to apply the same to the purpose for which they were
received, and shall not be affected by any notice to the contrary received by it
on or after such date. The foregoing shall not apply to the Paying Agent if the
Company or any Subsidiary or Affiliate of the Company is acting as Paying Agent.
Nothing contained in this Section 10.07 shall limit the right of the holders of
Senior Debt to recover payments as contemplated by this Article Ten.
SECTION 10.08. No Waiver of Subordination Provisions.
(a) No right of any present or future holder of any Senior Debt to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act by any such holder, or by any non-compliance by
the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof any such holder may have or be otherwise
charged with.
(b) Without limiting the generality of subsection (a) of this
Section 10.08, the holders of Senior Debt may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Notes, without incurring responsibility to the Holders of the Notes and without
impairing or releasing the subordination provided in this Article Ten or the
obligations hereunder of the Holders of the Notes to the holders of Senior Debt,
do any one or more of the following: (1) change the manner, place, terms or time
of payment of, or renew, refinance, replace or alter, Senior Debt or any
instrument evidencing the same or any agreement under which Senior Debt is
outstanding; (2) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Debt; (3) release any Person
liable in any man-
122
- 114 -
ner for the collection or payment of Senior Debt; and (4) exercise or refrain
from exercising any rights against the Company and any other Person.
SECTION 10.09. Holders Authorize Trustee To Effectuate Subordination
of Notes.
Each Holder of the Notes by such Holder's acceptance thereof
authorizes and expressly directs the Trustee on his behalf to take such action
as may be necessary or appropriate to effect the subordination provisions
contained in this Article Ten, and appoints the Trustee such Holder's
attorney-in-fact for such purpose, including, in the event of any liquidation,
dissolution, winding-up, reorganization, assignment for the benefit of creditors
or marshaling of assets of the Company tending towards liquidation or
reorganization of the business and assets of the Company, the immediate filing
of a claim for the unpaid balance of such Holder's Notes in the form required in
said proceedings and cause said claim to be approved. If the Trustee does not
file a proper claim or proof of debt in the form required in such proceeding
prior to 30 days before the expiration of the time to file such claim or claims,
then any of the holders of the Senior Debt or their Representative is hereby
authorized to file an appropriate claim for and on behalf of the Holders of said
Notes. Nothing herein contained shall be deemed to authorize the Trustee or the
holders of Senior Debt or their Representative to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder
thereof, or to authorize the Trustee or the holders of Senior Debt or their
Representative to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 10.10. Right of Trustee to Hold Senior Debt.
The Trustee and any agent of the Company or the Trustee shall be
entitled to all the rights set forth in this Article Ten with respect to any
Senior Debt which may at any time be held by it in its individual or any other
capacity to the same extent as any other holder of Senior Debt and nothing in
this Indenture shall deprive the Trustee or any such agent of any of its rights
as such holder.
Whenever a distribution is to be made or a notice given to holders
or owners of Senior Debt, the distribution may be made and the notice may be
given to their Representative, if any.
123
- 115 -
SECTION 10.11. This Article Ten Not To Prevent Events of Default.
The failure to make a payment on account of principal of or interest
on the Notes by reason of any provision of this Article Ten will not be
construed as preventing the occurrence of an Event of Default.
Nothing contained in this Article Ten shall limit the right of the
Trustee or the Holders of Notes to take any action to accelerate the maturity of
the Notes pursuant to Article Six or to pursue any rights or remedies hereunder
or under applicable law, subject to the rights, if any, under this Article Ten
of the holders, from time to time, of Senior Debt.
SECTION 10.12. No Fiduciary Duty of Trustee to Holders of Senior
Debt.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and it undertakes to perform or observe such of its
covenants and obligations as are specifically set forth in this Article Ten, and
no implied covenants or obligations with respect to the Senior Debt shall be
read into this Indenture against the Trustee. The Trustee shall not be liable to
any such holders (other than for its willful misconduct or gross negligence) if
it shall pay over or deliver to the Holders of Notes or the Company or any other
Person money or assets in compliance with the terms of this Indenture. Nothing
in this Section 10.12 shall affect the obligation of any Person other than the
Trustee to hold such payment for the benefit of, and to pay such payment over
to, the holders of Senior Debt or their Representative.
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. TIA Controls.
If any provision of this Indenture limits, qualifies, or conflicts
with another provision which is required to be included in this Indenture by the
TIA, the required provision shall control; provided, however, that this Section
11.01 shall not of itself require that this Indenture or the Trustee be
qualified under the TIA or constitute any admission or acknowledgment by any
party hereto that any such qualification is re-
124
- 116 -
quired prior to the time this Indenture and the Trustee are required by the TIA
to be so qualified.
SECTION 11.02. Notices.
Any notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficiently given if made by hand delivery,
by telex, by telecopier or overnight courier guaranteeing next-day delivery or
registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
if to the Company or any Guarantor:
KINETIC CONCEPTS, INC.
0000 Xxxxxxx Xxxxx
Xxx Xxxxxxx, XX 00000
Telecopier Number: (000) 000-0000
Attn: Chief Executive Officer
with a copy to:
Xxx & Xxxxx
000 X. Xxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Telecopier Number: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxx, Esq.
125
- 117 -
if to the Trustee:
MARINE MIDLAND BANK
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier Number: (000) 000-0000
Attention: Corporate Trust Administration - KCI
Each of the Company and the Trustee by written notice to the other
may designate additional or different addresses for notices to such Person. Any
notice or communication to the Company or the Trustee shall be deemed to have
been given or made as of the date so delivered if hand delivered; when answered
back, if telexed; when receipt is acknowledged, if faxed; and five (5) calendar
days after mailing if sent by registered or certified mail, postage prepaid
(except that (i) the Trustee shall not be deemed to have knowledge of such
notice nor shall any time period within which the Trustee is required to act as
a result of such notice commence until the Trustee actually receives the notice
in question and (ii) a notice of change of address shall not be deemed to have
been given until actually received by the addressee).
Any notice or communication mailed to a Holder shall be mailed by
first class mail, certified or registered return receipt requested, or by
overnight courier guaranteeing next-day delivery to its address as it appears on
the registration books of the Registrar. Any notice or communication shall be
mailed to any Person as described in TIA Section 313(c), to the extent required
by the TIA.
Failure to mail a notice or communication to a Holder or any defect
in it shall not affect its sufficiency with respect to other Holders. If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
SECTION 11.03. Communications by Holders with Other Holders.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and any other Person shall have the
protection of TIA Section 312(c).
126
- 118 -
SECTION 11.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate, in form and substance satisfactory to
the Trustee, stating that, in the opinion of the signers, all conditions
precedent to be performed by the Company, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent to be performed by the Company, if
any, provided for in this Indenture relating to the proposed action have
been complied with (which counsel, as to factual matters, may rely on an
Officers' Certificate).
SECTION 11.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture, other than the Officers'
Certificate required by Section 4.06, shall include:
(1) a statement that the Person 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 Person, he has made
such examination or investigation as is reasonably necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of each such
Person, such condition or covenant has been complied with.
127
- 119 -
SECTION 11.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules in accordance with the
Trustee's customary practices for action by or at a meeting of Holders. The
Paying Agent or Registrar may make reasonable rules for its functions.
SECTION 11.07. Legal Holidays.
A "Legal Holiday" used with respect to a particular place of payment
is a Saturday, a Sunday or a day on which banking institutions in New York, New
York or at such place of payment are not required to be open. If a payment date
is a Legal Holiday at such place, payment may be made at such place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.
SECTION 11.08. Governing Law.
THIS INDENTURE, THE NOTES AND THE GUARANTEES SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED
TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO APPLICABLE PRINCIPLES OF CONFLICT OF LAWS TO THE EXTENT THAT THE
APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. Each
of the parties hereto agrees to submit to the jurisdiction of the courts of the
State of New York in any action or proceeding arising out of or relating to this
Indenture.
SECTION 11.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of the Company or any of its Subsidiaries. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
SECTION 11.10. No Personal Liability.
No director, officer, employee or stockholder, as such, of the
Company or any Guarantor, as such, shall have any liability for any obligations
of the Company or any Guarantor under the Notes, this Indenture, the Guarantees
or the Registration Rights Agreement or for any claim based on, in respect of,
or by reason of, such obligations or their creation. Each Holder of Notes by
accepting a Note waives and releases all
128
- 120 -
such liability. The waiver and release are part of the consideration for the
issuance of the Notes.
SECTION 11.11. Successors.
All agreements of the Company in this Indenture and the Notes shall
bind their successors. All agreements of the Trustee in this Indenture shall
bind its successors.
SECTION 11.12. Duplicate Originals.
All parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together shall represent the
same agreement.
SECTION 11.13. Severability.
In case any one or more of the provisions in this Indenture or in
the Notes shall be held invalid, illegal or unenforceable, in any respect for
any reason, the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions shall not in any way be
affected or impaired thereby, it being intended that all of the provisions
hereof shall be enforceable to the full extent permitted by law.
ARTICLE TWELVE
GUARANTEE OF NOTES
SECTION 12.01. Unconditional Guarantee.
Subject to the provisions of this Article Twelve, each Guarantor, if
any, hereby, jointly and severally, unconditionally and irrevocably guarantees,
on a senior subordinated basis (such guarantee to be referred to herein as a
"Guarantee") to each Holder of a Note authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns, the Notes or the obligations
of the Company hereunder or thereunder, that: (a) the principal of, premium, if
any, and interest on the Notes (and any Additional Interest payable thereon)
shall be duly and punctually paid in full when due, whether at maturity, upon
redemption at the option of Holders pursuant to the provisions of the Notes
relating thereto, by acceleration or otherwise, and interest on the overdue
principal and (to the extent permitted by law) interest, if any, on
129
- 121 -
the Notes and all other obligations of the Company or the Guarantors to the
Holders or the Trustee hereunder or thereunder (including amounts due the
Trustee under Section 7.07) and all other obligations shall be promptly paid in
full or performed, all in accordance with the terms hereof and thereof; and (b)
in case of any extension of time of payment or renewal of any Notes or any of
such other obligations, the same shall be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at
maturity, by acceleration or otherwise. Failing payment when due of any amount
so guaranteed, or failing performance of any other obligation of the Company to
the Holders under this Indenture or under the Notes, for whatever reason, each
Guarantor shall be obligated to pay, or to perform or cause the performance of,
the same immediately. An Event of Default under this Indenture or the Notes
shall constitute an event of default under this Guarantee, and shall entitle the
Holders of Notes to accelerate the obligations of the Guarantors hereunder in
the same manner and to the same extent as the obligations of the Company.
Each of the Guarantors hereby agrees that its obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Notes with respect
to any provisions hereof or thereof, any release of any other Guarantor, the
recovery of any judgment against the Company, any action to enforce the same,
whether or not a Guarantee is affixed to any particular Note, or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a guarantor. Each of the Guarantors hereby waives the benefit of
diligence, presentment, demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenants that its Guarantee shall not be discharged except by complete
performance of the obligations contained in the Notes, this Indenture and this
Guarantee. This Guarantee is a guarantee of payment and not of collection. If
any Holder or the Trustee is required by any court or otherwise to return to the
Company or to any Guarantor, or any custodian, trustee, liquidator or other
similar official acting in relation to the Company or such Guarantor, any amount
paid by the Company or such Guarantor to the Trustee or such Holder, this
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect. Each Guarantor further agrees that, as between it, on the one
hand, and the Holders of Notes and the Trustee, on the other hand, (a) subject
to this Article Twelve,
130
- 122 -
the maturity of the obligations guaranteed hereby may be accelerated as provided
in Article Six hereof for the purposes of this Guarantee, notwithstanding any
stay, injunction or other prohibition preventing such acceleration in respect of
the obligations guaranteed hereby, and (b) in the event of any acceleration of
such obligations as provided in Article Six hereof, such obligations (whether or
not due and payable) shall forthwith become due and payable by the Guarantors
for the purpose of this Guarantee.
No stockholder, officer, director, employee or incorporator, past,
present or future, of any Guarantor, as such, shall have any personal liability
under this Guarantee by reason of his, her or its status as such stockholder,
officer, director, employee or incorporator.
Each Guarantor that makes a payment or distribution under its
Guarantee shall be entitled to a contribution from each other Guarantor in an
amount pro rata, based on the net assets of each Guarantor, determined in
accordance with GAAP.
SECTION 12.02. Limitations on Guarantees.
The obligations of each Guarantor under its Guarantee will be
limited to the maximum amount which, after giving effect to all other contingent
and fixed liabilities of such Guarantor and after giving effect to any
collections from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under its Guarantee or
pursuant to its contribution obligations under this Indenture, will result in
the obligations of such Guarantor under its Guarantee not constituting a
fraudulent conveyance or fraudulent transfer under federal or state law.
SECTION 12.03. Execution and Delivery of Guarantee.
To further evidence the Guarantee set forth in Section 12.01, each
Guarantor hereby agrees that a notation of such Guarantee, substantially in the
form of Exhibit F hereto, shall be endorsed on each Note authenticated and
delivered by the Trustee. Such Guarantee shall be executed on behalf of each
Guarantor by either manual or facsimile signature of two Officers, or an Officer
and an Assistant Secretary, of each Guarantor, each of whom, in each case, shall
have been duly authorized to so execute by all requisite corporate action. The
validity and enforceability of any Guarantee shall not be affected by the fact
that it is not affixed to any particular Note.
131
- 123 -
Each of the Guarantors hereby agrees that its Guarantee set forth in
Section 12.01 shall remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Guarantee.
If an Officer of a Guarantor whose signature is on this Indenture or
a Guarantee no longer holds that office at the time the Trustee authenticates
the Note on which such Guarantee is endorsed or at any time thereafter, such
Guarantor's Guarantee of such Note shall be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of any Guarantee set forth in
this Indenture on behalf of each Guarantor.
SECTION 12.04. Release of a Guarantor.
(a) If no Default exists or would exist under this Indenture, upon
the sale or disposition of all of the Capital Stock, or all or substantially all
of the assets, of a Guarantor by the Company or one or more Restricted
Subsidiaries of the Company in a transaction constituting an Asset Sale the Net
Cash Proceeds of which are applied in accordance with Section 4.16 and the
Guarantor is released from all of its obligations under the Credit Agreement, or
upon the consolidation or merger of a Guarantor with or into any Person in
compliance with Article Five (in each case, other than to the Company or a
Wholly-Owned Restricted Subsidiary), or if any Guarantor is dissolved or
liquidated in accordance with this Indenture, or if a Guarantor is designated an
Unrestricted Subsidiary in accordance with Section 4.14, such Guarantor and each
Subsidiary of such Guarantor that is also a Guarantor shall be automatically and
unconditionally released from all obligations under this Article Twelve without
any further action required on the part of the Trustee or any Holder; provided,
however, that each such Guarantor is sold or disposed of in accordance with this
Indenture. Any Guarantor not so released or the entity surviving such Guarantor,
as applicable, shall remain or be liable under its Guarantee as provided in this
Article Twelve.
(b) The Trustee shall deliver an appropriate instrument evidencing
the release of a Guarantor upon receipt of a request by the Company or such
Guarantor accompanied by an Officers' Certificate and an Opinion of Counsel
certifying as to the compliance with this Section 12.04, provided the legal
counsel delivering such Opinion of Counsel may rely as to matters of fact on one
or more Officers' Certificates.
132
- 124 -
The Trustee shall execute any documents reasonably requested by the
Company or a Guarantor in order to evidence the release of such Guarantor from
its obligations under its Guarantee endorsed on the Notes and under this Article
Twelve.
Except as set forth in Articles Four and Five and this Section
12.04, nothing contained in this Indenture or in any of the Notes shall prevent
any consolidation or merger of a Guarantor with or into the Company or another
Guarantor or shall prevent any sale or conveyance of the property of a Guarantor
as an entirety or substantially as an entirety to the Company or another
Guarantor.
SECTION 12.05. Waiver of Subrogation.
Until this Indenture is discharged and all of the Notes are
discharged and paid in full, each Guarantor hereby irrevocably waives and agrees
not to exercise any claim or other rights which it may now or hereafter acquire
against the Company that arise from the existence, payment, performance or
enforcement of the Company's obligations under the Notes or this Indenture and
such Guarantor's obligations under this Guarantee and this Indenture, in any
such instance including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution, indemnification, and any right to
participate in any claim or remedy of the Holders against the Company, whether
or not such claim, remedy or right arises in equity, or under contract, statute
or common law, including, without limitation, the right to take or receive from
the Company, directly or indirectly, in cash or other property or by set-off or
in any other manner, payment or security on account of such claim or other
rights. If any amount shall be paid to any Guarantor in violation of the
preceding sentence and any amounts owing to the Trustee or the Holders of Notes
under the Notes, this Indenture, or any other document or instrument delivered
under or in connection with such agreements or instruments, shall not have been
paid in full, such amount shall have been deemed to have been paid to such
Guarantor for the benefit of, and held in trust for the benefit of, the Trustee
or the Holders and shall forthwith be paid to the Trustee for the benefit of
itself or such Holders to be credited and applied to the obligations in favor of
the Trustee or the Holders, as the case may be, whether matured or unmatured, in
accordance with the terms of this Indenture. Each Guarantor acknowledges that it
will receive direct and indirect benefits from the financing arrangements
contemplated by this Indenture and that the waiver set forth in this Section
12.05 is knowingly made in contemplation of such benefits.
133
- 125 -
SECTION 12.06. No Set-Off.
Each payment to be made by a Guarantor hereunder in respect of the
Obligations shall be payable in the currency or currencies in which such
Obligations are denominated, and shall be made without set-off, counterclaim,
reduction or diminution of any kind or nature.
SECTION 12.07. Obligations Absolute.
The obligations of each Guarantor hereunder are and shall be
absolute and unconditional and any monies or amounts expressed to be owing or
payable by each Guarantor hereunder which may not be recoverable from such
Guarantor on the basis of a Guarantee shall be recoverable from such Guarantor
as a primary obligor and principal debtor in respect thereof.
SECTION 12.08. Obligations Continuing.
The obligations of each Guarantor hereunder shall be continuing and
shall remain in full force and effect until all the obligations have been paid
and satisfied in full. Each Guarantor agrees with the Trustee that, if
requested, it will from time to time deliver to the Trustee suitable
acknowledgments of this continued liability hereunder and under any other
instrument or instruments in such form as counsel to the Trustee may advise and
as will prevent any action brought against it in respect of any default
hereunder being barred by any statute of limitations now or hereafter in force
and, in the event of the failure of a Guarantor so to do, it hereby irrevocably
appoints the Trustee the attorney and agent of such Guarantor to make, execute
and deliver such written acknowledgment or acknowledgments or other instruments
as may from time to time become necessary or advisable, in the judgment of the
Trustee on the advice of counsel, to fully maintain and keep in force the
liability of such Guarantor hereunder.
SECTION 12.09. Obligations Not Reduced.
The obligations of each Guarantor hereunder shall not be satisfied,
reduced or discharged solely by the payment of such principal, premium, if any,
interest, fees and other monies or amounts as may at any time prior to discharge
of this Indenture pursuant to Article Eight be or become owing or payable under
or by virtue of or otherwise in connection with the Notes or this Indenture.
134
- 126 -
SECTION 12.10. Obligations Reinstated.
The obligations of each Guarantor hereunder shall continue to be
effective or shall be reinstated, as the case may be, if at any time any payment
which would otherwise have reduced the obligations of any Guarantor hereunder
(whether such payment shall have been made by or on behalf of the Company or by
or on behalf of a Guarantor) is rescinded or reclaimed from any of the Holders
upon the insolvency, bankruptcy, liquidation or reorganization of the Company or
any Guarantor or otherwise, all as though such payment had not been made. If
demand for, or acceleration of the time for, payment by the Company is stayed
upon the insolvency, bankruptcy, liquidation or reorganization of the Company,
all such Indebtedness otherwise subject to demand for payment or acceleration
shall nonetheless be payable by each Guarantor as provided herein.
SECTION 12.11. Obligations Not Affected.
The obligations of each Guarantor hereunder shall not be affected,
impaired or diminished in any way by any act, omission, matter or thing
whatsoever, occurring before, upon or after any demand for payment hereunder
(and whether or not known or consented to by any Guarantor or any of the
Holders) which, but for this provision, might constitute a whole or partial
defense to a claim against any Guarantor hereunder or might operate to release
or otherwise exonerate any Guarantor from any of its obligations hereunder or
otherwise affect such obligations, whether occasioned by default of any of the
Holders or otherwise, including, without limitation:
(a) any limitation of status or power, disability, incapacity or
other circumstance relating to the Company or any other person, including
any insolvency, bankruptcy, liquidation, reorganization, readjustment,
composition, dissolution, winding up or other proceeding involving or
affecting the Company or any other person;
(b) any irregularity, defect, unenforceability or invalidity in
respect of any Indebtedness or other obligation of the Company or any
other person under this Indenture, the Notes or any other document or
instrument;
(c) any failure of the Company, whether or not without fault on its
part, to perform or comply with any of the provisions of this Indenture or
the Notes, or to give notice thereof to a Guarantor;
000
- 000 -
(x) the taking or enforcing or exercising or the refusal or neglect
to take or enforce or exercise any right or remedy from or against the
Company or any other Person or their respective assets or the release or
discharge of any such right or remedy;
(e) the granting of time, renewals, extensions, compromises,
concessions, waivers, releases, discharges and other indulgences to the
Company or any other Person;
(f) any change in the time, manner or place of payment of, or in any
other term of, any of the Notes, or any other amendment, variation,
supplement, replacement or waiver of, or any consent to departure from,
any of the Notes or this Indenture, including, without limitation, any
increase or decrease in the principal amount of or premium, if any, or
interest on any of the Notes;
(g) any change in the ownership, control, name, objects, businesses,
assets, capital structure or constitution of the Company or a Guarantor;
(h) any merger or amalgamation of the Company or a Guarantor with
any Person or Persons;
(i) the occurrence of any change in the laws, rules, regulations or
ordinances of any jurisdiction by any present or future action of any
governmental authority or court amending, varying, reducing or otherwise
affecting, or purporting to amend, vary, reduce or otherwise affect, any
of the Obligations or the obligations of a Guarantor under its Guarantee;
and
(j) any other circumstance (other than by complete, irrevocable
payment or a release made pursuant to Section 12.04) that might otherwise
constitute a legal or equitable discharge or defense of the Company under
this Indenture or the Notes or of a Guarantor in respect of its Guarantee
hereunder.
SECTION 12.12. Waiver.
Without in any way limiting the provisions of Section 12.01 hereof,
each Guarantor hereby waives notice of acceptance hereof, notice of any
liability of any Guarantor hereunder, notice or proof of reliance by the Holders
upon the obligations of any Guarantor hereunder, and diligence, presentment,
demand for payment on the Company, protest, notice of
136
- 128 -
dishonor or non-payment of any of the Obligations, or other notice or
formalities to the Company or any Guarantor of any kind whatsoever.
SECTION 12.13. No Obligation To Take Action Against the Company.
Neither the Trustee nor any other Person shall have any obligation
to enforce or exhaust any rights or remedies or to take any other steps under
any security for the Obligations or against the Company or any other Person or
any Property of the Company or any other Person before the Trustee is entitled
to demand payment and performance by any or all Guarantors of their liabilities
and obligations under their Guarantees or under this Indenture.
SECTION 12.14. Dealing with the Company and Others.
The Holders, without releasing, discharging, limiting or otherwise
affecting in whole or in part the obligations and liabilities of any Guarantor
hereunder and without the consent of or notice to any Guarantor, may
(a) grant time, renewals, extensions, compromises, concessions,
waivers, releases, discharges and other indulgences to the Company or any
other Person;
(b) take or abstain from taking security or collateral from the
Company or from perfecting security or collateral of the Company;
(c) release, discharge, compromise, realize, enforce or otherwise
deal with or do any act or thing in respect of (with or without
consideration) any and all collateral, mortgages or other security given
by the Company or any third party with respect to the obligations or
matters contemplated by this Indenture or the Notes;
(d) accept compromises or arrangements from the Company;
(e) apply all monies at any time received from the Company or from
any security upon such part of the Obligations as the Holders may see fit
or change any such application in whole or in part from time to time as
the Holders may see fit; and
137
- 129 -
(f) otherwise deal with, or waive or modify their right to deal
with, the Company and all other Persons and any security as the Holders or
the Trustee may see fit.
SECTION 12.15. Default and Enforcement.
If any Guarantor fails to pay in accordance with Section 12.01
hereof, the Trustee may proceed in its name as trustee hereunder in the
enforcement of the Guarantee of any such Guarantor and such Guarantor's
obligations thereunder and hereunder by any remedy provided by law, whether by
legal proceedings or otherwise, and to recover from such Guarantor the
obligations.
SECTION 12.16. Amendment, Etc.
No amendment, modification or waiver of any provision of this
Indenture relating to any Guarantor or consent to any departure by any Guarantor
or any other Person from any such provision will in any event be effective
unless it is signed by such Guarantor and the Trustee.
SECTION 12.17. Acknowledgment.
Each Guarantor hereby acknowledges communication of the terms of
this Indenture and the Notes and consents to and approves of the same.
SECTION 12.18. Costs and Expenses.
Each Guarantor shall pay on demand by the Trustee any and all costs,
fees and expenses (including, without limitation, legal fees on a solicitor and
client basis) incurred by the Trustee, its agents, advisors and counsel or any
of the Holders in enforcing any of their rights under any Guarantee in the same
manner as the Company shall be requested to pay the Trustee's fees.
SECTION 12.19. No Merger or Waiver; Cumulative Remedies.
No Guarantee shall operate by way of merger of any of the
obligations of a Guarantor under any other agreement, including, without
limitation, this Indenture. No failure to exercise and no delay in exercising,
on the part of the Trustee or the Holders, any right,
138
- 130 -
remedy, power or privilege hereunder or under this Indenture or the Notes, shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder or under this Indenture or the Notes
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
in the Guarantee and under this Indenture, the Notes and any other document or
instrument between a Guarantor and/or the Company and the Trustee are cumulative
and not exclusive of any rights, remedies, powers and privileges provided by
law.
SECTION 12.20. Survival of Obligations.
Without prejudice to the survival of any of the other obligations of
each Guarantor hereunder, the obligations of each Guarantor under Section 12.01
shall survive the payment in full of the Obligations and shall be enforceable
against such Guarantor without regard to and without giving effect to any
defense, right of offset or counterclaim available to or which may be asserted
by the Company or any Guarantor.
SECTION 12.21. Guarantee in Addition to Other Obligations.
The obligations of each Guarantor under its Guarantee and this
Indenture are in addition to and not in substitution for any other obligations
to the Trustee or to any of the Holders in relation to this Indenture or the
Notes and any guarantees or security at any time held by or for the benefit of
any of them.
SECTION 12.22. Severability.
Any provision of this Article Twelve which is prohibited or
unenforceable in any jurisdiction shall not invalidate the remaining provisions
and any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction
unless its removal would substantially defeat the basic intent, spirit and
purpose of this Indenture and this Article Twelve.
SECTION 12.23. Successors and Assigns.
Each Guarantee shall be binding upon and inure to the benefit of
each Guarantor and the Trustee and the other Holders and their respective
successors and permitted assigns, except that no Guarantor may assign any of its
obligations hereunder or thereunder.
139
- 131 -
ARTICLE THIRTEEN
SUBORDINATION OF GUARANTEE
SECTION 13.01. Obligations of Guarantors Subordinated to Guarantor
Senior Debt.
Anything herein to the contrary notwithstanding, each of the
Guarantors, for itself and its successors, and each Holder, by his or her
acceptance of Guarantees, agrees that the payment of all Obligations owing to
the Holders in respect of its Guarantee (collectively, as to any Guarantor, its
"Guarantee Obligations") is subordinated, to the extent and in the manner
provided in this Article Thirteen, to the prior payment in full in cash or in
Cash Equivalents (other than clause (vii) of the definition of Cash
Equivalents), or such payment duly provided for to the satisfaction of the
holders of Guarantor Senior Debt, of all Obligations on Guarantor Senior Debt of
such Guarantor, including without limitation, the Guarantors' obligations under
the Credit Agreement; that the subordination is for the benefit of, and shall be
enforceable directly by, any holder of Guarantor Senior Debt, and that each
holder of Guarantor Senior Debt whether now outstanding or hereafter created,
incurred, assumed or guaranteed shall be deemed to have acquired Guarantor
Senior Debt in reliance upon the covenants and provisions contained in this
Indenture and the Notes.
This Article Thirteen shall constitute a continuing offer to all
Persons who become holders of, or continue to hold, Guarantor Senior Debt, and
such provisions are made for the benefit of the holders of Guarantor Senior Debt
and such holders are made obligees hereunder and any one or more of them may
enforce such provisions.
SECTION 13.02. Suspension of Guarantee Obligations When Guarantor
Senior Debt Is in Default.
(a) If any default occurs and is continuing in the payment when due,
whether at maturity, upon any redemption, by declaration or otherwise, of any
principal or interest on, unpaid drawings for letters of credit issued in
respect of, or regularly accruing fees or commissions with respect to, any
Guarantor Senior Debt of a Guarantor or guaranteed by a Guarantor, no payment or
distribution of any kind or character shall be made by or on behalf of such
Guarantor or any other Person
140
- 132 -
on its or their behalf with respect to any Obligations on the Notes or to
acquire, repurchase, redeem or defease any of the Notes for cash or property or
otherwise. In addition, if any other event of default occurs and is continuing
with respect to any Designated Guarantor Senior Debt of any Guarantor, as such
event of default is defined in the instrument creating or evidencing such
Designated Guarantor Senior Debt, permitting the holders of such Designated
Guarantor Senior Debt then outstanding to accelerate the maturity thereof and if
the Representative for the respective issue of Designated Guarantor Senior Debt
gives a Default Notice, then, unless and until all events of default have been
cured or waived or have ceased to exist or the Trustee receives notice from the
Representative for the respective issue of Designated Guarantor Senior Debt
terminating the Blockage Period, during the Blockage Period, neither said
Guarantor nor any other Person on its behalf shall (x) make any payment or
distribution of any kind or character with respect to any Obligations on the
Notes or (y) acquire, repurchase, redeem or defease any of the Notes for cash or
property or otherwise. Notwithstanding anything herein to the contrary, in no
event will a Blockage Period extend beyond 180 days from the date the payment on
the Notes was due and only one such Blockage Period may be commenced within any
360 consecutive days. No event of default which existed or was continuing on the
date of the commencement of any Blockage Period with respect to the Designated
Guarantor Senior Debt shall be, or be made, the basis for commencement of a
second Blockage Period by the Representative of such Designated Guarantor Senior
Debt whether or not within a period of 360 consecutive days, unless such event
of default shall have been cured or waived for a period of not less than 90
consecutive days (it being acknowledged that any subsequent action, or any
breach of any financial covenants for a period commencing after the date of
commencement of such Blockage Period, that in either case, would give rise to an
event of default pursuant to any provisions under which an event of default
previously existed or was continuing shall constitute a new event of default for
this purpose).
(b) In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee or any Holder from such Guarantor when such
payment is prohibited by Section 13.02(a), such payment shall be held for the
benefit of, and shall be paid over or delivered to, the holders of Guarantor
Senior Debt with respect to such Guarantor (pro rata to such holders on the
basis of the respective amount of such Guarantor Senior Debt held by such
holders) or their respective Representatives, as their respective interests may
appear. The Trustee shall be entitled to rely on information regarding amounts
then
141
- 133 -
due and owing on the Guarantor Senior Debt, if any, received from the holders of
such Guarantor Senior Debt (or their Representatives) or, if such information is
not received from such holders or their Representatives after written request
therefor, from the Company and only amounts included in the information provided
to the Trustee shall be paid to the holders of such Guarantor Senior Debt.
Nothing contained in this Article Thirteen shall limit the right of
the Trustee or the Holders of Notes to take any action to accelerate the
maturity of the Notes pursuant to Section 6.02 or to pursue any rights or
remedies hereunder; provided that all Guarantor Senior Debt thereafter due or
declared to be due shall first be paid in full in cash or Cash Equivalents
(other than clause (vii) in the definition of Cash Equivalents) before the
Holders are entitled to receive any payment of any kind or character with
respect to Obligations on the Notes.
SECTION 13.03. Guarantee Obligations Subordinated to Prior Payment
of All Guarantor Senior Debt on Dissolution,
Liquidation or Reorganization of Such Guarantor.
(a) Upon any direct or indirect payment or distribution of assets of
any Guarantor of any kind or character, whether in cash, property or securities,
to creditors upon any liquidation, dissolution, winding-up, reorganization,
assignment for the benefit of creditors or marshaling of assets of such
Guarantor or in a bankruptcy, reorganization, insolvency, receivership or other
similar proceeding relating to such Guarantor or its property, whether voluntary
or involuntary, all Obligations due or to become due upon all Guarantor Senior
Debt shall first be paid in full in cash or in Cash Equivalents (other than
clause (vii) in the definition of Cash Equivalents), or such payment duly
provided for to the satisfaction of the holders of Guarantor Senior Debt, before
any payment or distribution of any kind or character is made on account of any
Obligations on the Guarantee of such Guarantor, or for the acquisition,
repurchase, redemption or defeasance of the Guarantee of such Guarantor for cash
or property or otherwise. Upon any such dissolution, winding-up, liquidation,
reorganization, receivership or similar proceeding, any direct or indirect
payment or distribution of assets of such Guarantor of any kind or character,
whether in cash, property or securities, to which the Holders of the Guarantee
of such Guarantor or the Trustee under this Indenture would be entitled, except
for the provi-
142
- 134 -
sions hereof, shall be paid by the Guarantor or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other Person making such payment or
distribution, or by the Holders or by the Trustee under this Indenture if
received by them, directly to the holders of Guarantor Senior Debt (pro rata to
such holders on the basis of the respective amounts of Guarantor Senior Debt
held by such holders) or their respective Representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Guarantor Senior Debt
may have been issued, as their respective interests may appear, for application
to the payment of Guarantor Senior Debt remaining unpaid until all such
Guarantor Senior Debt has been paid in full in cash or in Cash Equivalents
(other than clause (vii) in the definition of Cash Equivalents) after giving
effect to any concurrent payment, distribution or provision therefor to or for
the holders of Guarantor Senior Debt.
(b) To the extent any payment of Guarantor Senior Debt (whether by
or on behalf of any Guarantor, as proceeds of security or enforcement of any
right of setoff or otherwise) is declared to be fraudulent or preferential, set
aside or required to be paid to any receiver, trustee in bankruptcy, liquidating
trustee, agent or other similar Person under any bankruptcy, insolvency,
receivership, fraudulent conveyance or similar law, then, if such payment is
recovered by, or paid over to, such receiver, trustee in bankruptcy, liquidating
trustee, agent or other similar Person, the Guarantor Senior Debt or part
thereof originally intended to be satisfied shall be deemed to be reinstated and
outstanding as if such payment has not occurred.
(c) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of any Guarantor of any kind or character, whether in
cash, property or securities, shall be received by any Holder when such payment
or distribution is prohibited by this Section 13.03(c), such payment or
distribution shall be held in trust for the benefit of, and shall be paid over
or delivered to, the holders of Guarantor Senior Debt (pro rata to such holders
on the basis of the respective amount of Guarantor Senior Debt held by such
holders) or their respective Representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Guarantor Senior Debt may have
been issued, as their respective interests may appear, for application to the
payment of Guarantor Senior Debt remaining unpaid until all such Guarantor
Senior Debt has been paid in full in cash or in Cash Equivalents (other than
clause (vii) in the definition of Cash Equivalents), after giving effect to any
concurrent payment, distri-
143
- 135 -
bution or provision therefor to or for the holders of such Guarantor Senior
Debt.
(d) The consolidation of any Guarantor with, or the merger of any
Guarantor with or into, another corporation or the liquidation or dissolution of
any Guarantor following the conveyance or transfer of all or substantially all
of its assets, to another corporation upon the terms and conditions provided in
Article Five hereof and as long as permitted under the terms of the Guarantor
Senior Debt shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section if such other corporation shall,
as a part of such consolidation, merger, conveyance or transfer, assume such
Guarantor's obligations hereunder in accordance with Article Five hereof.
SECTION 13.04. Holders of Guarantee Obligations To Be Subrogated to
Rights of Holders of Guarantor Senior Debt.
Subject to the payment in full in cash or Cash Equivalents (other
than clause (vii) in the definition of Cash Equivalents), or such payment duly
provided for to the satisfaction of the holders of Guarantor Senior Debt, of all
Guarantor Senior Debt, the Holders of Guarantee Obligations of a Guarantor shall
be subrogated to the rights of the holders of Guarantor Senior Debt of such
Guarantor to receive payments or distributions of assets of such Guarantor
applicable to such Guarantor Senior Debt until all amounts owing on or in
respect of the Guarantee Obligations shall be paid in full in cash or Cash
Equivalents (other than clause (vii) in the definition of Cash Equivalents), and
for the purpose of such subrogation no payments or distributions to the holders
of such Guarantor Senior Debt by or on behalf of such Guarantor, or by or on
behalf of the Holders by virtue of this Article Thirteen, which otherwise would
have been made to the Holders shall, as between such Guarantor and the Holders,
be deemed to be payment by such Guarantor to or on account of such Guarantor
Senior Debt, it being understood that the provisions of this Article Thirteen
are and are intended solely for the purpose of defining the relative rights of
the Holders, on the one hand, and the holders of such Guarantor Senior Debt, on
the other hand.
If any payment or distribution to which the Holders would otherwise
have been entitled but for the provisions of this Article Thirteen shall have
been applied, pursuant to the provisions of this Article Thirteen, to the
payment of all amounts payable under such Guarantor Senior Debt, then the
144
- 136 -
Holders shall be entitled to receive from the holders of such Guarantor Senior
Debt any such payments or distributions received by such holders of such
Guarantor Senior Debt in excess of the amount sufficient to pay all amounts
payable under or in respect of such Guarantor Senior Debt in full in cash or
Cash Equivalents (other than clause (vii) in the definition of Cash
Equivalents), or such payment duly provided for to the satisfaction of the
holders of Guarantor Senior Debt.
Each Holder by purchasing or accepting a Note waives any and all
notice of the creation, modification, renewal, extension or accrual of any
Guarantor Senior Debt of the Guarantors and notice of or proof of reliance by
any holder or owner of Guarantor Senior Debt of the Guarantors upon this Article
Thirteen and the Guarantor Senior Debt of the Guarantors shall conclusively be
deemed to have been created, contracted or incurred in reliance upon this
Article Thirteen, and all dealings between the Guarantors and the holders and
owners of the Guarantor Senior Debt of the Guarantors shall be deemed to have
been consummated in reliance upon this Article Thirteen.
SECTION 13.05. Obligations of the Guarantors Unconditional.
Nothing contained in this Article Thirteen or elsewhere in this
Indenture or in the Guarantees is intended to or shall impair, as between the
Guarantors and the Holders, the obligation of the Guarantors, which is absolute
and unconditional, to pay to the Holders all amounts due and payable under the
Guarantees as and when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative rights of the
Holders and creditors of the Guarantors other than the holders of the Guarantor
Senior Debt, nor shall anything herein or therein prevent the Trustee or any
Holder from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this Article
Thirteen, of the holders of Guarantor Senior Debt in respect of cash, property
or securities of the Guarantors received upon the exercise of any such remedy.
Upon any payment or distribution of assets of any Guarantor referred to in this
Article Thirteen, the Trustee, subject to the provisions of Sections 7.01 and
7.02, and the Holders shall be entitled to rely upon any order or decree made by
any court of competent jurisdiction in which any liquidation, dissolution,
winding-up or reorganization proceedings are pending, or a certificate of the
receiver, trustee in bankruptcy, liquidating trustee or agent or other Person
making any payment or distribution to the Trustee or to the Holders for
145
- 137 -
the purpose of ascertaining the Persons entitled to participate in such payment
or distribution, the holders of Guarantor Senior Debt and other Indebtedness of
any 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
Thirteen. Nothing in this Article Thirteen shall apply to the claims of, or
payments to, the Trustee under or pursuant to Section 7.07. The Trustee shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself or itself to be a holder of any Guarantor Senior Debt (or a
trustee on behalf of, or other representative of, such holder) to establish that
such notice has been given by a holder of such Guarantor Senior Debt or a
trustee or representative on behalf of any such holder.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Guarantor Senior Debt to participate in any payment or distribution pursuant to
this Article Thirteen, the Trustee may request such Person to furnish evidence
to the reasonable satisfaction of the Trustee as to the amount of Guarantor
Senior Debt held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article Thirteen, and if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
SECTION 13.06. Trustee Entitled To Assume Payments Not Prohibited in
Absence of Notice.
The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Notes pursuant to the provisions of this
Article Thirteen. Regardless of anything to the contrary contained in this
Article Thirteen or elsewhere in this Indenture. The Trustee shall not be
charged with knowledge of the existence of any default or event of default with
respect to any Guarantor Senior Debt or of any other facts which would prohibit
the making of any payment to or by the Trustee unless and until the Trustee
shall have received notice in writing from the Company or the Guarantor, or from
a holder of Guarantor Senior Debt or a Representative therefor, together with
proof satisfactory to the Trustee of such holding of Guarantor Senior Debt or of
the authority of such Representative, and, prior to the receipt of any such
written notice, the Trustee shall be entitled to assume (in the
146
- 138 -
absence of actual knowledge to the contrary) that no such facts exist.
SECTION 13.07. Application by Trustee of Assets Deposited with It.
U.S. Legal Tender or U.S. Government Obligations deposited in trust
with the Trustee pursuant to and in accordance with Sections 8.01 and 8.02 shall
be for the sole benefit of Holders of the Notes and, to the extent allocated for
the payment of Notes, shall not from and after the time of such deposit be
subject to the subordination provisions of this Article Thirteen. Otherwise, any
deposit of assets or securities by or on behalf of a Guarantor with the Trustee
or any Paying Agent (whether or not in trust) for payment of the Guarantees
shall be subject to the provisions of this Article Thirteen; provided, however,
that if prior to the second Business Day preceding the date on which by the
terms of this Indenture any such assets may become distributable for any purpose
(including, without limitation, the payment of either principal of or interest
on any Note) the Trustee or such Paying Agent shall not have received with
respect to such assets any notice provided for in Section 13.06, then the
Trustee or such Paying Agent shall have full power and authority to receive such
assets and to apply the same to the purpose for which they were received, and
shall not be affected by any notice to the contrary received by it on or after
such date. The foregoing shall not apply to the Paying Agent if the Company or
any Subsidiary or Affiliate of the Company is acting as Paying Agent. Nothing
contained in this Section 13.07 shall limit the right of the holders of
Guarantor Senior Debt to recover payments as contemplated by this Article
Thirteen.
SECTION 13.08. No Waiver of Subordination Provisions.
(a) No right of any present or future holder of any Guarantor Senior
Debt to enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of any Guarantor
or by any act or failure to act, by any such holder, or by any non-compliance by
any Guarantor with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof any such holder may have or be otherwise
charged with.
(b) Without limiting the generality of subsection (a) of this
Section 13.08, the holders of Guarantor Senior Debt may, at any time and from
time to time, without the consent of
147
- 139 -
or notice to the Trustee or the Holders of the Notes, without incurring
responsibility to the Holders of the Notes and without impairing or releasing
the subordination provided in this Article Thirteen or the obligations hereunder
of the Holders of the Notes to the holders of Guarantor Senior Debt, do any one
or more of the following: (1) change the manner, place, terms or time of payment
of, or renew, refinance, replace or alter, Guarantor Senior Debt or any
instrument evidencing the same or any agreement under which Guarantor Senior
Debt is outstanding; (2) sell, exchange, release or otherwise deal with any
property pledged, mortgaged or otherwise securing Guarantor Senior Debt; (3)
release any Person liable in any manner for the collection or payment of
Guarantor Senior Debt; and (4) exercise or refrain from exercising any rights
against the Guarantors and any other Person.
SECTION 13.09. Holders Authorize Trustee To Effectuate Subordination
of Guarantee Obligations.
Each Holder of the Guarantee Obligations by its acceptance thereof
authorizes and expressly directs the Trustee on its behalf to take such action
as may be necessary or appropriate to effect the subordination provisions
contained in this Article Thirteen, and appoints the Trustee its
attorney-in-fact for such purpose, including, in the event of any liquidation,
dissolution, winding-up, reorganization, assignment for the benefit of creditors
or marshaling of assets of any Guarantor tending towards liquidation or
reorganization of the business and assets of any Guarantor, the immediate filing
of a claim for the unpaid balance under its or his Guarantee Obligations in the
form required in said proceedings and cause said claim to be approved. If the
Trustee does not file a proper claim or proof of debt in the form required in
such proceeding prior to 30 days before the expiration of the time to file such
claim or claims, then any of the holders of the Guarantor Senior Debt or their
Representative is hereby authorized to file an appropriate claim for and on
behalf of the Holders of said Guarantee Obligations. Nothing herein contained
shall be deemed to authorize the Trustee or the holders of Guarantor Senior Debt
or their Representative to authorize or consent to or accept or adopt on behalf
of any holder of Guarantee Obligations any plan of reorganization, arrangement,
adjustment or composition affecting the Guarantee Obligations or the rights of
any Holder thereof, or to authorize the Trustee or the holders of Guarantor
Senior Debt or their Representative to vote in respect of the claim of any
holder of Guarantee Obligations in any such proceeding.
148
- 140 -
SECTION 13.10. Right of Trustee To Hold Guarantor Senior Debt.
The Trustee shall be entitled to all of the rights set forth in this
Article Thirteen in respect of any Guarantor Senior Debt at any time held by it
to the same extent as any other holder of Guarantor Senior Debt, and nothing in
this Indenture shall be construed to deprive the Trustee of any of its rights as
such holder.
SECTION 13.11. No Suspension of Remedies.
The failure to make a payment in respect of the Guarantees by reason
of any provision of this Article Thirteen shall not be construed as preventing
the occurrence of a Default or an Event of Default under Section 6.01.
Nothing contained in this Article Thirteen shall limit the right of
the Trustee or the Holders of Notes to take any action to accelerate the
maturity of the Notes pursuant to Article Six or to pursue any rights or
remedies hereunder or under applicable law, subject to the rights, if any, under
this Article Thirteen of the holders, from time to time, of Guarantor Senior
Debt.
SECTION 13.12. No Fiduciary Duty of Trustee to Holders of Guarantor
Senior Debt.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Guarantor Senior Debt, and it undertakes to perform or observe such
of its covenants and obligations as are specifically set forth in this Article
Thirteen, and no implied covenants or obligations with respect to the Guarantor
Senior Debt shall be read into this Indenture against the Trustee. The Trustee
shall not be liable to any such holders (other than for its willful misconduct
or gross negligence) if it shall pay over or deliver to the holders of Guarantee
Obligations or the Guarantors or any other Person, money or assets in compliance
with the terms of this Indenture. Nothing in this Section 13.12 shall affect the
obligation of any Person other than the Trustee to hold such payment for the
benefit of, and to pay such payment over to, the holders of Guarantor Senior
Debt or their Representative.
149
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the date first written above.
KINETIC CONCEPTS, INC.
By: Xxxxxx X. Xxxx
_____________________________________
Name:
Title:
KCI HOLDING COMPANY, INC., as Guarantor
By: Xxxxxx X. Xxxx
_____________________________________
Name:
Title:
KCI PROPERTIES LIMITED,
as Guarantor
By: Xxxxxx X. Xxxx
_____________________________________
Name:
Title:
KCI REAL PROPERTY LIMITED,
as Guarantor
By: Xxxxxx X. Xxxx
_____________________________________
Name:
Title:
150
- 2 -
KCI THERAPEUTIC SERVICES, INC.,
as Guarantor
By: Xxxxxx X. Xxxx
_____________________________________
Name:
Title:
KCI NEW TECHNOLOGIES, INC.
as Guarantor
By: Xxxxxx X. Xxxx
_____________________________________
Name:
Title:
KCI INTERNATIONAL, INC.,
as Guarantor
By: Xxxxxx X. Xxxx
_____________________________________
Name:
Title:
KCI AIR, INC., as Guarantor
By: Xxxxxx X. Xxxx
_____________________________________
Name:
Title:
KCI-RIK ACQUISITION CORP., as Guarantor
By: Xxxxxx X. Xxxx
_____________________________________
Name:
Title:
PLEXUS ENTERPRISES, INC.
By: Xxxxxx X. Xxxx
_____________________________________
Name:
Title:
151
- 3 -
MEDICAL RETRO DESIGN, INC.
By: Xxxxxx X. Xxxx
_____________________________________
Name:
Title:
MARINE MIDLAND BANK, as Trustee
By: Xxxxx Xxxxxx
_____________________________________
Name: Xxxxx Xxxxxx
Title: Assistant Vice President
152
EXHIBIT A
[FORM OF SERIES A NOTE]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (2) AGREES THAT IT WILL NOT, PRIOR TO THE DATE THAT IS TWO YEARS
AFTER THE LATER OF THE ORIGINAL ISSUE DATE OF THIS SECURITY AND THE LAST DATE ON
WHICH THE COMPANY OR ANY AFFILIATED PERSON OF THE COMPANY WAS THE OWNER OF THIS
SECURITY, RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE COMPANY
OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
INSIDE THE UNITED STATES TO AN ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER,
FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH
LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR THIS SECURITY), (D) OUTSIDE THE
UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE
TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY
WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED
TRANSFEREE IS AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR
OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN,
THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
A - 1
153
CUSIP No.:
KINETIC CONCEPTS, INC.
9 5/8% SENIOR SUBORDINATED NOTE DUE 2007, SERIES A
No. $
KINETIC CONCEPTS, INC., a Texas corporation (the "Company," which
term includes any successor entities), for value received promises to pay to
or registered assigns the principal sum of Dollars on November 1,
2007.
Interest Payment Dates: May 1 and November 1, commencing May 1,
1998.
Record Dates: April 15 and October 15.
Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at this
place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
KINETIC CONCEPTS, INC.
By: _____________________________________
Name:
Title:
By: _____________________________________
Name:
Title:
Dated: November , 1997
A - 2
154
Certificate of Authentication
This is one of the 9 5/8% Senior Subordinated Notes due 2007, Series
A, referred to in the within-mentioned Indenture.
MARINE MIDLAND BANK, as Trustee
By: _____________________________________
Authorized Signatory
Date of Authentication: November , 1997
A - 3
155
(REVERSE OF SECURITY)
9 5/8% Senior Subordinated Note due 2007, Series A
Capitalized terms used and not otherwise defined herein shall have
the meanings ascribed to them in the Indenture, dated as of November 5, 1997
(the "Indenture"), and as amended from time to time, by and among Kinetic
Concepts, Inc., a Texas corporation (the "Company"), the Guarantors named
therein and Marine Midland Bank, as trustee (the "Trustee").
(1) Interest. The Company promises to pay interest on the principal
amount of this Note at the rate per annum shown above. Interest on the Notes
will accrue from the most recent date on which interest has been paid or, if no
interest has been paid, from November 5, 1997. The Company will pay interest
semi-annually in arrears on each Interest Payment Date, commencing May 1, 1998.
Interest will be computed on the basis of a 360-day year of twelve 30-day months
and, in the case of a partial month, the actual number of days elapsed.
The Company shall pay interest on overdue principal and on overdue
installments of interest from time to time on demand at the rate borne by the
Notes and on overdue installments of interest (without regard to any applicable
grace periods) to the extent lawful.
(2) Method of Payment. The Company shall pay interest on the Notes
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on the Record Date immediately preceding the Interest Payment
Date even if the Notes are cancelled on registration of transfer or registration
of exchange (including pursuant to an Exchange Offer (as defined in the
Registration Rights Agreement)) after such Record Date. Holders must surrender
Notes to a Paying Agent to collect principal payments. The Company shall pay
principal and premium, if any, and interest in money of the United States that
at the time of payment is legal tender for payment of public and private debts
("U.S. Legal Tender"). However, the Company may pay principal and premium, if
any, and interest by check payable in such U.S. Legal Tender. The Company may
deliver any such interest payment to the Paying Agent or to a Holder at the
Holder's registered address.
(3) Paying Agent and Registrar. Initially, the Trustee will act as
Paying Agent and Registrar. The Company may change any Paying Agent, Registrar
or co-Registrar without notice to the Holders.
A - 4
156
(4) Indenture. The Company issued the Notes under the Indenture.
This Note is one of a duly authorized issue of Notes of the Company designated
as its 9 5/8% Senior Subordinated Notes due 2007, Series A (the "Initial
Notes"), limited (except as otherwise provided in the Indenture) in aggregate
principal amount to $300,000,000 which may be issued under the Indenture. The
Notes include the Initial Notes, the Private Exchange Notes and the Unrestricted
Notes, as defined below, issued in exchange for the Initial Notes pursuant to
the Registration Rights Agreement. The Initial Notes, the Private Exchange Notes
and the Unrestricted Notes are treated as a single class of securities under the
Indenture. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S. Code Sections 77aaa-77bbbb) (the "TIA"), as in effect on the date
of the Indenture. Notwithstanding anything to the contrary herein, the Notes are
subject to all such terms, and Holders of Notes are referred to the Indenture
and the TIA for a statement of such terms. The Notes are general unsecured
obligations of the Company. Payment on each Note is guaranteed on a senior
subordinated basis by the Guarantors pursuant to Articles Twelve and Thirteen of
the Indenture. Each Holder, by accepting a Note, agrees to be bound by all of
the terms and provisions of the Indenture, as the same may be amended from time
to time in accordance with its terms.
(5) Special Redemption. Section 4.22 of the Indenture provides that
on the Special Redemption Date, the Notes will be subject to mandatory
redemption at a redemption price equal to 100% of the principal amount of the
Notes, plus accrued interest to the date of redemption, if the Tender Offer is
not consummated on or prior to November 6, 1997.
(6) Redemption. The Notes are redeemable, at the Company's option,
in whole at any time or in part from time to time, on and after November 1,
2002, upon not less than 30 nor more than 60 days' notice, at the following
Redemption Prices (expressed as percentages of the principal amount thereof) if
redeemed during the twelve-month period commencing on November 1 of the years
set forth below, plus, in each case, accrued and unpaid interest thereon, if
any, to the date of redemption:
Year Percentage
---- ----------
2002 104.813%
2003 103.208%
2004 101.604%
2005 and thereafter 100.000%
Notwithstanding the foregoing, at any time, or from time to time, on
or prior to November 1, 2000, the Company may,
A - 5
157
at its option on one or more occasions use all or a portion of the net cash
proceeds of one or more Equity Offerings to redeem the Notes issued under the
Indenture at a redemption price equal to 109.625% of the principal amount
thereof, plus accrued and unpaid interest thereon, if any, to the date of
redemption, provided that at least 65% of the aggregate principal amount of the
Notes originally issued remain outstanding immediately following any such
redemption. In order to effect the foregoing redemption with the proceeds of any
Equity Offering, the Company shall make such redemption not more than 120 days
after the consummation of any such Equity Offering.
(7) Notice of Redemption. Notice of redemption will be mailed at
least 30 but not more than 60 days before the Redemption Date (other than with
respect to a Special Redemption) to each Holder of Notes to be redeemed at its
registered address. Notes in denominations larger than $1,000 may be redeemed in
part.
Except as set forth in the Indenture, if monies for the redemption
of the Notes called for redemption shall have been deposited with the Paying
Agent for redemption on such Redemption Date, then, unless the Company defaults
in the payment of such Redemption Price plus accrued interest, if any, the Notes
called for redemption will cease to bear interest from and after such Redemption
Date and the only right of the Holders of such Notes will be to receive payment
of the Redemption Price plus accrued interest, if any.
(8) Offers to Purchase. Sections 4.15 and 4.16 of the Indenture
provide that, after certain Asset Sales and upon the occurrence of a Change of
Control, and subject to further limitations contained therein, the Company will
make an offer to purchase certain amounts of the Notes in accordance with the
procedures set forth in the Indenture.
(9) Registration Rights. Pursuant to the Registration Rights
Agreement among the Company, the Guarantors and the Initial Purchasers, the
Company and the Guarantors will be obligated to consummate an exchange offer
pursuant to which the Holder of this Note shall have the right to exchange this
Note for the Company's 9 5/8% Senior Subordinated Notes due 2007, Series B (the
"Unrestricted Notes"), which will be registered under the Securities Act, in
like principal amount and having terms identical in all material respects as the
Initial Notes. The Holders of the Initial Notes shall be entitled to receive
certain additional interest payments in the event such exchange offer is not
consummated and upon certain other conditions, all pursuant to and in accordance
with the terms of the Registration Rights Agreement.
A - 6
158
(10) Denominations; Transfer; Exchange. The Notes are in registered
form, without coupons, and (except Notes issued as payment of Interest) in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange of Notes in accordance with the Indenture.
The Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay certain transfer taxes or similar
governmental charges payable in connection therewith as required by law or as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange of any Notes or portions thereof selected for redemption except for the
unredeemed portion of any Note being redeemed in part.
(11) Persons Deemed Owners. The registered Holder of a Note shall be
treated as the owner of it for all purposes.
(12) Unclaimed Money. If money for the payment of principal or
interest remains unclaimed for one year, the Trustee and the Paying Agent will
pay the money back to the Company. After that, all liability of the Trustee and
such Paying Agent with respect to such money shall cease.
(13) Discharge Prior to Redemption or Maturity. If the Company at
any time deposits with the Trustee U.S. Legal Tender or U.S. Government
Obligations sufficient to pay the principal of and interest on the Notes to
redemption or maturity and complies with the other provisions of the Indenture
relating thereto, the Company will be discharged from certain provisions of the
Indenture and the Notes (including certain covenants, but including, under
certain circumstances, their obligation to pay the principal of and interest on
the Notes but without affecting the rights of the Holders to receive such
amounts from such deposits).
(14) Amendment; Supplement; Waiver. Subject to certain exceptions
set forth in the Indenture, the Indenture or the Notes may be amended or
supplemented with the written consent of the Holders of not less than a majority
in aggregate principal amount of the Notes then outstanding, and any past
Default or Event of Default or noncompliance with any provision may be waived
with the written consent of the Holders of not less than a majority in aggregate
principal amount of the Notes then outstanding. Without notice to or consent of
any Holder, the parties thereto may amend or supplement the Indenture or the
Notes to, among other things, cure any ambiguity, defect or inconsistency,
provide for uncertificated Notes in addition to or in place of certificated
Notes, comply with any requirements of the Commission in order to effect or
maintain the qualification of the Indenture under the TIA or comply with Article
Five of the Indenture or make any other change that does
A - 7
159
not adversely affect the rights of any Holder of a Note in any material respect.
(15) Restrictive Covenants. The Indenture imposes certain
limitations on the ability of the Company and the Restricted Subsidiaries to,
among other things, incur additional Indebtedness, make payments in respect of
its Capital Stock or certain Indebtedness, make certain Investments, create or
incur liens, enter into transactions with Affiliates, create dividend or other
payment restrictions affecting Restricted Subsidiaries, issue Preferred Stock of
its Restricted Subsidiaries, and on the ability of the Company to merge or
consolidate with any other Person or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of the Company's and its
Restricted Subsidiaries' assets or adopt a plan of liquidation. Such limitations
are subject to a number of important qualifications and exceptions. Pursuant to
Section 4.06 of the Indenture, the Company must annually report to the Trustee
on compliance with such limitations.
(16) Subordination. The Notes are subordinated in right of payment,
in the manner and to the extent set forth in the Indenture, to the prior payment
in full in cash or Cash Equivalents of all Obligations on Senior Debt of the
Company, whether outstanding on the date of the Indenture or thereafter created,
incurred, assumed or guaranteed. Each Holder by its acceptance hereof agrees to
be bound by such provisions and authorizes and expressly directs the Trustee, on
its behalf, to take such action as may be necessary or appropriate to effectuate
the subordination provided for in the Indenture and appoints the Trustee its
attorney-in-fact for such purposes.
(17) Successors. When a successor assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor, subject to certain exceptions, will be released from
those obligations.
(18) Defaults and Remedies. Except as set forth in the Indenture, if
an Event of Default occurs and is continuing, the Trustee or the Holders of not
less than 25% in principal amount of Notes then outstanding may declare all the
Notes to be due and payable in the manner, at the time and with the effect
provided in the Indenture. Holders of Notes may not enforce the Indenture or the
Notes except as provided in the Indenture. The Trustee is not obligated to
enforce the Indenture or the Notes unless it has received indemnity reasonably
satisfactory to it. The Indenture permits, subject to certain limitations
therein provided, Holders of a majority in aggregate principal amount of the
Notes then outstanding to direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of Notes notice of any continuing
Default
A - 8
160
or Event of Default (except a Default in payment of principal or interest when
due, including defaults in payments to be made pursuant to a Change of Control
Offer or Net Proceeds Offer, for any reason or a Default in compliance with
Article Five of the Indenture) if it determines that withholding notice is in
their interest.
(19) Trustee Dealings with Company. The Trustee under the Indenture,
in its individual or any other capacity, may become the owner or pledgee of
Notes and may otherwise deal with the Company, its Subsidiaries or their
respective Affiliates as if it were not the Trustee.
(20) No Recourse Against Others. No partner, director, officer,
employee or stockholder, as such, of the Company or any Guarantor, as such,
shall have any liability for any obligations of the Company or any Guarantor
under the Notes, the Indenture, the Guarantees or the Registration Rights
Agreement or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Notes by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
(21) Guarantees. This Note will be entitled to the benefits of
certain Guarantees, if any, made for the benefit of the Holders. Reference is
hereby made to the Indenture for a statement of the respective rights,
limitations of rights, duties and obligations thereunder of the Guarantors, the
Trustee and the Holders.
(22) Authentication. This Note shall not be valid until the Trustee
or Authenticating Agent manually signs the certificate of authentication on this
Note.
(23) Governing Law. This Note and the Indenture shall be governed by
and construed in accordance with the laws of the State of New York, as applied
to contracts made and performed within the State of New York, without regard to
principles of conflict of laws. Each of the parties hereto and the Holders agree
to submit to the jurisdiction of the courts of the State of New York in any
action or proceeding arising out of or relating to this Note.
(24) Abbreviations and Defined Terms. Customary abbreviations may be
used in the name of a Holder of a Note or an assignee, such as: TEN COM (=
tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
A - 9
161
(25) CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes as a convenience to the Holders of the
Notes. No representation is made as to the accuracy of such numbers as printed
on the Notes and reliance may be placed only on the other identification numbers
printed hereon.
The Company will furnish to any Holder of a Note upon written
request and without charge a copy of the Indenture, which has the text of this
Note. Requests may be made to: KINETIC CONCEPTS, INC., 0000 Xxxxxxx Xxxxx, Xxx
Xxxxxxx, Xxxxx 00000.
A - 10
162
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below
and have your signature guaranteed:
I or we assign and transfer this Note to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint _______________________________________, agent to
transfer this Note on the books of the Company. The agent may substitute another
to act for him.
Dated: _____________________ Signed:___________________________
(Sign exactly as your name appears
on the other side of this Note)
Signature Guarantee:____________________________________________________________
Signature must be guaranteed by an "eligible guarantor institution,"
that is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include membership
or participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.
A - 11
163
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.15 or Section 4.16 of the Indenture, check the appropriate
box:
Section 4.15 [ ]
Section 4.16 [ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.15 or Section 4.16 of the Indenture, state the
amount you elect to have purchased:
$___________________
Dated: _________________ ________________________________________________
NOTICE: The signature on this assignment must
correspond with the name as it appears upon the
face of the within Note in every particular
without alteration or enlargement or any change
whatsoever and be guaranteed.
Signature Guarantee: _________________________________
A - 12
164
EXHIBIT B
CUSIP No.:
KINETIC CONCEPTS, INC.
9 5/8% SENIOR SUBORDINATED NOTE DUE 2007, SERIES B
No. $
KINETIC CONCEPTS, INC., a Texas corporation (the "Company," which
term includes any successor entities), for value received promises to pay to
or registered assigns the principal sum of Dollars on November 1,
2007.
Interest Payment Dates: May 1 and November 1, commencing May 1,
1998.
Record Dates: April 15 and October 15.
Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at this
place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
KINETIC CONCEPTS, INC.
By: _____________________________________
Name:
Title:
By: _____________________________________
Name:
Title:
Dated:
B - 1
165
Certificate of Authentication
This is one of the 9 5/8% Senior Subordinated Notes due 2007, Series
B, referred to in the within-mentioned Indenture.
MARINE MIDLAND BANK,
as Trustee
By: _____________________________________
Authorized Signatory
Date of Authentication:
B - 2
166
(REVERSE OF SECURITY)
9 5/8% Senior Subordinated Note due 2007, Series B
Capitalized terms used and not otherwise defined herein shall have
the meanings ascribed to them in the Indenture, dated as of November 5, 1997
(the "Indenture"), and as amended from time to time, by and among Kinetic
Concepts, Inc., a Texas corporation (the "Company"), the Guarantors named
therein and Marine Midland Bank, as trustee (the "Trustee").
(1) Interest. The Company promises to pay interest on the principal
amount of this Note at the rate per annum shown above. Interest on the Notes
will accrue from the most recent date on which interest has been paid or, if no
interest has been paid, from November 5, 1997. The Company will pay interest
semi-annually in arrears on each Interest Payment Date, commencing May 1, 1998.
Interest will be computed on the basis of a 360-day year of twelve 30-day months
and, in the case of a partial month, the actual number of days elapsed.
The Company shall pay interest on overdue principal and on overdue
installments of interest from time to time on demand at the rate borne by the
Notes and on overdue installments of interest (without regard to any applicable
grace periods) to the extent lawful.
(2) Method of Payment. The Company shall pay interest on the Notes
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on the Record Date immediately preceding the Interest Payment
Date even if the Notes are cancelled on registration of transfer or registration
of exchange after such Record Date. Holders must surrender Notes to a Paying
Agent to collect principal payments. The Company shall pay principal and
premium, if any, and interest in money of the United States that at the time of
payment is legal tender for payment of public and private debts ("U.S. Legal
Tender"). However, the Company may pay principal and premium, if any, and
interest by check payable in such U.S. Legal Tender. The Company may deliver any
such interest payment to the Paying Agent or to a Holder at the Holder's
registered address.
(3) Paying Agent and Registrar. Initially, the Trustee will act as
Paying Agent and Registrar. The Company may change any Paying Agent, Registrar
or Co-Registrar without notice to the Holders.
(4) Indenture. The Company issued the Notes under the Indenture.
This Note is one of a duly authorized issue of Exchange Notes of the Company
designated as its 9 5/8% Senior Subordinated Notes due 2007, Series B (the
"Unrestricted Notes"), limited (except as otherwise provided in the Indenture)
in aggregate principal amount to $300,000,000, which may be issued under the
Indenture. The Notes include the 9 5/8%
B - 3
167
Senior Subordinated Notes due 2007, Series A (the "Initial Notes"), the Private
Exchange Notes, and the Unrestricted Notes, issued in exchange for the Initial
Notes pursuant to the Registration Rights Agreement. The Initial Notes, the
Private Exchange Notes and the Unrestricted Notes are treated as a single class
of securities under the Indenture. The terms of the Notes include those stated
in the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) (the "TIA"), as
in effect on the date of the Indenture. Notwithstanding anything to the contrary
herein, the Notes are subject to all such terms, and Holders of Notes are
referred to the Indenture and the TIA for a statement of such terms. The Notes
are general unsecured obligations of the Company. Payment on each Note is
guaranteed on a senior subordinated basis by the Guarantors pursuant to Articles
Twelve and Thirteen of the Indenture. Each Holder, by accepting a Note, agrees
to be bound by all of the terms and provisions of the Indenture, as the same may
be amended from time to time in accordance with its terms.
(5) Redemption. The Notes are redeemable, at the Company's option,
in whole at any time or in part from time to time, on and after November 1,
2002, upon not less than 30 nor more than 60 days' notice, at the following
Redemption Prices (expressed as percentages of the principal amount thereof) if
redeemed during the twelve-month period commencing on November 1 of the years
set forth below, plus, in each case, accrued and unpaid interest thereon, if
any, to the date of redemption:
Year Percentage
---- ----------
2002 104.813%
2003 103.208%
2004 101.604%
2005 and thereafter 100.000%
Notwithstanding the foregoing, at any time, or from time to time, on
or prior to November 1, 2000, the Company may, at its option on one or more
occasions use all or a portion of the net cash proceeds of one or more Equity
Offerings to redeem the Notes issued under the Indenture at a redemption price
equal to 109.625% of the principal amount thereof, plus accrued and unpaid
interest thereon, if any, to the date of redemption, provided, that at least 65%
of the aggregate principal amount of the Notes originally issued remain
outstanding immediately following any such redemption. In order to effect the
foregoing redemption with the proceeds of any Equity Offering, the Company shall
make such redemption not more than 120 days after the consummation of any such
Equity Offering.
(6) Notice of Redemption. Notice of redemption will be mailed at
least 30 but not more than 60 days before the Redemption Date to each Holder of
Notes to be redeemed at its registered address. Notes in denominations larger
than $1,000 may be redeemed in part.
B - 4
168
Except as set forth in the Indenture, if monies for the redemption
of the Notes called for redemption shall have been deposited with the Paying
Agent for redemption on such Redemption Date, then, unless the Company defaults
in the payment of such Redemption Price plus accrued interest, if any, the Notes
called for redemption will cease to bear interest from and after such Redemption
Date and the only right of the Holders of such Notes will be to receive payment
of the Redemption Price plus accrued interest, if any.
(7) Offers to Purchase. Sections 4.15 and 4.16 of the Indenture
provide that, after certain Asset Sales and upon the occurrence of a Change of
Control, and subject to further limitations contained therein, the Company will
make an offer to purchase certain amounts of the Notes in accordance with the
procedures set forth in the Indenture.
(8) Denominations; Transfer; Exchange. The Notes are in registered
form, without coupons, and (except Notes issued as payment of Interest) in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange of Notes in accordance with the Indenture.
The Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay certain transfer taxes or similar
governmental charges payable in connection therewith as required by law or as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange of any Notes or portions thereof selected for redemption, except for
the unredeemed portion of any Note being redeemed in part.
(9) Persons Deemed Owners. The registered Holder of a Note shall be
treated as the owner of it for all purposes.
(10) Unclaimed Money. If money for the payment of principal or
interest remains unclaimed for one year, the Trustee and the Paying Agent will
pay the money back to the Company. After that, all liability of the Trustee and
such Paying Agent with respect to such money shall cease.
(11) Discharge Prior to Redemption or Maturity. If the Company at
any time deposits with the Trustee U.S. Legal Tender or U.S. Government
Obligations sufficient to pay the principal of and interest on the Notes to
redemption or maturity and complies with the other provisions of the Indenture
relating thereto, the Company will be discharged from certain provisions of the
Indenture and the Notes (including certain covenants, including, under certain
circumstances, their obligation to pay the principal of and interest on the
Notes but without affecting the rights of the Holders to receive such amounts
from such deposit).
(12) Amendment; Supplement; Waiver. Subject to certain exceptions
set forth in the Indenture, the Indenture or the Notes may be amended or
supplemented with the written consent of the Holders of not less than a majority
in aggregate
B - 5
169
principal amount of the Notes then outstanding, and any past Default or Event of
Default or noncompliance with any provision may be waived with the written
consent of the Holders of not less than a majority in aggregate principal amount
of the Notes then outstanding. Without notice to or consent of any Holder, the
parties thereto may amend or supplement the Indenture or the Notes to, among
other things, cure any ambiguity, defect or inconsistency, provide for
uncertificated Notes in addition to or in place of certificated Notes, comply
with any requirements of the Commission in order to effect or maintain the
qualification of the Indenture under the TIA or comply with Article V of the
Indenture or make any other change that does not adversely affect the rights of
any Holder of a Note in any material respect.
(13) Restrictive Covenants. The Indenture imposes certain
limitations on the ability of the Company and the Restricted Subsidiaries to,
among other things, incur additional Debt, make payments in respect of its
Capital Stock or certain Debt, make certain Investments, create or incur liens,
enter into transactions with Affiliates, create dividend or other payment
restrictions affecting Restricted Subsidiaries, issue Preferred Stock of its
Restricted Subsidiaries, and on the ability of the Company to merge or
consolidate with any other Person or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of the Company's and its
Restricted Subsidiaries' assets or adopt a plan of liquidation. Such limitations
are subject to a number of important qualifications and exceptions. Pursuant to
Section 4.06 of the Indenture, the Company must annually report to the Trustee
on compliance with such limitations.
(14) Subordination. The Notes are subordinated in right of payment,
in the manner and to the extent set forth in the Indenture, to the prior payment
in full in cash or Cash Equivalents of all Obligations on Senior Debt of the
Company, whether outstanding on the date of the Indenture or thereafter created,
incurred, assumed or guaranteed. Each Holder by its acceptance hereof agrees to
be bound by such provisions and authorizes and expressly directs the Trustee, on
its behalf, to take such action as may be necessary or appropriate to effectuate
the subordination provided for in the Indenture and appoints the Trustee its
attorney-in-fact for such purposes.
(15) Successors. When a successor assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor, subject to certain exceptions, will be released from
those obligations.
(16) Defaults and Remedies. Except as set forth in the Indenture, if
an Event of Default occurs and is continuing, the Trustee or the Holders of not
less than 25% in principal amount of Notes then outstanding may declare all the
Notes to be due and payable in the manner, at the time and with the effect
provided in the Indenture. Holders of Notes may not en-
B - 6
170
force the Indenture or the Notes except as provided in the Indenture. The
Trustee is not obligated to enforce the Indenture or the Notes unless it has
received indemnity reasonably satisfactory to it. The Indenture permits, subject
to certain limitations therein provided, Holders of a majority in aggregate
principal amount of the Notes then outstanding to direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of Notes
notice of any continuing Default or Event of Default (except a Default in
payment of principal or interest when due, including defaults in payments to be
made pursuant to a Change of Control Offer or Net Proceeds Offer, for any reason
or a Default in compliance with Article Five of the Indenture) if it determines
that withholding notice is in their interest.
(17) Trustee Dealings with Company. The Trustee under the Indenture,
in its individual or any other capacity, may become the owner or pledgee of
Notes and may otherwise deal with the Company, its Subsidiaries or their
respective Affiliates as if it were not the Trustee.
(18) No Recourse Against Others. No partner, director, officer,
employee or stockholder, as such, of the Company or any Guarantor, as such,
shall have any liability for any obligations of the Company or any Guarantor
under the Notes, the Indenture, the Guarantees or the Registration Rights
Agreement or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Notes by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
(19) Guarantees. This Note will be entitled to the benefits of
certain Guarantees, if any, made for the benefit of the Holders. Reference is
hereby made to the Indenture for a statement of the respective rights,
limitations of rights, duties and obligations thereunder of the Guarantors, the
Trustee and the Holders.
(20) Authentication. This Note shall not be valid until the Trustee
or Authenticating Agent manually signs the certificate of authentication on this
Note.
(21) Governing Law. This Note and the Indenture shall be governed by
and construed in accordance with the laws of the State of New York, as applied
to contracts made and performed within the State of New York, without regard to
principles of conflict of laws. Each of the parties hereto and the Holders agree
to submit to the jurisdiction of the courts of the State of New York in any
action or proceeding arising out of or relating to this Note.
(22) Abbreviations and Defined Terms. Customary abbreviations may be
used in the name of a Holder of a Note or an assignee, such as: TEN COM (=
tenants in common), TEN ENT (=
B - 7
171
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
(23) CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes as a convenience to the Holders of the
Notes. No representation is made as to the accuracy of such numbers as printed
on the Notes and reliance may be placed only on the other identification numbers
printed hereon.
The Company will furnish to any Holder of a Note upon written
request and without charge a copy of the Indenture, which has the text of this
Note. Requests may be made to: KINETIC CONCEPTS, INC., 0000 Xxxxxxx Xxxxx, Xxx
Xxxxxxx, Xxxxx 00000.
B - 8
172
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below
and have your signature guaranteed:
I or we assign and transfer this Note to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint _______________________________________, agent to
transfer this Note on the books of the Company. The agent may substitute another
to act for him.
Dated: _____________________ Signed:___________________________________________
(Sign exactly as your name appears
on the other side of this Note)
Signature Guarantee:____________________________________________________________
Signature must be guaranteed by an "eligible guarantor institution,"
that is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include membership
or participation in the Securities Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
B - 9
173
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.15 or Section 4.16 of the Indenture, check the appropriate
box:
Section 4.15 [ ]
Section 4.16 [ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.15 or Section 4.16 of the Indenture, state the
amount you elect to have purchased:
$___________________
Dated: _________________ ________________________________________________
NOTICE: The signature on this assignment must
correspond with the name as it appears upon the
face of the within Note in every particular
without alteration or enlargement or any change
whatsoever and be guaranteed.
Signature Guarantee: ___________________________________
B - 10
174
EXHIBIT C
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY, OR BY ANY SUCH NOMINEE OF THE
DEPOSITORY, OR BY THE DEPOSITORY OR NOMINEE OF SUCH SUCCESSOR DEPOSITORY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.17 OF THE INDENTURE.
C - 1
175
EXHIBIT D
Form of Certificate To Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
__________ __, ____
Marine Midland Bank, as Registrar
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Corporate Trust Department - KCI
Ladies and Gentlemen:
In connection with our proposed purchase of 9 5/8% Senior
Subordinated Notes due 2007 (the "Notes") of KINETIC CONCEPTS, INC. (the
"Company"), we confirm that:
1. We understand that any subsequent transfer of the Notes is
subject to certain restrictions and conditions set forth in the Indenture
relating to the Notes (the "Indenture") and the undersigned agrees to be
bound by, and not to resell, pledge or otherwise transfer the Notes except
in compliance with, such restrictions and conditions and the Securities
Act of 1933, as amended (the "Securities Act"), and all applicable State
securities laws.
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act or any other applicable securities
law, and that the Notes may not be offered or sold within the United
States or to, or for the account or benefit of, U.S. persons except as
permitted in the following sentence. We agree, on our own behalf and on
behalf of any accounts for which we are acting as hereinafter stated, that
if we should sell any Notes, we will do so only (i) to the Company or any
subsidiary thereof, (ii) inside the United States in accordance with Rule
144A under the Securities Act to a person who we reasonably believe is a
"qualified institutional buyer" (as defined in Rule 144A promulgated under
the Securities Act), (iii) inside the United States to an institutional
"accredited investor" (as defined below) that, prior to such transfer,
furnishes (or has furnished on its behalf by a U.S. broker-dealer) to the
Trustee (as defined in the Indenture) a signed letter containing certain
representations and agreements relating to the restrictions
D - 1
176
on transfer of the Notes (the form of which letter can be obtained from
the Trustee), (iv) outside the United States in accordance with Rule 904
of Regulation S promulgated under the Securities Act, (v) pursuant to the
exemption from registration provided by Rule 144 under the Securities Act
(if available), or (vi) pursuant to an effective registration statement
under the Securities Act, and we further agree to provide to any person
purchasing any of the Notes from us a notice advising such purchaser that
resales of the Notes are restricted as stated herein.
3. We understand that, on any proposed resale of any Notes, we will
be required to furnish to the Trustee, the Company such certification,
legal opinions and other information as the Trustee and the Company may
reasonably require to confirm that the proposed sale complies with the
foregoing restrictions. We further understand that the Notes purchased by
us will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of our investment in the
Notes, and we and any accounts for which we are acting are each able to
bear the economic risk of our or their investment, as the case may be.
5. We are acquiring the Notes purchased by us for our account or for
one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
6. We acknowledge that we have had access to such financial and
other information, have been afforded the opportunity to ask such
questions of representatives of the Company and receive answers thereto as
we deem necessary in connection with our decision to purchase the Notes
and we have reviewed the "Transfer Restrictions" section from the
Company's Final Offering Memorandum dated October 29, 1997.
D - 2
177
You, the Company, the Trustee, the Initial Purchasers and others are
entitled to rely upon this letter and are irrevocably authorized to produce this
letter or a copy hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By:_______________________________________
Name:
Title:
D - 3
178
EXHIBIT E
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
__________ __, ____
Marine Midland Bank, as Registrar
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Corporate Trust Department - KCI
Re: KINETIC CONCEPTS, INC. (the "Company")
9 5/8% Senior Subordinated Notes due 2007
(the "Notes")
Ladies and Gentlemen:
In connection with our proposed sale of $__________ aggregate
principal amount of the Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the U.S. Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United
States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
prearranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Notes.
E - 1
179
You, the Company and counsel for the Company are entitled to rely
upon this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferee]
By: _____________________________________
Authorized Signature
E - 2
180
EXHIBIT F
GUARANTEE
For value received, the undersigned hereby unconditionally
guarantees, as principal obligor and not only as a surety, to the Holder of this
Note the cash payments in United States dollars of principal of, premium, if
any, and interest on this Note (and including Additional Interest payable
thereon) in the amounts and at the times when due and interest on the overdue
principal, premium, if any, and interest, if any, of this Note, if lawful, and
the payment or performance of all other obligations of the Company under the
Indenture or the Notes, to the Holder of this Note and the Trustee, all in
accordance with and subject to the terms and limitations of this Note, Articles
Twelve and Thirteen of the Indenture and this Guarantee. This Guarantee will
become effective in accordance with Article Twelve of the Indenture and its
terms shall be evidenced therein. The validity and enforceability of any
Guarantee shall not be affected by the fact that it is not affixed to any
particular Note.
Capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Indenture dated as of November 5, 1997, among
Kinetic Concepts, Inc., a Texas corporation, the Guarantors named therein and
Marine Midland Bank, as trustee (the "Trustee"), as amended or supplemented (the
"Indenture").
The obligations of the undersigned to the Holders of Notes and to
the Trustee pursuant to this Guarantee and the Indenture are expressly set forth
in Article Twelve and Thirteen of the Indenture and reference is hereby made to
the Indenture for the precise terms of the Guarantee and all of the other
provisions of the Indenture to which this Guarantee relates.
THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF
CONFLICTS OF LAW. Each Guarantor hereby agrees to submit to the jurisdiction of
the courts of the State of New York in any action or proceeding arising out of
or relating to this Guarantee.
This Guarantee is subject to release upon the terms set forth in the
Indenture.
F - 1
181
IN WITNESS WHEREOF, each Guarantor has caused its Guarantee to be
duly executed.
Date: ____________________
[NAME OF GUARANTOR],
as Guarantor
By: ____________________________________
Name:
Title:
By: ____________________________________
Name:
Title:
F - 2
182
EXHIBIT G
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: 9 5/8% Senior Notes due 2007, Series A,
and 9 5/8% Senior Notes due 2007, Series B
(the "Notes"), of Kinetic Concepts, Inc.
This Certificate relates to $________ principal amount of Notes held
in the form of *_________ a beneficial interest in a Global Note or *_________
Physical Notes by ___________ (the "Transferor").
The Transferor:*
[ ] has requested by written order that the Registrar deliver in
exchange for its beneficial interest in the Global Note held by the Depositary a
Physical Note or Physical Notes in definitive, registered form of authorized
denominations and an aggregate number equal to its beneficial interest in such
Global Note (or the portion thereof indicated above); or
[ ] has requested by written order that the Registrar exchange or
register the transfer of a Physical Note or Physical Notes.
In connection with such request and in respect of each such Note,
the Transferor does hereby certify that the Transferor is familiar with the
Indenture relating to the above-captioned Notes and the restrictions on
transfers thereof as provided in Section 2.17 of such Indenture, and that the
transfer of this Note does not require registration under the Securities Act of
1933, as amended (the "Act"), because*:
[ ] Such Note is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 2.17(a)(II)(A) or Section
2.17(d)(i)(A) of the Indenture).
[ ] Such Note is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Act), in reliance on Rule 144A.
[ ] Such Note is being transferred to an institutional "accredited
investor" (within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule
501 under the Act).
G - 1
183
[ ] Such Note is being transferred in reliance on Regulation S under
the Act.
[ ] Such Note is being transferred in reliance on Rule 144 under the
Act.
Such Note is being transferred in reliance on and in
compliance with an exemption from the registration requirements of the Act other
than Rule 144A or Rule 144 or Regulation S under the Act to a person other than
an institutional "accredited investor."
___________________________
[INSERT NAME OF TRANSFEROR]
By: ______________________
[Authorized Signatory]
Date: ___________________
*Check applicable box.
G - 2
