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XXX XXXX XXXXXXX XX XXXXXXX, INC., as Issuer
THE GUARANTORS NAMED HEREIN
and
UNITED STATES TRUST COMPANY OF NEW YORK, as Trustee
_______________
$100,000,000
9 1/8% Senior Subordinated Notes due 2008
$50,000,000
Floating Interest Rate Subordinated Term Securities
("FIRSTS")sm(a) due 2008
_______________
INDENTURE
Dated as of April 24, 1998
_______________
================================================================================
_________________________
(a) FIRSTS is a service xxxx of BT Alex. Xxxxx Incorporated
CROSS-REFERENCE
TABLE
TIA . . . . . . . . . . . . . . . . . Indenture
Section . . . . . . . . . . . . . . . . Section
-------- ----------
310 (a)(1). . . . . . . . . . . . . . . . . 7.10
(a)(2). . . . . . . . . . . . . . . . 7.10
(a)(3). . . . . . . . . . . . . . . . . N.A.
(a)(4). . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . 7.8; 7.10
(c) . . . . . . . . . . . . . . . . . N.A.
311 (a). . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . N.A.
312 (a). . . . . . . . . . . . . . . . . . 2.5
(b) . . . . . . . . . . . . . . . . . 13.3
(c) . . . . . . . . . . . . . . . . . 13.3
313 (a). . . . . . . . . . . . . . . . . 7.6
(b)(1). . . . . . . . . . . . . . . . . N.A.
(b)(2). . . . . . . . . . . . . . 7.6
(c) . . . . . . . . . . . . . . . 7.6
(d) . . . . . . . . . . . . . . . 7.6
314 (a). . . . . . . . . . . . . . . . 4.18; 4.19;
.. . . . . . . . . . . . . . . . . . . .. . . 13.2
(b) . . . . . . . . . . . . . . . . . N.A.
(c)(1). . . . . . . . . . . . . . . . 13.4
(c)(2). . . . . . . . . . . . . . . . 13.4
(c)(3). . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . N.A.
(e) . . . . . . . . . . . . . . . . . 13.5
(f) . . . . . . . . . . . . . . . . . 4.19
315 (a). . . . . . . . . . . . . . . . . 7.1
(b) . . . . . . . . . . . . . . . . 7.5; 13.2
(c) . . . . . . . . . . . . . . . . . 7.1
(d) . . . . . . . . . . . . . . . . . 7.1
(e) . . . . . . . . . . . . . . . . . 6.11
316 (a)(last)(sentence) . . . . . . . . . . 13.6
(a)(1)(A) . . . . . . . . . . . . . . 6.5
(a)(1)(B) . . . . . . . . . . . . . . 6.4
(a)(2). . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . 6.7
317 (a)(1). . . . . . . . . . . . . . . . . 6.8
(a)(2). . . . . . . . . . . . . . . . 6.9
(b) . . . . . . . . . . . . . . . . . 2.4
318 (a). . . . . . . . . . . . . . . . . . 13.1
____________
N.A. means Not Applicable
Note: This Cross-Reference Table shall
not, for any purpose, be deemed
to be part of the Indenture.
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Page
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SECTION 1.1.. . . . . . . . . . . . . . . Definitions 1
SECTION 1.2.. . . . . . . . . . . . . . . Other Definitions 32
SECTION 1.3.. . . . . . . . . . . . . . . Incorporation by Reference of Trust
Indenture Act. . . . . . . . . . . . 33
SECTION 1.4.. . . . . . . . . . . . . . . Rules of Construction 33
ARTICLE II
THE NOTES
SECTION 2.1.. . . . . . . . . . . . . . . Form and Dating 34
SECTION 2.2.. . . . . . . . . . . . . . . Execution and Authentication; Aggregate
Principal Amount. . . . . . . . . . . . 35
SECTION 2.3.. . . . . . . . . . . . . . . Registrar and Paying Agent 36
SECTION 2.4.. . . . . . . . . . . . . . . Paying Agent To Hold Assets in Trust 37
SECTION 2.5.. . . . . . . . . . . . . . . Noteholder Lists 37
SECTION 2.6.. . . . . . . . . . . . . . . Transfer and Exchange 38
SECTION 2.7.. . . . . . . . . . . . . . . Replacement Notes 38
SECTION 2.8.. . . . . . . . . . . . . . . Outstanding Notes 39
SECTION 2.9.. . . . . . . . . . . . . . . Treasury Notes 39
SECTION 2.10. . . . . . . . . . . . . . . Temporary Notes 40
SECTION 2.11. . . . . . . . . . . . . . . Cancellation 40
SECTION 2.12. . . . . . . . . . . . . . . Defaulted Interest 41
SECTION 2.13. . . . . . . . . . . . . . . CUSIP Numbers 41
SECTION 2.14. . . . . . . . . . . . . . . Deposit of Moneys 41
SECTION 2.15. . . . . . . . . . . . . . . Restrictive Legends 42
SECTION 2.16. . . . . . . . . . . . . . . Book-Entry Provisions for Global Notes 44
SECTION 2.17. . . . . . . . . . . . . . . Special Transfer Provisions 45
ARTICLE III
REDEMPTION
SECTION 3.1.. . . . . . . . . . . . . . . Notices to Trustee 50
SECTION 3.2.. . . . . . . . . . . . . . . Selection of Notes To Be Redeemed 50
SECTION 3.3.. . . . . . . . . . . . . . . Notice of Redemption 50
SECTION 3.4.. . . . . . . . . . . . . . . Effect of Notice of Redemption 52
SECTION 3.5.. . . . . . . . . . . . . . . Deposit of Redemption Price 52
SECTION 3.6.. . . . . . . . . . . . . . . Notes Redeemed in Part 52
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ARTICLE IV
COVENANTS
Page
----
SECTION 4.1.. . . . . . . . . . . . . . . Payment of Notes 53
SECTION 4.2.. . . . . . . . . . . . . . . Limitation on Liens 53
SECTION 4.3.. . . . . . . . . . . . . . . Limitation on Incurrence of Additional
Indebtedness. . . . 54
SECTION 4.4.. . . . . . . . . . . . . . . Limitation on Restricted Payments 54
SECTION 4.5.. . . . . . . . . . . . . . . Limitation on Dividend and Other Payment
Restrictions Affecting Subsidiaries . 57
SECTION 4.6.. . . . . . . . . . . . . . . Limitation on Asset Sales 58
SECTION 4.7.. . . . . . . . . . . . . . . Limitation on Transactions with
Affiliates. 63
SECTION 4.8.. . . . . . . . . . . . . . . Change of Control 65
SECTION 4.9.. . . . . . . . . . . . . . . Prohibition on Incurrence of Senior
Subordinated Debt . 68
SECTION 4.10. . . . . . . . . . . . . . . Limitation on Preferred Stock of
Restricted Subsidiaries 68
SECTION 4.11. . . . . . . . . . . . . . . Additional Guarantors 68
SECTION 4.12. . . . . . . . . . . . . . . Conduct of Business 69
SECTION 4.13. . . . . . . . . . . . . . . Maintenance of Office or Agency 69
SECTION 4.14. . . . . . . . . . . . . . . Corporate Existence 69
SECTION 4.15. . . . . . . . . . . . . . . Payment of Taxes and Other Claims 70
SECTION 4.16. . . . . . . . . . . . . . . Maintenance of Properties and Insurance 70
SECTION 4.17. . . . . . . . . . . . . . . Compliance with Laws 71
SECTION 4.18. . . . . . . . . . . . . . . Additional Information 71
SECTION 4.19. . . . . . . . . . . . . . . Compliance Certificate; Notice of
Default . 72
SECTION 4.20. . . . . . . . . . . . . . . Waiver of Stay, Extension or Usury Laws 73
SECTION 4.21. . . . . . . . . . . . . . . Further Instruments and Acts 73
ARTICLE V
SUCCESSOR COMPANY
SECTION 5.1.. . . . . . . . . . . . . . . Merger, Consolidation and Sale of
Assets. 73
SECTION 5.2.. . . . . . . . . . . . . . . Successor Corporation Substituted 75
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.1.. . . . . . . . . . . . . . . Events of Default 76
SECTION 6.2.. . . . . . . . . . . . . . . Acceleration 78
SECTION 6.3.. . . . . . . . . . . . . . . Other Remedies 79
SECTION 6.4.. . . . . . . . . . . . . . . Waiver of Past Defaults 79
SECTION 6.5.. . . . . . . . . . . . . . . Control by Majority 80
SECTION 6.6.. . . . . . . . . . . . . . . Limitation on Suits 80
-ii-
Page
----
SECTION 6.7.. . . . . . . . . . . . . . . Rights of Holders To Receive Payment 81
SECTION 6.8.. . . . . . . . . . . . . . . Collection Suit by Trustee 81
SECTION 6.9.. . . . . . . . . . . . . . . Trustee May File Proofs of Claim 81
SECTION 6.10. . . . . . . . . . . . . . . Priorities 82
SECTION 6.11. . . . . . . . . . . . . . . Undertaking for Costs 82
SECTION 6.12. . . . . . . . . . . . . . . Restoration of Rights and Remedies 83
ARTICLE VII
TRUSTEE
SECTION 7.1.. . . . . . . . . . . . . . . Duties of Trustee 83
SECTION 7.2.. . . . . . . . . . . . . . . Rights of Trustee 84
SECTION 7.3.. . . . . . . . . . . . . . . Individual Rights of Trustee 85
SECTION 7.4.. . . . . . . . . . . . . . . Trustee's Disclaimer 86
SECTION 7.5.. . . . . . . . . . . . . . . Notice of Defaults 86
SECTION 7.6.. . . . . . . . . . . . . . . Reports by Trustee to Holders 86
SECTION 7.7.. . . . . . . . . . . . . . . Compensation and Indemnity 87
SECTION 7.8.. . . . . . . . . . . . . . . Replacement of Trustee 88
SECTION 7.9.. . . . . . . . . . . . . . . Successor Trustee by Merger 89
SECTION 7.10. . . . . . . . . . . . . . . Eligibility; Disqualification 89
SECTION 7.11. . . . . . . . . . . . . . . Preferential Collection of Claims
Against Company 90
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.1.. . . . . . . . . . . . . . . Discharge of Liability on Notes 90
SECTION 8.2.. . . . . . . . . . . . . . . Legal Defeasance and Covenant
Defeasance 92
SECTION 8.3.. . . . . . . . . . . . . . . Conditions to Defeasance 93
SECTION 8.4.. . . . . . . . . . . . . . . Application of Trust Money 95
SECTION 8.5.. . . . . . . . . . . . . . . Repayment to Company 96
SECTION 8.6.. . . . . . . . . . . . . . . Reinstatement 96
ARTICLE IX
AMENDMENTS
SECTION 9.1.. . . . . . . . . . . . . . . Without Consent of Holders 97
SECTION 9.2.. . . . . . . . . . . . . . . With Consent of Holders 98
SECTION 9.3.. . . . . . . . . . . . . . . Compliance With Trust Indenture Act 100
SECTION 9.4.. . . . . . . . . . . . . . . Revocation and Effect of Consents and
Waivers 100
SECTION 9.5.. . . . . . . . . . . . . . . Notation on or Exchange of Notes 100
SECTION 9.6.. . . . . . . . . . . . . . . Trustee To Sign Amendments 101
-iii-
ARTICLE X
SUBORDINATION
Page
----
SECTION 10.1. . . . . . . . . . . . . . . Agreement To Subordinate 101
SECTION 10.2. . . . . . . . . . . . . . . Liquidation, Dissolution, Bankruptcy 101
SECTION 10.3. . . . . . . . . . . . . . . Default on Senior Indebtedness 102
SECTION 10.4. . . . . . . . . . . . . . . Acceleration of Payment of Notes 103
SECTION 10.5. . . . . . . . . . . . . . . When Distribution Must Be Paid Over 103
SECTION 10.6. . . . . . . . . . . . . . . Subrogation 104
SECTION 10.7. . . . . . . . . . . . . . . Relative Rights 104
SECTION 10.8. . . . . . . . . . . . . . . Subordination May Not Be Impaired by
Company 104
SECTION 10.9. . . . . . . . . . . . . . . Rights of Trustee and Paying Agent 105
SECTION 10.10.. . . . . . . . . . . . . . Distribution or Notice to
Representative. 105
SECTION 10.11.. . . . . . . . . . . . . . Article X Not To Prevent Events of
Default or Limit Right to Accelerate 105
SECTION 10.12.. . . . . . . . . . . . . . Trust Moneys Not Subordinated 106
SECTION 10.13.. . . . . . . . . . . . . . Trustee Entitled To Rely 106
SECTION 10.14.. . . . . . . . . . . . . . Trustee To Effectuate Subordination 107
SECTION 10.15.. . . . . . . . . . . . . . Trustee Not Fiduciary for Holders of
Senior Indebtedness 107
SECTION 10.16.. . . . . . . . . . . . . . Reliance by Holders of Senior
Indebtedness on Subordination
Provisions 107
ARTICLE XI
GUARANTEE
SECTION 11.1. . . . . . . . . . . . . . . Unconditional Guarantee 108
SECTION 11.2. . . . . . . . . . . . . . . Subordination of Guarantee 109
SECTION 11.3. . . . . . . . . . . . . . . Severability 109
SECTION 11.4. . . . . . . . . . . . . . . Release of a Guarantor 109
SECTION 11.5. . . . . . . . . . . . . . . Limitation of Guarantor's Liability 110
SECTION 11.6. . . . . . . . . . . . . . . Contribution 110
SECTION 11.7. . . . . . . . . . . . . . . Waiver of Subrogation 111
SECTION 11.8. . . . . . . . . . . . . . . Execution of Guarantee 111
ARTICLE XII
SUBORDINATION OF GUARANTEES
SECTION 12.1. . . . . . . . . . . . . . . Agreement To Subordinate 112
SECTION 12.2. . . . . . . . . . . . . . . Liquidation, Dissolution, Bankruptcy 113
SECTION 12.3. . . . . . . . . . . . . . . Default on Guarantor Senior
Indebtedness 113
SECTION 12.4. . . . . . . . . . . . . . . When Distribution Must Be Paid Over 115
SECTION 12.5. . . . . . . . . . . . . . . Subrogation 115
-iv-
Page
----
SECTION 12.6. . . . . . . . . . . . . . . Relative Rights 115
SECTION 12.7. . . . . . . . . . . . . . . Subordination May Not Be Impaired by the
Guarantors 115
SECTION 12.8. . . . . . . . . . . . . . . Rights of Trustee and Paying Agent 116
SECTION 12.9. . . . . . . . . . . . . . . Distribution or Notice to Representative
SECTION 12.10.. . . . . . . . . . . . . . Article XII Not To Prevent Events of 117
Default or Limit Right to Accelerate 109
SECTION 12.11.. . . . . . . . . . . . . . Trust Moneys Not Subordinated 117
SECTION 12.12.. . . . . . . . . . . . . . Trustee Entitled To Rely 117
SECTION 12.13.. . . . . . . . . . . . . . Trustee To Effectuate Subordination 117
SECTION 12.14.. . . . . . . . . . . . . . Trustee Not Fiduciary for Holders of 118
Guarantor Senior Indebtedness 111
SECTION 12.15.. . . . . . . . . . . . . . Reliance by Holders of Guarantor Senior 118
Indebtedness on Subordination
Provisions. 119
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1. . . . . . . . . . . . . . . Trust Indenture Act Controls 119
SECTION 13.2. . . . . . . . . . . . . . . Notices 119
SECTION 13.3. . . . . . . . . . . . . . . Communication by Holders with Other
Holders 120
SECTION 13.4. . . . . . . . . . . . . . . Certificate and Opinion as to Conditions
Precedent 121
SECTION 13.5. . . . . . . . . . . . . . . Statements Required in Certificate or
Opinion 121
SECTION 13.6. . . . . . . . . . . . . . . Rules by Trustee, Paying Agent and
Registrar 122
SECTION 13.7. . . . . . . . . . . . . . . Legal Holidays 122
SECTION 13.8. . . . . . . . . . . . . . . GOVERNING LAW 122
SECTION 13.9. . . . . . . . . . . . . . . No Recourse Against Others 122
SECTION 13.10.. . . . . . . . . . . . . . Successors 122
SECTION 13.11.. . . . . . . . . . . . . . Multiple Originals 123
SECTION 13.12.. . . . . . . . . . . . . . Qualification of Indenture 123
SECTION 13.13.. . . . . . . . . . . . . . Table of Contents; Headings 123
SECTION 13.14.. . . . . . . . . . . . . . Severability 123
SECTION 13.15.. . . . . . . . . . . . . . Independence of Covenants 123
EXHIBITS
---------
EXHIBIT A-1 . . . . . . . . . . . . . . . FORM OF INITIAL FIXED RATE NOTE
EXHIBIT A-2 . . . . . . . . . . . . . . . FORM OF INITIAL FLOATING RATE NOTE
EXHIBIT B-1 . . . . . . . . . . . . . . . FORM OF EXCHANGE FIXED RATE NOTE
EXHIBIT B-1 . . . . . . . . . . . . . . . FORM OF EXCHANGE FLOATING RATE NOTE
EXHIBIT C . . . . . . . . . . . . . . . . FORM OF CERTIFICATE TO BE DELIVERED IN
CONNECTION WITH TRANSFERS TO NON-QIB
ACCREDITED INVESTORS
-v-
EXHIBIT D . . . . . . . . . . . . . . . . FORM OF CERTIFICATE TO BE DELIVERED IN
CONNECTION WITH TRANSFERS PURSUANT TO
REGULATION S
EXHIBIT E . . . . . . . . . . . . . . . . FORM OF GUARANTEE
-vi-
INDENTURE dated as of April 24, 1998, among EYE CARE CENTERS OF AMERICA,
INC., a Texas corporation (the "Company"), as Issuer, each of the Guarantors
-------
named herein, as Guarantors, and UNITED STATES TRUST COMPANY OF NEW YORK, a New
York corporation, as trustee (the "Trustee").
-------
The Company has duly authorized the creation of the Company's Initial 9
1/8% Senior Subordinated Notes due 2008 and the Company's Initial Floating
Interest Rate Subordinated Term Securities due 2008 and, if and when issued in
exchange for the Initial Notes (as defined below) as provided in the
Registration Rights Agreement (as hereinafter defined), the Company's Exchange 9
1/8% Senior Subordinated Notes due 2008 and the Company's Exchange Floating
Interest Rate Subordinated Term Securities due 2008. All things necessary to
make the Notes (as defined below), when duly issued and executed by the Company
and authenticated and delivered hereunder, and the Guarantees (as defined
below), when issued and executed by the Guarantors and affixed to the Notes, the
valid and binding obligations of the Company and the Guarantors, as applicable,
and to make this Indenture a valid and binding agreement of the Company and the
Guarantors have been done.
Each party hereto agrees as follows for the benefit of each other party and
for the equal and ratable benefit of the Holders of the Notes:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions.
-----------
"Acquired Indebtedness" means Indebtedness (i) of a Person or any of its
Subsidiaries existing at the time such Person becomes a Restricted Subsidiary of
the Company or (ii) assumed in connection with the acquisition of assets from
such Person, in each case whether or not incurred by such Person in connection
with, or in anticipation or contemplation of, such Person becoming a Restricted
Subsidiary of the Company or such acquisition. Acquired Indebtedness shall be
deemed to have been incurred, with respect to clause (i) of the preceding
sentence, on the date such Person becomes a Restricted Subsidiary of the Company
and, with respect to clause (ii) of the preceding sentence, on the date of
consummation of such acquisition of assets.
"Affiliate" means a Person who directly or indirectly through one or more
---------
intermediaries controls, or is controlled by, or is under common control with,
the Company. 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. Notwithstanding the foregoing, no Person (other than the Company or
any Subsidiary of the Company) in whom a Receivables Entity makes an Investment
in connection with a Qualified Receivables Transaction shall be deemed to be an
Affiliate of the Company or any of its Subsidiaries solely by reason of such
Investment.
"Agent" means any Registrar, Paying Agent or co-Registrar.
-----
"all or substantially all" shall have the meaning given such phrase in the
---------------------------
Revised Model Business Corporation Act.
"Asset Acquisition" means (a) an Investment by the Company or any Restricted
------------------
Subsidiary of the Company in any other Person pursuant to which such Person
shall become a Restricted Subsidiary of the Company or any Restricted Subsidiary
of the Company, or shall be merged with or into the Company or any Restricted
Subsidiary of the Company; or (b) the acquisition by the Company or any
Restricted Subsidiary of the Company of the assets of any Person which
constitute all or substantially all of the assets of such Person, any division
or line of business of such Person or any other properties or assets of such
Person other than in the ordinary course of business.
"Asset Sale" means any direct or indirect sale, 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) any transaction or series of related transactions
for which the Company or its Restricted Subsidiaries receive aggregate
consideration of less than $2.0 million, (ii) the sale, lease, conveyance,
disposition or other transfer of all or substantially all of the assets of the
Company as permitted under Ar- ticle V, (iii) the sale or discount, in each case
without recourse, of accounts receivable arising in the ordinary course of
business, but only in connection with the
2
compromise or collection thereof, (iv) the factoring of accounts receivable
arising in the ordinary course of business pursuant to arrangements customary in
the industry, (v) the licensing of intellectual property, (vi) disposals or
replacements of obsolete equipment in the ordinary course of business, (vii) the
sale, lease, conveyance, disposition or other transfer by the Company or any
Restricted Subsidiary of assets or property in transactions constituting
Investments that are not prohibited under Section 4.4, (viii) leases or
subleases to third persons not interfering in any material respect with the
business of the Company or any of its Restricted Subsidiaries, (ix) the sale of
properties (in one transaction or a series of related transactions) to be
acquired by the Company on or about February 1, 1999 related to the Company's
acquisition of Visionworks Holdings, Inc., or the capital lease in respect of
such properties prior to the acquisition thereof, to the extent that the
consideration to be received by the Company or any of its Restricted
Subsidiaries in any such transaction or series of related transactions does not
exceed $10.0 million, (x) sales of accounts receivable and related assets of the
type specified in the definition of "Qualified Receivables Transaction" to a
Receivables Entity, or (xi) transfers of accounts receivable and related assets
of the type specified in the definition of "Qualified Receivables Transaction"
(or a fractional undivided interest therein) by a Receivables Entity in a
Qualified Receivables Transaction.
"Bank Indebtedness" means any and all amounts, whether outstanding on the Issue
------------------
Date or thereafter incurred, payable under or in respect of the New Credit
Facility and any related notes, collateral documents, letters of credit and
guarantees, including principal, premium (if any), interest (including interest
accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company at the relevant contractual rate provided
in the New Credit Facility whether or not a claim for post-filing interest is
allowed in such proceedings), fees, charges, expenses, indemnities,
reimbursement obligations, guarantees and all other amounts payable thereunder
or in respect thereof.
"Board of Directors" means, as to any Person, the board of directors of such
--------------------
Person or any duly authorized committee thereof.
"Business Day" means each day which is not a Legal Holiday.
-------------
"Calculation Agent" means the Person appointed by the Company to calculate the
------------------
interest on the Floating Rate Notes, which shall initially be the Trustee.
3
"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 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) 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 two highest ratings
obtainable from either S&P or Xxxxx'x; (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 Xxxxx'x; (iv)
certificates of deposit or bankers' acceptances (or, with respect to foreign
banks, similar instruments) maturing within one year from the date of
acquisition thereof issued by any bank organized under the laws of the United
States of America or any state thereof or the District of Columbia or any U.S.
branch of a foreign bank having at the date of acquisition thereof combined
capital and surplus of not less than $200 million; (v) certificates of deposit
or bankers' acceptances or similar instruments maturing within one year from the
date of acquisition thereof issued by any foreign bank that is a lender under
the New Credit Facility having at the date of acquisition thereof combined
capital and surplus of not less than $500 million; (vi) 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) or clause (v) above; and (vii)
investments in money market funds which invest substantially all their assets in
securities of the types described in clauses (i) through (vi) above.
"Cedel" means Cedel Bank, Socie'te' anonyme.
-----
4
"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 (other than one or more
Permitted Holders) for purposes 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 one or more Permitted Holders) shall become the owner, directly or
indirectly, beneficially or of record, of shares representing 50% or more 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 Triggering Event" means the occurrence of a Change of Control
----------------------------------
and the failure of the Notes to have a Minimum Rating on the 30th day after the
occurrence of such Change of Control.
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Company" means the party named as such in this Indenture until a successor
-------
replaces it pursuant to this Indenture and thereafter means such successor.
"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 ac- cordance with GAAP
for such period, (B) Consolidated Interest Expense, (C) Consolidated Non-cash
Charges and (D) (i) cash charges attributable to the exercise of employee
options vesting upon the consummation of the Recapitalization and (ii) for any
four quarter period that includes one or more fiscal quarters ending within the
period from the Issue Date to the first anniversary of the Issue Date, cash
restructuring or nonrecurring charges incurred in connection with the
Recapitalization; provided, however, that the cash charges in (i) and (ii) shall
not exceed $2.0 million in the aggregate since the Issue Date.
"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
5
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 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) 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, (ii) any Asset Sales or Asset Acquisitions (including, without
limitation, any Asset Acquisition giving rise to the need to make such
calculation as a result of such Person or one of its Restricted
Subsidiaries (including any Person who becomes a Restricted Subsidiary as a
result of the Asset Acquisition) incurring, assuming or otherwise being liable
for Acquired Indebtedness and also including any Consolidated EBITDA (including
pro forma adjustments for cost savings ("Cost Savings Adjustments") that the
--- ----- ------------------------
Company reasonably believes in good faith could have been achieved during the
Four Quarter Period as a result of such acquisition or disposition (provided
that both (A) such cost savings were identified and quantified in an Officers'
Certificate delivered to the Trustee at the time of the consummation of the
acquisition or disposition and (B) with respect to each acquisition or
disposition completed prior to the 90th day preceding such date of
determination, actions were commenced or initiated by the Company within 90 days
of such acquisition or disposition to effect such cost savings identified in
such Officers' Certificate and with respect to any other acquisition or
disposition, such Officers' Certificate sets forth the specific steps to be
taken within the 90 days after such acquisition or disposition to accomplish
such cost savings) attributable to the assets which are the subject of the Asset
Acquisition or Asset Sale during the Four Quarter Period) occurring during the
Four Quarter Period or at any time subsequent to the last day of the Four
Quarter Period and on or prior to the Transaction Date, as if such Asset Sale or
Asset Acquisition (including the incurrence, assumption or liability for any
such Indebtedness or Acquired Indebtedness) occurred on the first day of the
Four Quarter Period, and (iii) with respect to any such Four Quarter Period
commencing prior to the Recapitalization, the Recapitalization (including any
Cost Savings Adjustments), which shall be deemed to have taken place on the
first day of such Four Quarter Period, and
6
(iv) any asset sales or asset acquisitions (including any Consolidated EBITDA
(including any Cost Savings Adjustments) attributable to the assets which are
the subject of the asset acquisition or asset sale during the Four Quarter
Period) that have been made by any Person that has become a Restricted
Subsidiary of the Company or has been merged with or into the Company or any
Restricted Subsidiary of the Company 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 that would have constituted Asset Sales or Asset
Acquisitions had such transactions occurred when such Person was a Restricted
Subsidiary of the Company or subsequent to such Person's merger into the
Company, as if such asset sale or asset acquisition (including the incurrence,
assumption or liability for any Indebtedness or Acquired Indebtedness in
connection therewith) occurred on the first day of the Four Quarter Period;
provided that to the extent that clause (ii) or (iv) of this sentence requires
that pro forma effect be given to an asset sale or asset acquisition, such pro
forma calculation shall be based upon the four full fiscal quarters, immediately
preceding the Transaction Date of the Person, or division or line of business of
the Person, that is acquired or disposed of for which financial information is
available. 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 (excluding
amortization or
7
write-off of debt issuance costs relating to the Recapitalization and the
financing therefor or relating to retired or existing Indebtedness and
amortization or write-off of customary debt issuance costs relating to future
Indebtedness incurred in the ordinary course of business) 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) times (y) a
fraction, the numerator of which is one and the denominator of which is one
minus the then current effective consolidated Federal, state 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 all cash and
non-cash interest expense with respect to all outstanding Indebtedness of such
Person and its Restricted Subsidiaries, including the net costs associated with
Interest Swap Obligations, for such period determined on a consolidated basis in
conformity with GAAP, 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" of the Company means, for any period, the aggregate
-------------------------
net income (or loss) of the Company and its Restricted Subsidiaries for such
period on a consolidated basis, determined in accordance with GAAP; provided
that there shall be excluded therefrom (a) gains and losses from Asset Sales
(without regard to the $2.0 million limitation set forth in the definition
thereof) or abandonments or reserves relating thereto and the related tax
effects according to GAAP, (b) gains and losses due solely to fluctuations in
currency values and related tax effects according to GAAP, (c) items classified
as extraordinary, unusual or nonrecurring gains and losses, and the related tax
effects according to GAAP, (d) the net income (or loss) of any Person acquired
in a pooling of interests transaction accrued prior to the date it becomes a
Restricted Subsidiary of the Company or is merged or consolidated with the
Company or any Restricted Subsidiary of the Company, (e) the net income of any
Restricted Subsidiary of the Company to the extent that the declaration of
dividends or similar distributions by that Restricted Subsidiary of that income
is restricted by contract, operation of law or otherwise, (f) the net loss of
any Person other than a Restricted Subsidiary of the Company, (g) the net income
of any Person, other than a Restricted Subsidiary, except to the extent of cash
dividends or distributions paid to the Company or a Restricted Subsidiary of the
Company by such Person unless (and to the extent), in the case of a Restricted
Subsidiary of the Company who
8
receives such dividends or distributions, such Restricted Subsidiary is subject
to clause (e) above, (h) one time non-cash compensation charges, including any
arising from existing stock options resulting from the Recapitalization, and (i)
bonus payments to be paid to senior management of the Company in connection with
the Recapitalization within 90 days of the Issue Date in an aggregate amount not
to exceed $1.0 million. Notwithstanding the foregoing, it is understood that the
payment of dividends on Preferred Stock shall not reduce Consolidated Net
Income.
"Consolidated Non-cash Charges" means, with respect to any Person for any
-------------------------------
period, the aggregate depreciation, amortization and other non-cash expenses of
such Person and its Restricted Subsidiaries reducing Consolidated Net Income of
such Person and its Restricted Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP (excluding any such charges which
require an accrual of or a reserve for cash charges for any future period).
"Continuing Directors" means, as of any 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 Issue Date, (ii) was nominated for election or elected to such
Board of Directors with, or whose election to such Board of Directors was
approved by, the affirmative vote of a majority of the Continuing Directors who
were members of such Board of Directors at the time of such nomination or
election or (iii) is any designee of a Permitted Holder or was nominated by a
Permitted Holder or any designees of a Permitted Holder on the Board of
Directors.
"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.
"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 their
----------
respective successors and assigns, or such other depository institution
hereinafter appointed by the Company.
"Designated Guarantor Senior Indebtedness" means, with respect to any Guarantor,
----------------------------------------
(i) Bank Indebtedness and (ii) any other Guarantor Senior Indebtedness which, at
the date of determination, has an aggregate principal amount outstanding of, or
under which, at the date of determination, the holders thereof are committed to
lend up to, at least
9
$25.0 million and is specifically designated by such Guarantor in the instrument
evidencing or governing such Guarantor Senior Indebtedness or another writing as
"Designated Guarantor Senior Indebtedness" for purposes of this Indenture.
"Designated Senior Indebtedness" means (i) Bank Indebtedness and (ii) any other
-------------------------------
Senior Indebtedness which, at the date of determination, has an aggregate
principal amount outstanding of, or under which, at the date of determination,
the holders thereof, are committed to lend up to, at least $25.0 million and is
specifically designated by the Company in the instrument evidencing or governing
such Senior Indebtedness or another writing as "Designated Senior Indebtedness"
for purposes of this Indenture.
"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 (other than an
event which would constitute a Change of Control Triggering Event), matures
(excluding any maturity as the result of an optional redemption by the issuer
thereof) or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or is redeemable at the sole option of the holder thereof (except, in
each case, upon the occurrence of a Change of Control Triggering Event) on or
prior to the final maturity date of the Notes; provided that Capital Stock of
the Company that is held by a current or former employee of the Company subject
to a put option and/or a call option with the Company triggered by the
termination of such employee's employment with the Company and/or the Company's
performance shall not be deemed to be Disqualified Capital Stock solely by
virtue of such call option and/or put option.
"Equity Offering" means a sale of Qualified Capital Stock of the Company.
----------------
"Euroclear" means Xxxxxx Guaranty Trust Company of New York, Brussels Office, as
---------
operator of the Euroclear System.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or any
-------------
successor statute or statutes thereto.
"Exchange Fixed Rate Notes" means the 9 1/8% Senior Subordinated Notes due 2008
--------------------------
(the terms of which are identical to the Initial Fixed Rate Notes except that
the Exchange Fixed Rate Notes shall be registered under the Securities Act, and
shall not contain the restrictive legend on the face of the form of the Initial
Fixed Rate Notes), to be issued in exchange for the Initial Fixed Rate Notes
pursuant to the
10
registered Exchange Offer (as defined in the Registration Rights Agreement).
"Exchange Floating Rate Notes" means the Floating Interest Rate Subordinated
-------------------------------
Term Securities due 2008 (the terms of which are identical to the Initial
Floating Rate Notes except that the Exchange Floating Rate Notes shall be
registered under the Securities Act, and shall not contain the restrictive
legend on the face of the form of the Initial Floating Rate Notes), to be issued
in exchange for the Initial Floating Rate Notes pursuant to the registered
Exchange Offer (as defined in the Registration Rights Agreement).
"Exchange Notes" means the Exchange Fixed Rate Notes and the Exchange Floating
---------------
Rate Notes.
"Exchange Offer" means the registration by the Company and the Guarantors under
---------------
the Securities Act pursuant to a registration statement of the offer by the
Company and the Guarantors to each Holder of the Initial Notes to exchange all
the Initial Notes held by such Holder for the Exchange Notes in an aggregate
principal amount equal to the aggregate principal amount of the Initial Notes
held by such Holder, all in accordance with the terms and conditions of the
Registration Rights Agreement.
"fair market value" means, unless otherwise specified, 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
resolution of the Board of Directors of the Company delivered to the Trustee.
"Fixed Rate Notes" means the Initial Fixed Rate Notes and the Exchange Fixed
------------------
Rate Notes treated as a single class of securities, as amended or supplemented
from time to time in accordance with the terms hereof, that are issued pursuant
to this Indenture.
"Floating Rate Notes" means the Initial Floating Rate Notes and the Exchange
---------------------
Floating Rate Notes treated as a single class of securities, as amended or
supplemented from time to time in accordance with the terms hereof, that are
issued pursuant to this Indenture.
"GAAP" means generally accepted accounting principles in the United States of
----
America as in effect on the Issue Date, including, without limitation, those set
forth in the opinions and pronouncements of the Accounting Principles
11
Board of the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession.
"Guarantee" means the guarantee of the Guarantors set forth in Article XI.
---------
"Guarantor" means (i) each of Enclave Advancement Group, Inc., a Texas
---------
corporation, ECCA Managed Vision Care, Inc., a Texas corporation, Visionworks
Holdings, Inc., a Florida corporation, Visionworks, Inc., a Florida corporation,
Visionworks Properties, Inc., a Florida corporation, Eye Care Holdings, Inc., a
Delaware corporation, Visionary Retail Management, Inc., a Delaware corporation,
Visionary Properties, Inc., a Delaware corporation, Visionary MSO, Inc., a
Delaware corporation, The Xxxxx Group, Inc., a Delaware corporation, Hour Eyes,
Inc., a Maryland corporation, Skylab Optical, Inc., a Virginia corporation, and
Metropolitan Vision Services, Inc., a Virginia corporation 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
Guarantee is released in accordance with the terms of this Indenture.
"Guarantor Senior Indebtedness" means with respect to any Guarantor, (i) the
-------------------------------
Bank Indebtedness and (ii) all Indebtedness of such Guarantor including interest
thereon (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to such Guarantor at the relevant
contractual rate provided in the documentation relating thereto whether or not a
claim for post-filing interest is allowed in such proceedings), whether
outstanding on the Issue Date or thereafter incurred, unless in the instrument
creating or evidencing the same or pursuant to which the same is outstanding it
is expressly provided that such obligations are not superior in right of payment
to the Guarantee of such Guarantor; provided, however, that Guarantor Senior
-------- -------
Indebtedness shall not include (1) any obligation of such Guarantor to any
Subsidiary of such Guarantor, (2) any liability for Federal, state, local or
other taxes owed or owing by such Guarantor, (3) any accounts payable or other
liability to trade creditors arising in the ordinary course of business
(including guarantees thereof or instruments evidencing such liabilities), (4)
any Indebtedness of such Guarantor which is expressly subordinate in right of
payment to any other Indebtedness of such Guarantor, including any Senior
Subordinated Indebtedness and any Subordinated Obligations, (5) any obligations
to repurchase, redeem or make
12
payments owing with respect to any Capital Stock or (6) that portion of any
Indebtedness incurred in violation of Section 4.3 (but, as to any such
obligation, no such violation shall be deemed to exist for purposes of this
clause (6) if the holder(s) of such obligation 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, 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).
"Holder" or "Noteholder" means the Person in whose name a Note is registered on
------ ----------
the Registrar's books.
"IAI Global Note" means a permanent global Note in registered form representing
----------------
the aggregate principal amount of Notes transferred to Institutional Accredited
Investors.
"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 arising in the ordinary course
of business), (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 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 but
which obligations are not assumed by such Person, the amount of such obligation
being deemed to be 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 swap agreements and interest swap agreements 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, (x) 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
13
to be determined pursuant to this Indenture, and if such price is based upon, or
measured by, the fair market value of such Disqualified Capital Stock, such fair
market value shall be determined reasonably and in good faith by the Board of
Directors of the issuer of such Disqualified Capital Stock and (y) any transfer
of accounts receivable or other assets which constitute a sale for purposes of
GAAP shall not constitute Indebtedness hereunder.
"Indenture" means this Indenture, as amended or supplemented from time to time
---------
in accordance with the terms hereof.
"Initial Fixed Rate Notes" means the 9 1/8% Senior Subordinated Notes due 2008
--------------------------
of the Company issued on the Issue Date and authenticated and delivered under
this Indenture pursuant to Section 2.2 of this Indenture.
"Initial Floating Rate Notes" means the Floating Interest Rate Subordinated Term
---------------------------
Securities due 2008 issued on the Issue Date and authenticated and delivered
under this Indenture pursuant to Section 2.2 of this Indenture.
"Initial Notes" means the Initial Fixed Rate Notes and the Initial Floating Rate
-------------
Notes.
"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.
"interest" means, with respect to the Notes, the sum of any interest and
--------
Additional Interest (as defined in Section 4(a) of the Registration Rights
Agreement) on the Notes.
"Interest Payment Date" means the semiannual interest payment date on May 1 and
----------------------
November 1 of each year, commencing November 1, 1998.
"Interest Record Date" for the interest payable on any Interest Payment Date
----------------------
(except a date for payment of defaulted interest) means the April 15 and October
15 (whether or not a Business Day), as the case may be, immediately preceding
such Interest Payment Date.
"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
14
by such other Person calculated by applying a fixed or a floating rate of
interest on the same notional amount.
"Investment" by any Person in any other Person 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, such 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. For
the purposes of Section 4.4, (i) the Company shall be deemed to have made an
"Investment" equal to the fair market value of the net assets of any Restricted
Subsidiary at the time that such Restricted Subsidiary is designated an
Unrestricted Subsidiary and the aggregate amount of Investments made on the
Issue Date shall exclude (to the extent the designation as an Unrestricted
Subsidiary was included as a Restricted Payment) the fair market value of the
net assets of any Unrestricted Subsidiary at the time that such Unrestricted
Subsidiary is designated a Restricted Subsidiary, not to exceed the amount of
the Investment deemed made at the date of designation thereof as an Unrestricted
Subsidiary, and (ii) the amount of any Investment shall be the original cost of
such Investment plus the cost of all additional Investments by the Company or
any of its Restricted Subsidiaries, without any adjustments for increases or
decreases in value, or write-ups, writedowns or write-offs with respect to such
Investment, reduced by the payment of dividends or distributions (including tax
sharing payments) in connection with such Investment or any other amounts
received in respect of such Investment, 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 dividends or distributions or
receipt of any such amounts would be included in Consolidated Net Income. 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, the
Company no longer owns, directly or indirectly, 100% (or 80% in the case of
clause (ix) of the definition of "Permitted Investments") of the outstanding
common stock of such Restricted Subsidiary, the Company shall be deemed to have
made an Investment on the date of any such sale or disposition equal to the fair
market value of the common stock of such Restricted Subsidiary not sold or
disposed of.
15
"Issue Date" means the date of original issuance of the Initial Notes.
-----------
16
"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).
"Maturity Date" means May 1, 2008.
--------------
"Minimum Rating" means (i) a rating of at least BBB- (or equivalent successor
---------------
rating) by S&P and (ii) a rating of at least Baa3 (or equivalent successor
rating) by Moody's.
"Moody's" means Xxxxx'x Investors Service, Inc. and its successors.
-------
"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) 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 Senior Indebtedness that is required
to be repaid in connection with such Asset Sale and (d) any portion of cash
proceeds which the Company determines in good faith should be reserved for
post-closing adjustments, it being understood and agreed that on the day that
all such postclosing adjustments have been determined, the amount (if any) by
which the reserved amount in respect of such Asset Sale exceeds the actual
post-closing adjustments payable by the Company or any of its Subsidiaries shall
constitute Net Cash Proceeds on such date; provided that, in the case of the
sale by the Company of an asset constituting an Investment made after the Issue
Date (other than a Permitted Investment), the "Net Cash Proceeds" in respect of
such Asset Sale shall not include the lesser of (x) the cash received with
respect to such Asset Sale and (y) the initial amount of such Investment, less,
in the case of clause (y), all amounts (up to an amount not to exceed the
initial amount of such Investment) received by the Company with respect to such
Investment, whether by dividend, sale, liquidation or repayment, in each case
prior to the date of such Asset Sale.
"New Credit Facility" means (i) the credit agreement to be dated as of April 23,
-------------------
1998, among the Company, the
17
lenders party thereto from time to time and Bankers Trust Company, as
administrative agent, and Xxxxxxx Xxxxx Capital Corporation, as syndication
agent, and (ii) the guarantee by the Company of the Xxxx Loan, in each case
together with the related documents thereto (including, without limitation, any
guarantee agreements, promissory notes and collateral documents), as such
agreements may be amended, supplemented or otherwise modified from time to time,
or refunded, refinanced, restructured, replaced, renewed, repaid or extended
from time to time (whether in whole or in part and whether with the original
agents and lenders or other agents and lenders or otherwise, and whether
provided under the original New Credit Facility or one or more other credit
agreements or otherwise) including, without limitation, to increase the amount
of available borrowings thereunder or to add Restricted Subsidiaries as
additional borrowers or guarantors or otherwise.
"Non-U.S. Person" has the meaning assigned to such term in Regulation S.
----------------
"Notes" means the Initial Notes and the Exchange Notes treated as a single class
-----
of securities, as amended or supplemented from time to time in accordance with
the terms hereof, that are issued pursuant to this Indenture.
"Obligations" means all obligations for principal, premium, interest, penalties,
-----------
fees, indemnifications, reimbursements, damages and other liabilities payable
under the documentation governing any Indebtedness, without duplication.
"Offering Memorandum" means the Offering Memorandum dated April 17, 1998
--------------------
relating to the Initial Notes, and any supplement thereto; provided that after
the issuance of Exchange Notes, all references herein to "Offering Memorandum"
shall be deemed references to the prospectus relating to the Exchange Notes.
"Officer" means the Chairman of the Board, the President, any Vice President,
-------
the Treasurer or the Secretary or any Assistant Secretary of the Company or any
Guarantor, as applicable.
"Officers' Certificate" means a certificate signed by two Officers and otherwise
---------------------
complying with the requirements
18
of Sections 13.4 and 13.5, as they relate to the making of an Officers'
Certificate. One of the Officers signing an Officer's
of Sections 13.4 and 13.5, as they relate to the making of an Officers'
Certificate. One of the Officers signing an Officer's Certificate shall be the
principal executive, financial or accounting officer of the Company.
"144A Global Note" means a permanent global Note in registered form representing
----------------
the aggregate principal amount of Notes sold in reliance on Rule 144A under the
Securities Act.
"Opinion of Counsel" means a written opinion from legal counsel who is
--------------------
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Permitted Holder" means and includes (i) the Principal or any of its
-----------------
Affiliates, (ii) any corporation the outstanding voting power of the capital
stock of which is beneficially owned, directly or indirectly, by the Principal
or any of its Affiliates in substantially the same proportions as their
ownership of the voting power of the capital stock of the Company, or (iii) any
underwriter during the period engaged in a firm commitment underwriting on
behalf of the Company with respect to the shares of capital stock being
underwritten.
"Permitted Indebtedness" means, without duplication, (i) the Notes and the
-----------------------
Guarantees, (ii) Indebtedness incurred pursuant to the New Credit Facility in an
aggregate outstanding principal amount at any time not to exceed the maximum
aggregate amount of the commitments in effect on the Issue Date and permitted in
the future pursuant to the New Credit Facility as in effect on the Issue Date
(without giving effect to any reductions of term loan commitments on the Issue
Date), plus $1.0 million in connection with the guarantee by the Company of the
Xxxx Loan (A) less the amount of all mandatory principal payments actually made
in respect of the Term Loan Facility (excluding any such repayment to the extent
refinanced and replaced at the time of payment) and (B) reduced by any required
permanent repayments actually made (which are accompanied by a corresponding
permanent commitment reduction) in respect of the Revolving Credit Facility
(excluding any such repayment and commitment reductions to the extent refinanced
and replaced at the time of payment) in each case pursuant to this clause (B)
actually effected in satisfaction of the Net Cash Proceeds requirement in
Section 4.6 (it being recognized that a reduction in any borrowing base
thereunder in and of itself shall not be deemed a required permanent repayment),
(iii) other Indebtedness of the Company and its Restricted Subsidiaries
outstanding on the Issue Date reduced by the amount of any scheduled
amortization payments or mandatory prepayments when actually paid or permanent
reductions thereon, (iv) Interest Swap Obligations of the Company or any of its
Restricted Subsidiaries covering
19
Indebtedness of the Company or any of its Restricted Subsidiaries; provided that
any Indebtedness to which any such Interest Swap Obligations correspond is
otherwise permitted to be incurred under this Indenture; provided, further, that
such Interest Swap Obligations are entered into, in the judgment of the Company,
to protect the Company and its Restricted Subsidiaries from fluctuation in
interest rates on their respective outstanding Indebtedness, (v) Indebtedness of
the Company or any of its Restricted Subsidiaries under Currency Agreements
entered into, in the judgment of the Company, to protect the Company or such
Restricted Subsidiary from foreign currency exchange rates, (vi) intercompany
Indebtedness owed by any Restricted Subsidiary of the Company to the Company or
any Restricted Subsidiary of the Company or by the Company to any Restricted
Subsidiary, (vii) Acquired Indebtedness of the Company or any Restricted
Subsidiary of the Company to the extent the Company could have incurred such
Indebtedness in accordance with Section 4.3 (without giving effect to the
exception for Permitted Indebtedness) on the date such Indebtedness became
Acquired Indebtedness; provided that, in the case of Acquired Indebtedness of a
Restricted Subsidiary of the Company, such Acquired Indebtedness was not
incurred in connection with, or in anticipation or contemplation of, such Person
becoming a Restricted Subsidiary of the Company, (viii) Indebtedness arising
from the honoring by a bank or other financial institution of a check, draft or
other similar instrument inadvertently drawn against insufficient funds in the
ordinary course of business; provided that such Indebtedness is extinguished
within five business days of its incurrence, (ix) any refinancing, modification,
replacement, renewal, restatement, refunding, deferral, extension, substitution,
supplement, reissuance or resale of existing or future Indebtedness, including
any additional Indebtedness incurred to pay interest or premiums required by the
instruments governing such existing or future Indebtedness as in effect at the
time of issuance thereof ("Required Premiums") and fees in connection therewith;
provided that any such event shall not (1) result in an increase in the
aggregate principal amount of Permitted Indebtedness (except to the extent such
increase is a result of a simultaneous incurrence of additional Indebtedness (A)
to pay Required Premiums and related fees or (B) otherwise permitted to be
incurred under this Indenture) of the Company and its Restricted Subsidiaries
and (2) create Indebtedness with a Weighted Average Life to Maturity at the time
such Indebtedness is incurred that is less than the Weighted Average Life to
Maturity at such time of the Indebtedness being refinanced, modified, replaced,
renewed, restated, refunded, deferred, extended, substituted, supplemented,
reissued or resold (except that this subclause (2) will not apply in the event
the Indebtedness being refinanced, modified, replaced, renewed, restated,
refunded, deferred, extended, substituted, supplemented, reissued or resold was
20
originally incurred in reliance upon clause (vi) or (xv) of this definition);
provided that no Restricted Subsidiary of the Company may refinance any
Indebtedness pursuant to this clause (ix) other than its own Indebtedness, (x)
Indebtedness (including Capitalized Lease Obligations) incurred by the Company
or any Restricted Subsidiary to finance the purchase, lease or improvement of
property (real or personal) or equipment (whether through the direct purchase of
assets or the Capital Stock of any Person owning such assets) in an aggregate
principal amount outstanding not to exceed $10.0 million at the time of any
incurrence thereof (which amount may, but shall not be required to be incurred
pursuant to the New Credit Facility, but shall be deemed not to include any such
Indebtedness incurred in whole or in part under the New Credit Facility to the
extent permitted by clause (ii) above or clause (xvi) below or pursuant to the
proviso to Section 4.3), (xi) Indebtedness incurred by the Company or any of its
Restricted Subsidiaries constituting reimbursement obligations with respect to
letters of credit issued in the ordinary course of business, including, without
limitation, letters of credit in respect of workers' compensation claims or
self-insurance, or other Indebtedness with respect to reimbursement type
obligations regarding workers' compensation claims, (xii) Indebtedness arising
from agreements of the Company or a Restricted Subsidiary of the Company
providing for indemnification, adjustment of purchase price, earn out or other
similar obligations, in each case, incurred or assumed in connection with the
disposition of any business, assets or a Restricted Subsidiary of the Company,
other than guarantees of Indebtedness incurred by any Person acquiring all or
any portion of such business, assets or Restricted Subsidiary for the purpose of
financing such acquisition, provided that the maximum assumable liability in
respect of all such Indebtedness shall at no time exceed the gross proceeds
actually received by the Company and its Restricted Subsidiaries in connection
with such disposition, (xiii) the incurrence by a Receivables Entity of
Indebtedness in a Qualified Receivables Transaction that is not recourse to the
Company or any Restricted Subsidiary of the Company (except for Standard
Securitization Undertakings), (xiv) obligations in respect of performance and
surety bonds and completion guarantees provided by the Company or any Restricted
Subsidiary of the Company in the ordinary course of business, (xv) Indebtedness
consisting of guarantees (x) by the Company of Indebtedness, leases and any
other obligation or liability permitted to be incurred under this Indenture by
Restricted Subsidiaries of the Company, and (y) by Restricted Subsidiaries of
the Company that are Guarantors of Indebtedness, leases and any other obligation
or liability permitted to be incurred under this Indenture by the Company or
other Restricted Subsidiaries of the Company, and (xvi) additional Indebtedness
of the Company or any Restricted Subsidiary of the Company that is a Guarantor
in an aggregate
21
principal amount not to exceed $10.0 million at any one time outstanding (which
amount may, but shall not be required to, be incurred pursuant to the New Credit
Facility, but shall not be deemed to include any such Indebtedness incurred in
whole or in part under the New Credit Facility to the extent permitted by clause
(ii) or clause (x) above or pursuant to the proviso to Section 4.3).
"Permitted Investments" means (i) Investments by the Company or any Restricted
----------------------
Subsidiary of the Company in any Restricted Subsidiary of the Company (whether
existing on the Issue Date or created thereafter) and Investments in the Company
by any Restricted Subsidiary of the Company; (ii) cash and Cash Equivalents;
(iii) Investments existing on the Issue Date and Investments made on the Issue
Date pursuant to the Recapitalization Agreement; (iv) loans and advances to
employees, officers and directors of the Company and its Restricted Subsidiaries
not in excess of $3.0 million at any one time outstanding; (v) accounts
receivable owing to the Company or any Restricted Subsidiary created or acquired
in the ordinary course of business and payable or dischargeable in accordance
with customary trade terms; provided, however, that such trade terms may include
such concessionary trade terms as the Company or such Restricted Subsidiary
deems reasonable under the circumstances; (vi) Currency Agreements and Interest
Swap Obligations entered into by the Company or any of its Restricted
Subsidiaries for bona fide business reasons and not for speculative purposes,
and otherwise in compliance with this Indenture; (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) guarantees by the Company or any of its Restricted
Subsidiaries of Indebtedness otherwise permitted to be incurred by the Company
or any of its Restricted Subsidiaries under this Indenture; (ix) Investments by
the Company or any Restricted Subsidiary of the Company in a Person, if as a
result of such Investment (A) such Person becomes a Restricted Subsidiary of the
Company or (B) such Person is merged, consolidated or amalgamated with or into,
or transfers or conveys all or substantially all of its assets to, or is
liquidated into, the Company or a Restricted Subsidiary of the Company; (x)
additional Investments having an aggregate fair market value, taken together
with all other Investments made pursuant to this clause (x) that are at the time
outstanding, not exceeding $5.0 million at the time of such Investment (with the
fair market value of each Investment being measured at the time made and without
giving effect to subsequent changes in value), plus an amount equal to (A) 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 of Qualified Capital Stock of the Company (including Qualified
Capital
22
Stock issued upon the conversion of convertible Indebtedness or in exchange for
outstanding Indebtedness or as capital contributions to the Company (other than
from a Subsidiary)) and (B) without duplication of any amounts included in
clause (x) (A) 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, that in the case of amounts described in clause (x) (A) or (x) (B) are
applied by the Company within 180 days after receipt, to make additional
Permitted Investments under this clause (x) (such additional Permitted
Investments being referred to collectively as "Stock Permitted Investments");
(xi) any Investment by the Company or a Restricted Subsidiary of the Company in
a Receivables Entity or any Investment by a Receivables Entity in any other
Person in connection with a Qualified Receivables Transaction, including
investments of funds held in accounts permitted or required by the arrangements
governing such Qualified Receivables Transaction or any related Indebtedness;
provided that any Investment in a Receivables Entity is in the form of a
Purchase Money Note, contribution of additional Receivables or an equity
interest; (xii) Investments received by the Company or its Restricted
Subsidiaries as consideration for asset sales, including Asset Sales; provided
in the case of an Asset Sale, (A) such Investment does not exceed 25% of the
consideration received for such Asset Sale and (B) such Asset Sale is otherwise
effected in compliance with Section 4.6; (xiii) Investments by the Company or
its Restricted Subsidiaries in joint ventures in an aggregate amount not in
excess of $5.0 million at any time outstanding; and (xiv) that portion of any
Investment where the consideration provided by the Company is Capital Stock of
the Company (other than Disqualified Capital Stock). Any net cash proceeds that
are used by the Company or any of its Restricted Subsidiaries to make Stock
Permitted Investments pursuant to clause (x) of this definition shall not be
included in subclauses (x) and (y) of clause (iii) of the first paragraph of
Section 4.4.
"Permitted Liens" means the following types of Liens:
----------------
(i) Liens securing the Notes;
(ii) Liens securing Acquired Indebtedness incurred in reliance on clause (vii)
of the definition of Permitted Indebtedness; provided that 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;
(iii) Liens existing on the Issue Date, together with any Liens securing
Indebtedness incurred in reliance on
23
clause (ix) of the definition of "Permitted Indebtedness" in order to refinance
the Indebtedness secured by Liens existing on the Issue Date; provided that the
Liens securing the refinancing Indebtedness shall not extend to property other
than that pledged under the Liens securing the Indebtedness being refinanced;
(iv) Liens in favor of the Company on the property or assets, or any proceeds,
income or profit therefrom, of any Restricted Subsidiary of the Company; and
(v) other Liens securing Senior Subordinated Indebtedness of the Company or any
Restricted Subsidiary that is a Guarantor, provided that the maximum aggregate
amount of outstanding obligations secured thereby shall not at any time exceed
$5.0 million.
"Person" means an individual, partnership, corporation, unincorporated
------
organization, trust or joint venture, or a governmental agency or political
subdivision thereof or any other entity.
"Plan" means any employee benefit plan, retirement plan, deferred compensation
----
plan, restricted stock plan, health, life, disability or other insurance plan or
program, employee stock purchase plan, employee stock ownership plan, pension
plan, stock option plan or similar plan or arrangement of the Company or any
Subsidiary of the Company, or other successor plan thereof, and "Plans" shall
have a correlative meaning.
"Xxxx Loan" shall mean the loan in an initial aggregate principal amount of $1.0
---------
million to Xx. Xxxxxx Xxxx in connection with his previous purchase of the
stock of Hour Eyes Doctors of Optometry, P.C., as the same may be amended or
modified from time to time pursuant to the terms thereof.
"Preferred Stock" of any Person means any Capital Stock of such Person that has
----------------
preferential rights to any other Capital Stock of such Person with respect to
dividends or redemptions or upon liquidation.
"principal" of any Indebtedness (including the Notes) means the principal amount
--------
of such Indebtedness plus the premium when due, if any, on such Indebtedness.
"Principal" means Xxxxxx X. Xxx Company and its Affiliates.
---------
"Private Exchange Notes" has the meaning set forth in the Registration Rights
------------------------
Agreement.
24
"Productive Assets" means assets (including Capital Stock of a Person that
------------------
directly or indirectly owns assets) of a kind used or usable in the businesses
of the Company and its Restricted Subsidiaries as, or related to such business,
conducted on the date of the relevant Asset Sale.
"Purchase Money Note" means a promissory note of a Receivables Entity evidencing
-------------------
a line of credit, which may be irrevocable, from the Company or any Subsidiary
of the Company in connection with a Qualified Receivables Transaction to a
Receivables Entity, which note (a) shall be repaid from cash available to the
Receivables Entity, other than (i) amounts required to be established as
reserves pursuant to agreements, (ii) amounts paid to investors in respect of
interest, (iii) principal and other amounts owing to such investors and (iv)
amounts paid in connection with the purchase of newly generated receivables and
(b) may be subordinated to the payments described in (a).
"QIB" means any "qualified institutional buyer" (as defined in Rule 144A under
---
the Securities Act).
"Qualified Capital Stock" means any stock that is not Disqualified Capital
-------------------------
Stock.
"Qualified Receivables 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 Receivables 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 Receivables Entity), or may grant a security interest in, any
accounts receivable (whether now existing or arising 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, all
contracts and all guarantees or other obligations in respect of such accounts
receivable, proceeds of such accounts receivable and other assets which are
customarily transferred or in respect of which security interests are
customarily granted in connection with asset securitization transactions
involving accounts receivable. The grant of a security interest in any accounts
receivable of the Company or any of its Restricted Subsidiaries to secure Bank
Indebtedness shall not be deemed a Qualified Receivables Transaction.
"Recapitalization" means the transaction contemplated by the Recapitalization
----------------
Agreement, together with the financings therefore.
-
"Recapitalization Agreement" means the Recapitalization Agreement dated as of
---------------------------
March 6, 1998 among
25
ECCA Merger Corp., a Delaware corporation, the Company and the Sellers named
therein, as in effect on the Issue Date.
"Receivables Entity" means a Wholly Owned 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 transfers accounts
receivable and related assets) which engages in no activities other than in
connection with the financing of accounts receivable, all proceeds thereof and
all rights (contractual or other), collateral and other assets relating thereto,
and any business or activities incidental or related to such business, and which
is designated by the Board of Directors of the Company (as provided below) as a
Receivables 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 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 which the Company reasonably believes to be 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 accounts
receivable, 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
other than through the contribution of additional Receivables, related security
and collections thereto and proceeds of the foregoing. 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.
"Redemption Date," when used with respect to any Note to be redeemed, means the
----------------
date fixed for such redemption pursuant to this Indenture and the Notes.
"Redemption Price," when used with respect to any Note to be redeemed, means the
----------------
price fixed for such redemption pursuant to this Indenture and the Notes.
26
"Registration Rights Agreement" means the Registration Rights Agreement, dated
-------------------------------
as of April 24, 1998, among the Company, the Guarantors and BT Alex. Xxxxx
Incorporated and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated.
"Regulation S" means Regulation S under the Securities Act.
-------------
"Regulation S Global Note" means a permanent global Note in registered form
---------------------------
representing the aggregate principal amount of Notes sold in reliance on
Regulation S under the Securities Act.
"Representative" means the indenture trustee or other trustee, agent or
--------------
representative in respect of any Designated Senior Indebtedness; provided that
if, and for so long as, any Designated Senior Indebtedness lacks such a
representative, then the Representative for such Designated Senior Indebtedness
shall at all times constitute the holders of a majority in outstanding principal
amount of such Designated Senior Indebtedness in respect of any Designated
Senior Indebtedness.
"Restricted Security" has the meaning assigned to such term in Rule 144(a)(3)
--------------------
under the Securities Act; provided 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.
"Revolving Credit Facility" means the Revolving Credit Facility under the New
---------------------------
Credit Facility.
"S&P" means Standard & Poor's Ratings Service, a division of The XxXxxx-Xxxx
---
Companies, Inc., and its successors.
"Sale and Leaseback Transaction" means any direct or indirect arrangement with
--------------------------------
any Person or to which any such Person is a party, providing for the leasing to
the Company or a Restricted Subsidiary of any property, whether owned by the
Company or any Restricted Subsidiary at the Issue Date or later acquired, which
has been or is to be sold or transferred by the Company or such Restricted
Subsidiary to such Person or to any other Person from whom funds have been or
are to be advanced by such Person on the security of such Property.
27
"SEC" means the Securities and Exchange Commission and any successor thereto.
---
"Secured Indebtedness" means any Indebtedness of the Company or any Guarantor
---------------------
secured by a Lien.
"Securities Act" means the Securities Act of 1933, as amended, or any successor
---------------
statute or statutes thereto.
"Senior Indebtedness" means (i) the Bank Indebtedness and (ii) all Indebtedness
--------------------
of the Company, including interest thereon (including interest accruing on or
after the filing of any petition in bankruptcy or for reorganization relating to
the Company at the relevant contractual rate provided in the documentation
relating thereto whether or not a claim for postfiling interest is allowed in
such proceedings), whether outstanding on the Issue Date or thereafter incurred,
unless in the instrument creating or evidencing the same or pursuant to which
the same is outstanding it is expressly provided that such obligations are not
superior in right of payment to the Notes; provided, however, that Senior
Indebtedness shall not include (1) any obligation of the Company to any
Subsidiary of the Company, (2) any liability for Federal, state, local or other
taxes owed or owing by the Company, (3) any accounts payable or other liability
to trade creditors arising in the ordinary course of business (including
guarantees thereof or instruments evidencing such liabilities), (4) any
Indebtedness of the Company which is expressly subordinate in right of payment
to any other Indebtedness of the Company, including any Senior Subordinated
Indebtedness and any Subordinated Obligations, (5) any obligations to
repurchase, redeem or make payments owing with respect to any Capital Stock or
(6) that portion of any Indebtedness incurred in violation of Section 4.3 (but,
as to any such obligation, no such violation shall be deemed to exist for
purposes of this clause (6) if the holder(s) of such obligation 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, 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).
"Senior Subordinated Indebtedness" means, with respect to the Company or any
----------------------------------
Guarantor, the Notes or the Guarantee of such Guarantor, as applicable, and any
other Indebtedness of the Company or such Guarantor, as applicable, that
specifically provides that such Indebtedness is to rank pari passu with the
Notes or the Guarantee of such Guarantor, as applicable, and is not by its
express terms subordinate in right of payment to any Indebtedness of the Company
or such
28
Guarantor, as applicable, which is not Senior Indebtedness or Guarantor Senior
Indebtedness, as applicable.
"Significant Subsidiary" means, as of any date of determination, for any Person,
----------------------
each Restricted Subsidiary of such Person which (i) for the most recent fiscal
year of such Person accounted for more than 10% of consolidated revenues or
consolidated net income of such Person or (ii) as at the end of such fiscal
year, was the owner of more than 10% of the consolidated assets of such Person.
"Standard Securitization Undertakings" means representations, warranties,
--------------------------------------
covenants and indemnities entered into by the Company or any Subsidiary of the
Company which the Company reasonably believes to be customary in an accounts
receivable transaction.
"Stated Maturity" means, with respect to any security, the date specified in
----------------
such security as the fixed date on which the payment of principal of such
security is due and payable, including pursuant to any mandatory redemption
provision.
"Subordinated Obligation" means, with respect to the Company or any Guarantor,
------------------------
any Indebtedness of the Company or such Guarantor, as applicable (whether
outstanding on the Issue Date or thereafter incurred), which is expressly
subordinate in right of payment to the Notes or the Guarantee of such Guarantor,
as applicable, pursuant to a written agreement.
"Subsidiary" means, with respect to any Person, (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.
"Term Loan Facility" means the Term Loan Facility under the New Credit Facility.
------------------
"THL Co." means Xxxxxx X. Xxx Company, a financial investment firm.
--------
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. 77aaa-77bbbb), as
---
amended, as in effect on the date of this Indenture, except as provided in
Section 9.3.
"Trust Officer" means any 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
29
department, division or group performing the corporation trust work of such
successor and assigned to administer this Indenture.
"Trustee" means the party named as such in this Indenture until a successor
-------
replaces it in accordance with the provisions of this Indenture and thereafter
means such successor.
"Unrestricted 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 B-1 (in the
case of the Fixed Rate Notes) and Exhibit B-2 (in the case of the Floating Rate
Notes), including without limitation the Exchange Fixed Rate Notes and the
Exchange Floating Rate Notes, as applicable.
"Unrestricted Subsidiary" of any Person means (i) any Subsidiary of such Person
------------------------
that at the time of determination shall be or continue to be designated an
Unrestricted Subsidiary by the Board of Directors of such Person in the manner
provided below and (ii) any Subsidiary of an Unrestricted Subsidiary. 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 other Subsidiary of the Company that is not a Subsidiary of the
Subsidiary to be so designated; provided that (x) the Company certifies to the
Trustee that such designation complies with Section 4.4 and (y) each Subsidiary
to be so designated and each of its Subsidiaries has not at the time of
designation, and does not thereafter, create, incur, issue, assume, guarantee or
otherwise become directly or indirectly liable with respect to any Indebtedness
pursuant to which the lender has recourse to any of the assets of the Company or
any of its Restricted Subsidiaries. The Board of Directors may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary only if (x) immediately
after giving effect to such designation and treating all Indebtedness of such
Unrestricted Subsidiary as being incurred on such date, the Company is able to
incur at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) in compliance with Section 4.3 and (y) immediately before and
immediately after giving effect to such designation, no Default or Event of
Default shall have occurred and be continuing. Any such designation by the
Board of Directors shall be evidenced to the Trustee by promptly filing with the
Trustee a copy of the resolution giving effect to such designation and an
officers' certificate certifying that such designation complied with the
foregoing provisions.
"U.S. Government Obligations" means direct obligations of, and obligations
-----------------------------
guaranteed by, the United
30
States of America for the payment of which the full faith and credit of the
United States of America is pledged.
"U.S. Legal Tender" means such coin or currency of the United States of America
------------------
as at the time of payment shall be legal tender for the payment of public and
private debts.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness at
-----------------------------------
any date, the number of years obtained by dividing (a) the then outstanding
aggregate principal amount of such Indebtedness into (b) the sum of the total of
the products obtained by multiplying (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 (i) the
number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
"Wholly Owned Subsidiary" means any Restricted Subsidiary of the Company all the
-----------------------
outstanding voting securities of which (other than directors, qualifying shares
or an immaterial amount of shares required to be owned by other Persons pursuant
to applicable law) are owned, directly or indirectly, by the Company.
SECTION 1.2. Other Definitions.
------------------
Defined in
Term Section
---- --------
"Affiliate Transaction" 4.7
"Agent Members" 2.1
"Authenticating Agent" 2.2
"Bankruptcy Law" 6.1
"Blockage Notice" 10.3
"Change of Control Offer" 4.8
"Change of Control Payment Date" 4.8
"Covenant Defeasance" 8.2(c)
"Custodian" 6.1
"Event of Default" 6.1
"Global Note" 2.1
"Guarantor Blockage Notice" 12.3
"Guarantor Payment Blockage Period" 12.3
"incur" 4.3
"Legal Defeasance" 8.2(b)
"Legal Holiday" 13.8
"Net Proceeds Offer" 4.6
"Net Proceeds Offer Amount" 4.6
"Net Proceeds Offer Payment Date" 4.6
"Net Proceeds Offer Trigger Date" 4.6
"Note Offer Amount" 4.6
"Other Debt" 4.6
"pay the Notes" 10.3
31
"Paying Agent" 2.3
"Payment Blockage Period" 10.3
"Physical Notes" 2.1
"Proceeds Purchase Date" 4.6(b)
"Reference Date" 4.4(a)
"Registrar" 2.3
"Restricted Payment" 4.4
"Rule 144A" 2.1(b)
SECTION 1.3. Incorporation by Reference of Trust Indenture Act.
-----------------------------------------------------
This Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company, the Guarantors and
any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION 1.4. Rules of Construction.
-----------------------
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to it
in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular; and
32
(6) unsecured Indebtedness shall not be deemed to be subordinate or junior
to Secured Indebtedness merely by virtue of its nature as unsecured
Indebtedness.
ARTICLE II
THE NOTES
SECTION 2.1. Form and Dating.
-----------------
The Initial Fixed Rate Notes and the Initial Floating Rate Notes and the
Trustee's certificate of authentication relating thereto shall be substantially
in the form of Exhibits A-1 and A-2 hereto, respectively. The Exchange Fixed
Rate Notes and the Exchange Floating Rate Notes and the Trustee's certificate of
authentication relating thereto shall be substantially in the form of Exhibits
B-1 and B-2 hereto, respectively. 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.
The terms and provisions contained in the Notes, annexed hereto as Exhibits A-1
and A-2, and B-1 and B-2, shall constitute, and are hereby expressly made, a
part of this Indenture and, to the extent applicable, the Company, the
Guarantors 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 in reliance on Rule 144A or in offshore transactions in
reliance on Regulation S shall be issued initially in the form of one or more
permanent global Notes in registered form, substantially in the form set forth
in Exhibits A-1 and A-2 (the "Global Notes"), deposited with the Trustee, as
custodian for the Depository, duly executed by the Company and authenticated by
the Trustee as hereinafter provided and shall bear the legends set forth in
Section 2.15. The aggregate principal amount of the Global Notes 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.
Notes issued in exchange for interests in the Global Notes pursuant to Section
2.16 may be issued in the form of permanent certificated Notes in registered
form (the "Physical Notes") and shall bear the first legend set forth in Section
2.15.
33
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 have been so complied with.
SECTION 2.2. Execution and Authentication; Aggregate Principal Amount.
------------------------------------------------------------
Two Officers, or an Officer and an Assistant Secretary, 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 by manual or facsimile
signature. The Company's seal shall also be reproduced on the Notes.
If an Officer or Assistant Secretary whose signature is on a Note 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) (x) Initial Fixed Rate Notes for original
issue on the Issue Date in aggregate principal amount not to exceed $100,000,000
and (y) Initial Floating Rate Notes for original issue on the Issue Date in
aggregate principal amount not to exceed $50,000,000, (ii) Private Exchange
Notes from time to time only in exchange for a like principal amount of Initial
Notes and (iii) Unrestricted Notes from time to time for issue only in exchange
for (x) a like principal amount of Initial Notes or (y) a like principal amount
of Private Exchange Notes, in each case upon written orders of the Company in
the form of an Officers' Certificate. In each case, the Officers' Certificate
shall specify the amount of Notes to be authenticated, the date on which the
Notes are to be authenticated, the aggregate principal amount of Notes
outstanding on the date of authentication and whether the Notes are to be
Initial Notes, Private Exchange Notes or Unrestricted Notes and shall further
specify the amount of such Notes to be issued as a Global Note or Physical
Notes. The aggregate principal amount of Notes outstanding at any time may not
exceed $150,000,000, except as provided in Sections 2.7 and 2.8.
34
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
clause (ii) or (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.
Notwithstanding the foregoing, all Notes issued under this Indenture shall vote
and consent together on all matters (as to which any of such Notes may vote or
consent) 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, the Guarantors or with any of their respective Affiliates.
The Notes shall be issuable in fully registered form only, without coupons, in
denominations of $1,000 and any integral multiple thereof.
SECTION 2.3. Registrar and Paying Agent.
-----------------------------
The Company shall maintain an office or agency (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 and/or the Guarantors
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,
upon prior written notice to the Trustee, may have one or more co-Registrars and
one or more additional paying agents reasonably acceptable to the Trustee. The
term "Paying Agent" includes any additional Paying Agent. Neither the Company,
the Guarantors nor any of their respective Affiliates 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, in advance, of
35
the name and address of any such Agent. If the Company fails to maintain a
Registrar or Paying Agent, or fails to give the foregoing notice, the Trustee
shall act as such.
The Company initially appoints the Trustee as Registrar, Paying Agent,
Calculation 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. The Paying Agent or Registrar may resign upon 30 days notice to
the Company.
SECTION 2.4. Paying Agent To Hold Assets in Trust.
------------------------------------------
The Company shall require each Paying Agent other than the Trustee to agree in
writing that each Paying Agent shall hold in trust for the benefit of the
Holders or the Trustee all assets held by the Paying Agent for the payment of
principal of, 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 2.5. Noteholder 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. If
the Trustee is not the Registrar, the Company shall furnish or cause the
Registrar to furnish to the Trustee five (5) Business Days before each Interest
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.
SECTION 2.6. Transfer and Exchange.
-----------------------
Subject to the provisions of Sections 2.15, 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 Fixed Rate Notes or Floating Rate Notes, as applicable, of
36
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 instrument of transfer in form satisfactory to the Company and the
Registrar or co-Registrar, duly executed by the Holder thereof or his attorney
duly authorized in writing. To permit registrations of transfer and exchanges,
the Company shall execute and the Trustee shall authenticate Notes 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 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 Sections
2.10, 3.6, 4.6, 4.8 or 9.5, 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
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 III, except the unredeemed portion of any
Note being redeemed in part.
Any Holder of the 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.
SECTION 2.7. 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 if the
Trustee's requirements are met. If required by the Trustee or the Company, such
Holder must provide an affidavit of lost certificate and an indemnity bond or
other indemnity, sufficient in the judgment of both the Company and the Trustee,
to protect the Company, the Trustee or any Agent from any loss which any of them
may suffer if a Note is replaced. The Company may charge such Holder for its
reasonable out-of-pocket expenses in replacing a Note, including reasonable fees
and expenses of counsel. Every replacement Note shall constitute an additional
obligation of the Company.
37
SECTION 2.8. 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 2.9, a Note does not cease to be outstanding because the
Company, any Guarantor or any of their respective Affiliates holds the Note.
If a Note is replaced pursuant to Section 2.7 (other than a mutilated Note
surrendered for replacement), it ceases to be outstanding unless the Trustee
receives an Opinion of Counsel 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 2.7.
If on a Redemption Date or the Maturity Date the Paying Agent holds U.S. Legal
Tender or U.S. Government Obligations sufficient to pay all of the principal and
interest due on the Notes payable on that date and is not prohibited from paying
such U.S. Legal Tender to the Holders thereof pursuant to the terms of this
Indenture, then on and after that date such Notes cease to be outstanding and
interest on them ceases to accrue.
SECTION 2.9. 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, any Guarantor or any of their respective Affiliates 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 it, any Guarantor or any of their respective Affiliates
repurchases or otherwise acquires Notes, of the aggregate principal amount of
such Notes so repurchased or otherwise acquired.
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' Certificate
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
38
Company considers appropriate for temporary Notes. Without unreasonable delay,
the Company shall prepare and the Trustee shall authenticate upon receipt of a
written order of the Company pursuant to Section 2.2 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 of all
Notes surrendered for transfer, exchange, payment or cancellation. Subject to
Section 2.7, the Company may not issue new Notes to replace Notes that it has
paid 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.
-------------------
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 at the rate of interest then borne by the Fixed Rate Notes or
Floating Rate Notes, as the case may be, to the Persons who are Holders on a
subsequent special record date, which date shall be the fifteenth day next
preceding the date fixed by the Company for the payment of defaulted interest or
the next succeeding Business Day if such date is not a Business Day. At least
15 days before the subsequent special record date, the Company shall mail 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, 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,
if, after notice given by the Company to the Trustee of the proposed payment
pursuant to this sentence, such manner of payment shall be deemed practicable by
the Trustee.
39
SECTION 2.13. CUSIP Numbers.
--------------
The Company in issuing the Notes may use one or more "CUSIP" numbers, and if so,
the Trustee shall use the CUSIP numbers in notices of redemption or exchange as
a convenience to Holders; provided 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 numbers.
SECTION 2.14. Deposit of Moneys.
-------------------
Prior to 10:00 a.m. New York City time on each Interest Payment Date, Proceeds
Purchase Date and Change of Control Payment Date and on the Maturity Date, the
Company shall have deposited with the Paying Agent in immediately available
funds U.S. Legal Tender sufficient to make cash payments, if any, due on such
Interest Payment Date, Proceeds Purchase Date, Change of Control Payment Date or
Maturity Date, as the case may be, in a timely manner which permits the Paying
Agent to remit payment to the Holders on such Interest Payment Date, Proceeds
Purchase Date, Change of Control Payment Date or Maturity Date, as the case may
be.
SECTION 2.15. Restrictive Legends.
--------------------
Each Global Note and Physical Note that constitutes a Restricted Security or is
sold in compliance with Regulation S shall bear the following legend (the
"Private Placement Legend") 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(k) under the Securities Act or any successor provision thereunder) (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, unless
otherwise agreed by the Company and the Holder thereof):
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
40
SECURITIES ACT, (2) AGREES THAT IT WILL NOT PRIOR TO THE DATE THAT IS TWO YEARS
AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THIS
SECURITY EXCEPT (A) TO THE COMPANY THEREOF 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" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES
ACT) (AN "ACCREDITED INVESTOR") THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS
FURNISHED ON ITS BEHALF BY A U.S. BROKE-RDEALER) TO THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS
ON TRANSFER FOR 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 MEANING GIVEN
TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
Each Global Note shall also bear the following legend on the face thereof:
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
41
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 GOVERNING THIS NOTE.
SECTION 2.16. Book-Entry Provisions for Global Notes.
------------------------------------------
(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 legends as set forth in Section
2.15.
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 absolute owner of the Global Notes 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 the Global Notes 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 the Global Notes may be transferred or,
subject to Section 2.1, exchanged for Physical Notes in accordance with the
rules and procedures of the Depository and
42
the provisions of Section 2.17. In addition, Physical Notes shall be transferred
to all beneficial owners in exchange for their beneficial interests in the
Global Notes 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 any 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 such Global Note to be transferred, and the
Company shall execute, 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), such Global Note shall be deemed to be
surrendered to the Trustee for cancellation, and the Company shall execute, 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 pursuant to paragraph (b), (c) or (d)
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 the Global Notes 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. Special Transfer Provisions.
-----------------------------
(a) Transfers to Non-QIB Institutional Accredited Investors.
The following provisions shall apply with respect to the registration of any
proposed transfer of a Note constituting a Restricted Security to any
Institutional Accredited Investor which is not a QIB:
(i) the Registrar shall register the transfer of any Note constituting a
Restricted Security, whether or not
43
such Note bears the Private Placement Legend, if (x) the transferee is not an
Affiliate of the Company and the requested transfer is after the second
anniversary of the later of the (a) Issue Date and (b) the last date on which
the Company or an 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(k)
under the Securities Act or any successor provision thereunder or (y) the
proposed transferee has delivered to the Registrar a certificate substantially
in the form of Exhibit C hereto and such other information that the Trustee may
reasonably request in order 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;
(ii) if the proposed transferee is an Agent Member and the Notes to be
transferred consist of Physical Notes which after transfer are to be evidenced
by an interest in the IAI Global Note, upon receipt by the Registrar of (x)
written instructions given in accordance with the Depository's and the
Registrar's procedures and (y) the appropriate certificate, if any, required by
clause (y) of paragraph (i) above, together with any required legal opinions and
certifications, the Registrar shall register the transfer and reflect on its
books and records the date and an increase in the principal amount of the IAI
Global Note in an amount equal to the principal amount of Physical Notes to be
transferred, and the Trustee shall cancel the Physical Notes so transferred; and
(iii) if the proposed transferor is an Agent Member seeking to transfer an
interest in a Global Note, upon receipt by the Registrar of (x) written
instructions given in accordance with the Depository's and the Registrar's
procedures and (y) the appropriate certificate, if any, required by clause (y)
of paragraph (i) above, together with any required legal opinions and
certifications, the Registrar shall register the transfer and reflect on its
books and records the date and (A) a decrease in the principal amount of the
Global Note from which such interests are to be transferred in an amount equal
to the principal amount of the Notes to be transferred and (B) an increase in
the principal amount of the IAI Global Note in an amount equal to the principal
amount of the Global Note to be transferred.
(b) Transfers to Non-U.S. Persons. The following additional provisions
shall apply with respect to the registration of any proposed transfer of an
Initial Note to any Non-U.S. Person:
44
(i) the Registrar shall register the transfer of any Note constituting a
Restricted Security, whether or not such Note bears the Private Placement
Legend, if (x) the transferee is not an Affiliate of the Company and the
requested transfer is after the second anniversary of the later of the (a) Issue
Date and (b) the last date on which the Company or an 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(k) under the Securities Act or any successor
provision thereunder or (y) the proposed transferor has delivered to the
Registrar a certificate substantially in the form of Exhibit D hereto and such
other information that the Trustee may reasonably request in order 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;
(ii) if the proposed transferee is an Agent Member and the Notes to be
transferred consist of Physical Notes which after transfer are to be evidenced
by an interest in the Regulation S Global Note, upon receipt by the Registrar of
(x) written instructions given in accordance with the Depository's and the
Registrar's procedures and (y) the appropriate certificate, if any, required by
clause (y) of paragraph (i) above, together with any required legal opinions and
certifications, the Registrar shall register the transfer and reflect on its
books and records the date and an increase in the principal amount of the
Regulation S Global Note in an amount equal to the principal amount of Physical
Notes to be transferred, and the Trustee shall cancel the Physical Notes so
transferred;
(iii) if the proposed transferor is an Agent Member seeking to transfer an
interest in a Global Note, upon receipt by the Registrar of (x) written
instructions given in accordance with the Depository's and the Registrar's
procedures and (y) the appropriate certificate, if any, required by clause (y)
of paragraph (i) above, together with any required legal opinions and
certifications, the Registrar shall register the transfer and reflect on its
books and records the date and (A) a decrease in the principal amount of the
Global Note from which such interests are to be transferred in an amount equal
to the principal amount of the Notes to be transferred and (B) an increase in
the principal amount of the Regulation S Global Note in an amount equal to the
principal amount of the Global Note to be transferred; and
45
(iv) until the 41st day after the Issue Date (the "Restricted Period"), an owner
of a beneficial interest in the Regulation S Global Note may not transfer such
interest to a transferee that is a U.S. person or for the account or benefit of
a U.S. person within the meaning of Rule 902(o) of the Securities Act. During
the Restricted Period, all beneficial interests in the Regulation S Global Note
shall be transferred only through Cedel or Euroclear, either directly if the
transferor and transferee are participants in such systems, or indirectly
through organizations that are participants therein.
(c) Transfers to QIBs. The following provisions shall apply with respect
to the registration of any proposed transfer of a Note constituting a Restricted
Security to a QIB (excluding transfers to Non-U.S. Persons):
(i) the Registrar shall register the transfer if such transfer is being made by
a proposed transferor who has checked the box provided for on the form of Note
stating, or has otherwise advised the Company and the Registrar in writing, that
the sale has been made in compliance with the provisions of Rule 144A to a
transferee who has signed the certification provided for on the form of Note
stating, or has otherwise advised the Company and the Registrar in writing, that
it is purchasing the Note for its own account or an account with respect to
which it exercises sole investment discretion and that it and any such account
is a QIB within the meaning of Rule 144A, and is aware that the sale to it is
being made in reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as it has requested pursuant to Rule 144A or
has determined not to request such information and that it is aware that the
transferor is relying upon its foregoing representations in order to claim the
exemption from registration provided by Rule 144A;
(ii) if the proposed transferee is an Agent Member, and the Notes to be
transferred consist of Physical Notes which after transfer are to be evidenced
by an interest in the 144A Global Note, upon receipt by the Registrar of
instructions given in accordance with the Depository's and the Registrar's
procedures, the Registrar shall reflect on its books and records the date and an
increase in the principal amount of the 144A Global Note in an amount equal to
the principal amount of the Physical Notes to be transferred, and the Trustee
shall cancel the Physical Notes so transferred; and
46
(iii) if the proposed transferor is an Agent Member seeking to transfer an
interest in a Global Note, upon receipt by the Registrar of written instructions
given in accordance with the Depository's and the Registrar's procedures, the
Registrar shall register the transfer and reflect on its books and records the
date and (A) a decrease in the principal amount of the Global Note from which
interests are to be transferred in an amount equal to the principal amount of
the Notes to be transferred and (B) an increase in the principal amount of the
144A Global Note in an amount equal to the principal amount of the Global Note
to be transferred.
(d) Private Placement Legend. Upon the transfer, exchange or replacement
of Notes not bearing the Private Placement Legend, the 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 shall deliver only Notes that bear the Private Placement Legend unless
(i) the circumstance contemplated by paragraph (a)(i)(x) of this Section 2.17
exist or (ii) there is delivered to the Registrar an Opinion of Counsel
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.
(e) 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 upon the giving
of reasonable written notice to the Registrar.
47
ARTICLE III
REDEMPTION
SECTION 3.1. Notices to Trustee.
--------------------
If the Company elects to redeem Notes pursuant to Paragraph 6 of the Notes,
it shall notify the Trustee in writing of the Redemption Date, the Redemption
Price and the principal amount of Notes to be redeemed. The Company shall give
notice of redemption to the Paying Agent and Trustee at least 45 days but not
more than 60 days before the Redemption Date (unless a shorter notice shall be
agreed to by the Trustee in writing), together with an Officers' Certificate
stating that such redemption will comply with the conditions contained herein.
SECTION 3.2. Selection of Notes To Be Redeemed.
--------------------------------------
In the event that less than all of the Fixed Rate Notes or Floating Rate
Notes are to be redeemed at any time, selection of such Notes for redemption
will be made by the Trustee in compliance with the requirements of the principal
national securities exchange, if any, on which the Fixed Rate Notes or Floating
Rate Notes, as applicable, are listed or, if the Fixed Rate Notes or Floating
Rate Notes, as applicable, are not then listed on a national securities
exchange, on a pro rata basis within such type of Notes, 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; and
provided, further, that if a partial redemption is made with the net cash
proceeds of an Equity Offering, selection of the Fixed Rate 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 the procedures of
the Depository), unless such method is otherwise prohibited.
SECTION 3.3 Notice of Redemption.
----------------------
At least 30 days but not more than 60 days before a Redemption Date, the
Company shall mail a notice of redemption by first class mail, postage prepaid,
to each Holder whose Notes are to be redeemed at its registered address;
provided, however, that any notice of redemption pursuant to Paragraph 6(b) of
the Fixed Rate Notes must be mailed not later than 60 days after the related
Equity Offering and such redemption must be consummated within 90 days after the
closing of the related Equity Offering. At the Company's request, the Trustee
shall give the notice of redemption in the Company's name and at the Company's
expense. Each notice
48
for redemption shall identify 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) that Notes called for redemption must be surrendered to the Paying
Agent to collect the Redemption Price plus accrued interest, if any;
(5) that, unless the Company defaults in making the redemption payment,
interest on Notes 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 upon surrender to the Paying Agent of
the Notes redeemed;
(6) 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 aggregate principal amount equal
to the unredeemed portion thereof will be issued;
(7) if fewer than all the Notes are to be redeemed, the identification of
the particular Notes (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;
(8) the Paragraph of the Notes pursuant to which the Notes are to be
redeemed; and
(9) that no representation is made as to the correctness or accuracy of the
CUSIP number, if any, listed in such notice or printed on the Notes.
The notice, if mailed in a manner herein provided, shall be conclusively
presumed to have been given, whether or not the Holder receives such notice. In
any case, failure to give such notice by mail or any defect in the notice to the
Holder of any Note designated for redemption in whole or in part shall not
affect the validity of the proceedings for the redemption of any other Note.
49
SECTION 3.4. Effect of Notice of Redemption.
----------------------------------
Once notice of redemption is mailed, Notes called for redemption become due
and payable on the Redemption Date and at the Redemption Price stated in the
notice, plus accrued interest to the redemption date. Upon surrender to the
Paying Agent, such Notes shall be paid at the Redemption Price stated in the
notice, plus accrued interest to the Redemption Date; provided that if the
Redemption Date is after an Interest Record Date and on or prior to the Interest
Payment Date, the accrued interest shall be payable to the Holder of the
redeemed Notes registered on the Interest Record Date. Failure to give notice
or any defect in the notice to any Holder shall not affect the validity of the
notice to any other Holder.
SECTION 3.5. Deposit of Redemption Price.
------------------------------
On or before 10:00 a.m. New York time on the Redemption Date, 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.
If the Company complies with the preceding paragraph, then, unless the
Company 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.
SECTION 3.6. Notes Redeemed in Part.
-------------------------
Upon surrender of a Note that is redeemed in part, the Company shall
execute and the Trustee shall authenticate for the Holder (at the Company's
expense) a new Note equal in a principal amount to the unredeemed portion of the
Note surrendered.
50
ARTICLE IV
COVENANTS
SECTION 4.1. Payment of Notes.
------------------
The Company shall promptly pay the principal of (and premium, if any) and
interest on the Notes on the dates and in the manner provided in the Notes and
in this Indenture. Principal (and premium, if any) and interest shall be
considered paid on the date due if on such date the Trustee or the Paying Agent
holds in accordance with this Indenture U.S. Legal Tender sufficient to pay all
principal (and premium, if any) and interest then due and the Trustee or the
Paying Agent, as the case may be, is not prohibited from paying such U.S. Legal
Tender to the Noteholders on that date pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the rate specified
therefor in the Notes, and it shall pay interest on overdue installments of
interest at the same rate to the extent lawful.
Notwithstanding anything to the contrary contained in this Indenture, the Paying
Agent 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 4.2. Limitation on Liens.
---------------------
The Company will not, and will not permit any of its Restricted Subsidiaries to,
create, incur, assume or suffer to exist any Liens (other than Permitted Liens)
of any kind against or upon any of their respective property or assets, or any
proceeds, income or profit therefrom, which secure Senior Subordinated
Indebtedness or Subordinated Obligations, unless (i) in the case of Liens
securing Subordinated Obligations, the Notes are secured by a Lien on such
property, assets, proceeds, income or profit that is senior in priority to such
Liens and (ii) in the case of Liens securing Senior Subordinated Indebtedness,
the Notes are equally and ratably secured by a Lien on such property, assets,
proceeds, income or profit.
SECTION 4.3. 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
51
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 or as a consequence of the
incurrence of any such Indebtedness, the Company and its Restricted Subsidiaries
which are Guarantors may incur Indebtedness (including, without limitation,
Acquired Indebtedness) and Restricted Subsidiaries of the Company may incur
Acquired Indebtedness, in each case 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.
SECTION 4.4. Limitation on Restricted Payments.
------------------------------------
(a) 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) on or in respect of shares of Capital Stock of the
Company 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, other than the exchange of such Capital Stock for Qualified 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) in any
other Person (each of the foregoing actions set forth in clauses (a), (b), (c)
and (d) (other than the exceptions thereto) 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
continuing, (ii) the Company is not able to incur at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with Section 4.3
or (iii) the aggregate amount of Restricted Payments made subsequent to the
Issue Date shall exceed the sum of: (w) 50% of the cumulative Consolidated Net
Income (or if cumulative Consolidated Net Income shall be a loss, minus 100% of
such loss) of the Company earned subsequent to 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 (x) 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 (including
Qualified Capital Stock issued upon the conversion of
52
convertible Indebtedness or in exchange for outstanding Indebtedness but
excluding net cash proceeds from the sale of Qualified Capital Stock to the
extent used to repurchase or acquire shares of Capital Stock of the Company
pursuant to clause (2)(ii) of the next succeeding paragraph); plus (y) without
duplication of any amounts included in clause (iii) (x) 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; plus (z) to the extent that any
Investment (other than a Permitted Investment) that was made after the Issue
Date is sold for cash or otherwise liquidated or repaid for cash, the lesser of
(A) the cash received with respect to such sale, liquidation or repayment of
such Investment (less the cost of such sale, liquidation or repayment, if any)
and (B) the initial amount of such Investment, but only to the extent not
included in the calculation of Consolidated Net Income. Any net cash proceeds
included in the foregoing clauses (iii)(x) or (iii)(y) shall not be included in
clause (x)(A) or clause (x)(B) of the definition of "Permitted Investments" to
the extent actually utilized to make a Restricted Payment under this paragraph.
Notwithstanding the foregoing, the provisions set forth in the immediately
preceding paragraph will not prohibit: (1) the payment of any dividend or the
consummation of any irrevocable redemption within 60 days after the date of
declaration of such dividend or notice of such redemption if the dividend or
payment of the redemption price, as the case may be, would have been permitted
on the date of declaration or notice; (2) if no Default or Event of Default
shall have occurred and be continuing as a consequence thereof, 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 (ii) through the
application of net proceeds of a substantially concurrent sale (other than to a
Subsidiary of the Company) of shares of Qualified Capital Stock of the Company;
(3) so long as no Default or Event of Default shall have occurred or be
continuing, payments for the purpose of and in an amount equal to the amount
required to permit the Company to redeem or repurchase shares of its Capital
Stock or options in respect thereof, in each case in connection with the
repurchase provisions under employee stock option or stock purchase agreements
or other agreements to compensate management employees; provided that such
redemptions or repurchases pursuant to this clause (3) shall not exceed $5.0
million in the aggregate since the Issue Date (which amount shall be increased
by the amount of any cash proceeds to the Company from (x) sales of its Capital
Stock to management employees subsequent to the Issue Date and (y) any "key-man"
life insurance policies which are used to make such redemptions or repurchases);
(4) the payment of fees and compensation as permitted under clause (i) of
paragraph (b) of Section 4.7; (5) repurchases of Capital Stock deemed to occur
53
upon the exercise of stock options if such Capital Stock represents a portion of
the exercise price thereof; (6) Restricted Payments made pursuant to the
Recapitalization Agreement; (7) so long as no Default or Event of Default shall
have occurred or be continuing, payments in respect of any redemption,
repurchase, acquisition, cancellation or other retirement for value of shares of
Capital Stock of the Company or options, stock appreciation or similar
securities, in each case held by then current or former officers, directors or
employees of the Company or any of its Subsidiaries (or their estates or
beneficiaries under their estates) or by an employee benefit plan, upon death,
disability, retirement or termination of employment, not to exceed $2.5 million
in the aggregate in any fiscal year or $10.0 million in the aggregate since the
Issue Date; (8) repurchases of Preferred Stock; provided that such repurchases
do not exceed $5.0 million in the aggregate since the Issue Date; (9) purchases
of all (but not less than all), excluding directors' qualifying shares, of the
Capital Stock or other ownership interests in a Subsidiary of the Company which
Capital Stock or other ownership interests were not theretofore owned by the
Company or a Subsidiary of the Company, such that after giving effect to such
purchase such Subsidiary becomes a Restricted Subsidiary of the Company; and
(10) so long as no Default or Event of Default shall have occurred or be
continuing, payments not to exceed $100,000 in the aggregate since the Issue
Date to enable the Company to make payments to holders of its Capital Stock in
lieu of issuance of fractional shares of its Capital Stock. In determining the
aggregate amount of Restricted Payments made subsequent to the Issue Date in
accordance with clause (iii) of the immediately preceding paragraph, (a) amounts
expended (to the extent such expenditure is in the form of cash or other
property other than Qualified Capital Stock) pursuant to clauses (1), (3), (7)
and (8) of this paragraph shall be included in such calculation, provided that
such expenditures pursuant to clauses (3) or (7) shall not be included to the
extent of cash proceeds received by the Company from any "key man" life
insurance policies, and (b) amounts expended pursuant to clauses (2), (4), (5),
(6), (9) and (10) shall be excluded from such calculation.
SECTION 4.5. Limitation on Dividend and Other Payment
Restrictions Affecting Subsidiaries.
--------------------------------------------
The Company will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to (a) pay dividends or make any other distributions on or
in respect of its Capital Stock; (b) make loans or advances or to pay any
Indebtedness or other obligation owed to the Company or any other Restricted
54
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) nonassignment provisions of any contract or any lease
entered into in the ordinary course of business; (4) any instrument governing
Acquired Indebtedness, which encumbrance or restriction is not applicable to the
Company or any Restricted Subsidiary of the Company, or the properties or assets
of any such Person, other than the Person or the properties or assets of the
Person so acquired; provided, however, that such Acquired Indebtedness was not
incurred in connection with, or in anticipation or contemplation of an
acquisition by the Company or the Restricted Subsidiary; (5) agreements existing
on the Issue Date (including, without limitation, the New Credit Facility and
the Recapitalization Agreement); (6) restrictions on the transfer of assets
subject to any Lien permitted under this Indenture imposed by the holder of such
Lien; (7) restrictions imposed by any agreement to sell assets permitted under
this Indenture to any Person pending the closing of such sale; (8) any agreement
or instrument governing Capital Stock of any Person that is acquired after the
Issue Date; (9) Indebtedness or other contractual requirements of a Receivables
Entity in connection with a Qualified Receivables Transaction; provided that
such restrictions apply only to such Receivables Entity and such Restricted
Subsidiary is engaged in the Qualified Receivables Transaction; (10) an
agreement effecting a refinancing, replacement or substitution of Indebtedness
issued, assumed or incurred pursuant to an agreement referred to in clause (2),
(4) or (5) above; provided, however, that the provisions relating to such
encumbrance or restriction contained in any such refinancing, replacement or
substitution agreement are no less favorable to the Company or the Holders in
any material respect as determined by the Board of Directors of the Company in
good faith than the provisions relating to such encumbrance or restriction
contained in agreements referred to in such clause (2), (4) or (5); or (11) any
agreement evidencing, or relating to, any Indebtedness incurred after the Issue
Date which are not more restrictive than those contained in the New Credit
Facility as in effect on the Issue Date.
SECTION 4.6. 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 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 such Restricted Subsidiary, as the case may be, from such
55
Asset Sale shall be cash or Cash Equivalents and is received at the time of such
disposition; provided that the amount of (x) any liabilities (as shown on the
Company's or such Restricted Subsidiary's most recent balance sheet or in the
notes thereto) of the Company or such Restricted Subsidiary (other than
liabilities that are by their terms subordinated to the Notes) that are assumed
by the transferee of any such assets and from which the Company and its
Restricted Subsidiaries are unconditionally released and (y) any notes or other
obligations received by the Company or such Restricted Subsidiary from such
transferee that are promptly, but in no event more than 60 days after receipt,
converted by the Company or such Restricted Subsidiary into cash or Cash
Equivalents (to the extent of the cash or Cash Equivalents received) shall be
deemed to be cash for purposes of this provision; 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 prepay Senior Indebtedness or
Guarantor Senior Indebtedness and, in the case of any Senior Indebtedness or
Guarantor Senior Indebtedness under any revolving credit facility, effect a
permanent reduction in the availability under such revolving credit facility,
(B) to reinvest in Productive 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 Proceeds relating to such Asset Sale as set forth in clauses
(iii) (A), (iii) (B) and (iii) (C) of the immediately 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 immediately
preceding sentence (each a "Net Proceeds Offer Amount") shall be applied by the
Company or such Restricted Subsidiary to make an offer to purchase for cash (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 at least that amount of Notes
equal to the Note Offer Amount at a price in cash 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
56
covenant. Any offer to purchase with respect to Other Debt shall be made and
consummated concurrently with any Net Proceeds Offer.
"Other Debt" shall mean other Indebtedness of the Company that ranks pari passu
-----------
with the Notes and requires that an offer to purchase such Other Debt be made
upon consummation of an Asset Sale.
"Note Offer Amount" means (i) if an offer to purchase Other Debt is not being
-------------------
made, the amount of the Net Proceeds Offer Amount and (ii) if an offer to
purchase Other Debt is being made, an amount equal to the product of (x) the Net
Proceeds Offer Amount and (y) a fraction the numerator of which is the aggregate
amount of Notes tendered pursuant to such offer to purchase and the denominator
of which is the aggregate amount of Notes and Other Debt tendered pursuant to
such offer to purchase.
Notwithstanding the foregoing, if a Net Proceeds Offer Amount is less than $10.0
million, the application of the Net Cash Proceeds constituting such Net Proceeds
Offer Amount to a Net Proceeds Offer may be deferred until such time as such Net
Proceeds Offer Amount plus the aggregate amount of all Net Proceeds Offer
Amounts arising subsequent to the Net Proceeds Offer Trigger Date relating to
such initial Net Proceeds Offer Amount from all Asset Sales by the Company and
its Restricted Subsidiaries aggregates at least $10.0 million, at which time the
Company or such Restricted Subsidiary shall apply all Net Cash Proceeds
constituting all Net Proceeds Offer Amounts that have been so deferred to make a
Net Proceeds Offer (the first date the aggregate of all such deferred Net
Proceeds Offer Amounts is equal to $10.0 million or more shall be deemed to be a
"Net Proceeds Offer Trigger Date").
Notwithstanding the immediately preceding paragraphs of this covenant, the
Company and its Restricted Subsidiaries will be permitted to consummate an Asset
Sale without complying with such paragraphs to the extent (i) at least 75% of
the consideration for such Asset Sale constitutes Productive Assets and (ii)
such Asset Sale is for at least fair market value (as determined in good faith
by the Company's Board of Directors); provided that any consideration not
constituting Productive Assets received by the Company or any of its Restricted
Subsidiaries in connection with any Asset Sale permitted to be consummated under
this paragraph shall to the extent constituting Net Cash Proceeds, be subject to
the provisions of the immediately preceding paragraphs; provided that at the
time of entering into such transaction or immediately after giving effect
thereto, no Default or Event of Default shall have occurred or be continuing or
would occur as a consequence thereof.
57
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 Article V, 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 covenant, and
shall comply with the provisions of this covenant 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 covenant;
provided, however, that this paragraph shall not apply if, both immediately
before and immediately after giving effect to any such transaction, both the
transferor and transferee are obligors under this Indenture.
(b) Each Net Proceeds Offer will be mailed to the record Holders as shown
on the register of Holders within 25 days following the Net Proceeds Offer
Trigger Date, with a copy to the Trustee, and shall comply with the procedures
set forth in this Indenture. Upon receiving notice of the Net Proceeds Offer,
Holders may elect to tender their Notes in whole or in part in integral
multiples of $1,000 in exchange for cash. To the extent Holders properly tender
Notes in an amount exceeding the Note Offer Amount, Notes of tendering Holders
will be purchased on a pro rata basis (based on amounts tendered). A Net
Proceeds Offer shall remain open for a period of 20 business days or such longer
period as may be required by law. To the extent that the aggregate amount of
Notes tendered pursuant to a Net Proceeds Offer is less than the Net Proceeds
Offer Amount, the Company may use any remaining Net Proceeds Offer Amount for
general corporate purposes. Upon completion of any such Net Proceeds Offer, the
Net Proceeds Offer Amount shall be reset at zero.
The notice of a Net Proceeds Offer 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:
(1) that the Net Proceeds Offer is being made pursuant to this Section 4.6
and 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
exceeds the Note Offer Amount, the Company shall select the Notes to be
purchased on a pro rata basis based on the amounts tendered (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);
58
(2) the purchase price (including the amount of accrued interest) and
the purchase date (which shall be at least 20 Business Days from the date of
mailing of notice of such Net Proceeds Offer, or such longer period as required
by law) (the "Proceeds Purchase Date");
------------------------
(3) that any Note not tendered will continue to accrue interest;
(4) 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 Proceeds Purchase Date;
(5) 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 prior to the close of
business on the third Business Day prior to the Proceeds Purchase Date;
(6) that Holders will be entitled to withdraw their election if the Paying
Agent receives, not later than five Business Days prior to the Proceeds Purchase
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 his election to have
such Note purchased;
(7) 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 that each Note purchased and each new Note issued shall be
in an original principal amount of $1,000 or integral multiples thereof; and
(8) information concerning the business of the Company, the most recent
annual and quarterly reports of the Company filed with the Commission pursuant
to the Exchange Act (or, if the Company is not permitted to file any such
reports with the Commission, the comparable reports prepared pursuant to Section
4.18), a description of material developments in the Company's business,
information with respect to pro forma historical financial position and results
of operations after giving effect to such Asset Sale and such other information
concerning the circumstances and relevant facts regarding such Asset Sale and
Asset Sale Offer as would, in the good faith judgment of the Company, be
material to a Holder of Notes in connection with the decision of such
59
Holder as to whether or not it should tender Notes pursuant to the Net Proceeds
Offer.
On or before the Proceeds Purchase Date, the Company shall (i) accept for
payment Notes or portions thereof validly tendered pursuant to the Net Proceeds
Offer which are to be purchased in accordance with this paragraph (b), (ii)
deposit with the Paying Agent 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 4.6, the Trustee shall act as the Paying Agent.
Any amounts remaining after the purchase of Notes pursuant to a Net Proceeds
Offer shall be returned by the Trustee to the Company.
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 this Section 4.6, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 4.6 by virtue
thereof.
SECTION 4.7. 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 (an "Affiliate
Transaction"), other than (x) Affiliate Transactions permitted under paragraph
(b) below and (y) Affiliate Transactions entered into on terms that are no less
favorable than those that might be reasonably 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; provided, however, that
for a transaction or series of related transactions with an aggregate value of
$5.0 million or more, at the Company's option (i) such determination shall be
made in good faith by a majority of the disinterested members of the Board of
the Directors of the Company or (ii) the Board of Directors of the
60
Company or any such Restricted Subsidiary party to such Affiliate Transaction
shall have received a favorable opinion from an independent nationally
recognized investment banking firm that such Affiliate Transaction is fair from
a financial point of view to the Company or such Restricted Subsidiary;
provided, further, that for a transaction or series of related transactions with
an aggregate value of $10.0 million or more, the Board of Directors of the
Company shall have received a favorable opinion from an independent nationally
recognized investment banking firm that such Affiliate Transaction is fair from
a financial point of view to the Company or such Restricted Subsidiary.
(b) The foregoing restrictions shall not apply to (i) reasonable fees and
compensation paid to, and indemnity provided on behalf of, officers, directors,
employees or consultants of the Company or any Subsidiary of the Company as
determined in good faith by the Company's Board of Directors; (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 by this Indenture; (iii) transactions
effected as part of a Qualified Receivables Transaction; (iv) 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; (v) Restricted
Payments permitted by this Indenture; (vi) any Permitted Investment; (vii)
transactions permitted by, and complying with, the provisions of Article V;
(viii) any payment, issuance of securities or other payments, awards or grants,
in cash or otherwise, pursuant to, or the funding of, employment arrangements
and Plans approved by the Board of Directors of the Company; (ix) the grant of
stock options or similar rights to employees and directors of the Company and
its Subsidiaries pursuant to Plans and employment contracts approved by the
Board of Directors of the Company; (x) loans or advances to officers, directors
or employees of the Company or its Restricted Subsidiaries not in excess of $3.0
million at any one time outstanding; (xi) the granting or performance of
registration rights under a written registration rights agreement approved by
the Board of Directors of the Company; (xii) transactions with Persons solely in
their capacity as holders of Indebtedness or Capital Stock of the Company or any
of its Restricted Subsidiaries, where such Persons are treated no more favorably
than holders of Indebtedness or Capital Stock of the Company or such Restricted
Subsidiary generally; (xiii) any agreement to do any of the foregoing; (xiv) the
payment, on a quarterly basis, of management fees to THL Co. and/or any
Affiliate of THL Co. in accordance with
61
the management arrangements to be entered into in April 1998 between THL Co.
and/or any Affiliate of THL Co. and the Company in an aggregate amount (for all
such Persons taken together) not to exceed $125,000 in any fiscal quarter of the
Company; provided, however, the Company or any Restricted Subsidiary may make
any such payment greater than $125,000 but not to exceed $250,000 in any fiscal
quarter if, both before and after giving effect thereto, the Company could incur
$1.00 of additional indebtedness (other than Permitted Indebtedness) in
compliance with Section 4.3; (xv) reimbursement of THL Co. and/or any Affiliate
of THL Co. for their reasonable out-of-pocket expenses incurred by them in
connection with performing management services for the Company and its
Subsidiaries; (xvi) the payment of one time fees to THL Co. and/or Affiliates of
THL Co. in connection with each acquisition of a company or a line of business
by the Company or its Subsidiaries, such fees to be payable at the time of each
such acquisition and not to exceed 1.0% of the aggregate consideration paid by
the Company and its Subsidiaries for any such acquisition; (xvii) the payment of
consulting fees to Xxxxxx Xxxxxxxx pursuant to a consulting arrangement entered
into on or prior to the Issue Date in an aggregate amount not to exceed $50,000
in any fiscal year of the Company; and (xviii) transactions entered into on the
Issue Date in connection with the Recapitalization and the financing therefore.
SECTION 4.8. Change of Control.
-------------------
(a) Upon the occurrence of a Change of Control Triggering Event, each
Holder will have the right to require that the Company purchase for cash all or
a portion of such Holder's Notes pursuant to the offer described below (the
"Change of Control Offer"), at a purchase price in cash equal to 101% of the
principal amount thereof plus accrued interest to the date of purchase. Prior
to the mailing of the notice referred to below, but in any event within 30 days
following the date the Company obtains actual knowledge of any Change of Control
Triggering Event, the Company covenants to (i) repay in full and terminate all
commitments under the Bank Indebtedness or offer to repay in full and terminate
all commitments under all Bank Indebtedness and to repay the Bank Indebtedness
owed to each holder of Bank Indebtedness which has accepted such offer or (ii)
obtain the requisite consents under the New Credit Facility to permit the
repurchase of the Notes as provided below. The Company shall first comply with
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 this covenant shall constitute an Event of Default described in
clause (4) and not in clause (2) under Section 6.1.
62
(b) Within 30 days following the date upon which the Company obtains actual
knowledge that a Change of Control Triggering Event has occurred, the Company
shall send, by first class mail, a notice to each Holder, with a copy to the
Trustee, which notice shall govern the terms of the Change of Control Offer. 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:
(1) that the Change of Control Offer is being made pursuant to this
Section 4.8 and that all Notes tendered and not withdrawn will be accepted for
payment;
(2) the purchase price (including the amount of accrued interest) and the
purchase date (which shall be no earlier than 30 days nor later than 45 days
from the date such notice is mailed, other than as may be required by law) (the
"Change of Control Payment Date");
(3) that any Note not tendered will continue to accrue interest;
(4) 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;
(5) 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;
(6) that Holders will be entitled to withdraw their election if the Paying
Agent receives, not later than five Business Days 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 his election to
have such Notes purchased;
(7) 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 that each Note purchased and each new Note issued shall be
in an original principal amount of $1,000 or integral multiples thereof;
63
(8) the circumstances and relevant facts regarding such Change of Control;
and
(9) information concerning the business of the Company, the most recent
annual and quarterly reports of the Company filed with the Commission pursuant
to the Exchange Company (or, if the Company is not permitted to file any such
reports with the Commission, the comparable reports prepared pursuant to Section
4.18), a description of material developments in the Company's business,
information with respect to pro forma historical financial position and results
of operations after giving effect to such Change of Control and such other
information concerning the circumstances and relevant facts regarding such
Change of Control and Change of Control Offer as would, in the good faith
judgment of the Company, be material to a Holder of Notes in connection with the
decision of such Holder as to whether or not it should tender Notes pursuant to
the Change of Control Offer.
On or before the Change of Control Payment Date, the Company shall (i) accept
for payment Notes or portions thereof validly tendered pursuant to the Change of
Control Offer, (ii) deposit with the Paying Agent U.S. Legal Tender sufficient
to pay the purchase price plus accrued interest, if any, of all 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. 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. Any Notes not so accepted shall be promptly mailed by the Company
to the Holder thereof. For purposes of this Section 4.8, the Trustee shall act
as the Paying Agent.
Any amounts remaining after the purchase of Notes pursuant to a Change of
Control Offer shall be returned by the Trustee to the Company.
The Company shall comply with the requirements of Rule 14e-1 under the Exchange
Act and any other securities laws and regulations thereunder to the extent such
laws and regulations are applicable in connection with the repurchase of Notes
pursuant to a Change of Control Offer. To the extent the provisions of any
securities laws or regulations conflict with this Section 4.8, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 4.8 by virtue
thereof.
64
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 this Section 4.8, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 4.8.
SECTION 4.9. Prohibition on Incurrence of Senior Subordinated Debt.
----------------------------------------------------------
Neither the Company nor any Guarantor will incur or suffer to exist Indebtedness
that is senior in right of payment to the Notes or such Guarantor's Guarantee
and subordinate in right of payment to any other Indebtedness of the Company or
such Guarantor, as the case may be.
SECTION 4.10. 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 Restricted Subsidiary of the
Company) or permit any Person (other than the Company or a Restricted Subsidiary
of the Company) to own any Preferred Stock of any Restricted Subsidiary of the
Company.
SECTION 4.11. Additional Guarantors.
----------------------
(a) The Company will not permit any of its Restricted Subsidiaries that is
not a Guarantor (whether formed or acquired before or after the Issue Date),
directly or indirectly, to guarantee the payment of any Indebtedness under the
New Credit Facility, unless such Restricted Subsidiary, the Company and the
Trustee execute and deliver a supplemental indenture evidencing such Restricted
Subsidiary's Guarantee of the Notes pursuant to the terms of Article XI and XII
of this Indenture; provided that if any such Guarantor is released from its
guarantee with respect to Indebtedness outstanding under the New Credit
Facility, such Guarantor shall automatically be released from its obligations as
a Guarantor. Nothing in this covenant shall be construed to permit any
Restricted Subsidiary of the Company to incur Indebtedness otherwise prohibited
by Section 4.3.
(b) Any Person required by paragraph (a) of this Section 4.11 to become, or
that is at the option of the Company becoming, a Guarantor shall execute and
deliver to the Trustee (a) a supplemental indenture in form and substance
65
satisfactory to the Trustee, which subjects such Person to the provisions
(including the representations and warranties) of this Indenture as a Guarantor,
(b) in the event that as of the date of such supplemental indenture any
Registrable Notes (as defined in the Registration Rights Agreement) are
outstanding, an instrument in form and substance satisfactory to the Trustee
which subjects such Person to the provisions of the Registration Rights
Agreement with respect to such outstanding Registrable Notes, and (c) an Opinion
of Counsel to the effect that such supplemental indenture and such instrument
have been duly authorized and executed by such Person and constitute the legal,
valid and binding obligations of such Person (subject to customary assumptions
and exceptions).
SECTION 4.12. Conduct of Business.
---------------------
The Company and its Restricted Subsidiaries will not engage in any businesses
which are not the same, similar, related or ancillary to the businesses in which
the Company and its Restricted Subsidiaries are engaged on the Issue Date.
SECTION 4.13. Maintenance of Office or Agency.
-----------------------------------
The Company shall maintain the office or agency required under Section 2.3. 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 13.2.
SECTION 4.14. Corporate Existence.
--------------------
Except as otherwise permitted by Article V, 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 shall determine in
good faith that the preservation thereof is no longer desirable in the conduct
of the business of the Company and the Subsidiaries, taken as a whole.
66
SECTION 4.15. 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)
any lawful claims for labor, materials and supplies that, if unpaid, might by
law become a Lien upon the property of it 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 proceedings properly instituted and diligently conducted and for
which adequate reserves, to the extent required under GAAP, have been taken.
SECTION 4.16. Maintenance of Properties and Insurance.
-------------------------------------------
(a) The Company shall, and shall cause each of its Restricted Subsidiaries
to, maintain its material properties in good working order and condition
(subject to ordinary wear and tear) and make all necessary repairs, renewals,
replacements, additions, betterments and improvements thereto and actively
conduct and carry on its business; provided, however, that nothing in this
Section 4.16 shall prevent the Company or any of its Restricted Subsidiaries
from discontinuing the operation and maintenance of any of its properties, if
such discontinuance is, in the good faith judgment of the Board of Directors of
the Company or the 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 its Restricted Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds that, in the good faith judgment of the
Board of Directors of the Company, are adequate and appropriate for the conduct
of the business of the Company and such Restricted Subsidiaries of the Company
in a prudent manner, with reputable insurers or with the government of the
United States of America or any agency or instrumentality thereof, in such
amounts, with such deductibles, and by such methods as shall be customary, in
the good faith judgment of the Board of Directors of the Company, for companies
similarly situated in the industry.
67
SECTION 4.17. Compliance with Laws.
----------------------
The Company shall comply, and shall cause each of its Restricted 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 are not in the aggregate
reasonably likely 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 4.18. Additional Information.
-----------------------
The Company will deliver to the Trustee within 15 days after the 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 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 TIA Section 314(a). So long as any of
the Notes remain outstanding, the Company shall make available to any
prospective purchaser of the Notes or the beneficial owner of the Notes in
connection with any sale thereof the information required by Rule 144A(d)(4)
under the Securities Act.
SECTION 4.19. Compliance Certificate; Notice of Default.
---------------------------------------------
(a) The Company shall deliver to the Trustee, within 120 days after the
end of the Company's fiscal year, an Officers' Certificate which complies with
TIA Section 314(a)(4) stating that a review of its activities during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether it has kept, observed, performed and
fulfilled its covenants and obligations under this Indenture and further
stating, as to each such Officer signing such certificate, that to the best of
such Officer's knowledge the Company during such preceding fiscal year has kept,
observed, performed and fulfilled each and every such covenant and the
obligations contained in this Indenture and the Notes and no
68
Default or Event of Default occurred during such year and at the date of such
certificate there is no Default or Event of Default that has occurred and is
continuing or, if such signers do know of such Default or Event of Default, the
certificate shall describe the Default or Event of Default and its status with
particularity. The Officers' Certificate shall also notify the Trustee should
the Company elect to change the manner in which it fixes its fiscal year end.
(b) The annual financial statements delivered pursuant to Section 4.18
shall be accompanied by a written report of the Company's independent
accountants (who shall be a firm of established national reputation) that in
conducting their audit of such financial statements nothing has come to their
attention that would lead them to believe that the Company has violated any
provisions of Article IV, V or VI in this Indenture insofar as they relate to
accounting matters or, if any such violation has occurred, specifying the nature
and period of existence thereof, it being understood that such accountants shall
not be liable directly or indirectly to any Person for any failure to obtain
knowledge of any such violation.
(c) (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 13.2 hereof, by registered or
certified mail or by telegram, telex or facsimile transmission followed by hard
copy by registered or certified mail, an Officers' Certificate specifying such
event, notice or other action (including any action the Company is taking or
proposes to take in respect thereof) within 30 days of such occurrence.
SECTION 4.20. Waiver of Stay, Extension or Usury Laws.
--------------------------------------------
The Company and each Guarantor covenants (to the extent that it may lawfully do
so) that it shall not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
or any usury law or other law that would prohibit or forgive the Company or any
such Guarantor, as the case may be, from paying all or any portion of the
principal of or interest on the Notes or performing its Guarantee, as the case
may be and 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 and each
Guarantor, if any, hereby expressly waives all benefit or advantage of any such
law, and covenants that it shall not hinder, delay or impede the execution of
any power herein granted to the Trustee, but
69
shall suffer and permit the execution of every such power as though no such law
had been enacted.
SECTION 4.21. Further Instruments and Acts.
-------------------------------
Upon request of the Trustee, the Company and each Guarantor will execute and
deliver such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purpose of this Indenture.
ARTICLE V
SUCCESSOR COMPANY
SECTION 5.1. Merger, Consolidation and Sale of Assets.
---------------------------------------------
(a) The Company will not, in a single transaction or a series of related
transactions, consolidate with or merge with or into, or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its assets to,
another Person or Persons unless:
(i) either (A) the Company shall be the survivor of such merger or
consolidation or (B) the surviving Person is a corporation existing under the
laws of the United States, any state thereof or the District of Columbia and
such surviving Person shall expressly assume by Supplemental Indenture all the
obligations of the Company under the Notes, this Indenture and the Registration
Rights Agreement;
(ii) immediately after giving effect to such transaction (on a pro forma
basis, including any Indebtedness incurred or anticipated to be incurred in
connection with such transaction and the other adjustments referred to in the
definition of "Consolidated Fixed Charge Coverage Ratio"), the Company or the
surviving Person is able to incur at least $1.00 of additional Indebtedness
(other than Permitted Indebtedness) in compliance with Section 4.3;
(iii) immediately before and immediately after giving effect to such
transaction (including any Indebtedness incurred or anticipated to be incurred
in connection with the transaction), no Default or Event of Default shall have
occurred and be continuing; and
(iv) the Company has delivered to the Trustee an Officers' Certificate and
Opinion of Counsel, each
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stating that such consolidation, merger or transfer complies with this
Indenture, that the surviving Person agrees to be bound thereby and by the Notes
and the Registration Rights Agreement, and that all conditions precedent in this
Indenture relating to such transaction have been satisfied including (in the
case of the Officers' Certificate) the calculations required by clause (ii)
above.
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 and assets of one or more 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.
Notwithstanding the foregoing clauses (ii) and (iii) above, (a) any Restricted
Subsidiary of the Company may consolidate with, merge into or transfer all or
part of its properties and assets to the Company and (b) the Company may merge
with an Affiliate that is (x) a corporation that has no material assets or
liabilities and which was incorporated solely for the purpose of reincorporating
the Company in another jurisdiction or (y) a Restricted Subsidiary of the
Company so long as all assets of the Company and the Restricted Subsidiaries
immediately prior to such transaction are owned by such Restricted Subsidiary
and its Restricted Subsidiaries immediately after the consummation thereof.
(b) Each Guarantor (other 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 4.6)
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 (if other than the Guarantor) assumes by
supplemental indenture all of the obligations of the Guarantor on the Guarantee;
(iii) immediately before and immediately after giving effect to such transaction
(including any Indebtedness incurred or anticipated to be incurred in connection
with the transaction), no Default or Event of Default shall have occurred and be
continuing; and (iv) immediately after giving effect to such transaction on a
pro forma basis (including any Indebtedness incurred or anticipated to be
incurred in connection with the transaction), the Company could satisfy the
provisions of
71
clause (ii) of the first paragraph under paragraph (a) of this Section 5.1. 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 Restricted
Subsidiary of the Company need only comply with clause (iv) of the first
paragraph under paragraph (a) of this Section 5.1.
SECTION 5.2. Successor Corporation Substituted.
-----------------------------------
In the event of any transaction described in and complying with the conditions
listed in Section 5.1 in which the Company or a Guarantor, as the case may be,
is not the surviving Person, such surviving Person shall succeed to, and be
substituted for, and may exercise every right and power of, the Company or such
Guarantor, as the case may be, and the Company shall be discharged from its
Obligations under this Indenture and the Notes or such Guarantor shall be
discharged from its Obligations under this Indenture and its Guarantee, as the
case may be.
72
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.1. Events of Default.
-------------------
An "Event of Default" shall occur upon:
------------------
(1) the failure to pay interest (including additional interest, if any,
under the Registration Rights Agreement) 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 X);
(2) 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 X);
(3) a default in the observance or performance of Section 5.1;
(4) 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;
(5) 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 (other than a
Receivables Entity) of the Company, or the acceleration of the final stated
maturity of any such Indebtedness, 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, aggregates $10.0 million or more at any time;
(6) one or more judgments in an aggregate amount in excess of $10.0 million
shall have been rendered against the Company or any of its Significant
Subsidiaries and such judgments remain undischarged, unpaid and unstayed for a
period of 60 days after such judgment or judgments become final and
non-appealable, and in the event such judgment is covered by insurance, an
enforcement proceeding has been commenced by any creditor upon such judgment,
which is not promptly stayed;
73
(7) the Company or a Significant Subsidiary pursuant to or within the
meaning of any Bankruptcy Law:
(A) commences a voluntary case or proceeding;
(B) consents to the entry of judgment, decree or order for relief
against it in an involuntary case or proceeding;
(C) consents to the appointment of a Custodian of it or for any
substantial part of its property;
(D) makes a general assignment for the benefit of its creditors;
(E) consents to or acquiesces in the institution of a bankruptcy or an
insolvency proceeding against it;
(F) takes any corporate action to authorize or effect any of the
foregoing;
or takes any comparable action under any foreign laws relating to insolvency;
(8) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(A) is for relief against the Company or any Significant Subsidiary in
an involuntary case;
(B) appoints a Custodian of the Company or any Significant Subsidiary
or for any substantial part of its property; or
(C) orders the winding up or liquidation of the Company or any
Significant Subsidiary; or any similar relief is granted under any foreign
laws and the order, decree or relief remains unstayed and in effect for 60
days; or
(9) 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).
The foregoing will constitute Events of Default whatever the reason for any such
Event of Default and whether it is voluntary or involuntary or is effected by
operation of
74
law or pursuant any judgment, decree or order of any to court or
any order, rule or regulation of any administrative or governmental body.
The term "Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code, or any similar
Federal or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator, custodian or similar official under any
Bankruptcy Law.
SECTION 6.2. Acceleration.
------------
(a) If an Event of Default (other than an Event of Default specified in
6.1(7) or (8) with respect to the Company) occurs and is 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," and upon
receipt of such notice the same shall become due and payable upon the first to
occur of (x) an acceleration under any issue of then outstanding Designated
Senior Indebtedness or (y) the expiration of five Business Days after receipt by
the Company and each Representative of holders of Designated Senior Indebtedness
then outstanding of such notice of acceleration unless all Events of Default
specified in the respective notice of acceleration have been cured within said
five Business Day period.
(b) If an Event of Default specified in Sections 6.1(7) and (8) with
respect to the Company occurs and is continuing, then the principal of and
accrued interest on all the 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 of Notes.
(c) At any time after a declaration of acceleration with respect to the
Notes as described in Section 6.2(a) above, 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 (including
the reasonable fees, expenses and disbursements of its agents and counsel) and
(v) in the event
75
of the cure or waiver of an Event of Default of the type described in Section
6.1(6), (7) or (8), the Trustee shall have received an Officers' Certificate and
an Opinion of Counsel that such Event of Default has been cured or waived. No
such rescission shall affect any subsequent Default or impair any right
consequent thereto.
SECTION 6.3. Other Remedies.
---------------
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of principal of or interest on the Notes
or to enforce the performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding 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 Noteholder in exercising any right or remedy accruing upon an
Event of Default shall not impair the right or remedy or constitute a waiver of
or acquiescence in the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative.
SECTION 6.4. Waiver of Past Defaults.
--------------------------
Subject to Sections 2.9, 6.7 and 9.2, the holders of a majority in principal
amount of the Notes may waive any existing Default or Event of Default under
this Indenture, and its consequences, except (i) a Default in the payment of the
principal of or interest on any Notes or (ii) a Default or Event of Default in
respect of a provision that under Section 9.2 cannot be amended without the
consent of each Noteholder affected. When a Default or Event of Default is
waived, it is deemed cured, but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any consequent right. This paragraph
of this Section 6.4 shall be in lieu of 316(a)(1)(B) of the TIA and such
316(a)(1)(B) of the TIA is hereby expressly excluded from this Indenture and the
Notes, as permitted by the TIA.
Upon any such waiver, such Default shall cease to exist and be deemed to have
been cured and not to have occurred, and any Event of Default arising therefrom
shall be deemed to have been cured and not to have occurred for every purpose of
this Indenture and the Notes, but no such waiver shall extend to any subsequent
or other Default or impair any right consequent thereon.
SECTION 6.5. Control by Majority.
---------------------
Subject to Section 2.9, the Holders of a majority in principal amount of the
Notes may direct the time, method and place of conducting any proceeding for any
remedy available to
76
the Trustee or of exercising any trust or power conferred on the Trustee.
However, the Trustee may refuse to follow any direction that conflicts with law
or this Indenture or, subject to Section 7.1, that the Trustee determines is
unduly prejudicial to the rights of other Noteholders or would involve the
Trustee in personal liability; provided, however, that the Trustee may take any
other action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall be entitled
to indemnification satisfactory to it in its sole discretion against all losses
and expenses caused by taking or not taking such action. This Section 6.5 shall
be in lieu of 316(a)(1)(A) of the TIA, and such 316(a)(1)(A) of the TIA is
hereby expressly excluded from this Indenture and the Notes, as permitted by the
TIA.
SECTION 6.6. Limitation on Suits.
---------------------
A Noteholder may not pursue any remedy with respect to this Indenture or
the Notes unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(2) the Holders of at least 25% in principal amount of the outstanding
Notes make a written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable security or
indemnity against any loss, liability or expense;
(4) the Trustee does not comply with the request within 45 days after
receipt of the request and the offer of security or indemnity; and
(5) the Holders of a majority in principal amount of the outstanding
Notes do not give the Trustee a direction inconsistent with the request
during such 45-day period.
A Noteholder may not use this Indenture to prejudice the rights of another
Noteholder or to obtain a preference or priority over another Noteholder.
SECTION 6.7. Rights of Holders To Receive Payment.
-----------------------------------------
Notwithstanding any other provision of this Indenture, the right of any Holder
to receive payment of principal of and interest on the Notes held by such
Holder, on or after the respective due dates expressed in the Notes, or to bring
suit for the enforcement of any such payment on or
77
after such respective dates, shall not be impaired or affected without the
consent of such Holder.
SECTION 6.8. Collection Suit by Trustee.
-----------------------------
If an Event of Default specified in Section 6.1(1) or (2) occurs and is
continuing, the Trustee may recover judgment in its own name and as trustee of
an express trust against the Company and the Guarantors for the whole amount
then due and owing (together with interest on any unpaid interest to the extent
lawful) and the amounts provided for in Section 7.7.
SECTION 6.9. Trustee May File Proofs of Claim.
-------------------------------------
The Trustee may file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee and the
Noteholders allowed in any judicial proceedings relative to the Company, the
Guarantors, their respective Subsidiaries or their respective creditors or
properties and, unless prohibited by law or applicable regulations, may vote on
behalf of the Holders in any election of a trustee in bankruptcy or other Person
performing similar functions, and any Custodian in any such judicial proceeding
is hereby authorized by each Holder to make payments to the Trustee and, in the
event that the Trustee shall consent to the making of such payments directly to
the Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and its counsel, and any other amounts due the Trustee under Section 7.7.
Nothing herein contained shall be deemed to authorize the Trustee to authorize,
consent to or accept on behalf of any Holder any plan or reorganization,
arrangement or adjustment 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.
SECTION 6.10. Priorities.
----------
If the Trustee collects any money or property pursuant to this Article VI, it
shall pay out the money or property in the following order:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: to holders of Senior Indebtedness to the extent required by Article
X;
THIRD: to Noteholders for amounts due and unpaid on the Notes for principal
and interest, ratably, without preference or priority of any kind, according to
the
78
amounts due and payable on the Notes for principal and interest, respectively;
and
FOURTH: to the Company or any other obligors on the Notes as their
interests may appear, or as a court of competent jurisdiction may direct.
The Trustee may fix a record date and payment date for any payment to
Noteholders pursuant to this Section. At least 15 days before such record date,
the Trustee shall mail to each Noteholder and the Company a notice that states
the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs.
-----------------------
In any suit for the enforcement of any right or remedy under this Indenture or
in any suit against the Trustee for any action taken or omitted by it as
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section does
not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.7
or a suit by Holders of more than 10% in outstanding principal amount of the
Notes.
SECTION 6.12. Restoration of Rights and Remedies.
--------------------------------------
If the Trustee or any Holders have instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
ARTICLE VII
TRUSTEE
SECTION 7.1. Duties of Trustee.
-------------------
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture and use the
same degree of care and skill in their exercise as a prudent Person would
exercise
79
or use under the circumstances in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture. However, the Trustee shall
examine the certificates and opinions to determine whether or not they conform
to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:
(1) this paragraph does not limit the effect of paragraph (b) of this
Section;
(2) the Trustee shall not be liable for any error of judgment made in good
faith by a Trust Officer unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it takes or
omits to take in good faith in accordance with a direction received by it
pursuant to Section 6.5.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur financial liability in the performance of
any of its duties
80
hereunder or in the exercise of any of its rights or powers, if it shall have
reasonable grounds to believe that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it.
SECTION 7.2. Rights of Trustee.
-------------------
(a) The Trustee may rely on any document believed by it to be genuine and
to have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on the
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for the
misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute
willful misconduct or negligence. Unless otherwise specifically provided in this
Indenture, any demand, request, direction or notice from the Company shall be
sufficient if it is signed by an Officer of the Company.
(e) The Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture, the Notes and
the Guarantees shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
(f) The Trustee shall be under no obligation to exercise any of the rights
or powers created in it by this Indenture at the request or direction of any of
the Holders pursuant to the Indenture, unless such Holders shall have offered to
the Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction.
SECTION 7.3. 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, the Guarantors or any
of their respective Affiliates with the same rights it would have if it
81
were not Trustee. Any Paying Agent, Registrar, co-registrar or copaying agent
may do the same with like rights. However, the Trustee must comply with Sections
7.10 and 7.11.
SECTION 7.4. Trustee's Disclaimer.
---------------------
The Trustee shall not be responsible for and makes no representation as to the
validity or adequacy of this Indenture, the Notes or the Guarantees, 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 or the Guarantors in
this Indenture or in any document issued in connection with the sale of the
Notes or in the Notes or the Guarantees other than the Trustee's certificate of
authentication.
SECTION 7.5. Notice of Defaults.
--------------------
If a Default or Event of Default occurs and is continuing, the Trustee shall
mail to each Noteholder notice of the Default or Event of Default within 30 days
after it occurs. Except in the case of a Default or Event of Default in payment
of principal of or interest on any Note (including payments pursuant to the
optional redemption or required repurchase provisions of such Note and this
Indenture, if any) or for failure to comply with Article V, 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 Trust Officers in good
faith determines that withholding the notice is in the interests of Noteholders.
SECTION 7.6. Reports by Trustee to Holders.
---------------------------------
As promptly as practicable after each May 15 beginning with the May 15 following
the date of this Indenture, and in any event prior to July 15 in each year, the
Trustee shall mail to each Noteholder a brief report dated as of such May 15
that complies with TIA Section 313(a) if such a report is required by that
section. The Trustee also shall comply with TIA Section 313(b). The Trustee
shall also transmit by mail all reports required by TIA Section 313(c).
A copy of each report at the time of its mailing to Noteholders shall be filed
with the SEC if required by law and each stock exchange (if any) on which the
Notes are listed. The Company agrees to notify promptly the Trustee whenever the
Notes become listed on any stock exchange and of any delisting thereof.
SECTION 7.7. Compensation and Indemnity.
----------------------------
The Company shall pay to the Trustee from time to time reasonable compensation
for its services. The Trustee's
82
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company shall reimburse the Trustee upon request for all
reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, costs of preparing and reviewing reports, certificates and other
documents, costs of preparation and mailing-of notices to Noteholders and
reasonable costs of counsel retained by the Trustee in connection with the
delivery of an Opinion of Counsel or otherwise, in addition to the compensation
for its services. Such expenses shall include the reasonable compensation and
expenses, disbursements and advances of the Trustee's agents, counsel,
accountants and experts. The Company shall indemnify the Trustee against any and
all loss, liability or expense (including reasonable attorneys' fees, expenses
and disbursements) incurred by it in connection with the administration of this
trust and the performance of its duties hereunder, including the costs and
expenses of enforcing this Indenture (including this Section 7.7) and of
defending itself against any claims (whether asserted by any Noteholder, the
Company or otherwise). The Trustee shall notify the Company promptly of any
claim for which it may seek indemnity. Failure by the Trustee to so notify the
Company shall not relieve the Company of its obligations hereunder. The Company
shall defend the claim and the Trustee may have separate counsel and the Company
shall pay the fees and expenses of such counsel. The Company need not reimburse
any expense or indemnify against any loss, liability or expense incurred by the
Trustee through the Trustee's own willful misconduct, negligence or bad faith.
To secure the Company's payment obligations in this Section, the Trustee shall
have a lien prior to the Notes on all money or property held or collected by the
Trustee other than money or property held in trust to pay principal of and
interest on particular Notes. The Trustee's right to receive payment of any
amounts due under this Section 7.7 shall not be subordinate to any other
liability or indebtedness of the Company.
The Company's payment obligations pursuant to this Section shall survive the
discharge of this Indenture. When the Trustee incurs expenses after the
occurrence of a Default specified in Section 6.1(7) or (8) with respect to the
Company, the expenses (including the reasonable fees, expenses and disbursements
of its agents and counsel) are intended to constitute expenses of administration
under any Bankruptcy Law.
SECTION 7.8. Replacement of Trustee.
------------------------
The Trustee may resign at any time by so notifying the Company. The Holders of a
majority in principal amount of
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the outstanding Notes may remove the Trustee by so notifying the Trustee and may
appoint a successor Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or its
property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed by the Company or by the Holders of a
majority in principal amount of the outstanding Notes and such Holders do not
reasonably promptly appoint a successor Trustee, or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its appointment to the
retiring Trustee and to the Company. Thereupon the resignation or removal of the
retiring Trustee shall become effective, and the successor Trustee shall have
all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to Noteholders. The
retiring Trustee shall promptly transfer all property held by it as Trustee to
the successor Trustee, subject to the lien provided for in Section 7.7.
If a successor Trustee does not take office within 60 days after the retiring
Trustee resigns or is removed, the retiring Trustee or the Holders of 10% in
principal amount of the outstanding Notes may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Noteholder may petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this Section, the
Company's obligations under Section 7.7 shall continue for the benefit of the
retiring Trustee.
SECTION 7.9. Successor Trustee by Merger.
------------------------------
If the Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate
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trust business or assets to, another corporation or banking association, the
resulting, surviving or transferee corporation without any further act shall be
the successor Trustee.
In case at the time such successor or successors by merger, conversion,
consolidation or transfer to the Trustee shall succeed to the trusts created by
this Indenture, any of the Notes shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, an successor to the Trustee may authenticate such Notes either in
the name of an predecessor hereunder or in the name of the successor to the
Trustee; and in all such cases such certificates shall have the full force which
it is anywhere in the Notes or in this Indenture provided that the certificate
of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification.
------------------------------
The Trustee shall at all times satisfy the requirements of TIA Section 310(a).
The Trustee shall have a combined capital and surplus of at least $50.0 million
as set forth in its most recent published annual report of condition. 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.
SECTION 7.11. Preferential Collection of Claims Against Company.
-----------------------------------------------------
The Trustee shall comply with TIA Section 311(a), excluding an 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.
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.1. Discharge of Liability on Notes.
-----------------------------------
(a) The Company may terminate its and the Guarantors' obligations under the
Notes, the Guarantees and this Indenture, except those obligations referred to
in Section 8.1(b), if all Notes previously authenticated and
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delivered (other than destroyed, lost or stolen Notes which have been replaced
or paid or Notes for whose payment U.S. Legal Tender or non-callable U.S.
Government Obligations, or a combination thereof, has theretofore been deposited
with the Trustee or the Paying Agent in trust or segregated and held in trust by
the Company and thereafter repaid to the Company, as provided in Section 8.5)
have been delivered to the Trustee for cancellation and the Company has paid all
sums payable by it hereunder, or if:
(i) either (A) pursuant to Article III, the Company shall have given notice
to the Trustee and mailed a notice of redemption to each Holder of the
redemption of all of the Notes under arrangements satisfactory to the Trustee
for the giving of such notice or (B) all Notes have otherwise become due and
payable hereunder;
(ii) the Company shall have irrevocably deposited or caused to be deposited
with the Trustee or a trustee satisfactory to the Trustee, under the terms of an
irrevocable trust agreement in form and substance satisfactory to the Trustee,
as trust funds in trust solely for the benefit of the Holders for that purpose,
U.S. Legal Tender or non-callable U.S. Government Obligations, or a combination
thereof, in such amount as is sufficient without consideration of reinvestment
of such funds, to pay principal of, premium on, if any, and interest on the
outstanding Notes to maturity or redemption, as the case may be; provided that
the Trustee shall have been irrevocably instructed to apply such U.S. Legal
Tender to the payment of said principal, premium, if any, and interest with
respect to the Notes and, provided, further, that from and after the time of
deposit, the funds deposited shall not be subject to the rights of holders of
Senior Indebtedness pursuant to the provisions of Article X;
(iii) no Default or Event of Default with respect to this Indenture or the
Notes shall have occurred and be continuing on the date of such deposit or shall
occur as a result of such deposit and such deposit will not result in a breach
or violation of, or constitute a default under, any other instrument to which
the Company is a party or by which it is bound;
(iv) the Company shall have paid all other sums payable by it hereunder;
and
(v) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent providing for the termination of the Company's obligations under the
Notes and this Indenture have been
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satisfied. Such Opinion of Counsel shall also state that such satisfaction and
discharge does not result in a default under the New Credit Facility (if then in
effect) or any other agreement or instrument then known to such counsel that
binds or affects the Company.
(b) Notwithstanding the foregoing paragraph, the Company's obligations in
Sections 2.2, 2.5, 2.6, 2.7, 2.8, 4.1, 4.13, 4.14, 4.15, 4.17, 7.7, 8.4, 8.5,
and 8.6 shall survive until the Notes are no longer outstanding pursuant to the
last paragraph of Section 2.8. After the Notes are no longer outstanding, the
Company's obligations in Sections 7.7, 8.4, 8.5, and 8.6 shall survive.
After such delivery or irrevocable deposit, the Trustee upon request shall
acknowledge in writing the discharge of the Company's and the Guarantors'
obligations under the Notes, the Guarantees and this Indenture except for those
surviving obligations specified above.
SECTION 8.2. Legal Defeasance and Covenant Defeasance.
-------------------------------------------
(a) The Company may, at its option by Board Resolution of the Board of
Directors of the Company, at any time, elect to have either paragraph (b) or (c)
below be applied to all outstanding Notes upon compliance with the conditions
set forth in Section 8.3.
(b) Upon the Company's exercise under paragraph (a) hereof of the option
applicable to this paragraph (b), the Company and the Guarantors shall, subject
to the satisfaction of the conditions set forth in Section 8.3, be deemed to
have been discharged from their obligations with respect to all outstanding
Notes on the date the conditions set forth below are satisfied (hereinafter,
"Legal Defeasance"). For this purpose, Legal Defeasance means that the Company
shall be deemed to have paid and discharged the entire Indebtedness represented
by the outstanding Notes, which shall thereafter be deemed to be "outstanding"
only for the purposes of Section 8.4 hereof and the other Sections of this
Indenture referred to in (i) through (iv) below, and to have satisfied all its
other obligations under such Notes and this Indenture (and the Trustee, on
demand of and at the expense of the Company, shall execute proper instruments
acknowledging the same), and the following provisions shall survive until
otherwise terminated or discharged hereunder: (i) the rights of Holders of
outstanding Notes to receive solely from the trust fund described in Sections
8.3 and 8.4 hereof, and as more fully set forth in such Sections, payments in
respect of the principal of (and premium, if any, on) and interest on such Notes
when such payments are due, (ii) the Company's obligations with respect to such
Notes under Article II and
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Section 4.13 hereof, (iii) the rights, powers, trusts, duties and immunities of
the Trustee hereunder and the Company's obligations in connection therewith and
(iv) this Article VIII. The Holders of the Notes and any amounts deposited under
Section 8.3 hereof shall cease to be subject to any obligations to, or the
rights of, any holder of Senior Indebtedness or Guarantor Senior Indebtedness
under Articles X and XII or otherwise. Subject to compliance with this Article
VIII, the Company may exercise its option under this paragraph (b)
notwithstanding the prior exercise of its option under paragraph (c) hereof.
(c) Upon the Company's exercise under paragraph (a) hereof of the option
applicable to this paragraph (c), the Company and the Guarantors shall, subject
to the satisfaction of the conditions set forth in Section 8.3 hereof, be
released from their obligations under the covenants contained in Sections 4.2
through 4.12 and Article V hereof with respect to the outstanding Notes on and
after the date the conditions set forth below are satisfied (hereinafter,
"Covenant Defeasance"), and the Notes shall thereafter be deemed not
"outstanding" for the purposes of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other purposes
hereunder (it being understood that such Notes shall not be deemed outstanding
for accounting purposes) and Holders of the Notes and any amounts deposited
under Sections 8.3 and 8.4 hereof shall cease to be subject to any obligations
to, or the rights of, any holder of Senior Indebtedness or Guarantor Senior
Indebtedness under Articles X and XII or otherwise. For this purpose, such
Covenant Defeasance means that, with respect to the outstanding Notes, the
Company and the Guarantors may omit to comply with and shall have no liability
in respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such covenant or any reason of any reference in any such covenant to any
other provision herein or in any other document and such omission to comply
shall not constitute a Default or an Event of Default under Section 6.1(3) or
6.1(4) hereof, but, except as specified above, the remainder of this Indenture
and such Notes and the Guarantees shall be unaffected thereby.
SECTION 8.3. Conditions to Defeasance.
--------------------------
The Company may exercise its Legal Defeasance option or its Covenant Defeasance
option only if:
(1) the Company irrevocably deposits with the Trustee, in trust, for the
benefit of the holders of the Notes U.S. Legal Tender, non-callable U.S.
Government Obligations, or a combination thereof, in such amounts as
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will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay 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; provided that the Trustee shall have
received an irrevocable written order from the Company instructing the Trustee
to apply such U.S. Legal Tender or the proceeds of such U.S. Government
Obligations to said payments with respect to the Notes;
(2) in the case of a 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 (i) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling, or (ii) since the date of
this Indenture there has been a change in the applicable Federal income tax law,
in either case to the effect that, and based thereon such Opinion of Counsel
shall confirm that, the Noteholders will not recognize income, gain or loss for
Federal income tax purposes as a result of such defeasance and will be subject
to Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Legal Defeasance had not occurred;
provided, however, that notwithstanding the foregoing, the Opinion of Counsel
required by this Section 8.3(2) with respect to a Legal Defeasance need not be
delivered if all Notes theretofore delivered to the Trustee for cancellation (x)
have become due and payable, or (y) will become due and payable within one year
(whether by redemption or otherwise) under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the Trustee in the name, and
at the expense, of the Company;
(3) in the case of a 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 Noteholders 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;
(4) no Default or Event of Default shall have occurred and be continuing on
the date of such deposit (other than a Default or Event of Default with respect
to this Indenture resulting from the incurrence of Indebtedness, all or a
portion of which will be used to defease the Notes concurrently with such
incurrence) or
89
insofar as Sections 6.1(7) and 6.1(8) hereof are concerned, at any time in the
period ending on the 91st day after the date of such deposit;
(5) 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
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound;
(6) 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;
(7) the Company delivers to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent to the defeasance
and discharge of the Notes and this Indenture as contemplated by this Article
VIII have been complied with;
(8) 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 Indebtedness of the Company other than the Notes and (B) assuming no
intervening bankruptcy of the Company between the date of deposit and the 91st
day following the deposit and that no Holder is an insider of the Company, after
the 91st day following the deposit, the trust funds will not be subject to the
effect of an applicable bankruptcy insolvency, reorganization or similar laws
affecting creditors' rights generally; and
(9) the Company delivers to the Trustee an Opinion of Counsel to the effect
that the trust resulting from the deposit does not constitute, or is qualified
as, a regulated investment company under the Investment Company Act of 1940.
Before or after a deposit, the Company may make arrangements satisfactory to the
Trustee for the redemption of Notes at a future date in accordance with Article
III.
SECTION 8.4. Application of Trust Money.
-----------------------------
The Trustee or Paying Agent shall hold in trust U.S. Legal Tender or U.S.
Government Obligations deposited with it pursuant to this Article VIII, and
shall apply the deposited
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U.S. Legal Tender and the money from U.S. Government Obligations in accordance
with this Indenture to the payment of principal of, premium, if any, and
interest on the 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 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 8.3 hereof or the principal, premium,
if any, and interest received in respect thereof other than any such tax, fee or
other charge which by law is for the account of the Holders of the outstanding
Notes.
Anything in this Article VIII to the contrary notwithstanding, the Trustee shall
deliver or pay to the Company from time to time upon the Company's request any
U.S. Legal Tender or U.S. Government Obligations held by it as provided in
Section 8.3 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
SECTION 8.5. Repayment to Company.
----------------------
Subject to Article VIII, 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 U.S. Legal Tender. The Trustee and the Paying
Agent shall pay to the Company upon request any money held by them for the
payment of principal or interest that remains unclaimed for two years; provided
that the Trustee or such Paying Agent, before being required to make any
payment, may at the expense of the Company cause to be published once in a
newspaper of general circulation in the City of New York or mail to each Holder
entitled to such money notice that such money remains unclaimed and that after a
date specified therein which shall be at least 30 days from the date of such
publication or mailing any unclaimed balance of such money then remaining will
be repaid to the Company. After payment to the Company, Holders entitled to such
money must look to the Company for payment as general creditors unless an
applicable law designates another Person.
SECTION 8.6. Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any U.S. Legal Tender or U.S.
Government Obligations in accordance with Article VIII by reason of any legal
proceeding
91
or by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Company's
and the Guarantors' obligations under this Indenture and the Notes and the
Guarantees shall be revived and reinstated as though no deposit had occurred
pursuant to Article VIII until such time as the Trustee or Paying Agent is
permitted to apply all such U.S. Legal Tender or U.S. Government Obligations in
accordance with Article VIII; provided that if the Company has made any payment
of interest on or principal of any Notes because of the reinstatement of its
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.
ARTICLE IX
AMENDMENTS
SECTION 9.1. Without Consent of Holders.
-----------------------------
The Company, the Guarantors and the Trustee may amend this Indenture, the Notes
or the Guarantees without notice to or consent of any Noteholder:
(1) to cure any ambiguity, omission, defect or inconsistency; provided that
such amendment does not in the opinion of the Trustee, adversely affect the
rights of any Holder in any material respect;
(2) to comply with Article V;
(3) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(4) to comply with any requirements of the SEC in connection with
qualifying or maintaining the qualification of this Indenture under the TIA;
(5) 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; or
(6) to provide for the issuance of the Exchange Notes, which will have
terms substantially identical in all material respects to the Initial Notes
(except that the transfer restrictions contained in the Initial Notes and
provisions relating to an increase in interest rates in the event the Notes are
not registered under the Securities Act will be modified or eliminated, as
appropriate), and which will be treated together with any
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outstanding Initial Notes, as a single issue of securities;
provided, however, that the Company has delivered to the Trustee an Opinion of
Counsel stating that such amendment or supplement complies with the provisions
of this Section 9.1.
After an amendment under this Section becomes effective, the Company shall mail
to the Holders a notice briefly describing such amendment. The failure to give
such notice to all Holders, or any defect therein, shall not impair or affect
the validity of any amendment under this Section.
SECTION 9.2. With Consent of Holders.
--------------------------
Subject to Section 6.7, the Company and the Guarantors, when authorized by a
resolution of their respective Boards of Directors, and the Trustee may amend or
supplement this Indenture, the Notes or the Guarantees with the written consent
of the Holders of a majority in principal amount of the outstanding Notes.
Subject to Section 6.7, the Holders of a majority in principal amount of the
outstanding Notes may waive compliance by the Company with any provision of this
Indenture, the Notes or the Guarantees. However, without the consent of the
Holder of each Note affected, an amendment, supplement or waiver, including a
waiver pursuant to Section 6.4, may not:
(1) change the maturity of the principal of any such Note;
(2) reduce the amount of Notes whose Holders must consent to an amendment;
(3) reduce the rate of or change or have the effect of changing the time
for payment of interest, including defaulted interest, on any Note;
(4) reduce the principal of or change or have the effect of changing the
Stated Maturity of any Note, or change the date on which any Notes may be
subject to redemption or repurchase, or reduce the redemption or repurchase
price therefor;
(5) make any Note payable in money other than that stated in the Note;
(6) make an change in provisions of this Indenture protecting the right of
each Holder to receive payment of principal of, premium, if any, 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 the Notes to
waive Defaults or Events of Default (other than Defaults or Events of Default
with respect to the payment of principal of, premium, if any, or interest on the
Notes);
(7) amend, change or modify in any material respect the obligation of the
Company to make and consummate a Change of Control Offer or make and consummate
a Net Proceeds Offer with respect to any Asset Sale that has been consummated or
modify any of the provisions or definitions with respect thereto;
(8) modify Articles X and XII or the definitions used in Articles X and XII
of this Indenture to adversely affect the Holders in any material respect; or
(9) release any Guarantor from any of its obligations under its Guarantee
or this Indenture otherwise than in accordance with the terms of this Indenture.
It shall not be necessary for the consent of the Holders under this Section to
approve the particular form of any proposed amendment, but it shall be
sufficient if such consent approves the substance thereof.
An amendment under this Section of Articles X and XII and the definitions used
therein shall not be effective as to any holder of Senior Indebtedness or
Guarantor Senior Indebtedness then outstanding, as applicable, without the
written consent of such holder (or any group or representative thereof
authorized to give a consent).
After an amendment under this Section becomes effective, the Company shall mail
to Noteholders a notice briefly describing such amendment. The failure to give
such notice to all Noteholders, or any defect therein, shall not impair or
affect the validity of an amendment under this Section.
SECTION 9.3. Compliance With Trust Indenture Act.
---------------------------------------
Every amendment to this Indenture, the Notes or the Guarantees shall comply with
the TIA, as amended as then in effect.
SECTION 9.4. Revocation and Effect of Consents and Waivers
-------
A consent to an amendment or a waiver by a Holder of a Note shall bind the
Holder and every subsequent Holder of that Note or portion of the Note that
evidences the same debt as the consenting Holder's Note, even if notation of the
consent or waiver is not made on the Note. However, any such
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Holder or subsequent Holder may revoke the consent or waiver as to such Holder's
Note or portion of the Note if the Trustee receives the notice of revocation
before the date the amendment or waiver becomes effective. After an amendment or
waiver becomes effective, it shall bind every Noteholder, unless it makes a
change described in any of clauses (1) through (9) of Section 9.2, in which
case, the amendment or waiver shall bind only each Noteholder who has consented
to it and every subsequent Holder of a Note or portion of a Note that evidences
the same debt as the consenting Holder; provided that any such waiver shall not
impair or affect the right of any Holder to receive payment of principal of,
premium, if any, and interest on a Note, on or after the respective due dates
expressed in such Note, or to bring suit for the enforcement of any such payment
on or after such respective dates without the consent of such Holder.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Noteholders entitled to give their consent or take
any other action described above or required or permitted to be taken pursuant
to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Noteholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall become valid or effective more than 120
days after such record date.
SECTION 9.5. Notation on or Exchange of Notes.
-------------------------------------
If an amendment changes the terms of a Note, the Trustee may require the Holder
of the Note to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Note regarding the changed terms and return it to the Holder.
Alternatively, if the Company or the Trustee so determines, the Company in
exchange for the Note shall issue and the Trustee shall authenticate a new Note
that reflects the changed terms. Failure to make the appropriate notation or to
issue a new Note shall not affect the validity of such amendment.
SECTION 9.6. Trustee To Sign Amendments.
-----------------------------
The Trustee shall sign any amendment authorized pursuant to this Article IX if
the amendment does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. If it does, the Trustee may but need not sign it.
In signing such amendment the Trustee shall be entitled to receive indemnity
reasonably satisfactory to it and to receive, and (subject to Section 7.1) shall
be fully protected
94
in relying upon, an Officers' Certificate and an Opinion of Counsel stating that
such amendment is authorized or permitted by this Indenture.
ARTICLE X
SUBORDINATION
SECTION 10.1. Agreement To Subordinate.
--------------------------
The Company agrees, and each Noteholder by accepting a Note agrees, that the
Indebtedness evidenced by the Notes is subordinated in right of payment, to the
extent and in the manner provided in this Article X, to the prior payment in
cash or Cash Equivalents of all Senior Indebtedness and that the subordination
is for the benefit of and enforceable by the holders of Senior Indebtedness.
The Notes shall in all respects rank pari passu with all other Senior
Subordinated Indebtedness of the Company and only Indebtedness of the Company
which is Senior Indebtedness will rank senior to the Notes in accordance with
the provisions set forth herein. All provisions of this Article X shall be
subject to Section 10.12.
SECTION 10.2. Liquidation, Dissolution, Bankruptcy.
--------------------------------------
Upon any payment or distribution of the assets or securities of the Company to
creditors upon a total or partial liquidation or dissolution or reorganization
or winding up of or similar proceeding of the Company or its property or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or its properties, or in an assignment for the benefit
of creditors or any marshalling of the assets and liabilities of the Company,
whether voluntary or involuntary:
(1) holders of Senior Indebtedness shall be entitled to receive payment in
full in cash or Cash Equivalents of all Senior Indebtedness before Noteholders
shall be entitled to receive any payment or distribution of any character; and
(2) until all amounts owing with respect to the Senior Indebtedness is paid
in full in cash or Cash Equivalents, any payment or distribution to which
Noteholders would be entitled but for this Article X shall be made to holders of
the Senior Indebtedness as their interests may appear.
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SECTION 10.3. Default on Senior Indebtedness.
---------------------------------
The Company may not pay principal of, premium (if any) or interest on, or any
other amount in respect of, the Notes or make any deposit pursuant to Article
VIII and may not otherwise purchase, redeem or otherwise retire any Notes
(collectively, "pay the Notes") if any amount due in respect of any Senior
Indebtedness (including, without limitation any amount due as a result of
acceleration of the maturity thereof by reason of default or otherwise) has not
been paid in full in cash or Cash Equivalents unless the default has been cured
or waived and any such acceleration has been rescinded or such Senior
Indebtedness has been paid in full in cash or Cash Equivalents. However, the
Company may pay the Notes without regard to the foregoing if the Company and the
Trustee receive written notice approving such payment from the Representative of
the holders of the Senior Indebtedness with respect to which the events set
forth in the immediately preceding sentence have occurred and are continuing.
In addition, during the continuance of any default (other than a payment default
described in the first sentence of the immediately preceding paragraph) with
respect to any Designated Senior Indebtedness pursuant to which the maturity
thereof may be accelerated immediately without further notice (except such
notice as may be required to effect such acceleration) or the expiration of any
applicable grace periods, the Company may not pay the Notes for a period (a
"Payment Blockage Period") commencing upon the receipt by the Trustee (with a
copy to the Company) of written notice (a "Blockage Notice") of such default
from the Representative of the holders of such Designated Senior Indebtedness
specifying an election to effect a Payment Blockage Period and ending 179 days
thereafter (or earlier if such Payment Blockage Period is terminated (i) by
written notice to the Trustee and the Company from the Person or Persons who
gave such Blockage Notice, (ii) because the default giving rise to such Blockage
Notice and all other defaults with respect to such Designated Senior
Indebtedness shall have been cured or shall have ceased to exist or (iii)
because such Designated Senior Indebtedness has been repaid in full in cash or
Cash Equivalents).
Notwithstanding the provisions described in the immediately preceding paragraph,
unless any payment default described in the first sentence of the second
immediately preceding paragraph has occurred and is then continuing, the Company
may resume payments on the Notes after the end of such Payment Blockage Period,
including any missed payments. Not more than one Blockage Notice may be given
in any consecutive 360-day period, irrespective of the number of defaults with
respect to Designated Senior Indebtedness during such period. However, if any
Blockage Notice within such 360-day period is
96
given by or on behalf of any holders of Designated Senior Indebtedness other
than the Bank Indebtedness, a Representative of holders of Bank Indebtedness may
give another Blockage Notice within such period. In no event, however, may the
total number of days during which any Payment Blockage Period or Periods is in
effect exceed 179 days in the aggregate during any 360 consecutive day period.
SECTION 10.4. Acceleration of Payment of Notes.
------------------------------------
If payment of the Notes is accelerated because of an Event of Default, the
Company or the Trustee shall promptly notify the holders of the Designated
Senior Indebtedness or the Representative of such holders of the acceleration
and, if such notice is provided by the Company, provide copies of such notices
to the Trustee.
SECTION 10.5. When Distribution Must Be Paid Over.
----------------------------------------
If a payment or distribution is made to Noteholders by the Company that because
of this Article X should not have been made to them, the Noteholders who receive
the distribution shall hold it in trust for holders of Senior Indebtedness and
promptly pay it over to them as their respective interests may appear.
SECTION 10.6. Subrogation.
-----------
After all Senior Indebtedness is paid in full in cash or Cash Equivalents and
until the Notes are paid in full, Noteholders shall be subrogated to the rights
of holders of Senior Indebtedness to receive distributions applicable to Senior
Indebtedness. A distribution made under this Article X to holders of Senior
Indebtedness which otherwise would have been made to Noteholders is not, as
between the Company and Noteholders, a payment by the Company of Senior
Indebtedness.
SECTION 10.7. Relative Rights.
----------------
This Article X defines the relative rights of Noteholders and holders of Senior
Indebtedness. Nothing in this Indenture shall:
(1) impair, as between the Company and Noteholders, the obligation of the
Company, which is absolute and unconditional, to pay principal of and interest
on the Notes in accordance with their terms; or
(2) prevent the Trustee or any Noteholder from exercising its available
remedies upon a Default or Event of Default, subject to the rights of holders of
Senior Indebtedness to receive distributions otherwise payable to Noteholders.
97
SECTION 10.8. Subordination May Not Be Impaired by Company.
---------------------
No right of any holder of Senior Indebtedness to enforce the subordination of
the Indebtedness evidenced by the Notes shall be impaired by any act or failure
to act by the Company or by any act or failure to act, in good faith, by any
such holder or by the failure of the Company to comply with this Indenture
regardless of any knowledge thereof which any such holder may have or otherwise
be charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to the Trustee, without incurring responsibility to the
Trustee or the Holders of the Notes and without impairing or releasing the
subordination provided in this Article X or the obligations hereunder of the
Holders of the Notes to the holders of the Senior Indebtedness, do any one or
more of the following: (i) change the manner, place or terms of payment or
extend the time of payment of, or renew or alter, Senior Indebtedness, or
otherwise amend or supplement in any manner Senior Indebtedness, or any
instrument evidencing the same or any agreement under which Senior Indebtedness
is outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Indebtedness; (iii) release any
Person liable in any manner for the payment or collection of Senior
Indebtedness; and (iv) exercise or refrain from exercising any rights against
the Company and any other Person.
SECTION 10.9. Rights of Trustee and Paying Agent.
---------------------------------------
Notwithstanding Section 10.3, the Trustee or Paying Agent may continue to make
payments on the Notes and shall not be charged with knowledge of the existence
of facts that would prohibit the making of any such payments unless, not less
than two Business Days prior to the date of such payment, a Trust Officer of the
Trustee receives written notice satisfactory to it specifically stating that
payments may not be made under this Article X. The Company, the Registrar or
co-registrar, the Paying Agent, a Representative or a holder of Senior
Indebtedness may give the notice.
The Trustee in its individual or any other capacity may hold Senior Indebtedness
with the same rights it would have if it were not Trustee. The Registrar and
co-registrar and the Paying Agent may do the same with like rights. The Trustee
shall be entitled to all the rights set forth in this Article X with respect to
any Senior Indebtedness which may at any time be held by it, to the same extent
as any other holder of Senior Indebtedness; and nothing in Article VII shall
deprive the Trustee of any of its rights as such holder.
98
Nothing in this Article X shall apply to claims of, or payments to, the Trustee
under or pursuant to Section 7.7.
SECTION 10.10. Distribution or Notice to Representative.
---------------
Whenever a distribution is to be made or a notice given to holders of Senior
Indebtedness, the distribution may be made and the notice given to their
Representative (if any).
SECTION 10.11. Article X Not To Prevent Events of
Default or Limit Right to Accelerate.
------------------------------------
The failure to make a payment in respect of the Notes by reason of any provision
in this Article X shall not be construed as preventing the occurrence of a
Default or Event of Default. Nothing in this Article X shall have an effect on
the right of the Noteholders or the Trustee to accelerate the maturity of the
Notes or to pursue any rights or remedies hereunder or under applicable law,
subject to the rights under this Article X of the holders from time to time of
Senior Indebtedness.
SECTION 10.12. Trust Moneys Not Subordinated.
--------------------------------
Notwithstanding anything contained herein to the contrary, payments of U.S.
Legal Tender or the proceeds of U.S. Government Obligations held in trust under
Article VIII by the Trustee for the payment of principal of and interest on the
Notes shall not be subordinated to the prior payment of any Senior Indebtedness
or subject to the restrictions set forth in this Article X, and none of the
Noteholders shall be obligated to pay over any such amount to the Company, any
holder of Senior Indebtedness of the Company or any other creditor of the
Company.
SECTION 10.13. Trustee Entitled To Rely.
---------------------------
Upon any payment or distribution pursuant to this Article X, the Trustee and the
Noteholders shall be entitled to rely (i) upon any order or decree of a court of
competent jurisdiction in which any proceedings of the nature referred to in
Section 10.2 are pending, (ii) upon a certificate of the liquidating trustee or
agent or other Person making such payment or distribution to the Trustee or to
the Noteholders or (iii) upon the Representatives for the holders of Senior
Indebtedness for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of Senior Indebtedness 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 X. In the event that the Trustee determines, in good faith, that
evidence is required
99
with respect to the right of any person as a holder of Senior Indebtedness to
participate in any payment or distribution pursuant to this Article X, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness held by such
Person, the extent to which such Person is entitled to participate in such
payment or distribution and other facts pertinent to the rights of such Person
under this Article X, and, if such evidence is not furnished, the Trustee may
defer any payment to such Person pending judicial determination as to the right
of such Person to receive such payment. The provisions of Sections 7.1 and 7.2
shall be applicable to all actions or omissions of actions by the Trustee
pursuant to this Article X.
SECTION 10.14. Trustee To Effectuate Subordination.
--------------------------------------
Each Noteholder by accepting a Note authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Noteholders and the holders of Senior
Indebtedness as provided in this Article X and appoints the Trustee as
attorney-in-fact for any and all such purposes.
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior Indebtedness.
--------------------
The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior Indebtedness and shall not be liable to any such holders if it shall
mistakenly pay over or distribute to Noteholders or the Company or any other
Person, money or assets to which any holders of Senior Indebtedness shall be
entitled by virtue of this Article X or otherwise; provided that such amounts
shall be paid over by such Noteholders as provided herein.
100
SECTION 10.16. Reliance by Holders of Senior Indebtedness on Subordination
Provisions.
----------
Each Noteholder by accepting a Note acknowledges and agrees that the foregoing
subordination provisions are, and are intended to be, an inducement and a
consideration to each holder of any Senior Indebtedness, whether such Senior
Indebtedness was created or acquired before or after the issuance of the Notes,
to acquire and continue to hold, or to continue to hold, such Senior
Indebtedness and such holder of Senior Indebtedness shall be deemed conclusively
to have relied on such subordination provisions in acquiring and continuing to
hold, or in continuing to hold, such Senior Indebtedness.
ARTICLE XI
GUARANTEE
SECTION 11.1. Unconditional Guarantee.
------------------------
Each Guarantor hereby unconditionally, jointly and severally, guarantees,
subject to Article XII, to each Holder of a Note authenticated and delivered by
the Trustee and to the Trustee and its successors and assigns, that: (i) the
principal of and interest on the Notes will be promptly paid in full when due,
subject to an applicable grace period, whether at maturity, by acceleration or
otherwise and interest on the overdue principal, if any, and interest on any
interest, to the extent lawful, of the Notes and all other obligations of the
Company to the Holders or the Trustee hereunder or thereunder will be promptly
paid in full or performed, all in accordance with the terms hereof and thereof;
and (ii) in case of any extension of time of payment or renewal of any Notes or
of any such other obligations, the same will be promptly paid in full when due
or performed in accordance with the terms of the extension or renewal, subject
to any applicable grace period, whether at stated maturity, by acceleration or
otherwise, subject, however, in the case of clauses (i) and (ii) above, to the
limitations set forth in Section 11.5. Each Guarantor 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, the recovery of any judgment
against the Company, any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
guarantor. Each Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of
101
insolvency or bankruptcy of the Company, any right to require a proceeding first
against the Company, protest, notice and any demands whatsoever and covenants
that this Guarantee will not be discharged except by complete performance of the
obligations contained in the Notes, this Indenture and in this Guarantee. If any
Holder or the Trustee is required by any court or otherwise to return to the
Company, any Guarantor, or any custodian, trustee, liquidator or other similar
official acting in relation to the Company or any Guarantor, any amount paid by
the Company or any 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 each Guarantor, on the one hand,
and the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article VI for
the purposes of this Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any acceleration of such obligations
as provided in Article VI, such obligations (whether or not due and payable)
shall forthwith become due and payable by each Guarantor for the purpose of this
Guarantee.
SECTION 11.2. Subordination of Guarantee.
----------------------------
The obligations of each Guarantor to the Holders of Notes and to the Trustee
pursuant to the Guarantee and this Indenture are expressly subordinate and
subject in right of payment to the prior payment in full of all Guarantor Senior
Indebtedness of such Guarantor, to the extent and in the manner provided in
Article XII.
SECTION 11.3. Severability.
------------
In case any provision of this Guarantee shall be invalid, illegal or
unenforceable, the validity, legality, and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 11.4. Release of a Guarantor.
-------------------------
If no Default has occurred or is continuing or would arise therefrom, upon the
sale or disposition of all of the Capital Stock, or all or substantially all of
the assets, of a Guarantor to an entity which is not a Restricted Subsidiary of
the Company and which sale or disposition is otherwise in compliance with the
terms of this Indenture, such Guarantor shall be deemed released from all
obligations under this Article XI without any further action required on the
part of the Trustee or any Holder; provided, however, that any such termination
shall occur only to the extent that all obligations of such Guarantor under the
New Credit Facility
102
and all of its guarantees of, and under all of its pledges of assets or other
security interests which secure, Indebtedness of the Company shall also
terminate upon such release, sale or transfer.
The Trustee shall execute an appropriate instrument delivered by the Company
evidencing such release or a release pursuant to Section 4.11 upon receipt of a
request by the Company accompanied by an Officers' Certificate and Opinion of
Counsel certifying as to the compliance with this Section 11.4. Any Guarantor
not so released remains liable for the full amount of principal of and interest
on the Notes as provided in this Article XI.
SECTION 11.5. Limitation of Guarantor's Liability.
--------------------------------------
Each Guarantor and by its acceptance hereof each Holder hereby confirms that it
is the intention of all such parties that the guarantee by such Guarantor
pursuant to its Guarantee not constitute a fraudulent transfer or conveyance for
purposes of the Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar Federal or state law. To
effectuate the foregoing intention, the Holders and such Guarantor hereby
irrevocably agree that the obligations of such Guarantor under the Guarantee
shall be limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Guarantor (including, but not limited
to, the Guarantor Senior Indebtedness 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 Section 11.6, result in the obligations of such Guarantor under the
Guarantee not constituting such fraudulent transfer or conveyance.
SECTION 11.6. Contribution.
------------
In order to provide for just and equitable contribution among the Guarantors,
the Guarantors agree, inter se, that in the event any payment or distribution is
made by any Guarantor (a "Funding Guarantor") under the Guarantee, such Funding
Guarantor shall be entitled to a contribution from all other Guarantors in a pro
rata amount based on the Adjusted Net Assets (defined below) of each Guarantor
(including the Funding Guarantor) for all payments, damages and expenses
incurred by that Funding Guarantor in discharging the Company's obligations with
respect to the Notes or any other Guarantor's obligations with respect to the
Guarantee. "Adjusted Net Assets" of such Guarantor at any date shall mean the
lesser of the amount by which (x) the fair value of the property of such
Guarantor exceeds the total amount of liabilities, including without limitation,
contingent
103
liabilities (after giving effect to all other fixed and contingent liabilities
incurred or assumed on such date and after giving effect to any collection from
any Subsidiary of such Guarantor in respect of the obligation of such Subsidiary
under the Guarantee), but excluding liabilities under the Guarantee, of such
Guarantor at such date and (y) the present fair saleable value of the assets of
such Guarantor at such date exceeds the amount that will be required to pay the
probable liability of such Guarantor on its debts including, without limitation,
Guarantor Senior Indebtedness (after giving effect to all other fixed and
contingent liabilities incurred or assumed on such date and after giving effect
to any collection from any Subsidiary of such Guarantor in respect of the
obligations of such Subsidiary under the Guarantee), excluding debt in respect
of the Guarantee of such Guarantor, as they become absolute and matured.
SECTION 11.7. Waiver of Subrogation.
-----------------------
Until all Obligations are paid in full each Guarantor hereby irrevocably waives
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
such Guarantor's obligations under the Guarantees and this Indenture, including,
without limitation, any right of subrogation, reimbursement, exoneration,
indemnification, and any right to participate in any claim or remedy of any
Holder of Notes 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 the
Notes 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 Holders of the Notes, and shall, subject to the provisions of
Section 11.2, Article X and Article XII, forthwith be paid to the Trustee for
the benefit of such Holders to be credited and applied upon the Notes, whether
matured or unmatured, in accordance with terms of this Indenture. Each
Guarantor acknowledges that it will receive direct and indirect benefits from
the financing arrangements contemplated by this Indenture and that the waiver
set forth in this Section 11.8 is knowingly made in contemplation of such
benefits.
SECTION 11.8. Execution of Guarantee.
------------------------
To evidence their guarantee to the Noteholders specified in Section 11.1, the
Guarantors hereby agree to execute the Guarantee in substantially the form of
Exhibit E,
104
which shall be endorsed on each Note ordered to be authenticated and delivered
by the Trustee. Each Guarantor hereby agrees that its Guarantee set forth in
Section 11.1 shall remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Guarantee. Each such Guarantee shall
be signed on behalf of each Guarantor by two Officers, or an Officer and an
Assistant Secretary 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 such Guarantee prior to the
authentication of the Note on which it is endorsed, and the delivery of such
Note by the Trustee, after the authentication thereof hereunder, shall
constitute due delivery of such Guarantee on behalf of such Guarantor. Such
signatures upon the Guarantee may be by manual or facsimile signature of such
officers and may be imprinted or otherwise reproduced on the Guarantee, and in
case any such officer who shall have signed the Guarantee shall cease to be such
officer before the Note on which such Guarantee is endorsed shall have been
authenticated and delivered by the Trustee or disposed of by the Company, such
Note nevertheless may be authenticated and delivered or disposed of as though
the person who signed the Guarantee had not ceased to be such officer of the
Guarantor.
ARTICLE XII
SUBORDINATION OF GUARANTEES
SECTION 12.1. Agreement To Subordinate.
--------------------------
Each Guarantor agrees, and each Noteholder by accepting a Note agrees, that the
Indebtedness and other obligations evidenced by the Guarantees are subordinated
in right of payment, to the extent and in the manner provided in this Article
XII, to the prior payment in cash or Cash Equivalents of all Guarantor Senior
Indebtedness and that the subordination is for the benefit of and enforceable by
the holders of such Guarantor Senior Indebtedness. The Guarantee of each
Guarantor shall in all respects rank pari passu with all other Senior
Subordinated Indebtedness of such Guarantor and only Indebtedness of each
Guarantor which is Guarantor Senior Indebtedness shall rank senior to the
Guarantee of such Guarantor in accordance with the provisions set forth herein.
All provisions of this Article XII shall be subject to Section 12.11.
SECTION 12.2. Liquidation, Dissolution, Bankruptcy.
--------------------------------------
Upon any payment or distribution of the assets or securities of any Guarantor to
creditors upon a total or partial liquidation or a dissolution or reorganization
or
105
winding up of or similar proceeding of such Guarantor or its property or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to such Guarantor or its properties, or in an assignment for the
benefit of creditors or any marshalling of the assets and liabilities of such
Guarantor, whether voluntary or involuntary:
(a) holders of Guarantor Senior Indebtedness of such Guarantor shall be
entitled to receive payment in full in cash or Cash Equivalents of such
Guarantor Senior Indebtedness before Holders shall be entitled to receive any
payment or distribution of any character pursuant to its Guarantee; and
(b) until all amounts owing with respect to the Guarantor Senior
Indebtedness of such Guarantor is paid in full in cash or Cash Equivalents any
payment or distribution to which Noteholders would be entitled from such
Guarantor but for this Article XII shall be made to holders of Guarantor Senior
Indebtedness of such Guarantor as their interests may appear.
SECTION 12.3. Default on Guarantor Senior Indebtedness.
-------------
A Guarantor may not pay principal of, premium (if any) or interest on, or any
other amount in respect of, the Notes pursuant to its Guarantee or make any
deposit pursuant to Article VIII and may not otherwise purchase, redeem or
otherwise retire any Notes or make any payments with respect to any obligations
on the Guarantee of such Guarantor (collectively, "pay the Notes") if any amount
due in respect of any Guarantor Senior Indebtedness of such Guarantor
(including, without limitation any amount due as a result of acceleration of the
maturity thereof by reason of default or otherwise) has not been paid in full in
cash or Cash Equivalents unless the default has been cured or waived and any
such acceleration has been rescinded or such Guarantor Senior Indebtedness has
been paid in full in cash or Cash Equivalents. However, such Guarantor may pay
the Notes without regard to the foregoing if such Guarantor and the Trustee
receive written notice approving such payment from the Representative of the
holders of the Guarantor Senior Indebtedness with respect to which the events
set forth in the immediately preceding sentence have occurred and are
continuing.
In addition, during the continuance of any default (other than a payment default
described in the first sentence of the immediately preceding paragraph) with
respect to any Designated Guarantor Senior Indebtedness pursuant to which the
maturity thereof may be accelerated immediately without further notice (except
such notice as may be required to
106
effect such acceleration) or the expiration of any applicable grace periods,
such Guarantor may not pay the Notes for a period (a "Guarantor Payment Blockage
Period") commencing upon the receipt by the Trustee (with a copy to such
Guarantor) of written notice (a "Guarantor Blockage Notice") of such default
from the Representative of the holders of such Designated Guarantor Senior
Indebtedness specifying an election to effect a Guarantor Payment Blockage
Period and ending 179 days thereafter (or earlier if such Guarantor Payment
Blockage Period is terminated (i) by written notice to the Trustee and such
Guarantor from the Person or Persons who gave such Guarantor Blockage Notice,
(ii) because the default giving rise to such Guarantor Blockage Notice and all
other defaults with respect to such Designated Guarantor Senior Indebtedness
shall have been cured or shall have ceased to exist or (iii) because such
Designated Guarantor Senior Indebtedness has been repaid in full in cash or Cash
Equivalents).
Notwithstanding the provisions described in the immediately preceding paragraph,
unless any payment default described in the first sentence of the second
immediately preceding paragraph has occurred and is then continuing, such
Guarantor may resume payments on the Notes after the end of such Guarantor
Payment Blockage Period, including any missed payments. Not more than one
Guarantor Blockage Notice may be given in any consecutive 360-day period,
irrespective of the number of defaults with respect to Designated Guarantor
Senior Indebtedness during such period. However, if any Guarantor Blockage
Notice within such 360-day period is given by or on behalf of any holders of
Designated Guarantor Senior Indebtedness other than the Bank Indebtedness, a
Representative of holders of Bank Indebtedness may give another Guarantor
Blockage Notice within such period. In no event, however, may the total number
of days during which any Guarantor Payment Blockage Period or Periods is in
effect exceed 179 days in the aggregate during any 360 consecutive day period.
SECTION 12.4. When Distribution Must Be Paid Over.
----------------------------------------
If a payment or distribution is made to Noteholders by a Guarantor that because
of this Article XII should not have been made to them, the Noteholders who
receive the payment or distribution shall hold it in trust for holders of
Guarantor Senior Indebtedness and pay it over to them as their respective
interests may appear.
SECTION 12.5. Subrogation.
-----------
After all Guarantor Senior Indebtedness is paid in full in cash or Cash
Equivalents and until the Notes are paid in full, Noteholders shall be
subrogated to the rights of holders of Guarantor Senior Indebtedness to receive
107
distributions applicable to Guarantor Senior Indebtedness. A distribution made
under this Article XII to holders of Guarantor Senior Indebtedness which
otherwise would have been made to Noteholders is not, as between the Guarantors
and the Noteholders, a payment by the Guarantors of Guarantor Senior
Indebtedness.
SECTION 12.6. Relative Rights.
----------------
This Article XII defines the relative rights of Noteholders and holders of
Guarantor Senior Indebtedness. Nothing in this indenture shall:
(a) impair, as between each Guarantor and the Noteholders, the obligation
of each Guarantor, which is absolute and unconditional, to pay principal of and
interest on the Notes in accordance with the terms of the Notes and the
Guarantees; or
(b) prevent the Trustee or any Noteholder from exercising its available
remedies upon a Default or Event of Default, subject to the rights of holders of
Guarantor Senior Indebtedness to receive distributions otherwise payable to
Noteholders.
SECTION 12.7. Subordination May Not Be Impaired by the Guarantors.
----------------------------------------------------------
No right of any holder of Guarantor Senior Indebtedness to enforce the
subordination of the Indebtedness and other obligations evidenced by the
Guarantees shall be impaired by any act or failure to act by any Guarantor or by
any act or failure to act, in good faith, by any such holder or by the failure
of any Guarantor to comply with this Indenture regardless of any knowledge
thereof which any such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Guarantor Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee, without incurring
responsibility to the Trustee or the Holders of the Notes and without impairing
or releasing the subordination provided in this Article XII or the obligations
hereunder of the Holders of the Notes to the holders of the Guarantor Senior
Indebtedness, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter,
Guarantor Senior Indebtedness, or otherwise amend or supplement in any manner
Guarantor Senior Indebtedness, or any instrument evidencing the same or any
agreement under which Guarantor Senior Indebtedness is outstanding; (ii) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing
108
Guarantor Senior Indebtedness; (iii) release any Person liable in any manner for
the payment or collection of Guarantor Senior Indebtedness; and (iv) exercise or
refrain from exercising any rights against the Company and any other Person.
SECTION 12.8. Rights of Trustee and Paying Agent.
---------------------------------------
Notwithstanding Section 12.3, the Trustee or Paying Agent may continue to make
payments on the Notes and shall not be charged with knowledge of the existence
of facts that would prohibit the making of any such payments unless, not less
than two Business Days prior to the date of such payment, a Trust Officer of the
Trustee receives written notice satisfactory to it specifically stating that
payments may not be made under this Article XII. Each Guarantor, the Registrar
or co-registrar, the Paying Agent, a Representative or a holder of Guarantor
Senior Indebtedness may give the notice.
The Trustee in its individual or any other capacity may hold Guarantor Senior
Indebtedness with the same rights it would have if it were not Trustee. The
Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article XII with respect to any Guarantor Senior Indebtedness which may at any
time be held by it, to the same extent as any other holder of Guarantor Senior
Indebtedness; and nothing in Article VII shall deprive the Trustee of any of its
rights as such holder. Nothing in this Article XII shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 7.7.
SECTION 12.9. Distribution or Notice to Representative.
---------------
Whenever a payment or distribution is to be made or a notice given to holders of
Guarantor Senior Indebtedness, the payment or distribution may be made and the
notice given to their Representative (if any).
SECTION 12.10. Article XII Not To Prevent Events of
Default or Limit Right to Accelerate.
-------------------------------------
The failure to make a payment in respect of the Notes and the Guarantees by
reason of any provision in this Article XII shall not be construed as preventing
the occurrence of a Default or Event of Default. Nothing in this Article XII
shall have any effect on the right of the Noteholders or the Trustee to
accelerate the maturity of the Notes or the Guarantees or to pursue any rights
or remedies hereunder or under applicable law, subject to the rights under this
Article XII of the holders from time to time of Guarantor Senior Indebtedness
109
SECTION 12.11. Trust Moneys Not Subordinated.
--------------------------------
Notwithstanding anything contained herein to the contrary, payments of U.S.
Legal Tender or the proceeds of U.S. Government Obligations held in trust under
Article VIII by the Trustee for the payment of principal of and interest on the
Notes shall not be subordinated to the prior payment of any Guarantor Senior
Indebtedness or subject to the restrictions set forth in this Article XII, and
none of the Noteholders shall be obligated to pay over any such amount to any
Guarantor, any holder of Guarantor Senior Indebtedness or any other creditor of
the Guarantors.
SECTION 12.12. Trustee Entitled To Rely.
---------------------------
Upon any payment or distribution pursuant to this Article XII, the Trustee and
the Noteholders shall be entitled to rely (i) upon any order or decree of a
court of competent jurisdiction in which any proceedings of the nature referred
to in Section 12.2 are pending, (ii) upon a certificate of the liquidating
trustee or agent or other Person making such payment or distribution to the
Trustee or to the Noteholders or (iii) upon the Representatives for the holders
of Guarantor Senior Indebtedness for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of
Guarantor Senior Indebtedness and other Indebtedness of each 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 XII. In the
event that the Trustee determines, in good faith, that evidence is required with
respect to the right of any Person as a holder of Guarantor Senior Indebtedness
to participate in any payment or distribution pursuant to this Article XII, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Guarantor Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and other facts pertinent to the rights of such
Person under this Article XII, and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment. The provisions of Sections
7.1 and 7.2 shall be applicable to all actions or omissions of actions by the
Trustee pursuant to this Article XII.
SECTION 12.13. Trustee To Effectuate Subordination.
--------------------------------------
Each Noteholder by accepting a Note authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Noteholders and the holders of
110
Guarantor Senior Indebtedness as provided in this Article XII and appoints the
Trustee as attorney-in-fact for any and all such purposes.
SECTION 12.14. Trustee Not Fiduciary for Holders
of Guarantor Senior Indebtedness.
----------------------------------
The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Guarantor Senior Indebtedness and shall not be liable to any such holders if it
shall mistakenly pay over or distribute to Noteholders or any Guarantor or any
other Person, money or assets to which any holders of Guarantor Senior
Indebtedness shall be entitled by virtue of this Article XII or otherwise;
provided that such amounts shall be paid over by such Noteholders as provided
herein.
SECTION 12.15. Reliance by Holders of Guarantor
Senior Indebtedness on Subordination
Provisions.
-------------------------------------
Each Noteholder by accepting a Note acknowledges and agrees that the foregoing
subordination provisions are, and are intended to be, an inducement and a
consideration to each holder of any Guarantor Senior Indebtedness, whether such
Guarantor Senior Indebtedness was created or acquired before or after the
issuance of the Notes, to acquire and continue to hold, or to continue to hold,
such Guarantor Senior Indebtedness and such holder of Guarantor Senior
Indebtedness shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Guarantor Senior Indebtedness.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1. Trust Indenture Act Controls.
-------------------------------
If any provision of this Indenture limits, qualifies or conflicts with another
provision which is required to be included in this Indenture by the TIA, the
provision required by the TIA shall control.
SECTION 13.2. Notices.
-------
Any notice or communications required or permitted hereunder shall be in
writing, and shall be sufficiently given if made by hand delivery, by private
courier service guaranteeing next day delivery, by telex, by telecopier or
111
registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
if to the Company or any Guarantor:
Eye Care Centers of America, Inc.
00000 Xxxx Xxxxxx
Xxx Xxxxxxx, Xxxxx 00000
:Attention: Chief Financial Officer
with a copy to:
Xxxxxxxx, Xxxxxxx & Xxxxxxx
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
:Attention: Xxxxx Xxxxxx
if to the Trustee:
United States Trust Company of New York
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
:Attention: Corporate Trust Administration
Each of the Company, the Guarantors and the Trustee by written notice to each
other such Person may designate additional or different addresses for notices to
such Person. Any notice or communication to the Company, the Guarantors or the
Trustee shall be deemed to have been given or made as of the date so delivered
if personally delivered or delivered by private courier service guaranteeing
next day delivery; 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 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 Noteholder shall be mailed to the
Noteholder at the Noteholder's address as it appears on the registration books
of the Registrar and shall be sufficiently given if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Noteholder or any defect in it
shall not affect its sufficiency with respect to other Noteholders. If a notice
or communication is mailed in the manner provided above, it is duly given,
whether or not the addressee receives it.
112
SECTION 13.3. Communication by Holders with Other Holders.
------------------------------------------------
Noteholders may communicate pursuant to TIA Section 312(b) with other
Noteholders with respect to their rights under this Indenture or the Notes. The
Company, the Guarantors, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).
SECTION 13.4. Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------------
Upon any request or application by the Company to the Trustee to take or refrain
from taking any action under this Indenture, the Company, upon request, shall
furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably satisfactory
to the Trustee stating that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably satisfactory to
the Trustee stating that, in the opinion of such counsel, all such conditions
precedent have been complied with.
SECTION 13.5. Statements Required in Certificate or Opinion.
--------------------------------------------------
Each certificate or opinion with respect to compliance with a covenant or
condition provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or opinion has
read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of such individual,
such covenant or condition has been complied with.
113
SECTION 13.6. Rules by Trustee, Paying Agent and Registrar.
--------------------------------------------------
The Trustee may make reasonable rules for action by or a meeting of Noteholders.
The Registrar and the Paying Agent may make reasonable rules for their
functions.
SECTION 13.7. Legal Holidays.
---------------
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking institutions
are not required to be open in the State of New York or in the state in which
the corporate trust office of the Trustee is located. If a payment date is a
Legal Holiday, payment shall be made on the next succeeding day that is not a
Legal Holiday, and no interest shall accrue for the intervening period. If an
Interest Record Date is a Legal Holiday, the record date shall not be affected.
SECTION 13.8. 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 BUT WITHOUT GIVING EFFECT
TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION
OF THE LAWS 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 13.9. No Recourse Against Others.
-----------------------------
A director, officer, employee or stockholder, as such, of the Company or a
Guarantor shall not have an liability for any obligations of the Company or such
Guarantor under the Notes or the Guarantee of such Guarantor or this Indenture
or for any claim based on, in respect of or by reason of such obligations or
their creation. By accepting a Note, each Noteholder shall waive and release
all such liability. The waiver and release shall be part of the consideration
for the issue of the Notes.
SECTION 13.10. Successors.
----------
All agreements of the Company and the Guarantors in this Indenture and the Notes
shall bind their respective successors. All agreements of the Trustee in this
Indenture shall bind its successors.
114
SECTION 13.11. Multiple Originals.
-------------------
The parties may sign any number of copies of this Indenture. Each signed copy
shall be an original, but all of them together represent the same agreement.
One signed copy is enough to prove this Indenture.
SECTION 13.12. Qualification of Indenture.
----------------------------
The Company shall qualify this Indenture under the TIA in accordance with the
terms and conditions of the Registration Rights Agreement and shall pay all
reasonable costs and expenses (including attorneys' fees for the Company, the
Trustee and the Holders) incurred in connection therewith, including, but not
limited to, costs and expenses of qualification of this Indenture and the Notes
and printing this Indenture and the Notes. The Trustee shall be entitled to
receive from the Company any such Officers' Certificates, Opinions of Counsel or
other documentation as it may reasonably request in connection with any such
qualification of this Indenture under the TIA.
SECTION 13.13. Table of Contents; Headings.
------------------------------
The table of contents, cross-reference sheet and headings of the Articles and
Sections of this Indenture have been inserted for convenience of reference only,
are not intended to be considered a part hereof and shall not modify or restrict
any of the terms or provisions hereof.
SECTION 13.14. Severability.
------------
In case any one or more of the provisions in this Indenture or in the Notes or
in the Guarantees 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.
SECTION 13.15. Independence of Covenants.
---------------------------
All covenants and agreements in this Indenture and the Notes shall be given
independent effect so that if any particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or otherwise be within the limitation of, another covenant shall
not avoid the occurrence of a Default or an Event of Default if such action is
taken or condition exists.
[SIGNATURE PAGE FOLLOWS]
115
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
EYE CARE CENTERS OF AMERICA, INC.,
as Issuer
By: _________________________
Name:
Title:
ENCLAVE ADVANCEMENT GROUP, INC.
ECCA MANAGED VISION CARE, INC.
VISIONWORKS HOLDINGS, INC.
VISIONWORKS, INC.
VISIONWORKS PROPERTIES, INC.
EYE CARE HOLDINGS, INC.
VISIONARY RETAIL MANAGEMENT, INC.
VISIONARY PROPERTIES, INC.
VISIONARY MSO, INC.
THE XXXXX GROUP, INC.
HOUR EYES, INC.
SKYLAB OPTICAL, INC.
METROPOLITAN VISION SERVICES, INC., as Guarantors
By: _________________________
-----------------------
Name:
Title:
UNITED STATES TRUST COMPANY OF
NEW YORK, as Trustee
By: __________________________
--------------------------
Name:
Title:
116
EXHIBIT A-1
------------
[FORM OF INITIAL FIXED RATE 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 WITHIN TWO YEARS AFTER THE ORIGINAL
ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A)
TO THE COMPANY THEREOF 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" (AS
DEFINED IN RULE 501(a)(1), (2), (3), OR (7) UNDER THE SECURITIES ACT) (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 (IF AVAILABLE), (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 MEANING GIVEN
TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
X-0-0
XXX XXXX XXXXXXX XX XXXXXXX, INC.
9 1/8% Senior Subordinated Note
due 2008
CUSIP No.
No. $
EYE CARE CENTERS OF AMERICA, INC., a Texas corporation (the "Company", which
term includes any successor corporation), for value received promises to pay to
or registered assigns, the principal sum of $ Dollars, on May 1, 2008.
Interest Payment Dates: May 1 and November 1, commencing November 1, 1998.
Interest 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.
Dated:
EYE CARE CENTERS OF AMERICA, INC.
By: ____________________________
----------------------------
Name:
Title:
By: ____________________________
----------------------------
Name:
Title:
A-1-2
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 9 1/8% Senior Subordinated Notes due 2008 described in the
within-mentioned Indenture.
Dated: UNITED STATES TRUST COMPANY OF
NEW YORK,
as Trustee
By: __________________________
------------------------
Authorized Signatory
A-1-3
(REVERSE OF SECURITY)
EYE CARE CENTERS OF AMERICA, INC.
9 1/8% Senior Subordinated Note
due 2008
1. Interest.
--------
EYE CARE CENTERS OF AMERICA, INC., a Texas corporation (the "Company"), promises
to pay interest on the principal amount of this Note at the rate per annum shown
above. The Company will pay interest semi-annually on May 1 and November 1 of
each year (the "Interest Payment Date"), commencing November 1, 1998. Interest
on this Note will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from the date of issuance. Interest on
this Note will be computed on the basis of a 360-day year of twelve 30-day
months.
The Company shall pay interest on overdue principal from time to time on demand
at the rate borne by this Note 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 Interest
Record Date immediately preceding the Interest Payment Date even if the Notes
are canceled on registration of transfer or registration of exchange after such
Interest Record Date. Holders must surrender Notes to a Paying Agent to collect
principal payments. The Company shall pay principal and interest in money of the
United States that at the time of payment is legal tender for payment of public
and private debts ("U.S. Legal Tender"). However, the Company may pay principal
and interest by wire transfer of Federal funds, or interest by check payable in
such U.S. Legal Tender. The Company may deliver any such interest payment to the
Paying Agent or to a Holder at the Holder's registered address.
3. Paying Agent and Registrar.
-----------------------------
Initially, United States Trust Company of New York (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-1-41
4. Indenture.
---------
The Company issued the Notes under an Indenture, dated as of April 24, 1998 (the
"Indenture"), among the Company, the Guarantors named therein and the Trustee.
This Note is one of a duly authorized issue of Notes of the Company designated
as its 9 1/8% Senior Subordinated Notes due 2008 (the "Initial Fixed Rate Notes"
and, together with the Exchange Fixed Rate Notes issued under the Indenture
pursuant to the Registration Rights Agreement, the "Fixed Rate Notes"). The
"Notes" include the Fixed Rate Notes and the Floating Rate Notes (as defined in
the Indenture). The Fixed Rate Notes and the Floating Rate Notes are treated as
a single class of securities under the Indenture unless otherwise specified in
the Indenture. Capitalized terms herein are used as defined in the Indenture
unless otherwise defined herein. 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.C. 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 them. The Notes are general
obligations of the Company limited in aggregate principal amount to
$150,000,000.
5. 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 Senior Indebtedness of the Company, whether outstanding on
the date of the Indenture or thereafter created, incurred, assumed or
guaranteed. Each Holder by his acceptance hereof agrees to be bound by such
provisions and authorizes and expressly directs the Trustee, on his behalf, to
take such action as may be necessary or appropriate to effectuate the
subordination provided for in the Indenture and appoints the Trustee his
attorney-infact for such purposes.
6. Optional Redemption.
--------------------
(a) The Fixed Rate Notes will be redeemable, at the Company's option, in
whole at any time or in part from time to time, on and after May 1, 2003, upon
not less than 30 nor more than 60 days' notice, at the following redemption
prices (expressed as percentages of the principal amount) if redeemed during the
twelve-month period commencing on May 1 of the years set forth below, plus, in
each case, accrued and unpaid interest thereon, if any, to the date of
redemption:
A-1-5
Year Percentage
---- ----------
2003 104.563%
2004 103.042%
2005 101.521%
2006 and thereafter 100.000%
(b) At any time, or from time to time, on or prior to May 1, 2001, the
Company may, at its option, use the net cash proceeds of one or more Equity
Offerings to redeem up to 35% of the aggregate principal amount of Fixed Rate
Notes at a redemption price equal to 109.125% of the principal amount thereof,
plus accrued interest to the date of redemption; provided that at least 65% of
the original principal amount of Fixed Rate Notes remains outstanding
immediately after any such redemption (excluding any of the Fixed Rate Notes
owned by the Company). In order to effect the foregoing redemption with the net
cash proceeds of any Equity Offering, the Company must mail a notice of
redemption no later than 60 days after the related Equity Offering and must
consummate such redemption within 90 days of the closing of the Equity Offering.
"Equity Offering" means a sale of Qualified Capital Stock of the Company.
7. Notice of Redemption.
----------------------
Notice of redemption will be mailed at least 30 days but not more than 60 days
before the Redemption Date to each Holder of Notes to be redeemed at such
Holder's registered address. Notes in denominations of $1,000 may be redeemed
only in whole. The Trustee may select for redemption portions (equal to $1,000
or any integral multiple thereof) of the principal of Notes that have
denominations larger than $1,000.
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.
8. Change of Control Offer.
--------------------------
Upon the occurrence of a Change of Control Triggering Event, the Company will be
required to offer to purchase all of the outstanding Notes at a purchase price
equal to 101% of the principal amount thereof, plus accrued and unpaid interest,
if any, thereon to the date of purchase.
A-1-6
9. Net Proceeds Offer.
--------------------
The Company is, subject to certain conditions, obligated to make an offer to
purchase Notes at 100% of their principal amount, plus accrued and unpaid
interest, if any, thereon to the date of purchase with certain of the Net Cash
Proceeds of certain Asset Sales in accordance with the Indenture.
10. Registration Rights.
--------------------
Pursuant to the Registration Rights Agreement, 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 1/8%
Senior Subordinated Notes due 2008 (the "Exchange Fixed Rate Notes"), which have
been registered under the Securities Act, in like principal amount and having
terms identical in all material respects to the Initial Fixed Rate 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.
11. Denominations; Transfer; Exchange.
-----------------------------------
The Notes are in registered form, without coupons, in denominations of $1,000
and integral multiples of $1,000. A Holder shall register the transfer of or
exchange 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 permitted by the Indenture. The Registrar
need not register the transfer of or exchange any Notes or portions thereof
selected for redemption, except the unredeemed portion of any security being
redeemed in part.
12. Persons Deemed Owners.
-----------------------
The registered Holder of a Note shall be treated as the owner of it for all
purposes.
13. Unclaimed Funds.
----------------
If funds for the payment of principal or interest remain unclaimed for two
years, the Trustee and the Paying Agent will repay the funds to the Company at
its request. After that, all liability of the Trustee and such Paying Agent
with respect to such funds shall cease.
A-1-7
14. Discharge Prior to Redemption or Maturity.
----------------------------------------------
The Company and the Guarantors may be discharged from their obligations under
the Indenture, the Notes and the Guarantees except for certain provisions
thereof, and may be discharged from obligations to comply with certain covenants
contained in the Indenture, the Notes and the Guarantees, in each case upon
satisfaction of certain conditions specified in the Indenture.
15. Amendment; Supplement; Waiver.
-------------------------------
Subject to certain exceptions, the Indenture, the Notes and the Guarantees may
be amended or supplemented with the written consent of the Holders of at least a
majority in aggregate principal amount of the Notes then outstanding, and any
existing Default or Event of Default or compliance with any provision may be
waived with the consent of the Holders of a majority in aggregate principal
amount of the Notes then outstanding. Without notice to or consent of any
Holder, the parties thereto may amend or supplement the Indenture, the Notes and
the Guarantees to, among other things, cure any ambiguity, defect or
inconsistency, provide for uncertificated Notes in addition to or in place of
certificated Notes or comply with any requirements of the SEC in connection with
the qualification of the Indenture under the TIA, or make any other change that
does not adversely affect the rights of any Holder of a Note.
16. Restrictive Covenants.
----------------------
The Indenture contains certain covenants that, among other things, limit the
ability of the Company and its Restricted Subsidiaries to make restricted
payments, to incur indebtedness, to create liens, to sell assets, to permit
restrictions on dividends and other payments by Restricted Subsidiaries of the
Company to the Company, to consolidate, merge or sell all or substantially all
of its assets or to engage in transactions with affiliates. The limitations are
subject to a number of important qualifications and exceptions. The Company must
annually report to the Trustee on compliance with such limitations.
17. Defaults and Remedies.
-----------------------
If an Event of Default occurs and is continuing, the Trustee or the Holders of
at least 25% in aggregate principal amount of Notes then outstanding may declare
all the Notes to be due and payable immediately in the manner and with the
effect provided in the Indenture. Holders of Notes may not enforce the
Indenture, the Notes or the Guarantees except as provided in the Indenture. The
Trustee is not obligated to enforce the Indenture, the Notes or the Guarantees
unless it
A-1-8
has received indemnity satisfactory to it. The Indenture permits, subject to
certain limitations therein provided, Holders of a majority in aggregate
principal amount of the 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 certain continuing Defaults or Events of Default if it determines that
withholding notice is in their interest.
18. 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.
19. No Recourse Against Others.
-----------------------------
No stockholder, director, officer, employee or incorporator, as such, of the
Company or any Guarantor shall have any liability for any obligation of the
Company or any Guarantor under the Notes, the Guarantees or the Indenture or for
any claim based on, in respect of or by reason of, such obligations or their
creation. Each Holder of a Note 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.
20. Authentication.
--------------
This Note shall not be valid until the Trustee or authenticating agent signs the
certificate of authentication on this Note.
21. 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).
22. Governing Law.
--------------
This Note shall be governed by, and construed in accordance with, the laws of
the State of New York but without giving effect to applicable principles of
conflicts of laws to the extent that the application of the laws of another
jurisdiction would be required thereby.
A-1-9
23. CUSIP Numbers.
--------------
Pursuant to a recommendation promulgated by the Committee on Uniform Note
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.
A-1-10
ASSIGNMENT FORM
I or we assign and transfer this Note to
_______________________________________________________________________________
_______________________________________________________________________________
(Print or type name, address and zip code of assignee or transferee)
_______________________________________________________________________________
(Insert Social Security or other identifying number of assignee or transferee)
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 name
appears on the other
side of this Note)
Signature Guarantee:____________________________________________
Participant in a recognized Signature
Guarantee Medallion Program (or other
signature guarantor program reasonably
acceptable to the Trustee)
In connection with any transfer of this Note occurring prior to the date which
is the earlier of (i) the date of the declaration by the SEC of the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act") covering resales of this Note (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) April 24, 2000, the undersigned confirms that it has not
utilized any general solicitation or general advertising in connection with the
transfer and that this Note is being transferred:
A-1-11
[Check One]
(1) ___ to the Company or a subsidiary thereof; or
(2) ___ pursuant to and in compliance with Rule 144A under
the Securities Act; or
(3) ___ to an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act) that has furnished to the Trustee a
signed letter containing certain representations and
agreements (the form of which letter can be obtained
from the Trustee); or
(4) ___ outside the United states to a "foreign person" in
compliance with Rule 904 of Regulation S under the
Securities Act; or
(5) ___ pursuant to the exemption from registration
provided by Rule 144 under the Securities Act; or
(6) ___ pursuant to an effective registration statement
under the Securities Act; or
(7) ___ pursuant to another available exemption from the
registration requirements of the Securities Act;
and unless the box below is checked, the undersigned confirms that such Note is
not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate"):
___ The transferee is an Affiliate of the Company.
Unless one of the items is checked, the Trustee will refuse to register any
of the Notes evidenced by this certificate in the name of any person other than
the registered Holder thereof; provided that if box (3), (4), (5) or (7) is
checked, the Company or the Trustee may require, prior to registering any such
transfer of the Notes, in its sole discretion, such legal opinions,
certifications (including an investment letter in the case of box (3) or (4))
and other information as the Trustee or the Company has reasonably requested to
confirm that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act.
A-1-12
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Note in the name of any person other than the Holder
hereof unless and until the conditions to any such transfer of registration set
forth herein and in Section 2.17 of the Indenture shall have been satisfied.
Dated:______________________ Signed: ______________________
---------------------- ----------------------
(Sign exactly as name
appears on the other
side of this Security)
Signature Guarantee:_______________________________________
---------------------------------------
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this Note for its
own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act and is aware that the
sale to it is being made in reliance on Rule 144A and acknowledges that it has
received such information regarding the Company as the undersigned has requested
pursuant to Rule 144A or has determined not to request such information and that
it is aware that the transferor is relying upon the undersigned's foregoing
representations in order to claim the exemption from registration provided by
Rule 144A.
Dated:______________________ ______________________
---------------------
NOTICE: To be executed by
an executive officer
A-1-13
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.6 or Section 4.8 of the Indenture, check the appropriate box:
Section 4.6 [ ] Section 4.8 [ ]
If you want to elect to have only part of this Note purchased by the Company
pursuant to Section 4.6 or Section 4.8 of the Indenture, state
the amount: $__________
-------
Dated: _____________________ Signed: ______________________
--------------------- ----------------------
(Sign exactly as name appears on the other side of this Note)
Signature Guarantee: ____________________________________
------------------------------------
Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor program reasonably acceptable to the Trustee)
X-0-00
XXXXXXX X-0
-----------
[FORM OF INITIAL FLOATING RATE 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 WITHIN TWO YEARS AFTER THE ORIGINAL
ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A)
TO THE COMPANY THEREOF 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" (AS
DEFINED IN RULE 501(a)(1), (2), (3), OR (7) UNDER THE SECURITIES ACT) (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 (IF AVAILABLE), (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 MEANING GIVEN
TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
X-0-0
XXX XXXX XXXXXXX XX XXXXXXX, INC.
Floating Interest Rate Subordinated
Term Securities due 2008 (FIRSTSsm(a))
CUSIP No.
No. $
EYE CARE CENTERS OF AMERICA, INC., a Texas corporation (the "Company" which term
includes any successor corporation), for value received, promises to pay to
or registered assigns, the principal sum of $ Dollars, on May 1, 2008.
Interest Payment Dates: May 1 and November 1, commencing November 1, 1998.
Interest 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.
Dated: EYE CARE CENTERS OF AMERICA, INC.
By: ____________________________
----------------------------
Name:
Title:
By: ____________________________
----------------------------
Name:
Title:
_________________________
-------------------------
(a) FIRSTS is a service xxxx of BT Alex. Xxxxx Incorporated.
A-2-2
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Floating Interest Rate Subordinated Term Securities due 2008
described in the within-mentioned Indenture.
Dated:
UNITED STATES TRUST COMPANY OF
NEW YORK,
as Trustee
By: __________________________
--------------------------
Authorized Signatory
A-2-3
(REVERSE OF SECURITY)
EYE CARE CENTERS OF AMERICA, INC.
Floating Interest Rate Subordinated Term Securities due 2008
1. Interest.
--------
EYE CARE CENTERS OF AMERICA, INC., a Texas corporation (the "Company"), promises
to pay interest on the principal amount of this Note at the rate per annum,
reset semi-annually, equal to LIBOR (as defined below) plus 3.98%, as determined
by the Calculation Agent. Interest on this Note will accrue from the most
recent date on which interest has been paid or, if no interest has been paid,
from the date of issuance. The Company will pay interest semi-annually on each
May 1 and November 1 (each, an "Interest Payment Date"), commencing November 1,
1998, for the period commencing on and including the immediately preceding
Interest Payment Date and ending on and including the day immediately preceding
the next succeeding Interest Payment Date (an "Interest Period"), with the
exception that the first Interest Period shall commence on and include April 24,
1998 and end on and include October 31, 1998. Interest on this Note will be
computed on the basis of a 360-day year of twelve 30-day months.
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 this Note and on
overdue installments of interest (without regard to any applicable grace
periods) to the extent lawful.
"LIBOR", with respect to an Interest Period, will be the rate (expressed as a
-----
percentage per annum) for deposits in United States dollars for a six-month
period beginning on the second London Banking Day (as defined) after the
Determination Date (as defined) that appears on Telerate Page 3750 (as defined)
as of 11:00 a.m., London time, on the Determination Date. If Telerate Page 3750
does not include such a rate or is unavailable on a Determination Date, LIBOR
for the Interest Period shall be the arithmetic mean of the rates (expressed as
a percentage per annum) for deposits in a Representative Amount (as defined) in
United States dollars for a six-month period beginning on the second London
Banking Day after the Determination Date that appears on Reuters Screen LIBO
Page (as defined) as of 11:00 a.m., London time, on the Determination Date. If
Reuters Screen LIBO Page does not include two or more rates or is unavailable on
a Determination Date, the Calculation Agent will request the principal London
office of each of four major banks in the London interbank market, as selected
by the Calculation Agent, to provide such bank's offered quotation (expressed as
a percentage per annum), as of approximately 11:00 a.m., London time, on such
A-2-4
Determination Date, to prime banks in the London interbank market for deposits
in a Representative Amount in United States dollars for a six-month period
beginning on the second London Banking Day after the Determination Date. If at
least two such offered quotations are so provided, LIBOR for the Interest Period
will be the arithmetic mean of such quotations. If fewer than two such
quotations are so provided, the Calculation Agent will request each of three
major banks in New York City, as selected by the Calculation Agent, to provide
such bank's rate (expressed as a percentage per annum), as of approximately
11:00 a.m., New York City time, on such Determination Date, for loans in a
Representative Amount in United States dollars to leading European banks for a
six-month period beginning on the second London Banking Day after the
Determination Date. If at least two such rates are so provided, LIBOR for the
Interest Period will be the arithmetic mean of such rates. If fewer than two
such rates are so provided, then LIBOR for the Interest Period will be LIBOR in
effect with respect to the immediately preceding Interest Period.
"Determination Date," with respect to an Interest Period, will be the second
-------------------
London Banking Day preceding the first day of the Interest Period.
"London Banking Day" is any day in which dealings in United States dollars are
--------------------
transacted or, with respect to any future date, are expected to be transacted in
the London interbank market.
"Representative Amount" means a principal amount of not less than U.S.
----------------------
$1,000,000 for a single transaction in the relevant market at the relevant time.
"Telerate Page 3750" means the display designated as "Page 3750" on the Dow
--------------------
Xxxxx Telerate Service (or such other page as may replace Page 3750 on that
service).
"Reuters Screen LIBO Page" means the display designated as page "LIBO" on The
---------------------------
Reuters Monitor Money Rates Service (or such other page as may replace the LIBO
page on that service).
The amount of interest for each day that this Note is outstanding (the "Daily
Interest Amount") will be calculated by dividing the interest rate in effect for
such day by 360 and multiplying the result by the principal amount of this Note.
The amount of interest to be paid on this Note for each Interest Period will be
calculated by adding the Daily Interest Amounts for each day in the Interest
Period.
A-2-5
All percentages resulting from any of the above calculations will be rounded, if
necessary, to the nearest one hundred-thousandth of a percentage point, with
five onemillionths of a percentage point rounded upwards (e.g., 9.876545% (or
..09876545) being rounded to 9.87655% (or .0987655)) and all dollar amounts used
in or resulting from such calculations will be rounded to the nearest cent (with
one-half cent being rounded upwards).
The interest rate on this Note will in no event be higher than the maximum rate
permitted by New York law as the same may be modified by United States law of
general application. Under current New York law, the maximum rate of interest
is 25% per annum on a simple interest basis. This limit may not apply to
Floating Rate Notes in which $2,500,000 or more has been invested.
The Calculation Agent will, upon the request of the holder of any Floating Rate
Note, provide the interest rate then in effect with respect to the Floating Rate
Notes. All calculations made by the Calculation Agent in the absence of
manifest error shall be conclusive for all purposes and binding on the Company,
the Guarantors and the Holders of the Floating Rate Notes.
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 Interest
Record Date immediately preceding the Interest Payment Date even if the Notes
are canceled on registration of transfer or registration of exchange after such
Interest Record Date. Holders must surrender Notes to a Paying Agent to collect
principal payments. The Company shall pay principal and interest in money of
the United States that at the time of payment is legal tender for payment of
public and private debts ("U.S. Legal Tender"). However, the Company may pay
principal and interest by wire transfer of Federal funds, or interest by check
payable in such U.S. Legal Tender. The Company may deliver any such interest
payment to the Paying Agent or to a Holder at the Holder's registered address.
A-2-6
3. Paying Agent, Registrar and Calculation Agent.
--------------------------------------------------
Initially, United States Trust Company of New York (the "Trustee") will act as
Paying Agent, Registrar and Calculation Agent. The Company may change any
Paying Agent, Registrar, co-Registrar or Calculation Agent without notice to the
Holders.
4. Indenture.
---------
The Company issued the Notes under an Indenture, dated as of April 24, 1998 (the
"Indenture"), among the Company, each of the Guarantors named therein and the
Trustee. This Note is one of a duly authorized issue of Notes of the Company
designated as its Floating Interest Rate Subordinated Term Securities due 2008
(the "Initial Floating Rate Notes" and, together with the Exchange Floating Rate
Notes issued under the Indenture pursuant to the Registration Rights Agreement,
the "Floating Rate Notes"). The "Notes" include the Floating Rate Notes and the
Fixed Rate Notes (as defined in the Indenture). The Floating Rate Notes and the
Fixed Rate Notes are treated as a single class of securities under the Indenture
unless otherwise specified in the Indenture. Capitalized terms used herein
shall have the meanings assigned to them in the Indenture unless otherwise
defined herein. 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.C. 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 them. The Notes are general obligations of the
Company limited in aggregate principal amount to $150,000,000.
5. 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 Senior Indebtedness of the Company, whether outstanding on
the date of the Indenture or thereafter created, incurred, assumed or
guaranteed. Each Holder by his acceptance hereof agrees to be bound by such
provisions and authorizes and expressly directs the Trustee, on his behalf, to
take such action as may be necessary or appropriate to effectuate the
subordination provided for in the Indenture and appoints the Trustee his
attorney-infact for such purposes.
A-2-7
6. Optional Redemption.
--------------------
The Floating Rate Notes will be redeemable, at the Company's option, in whole at
any time or in part from time to time, 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 twelvemonth period
commencing on May 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
---- ----------
1998 105.000%
1999 104.000%
2000 103.000%
2001 102.000%
2002 101.000%
2003 and thereafter 100.000%
7. Notice of Redemption.
----------------------
Notice of redemption will be mailed at least 30 days but not more than 60 days
before the Redemption Date to each Holder of Notes to be redeemed at such
Holder's registered address. Notes in denominations larger than $1,000 may be
redeemed only in whole. The Trustee may select for redemption portions (equal
to $1,000 or any integral multiple thereof) of the principal of Notes that have
denominations larger than $1,000.
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.
8. Change of Control Offer.
--------------------------
Upon the occurrence of a Change of Control Triggering Event, the Company will be
required to offer to purchase all of the outstanding Notes at a purchase price
equal to 101% of the principal amount thereof, plus accrued and unpaid interest,
if any, thereon to the date of purchase.
A-2-8
9. Net Proceeds Offer.
--------------------
The Company is, subject to certain conditions, obligated to make an offer to
purchase Notes at 100% of their principal amount, plus accrued and unpaid
interest, if any, thereon to the date of purchase with certain of the Net Cash
Proceeds of certain Asset Sales in accordance with the Indenture.
10. Registration Rights.
--------------------
Pursuant to the Registration Rights Agreement, 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
Floating Interest Rate Subordinated Term Securities due 2008 (the "Exchange
Floating Rate Notes"), which have been registered under the Securities Act, in
like principal amount and having terms identical in all material respects to the
Initial Floating Rate 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.
11. Denominations; Transfer; Exchange.
-----------------------------------
The Notes are in registered form, without coupons, in denominations of $1,000
and integral multiples of $1,000. A Holder shall register the transfer of or
exchange 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 permitted by the Indenture. The Registrar
need not register the transfer of or exchange any Notes or portions thereof
selected for redemption, except the unredeemed portion of any security being
redeemed in part.
12. Persons Deemed Owners.
-----------------------
The registered Holder of a Note shall be treated as the owner of it for all
purposes.
13. Unclaimed Funds.
----------------
If funds for the payment of principal or interest remain unclaimed for two
years, the Trustee and the Paying Agent will repay the funds to the Company at
its request. After that, all liability of the Trustee and such Paying Agent
with respect to such funds shall cease.
A-2-9
14. Discharge Prior to Redemption or Maturity.
----------------------------------------------
The Company and the Guarantors may be discharged from their obligations under
the Indenture, the Notes and the Guarantees except for certain provisions
thereof, and may be discharged from obligations to comply with certain covenants
contained in the Indenture, the Notes and the Guarantees, in each case upon
satisfaction of certain conditions specified in the Indenture.
15. Amendment; Supplement; Waiver.
-------------------------------
Subject to certain exceptions, the Indenture, the Notes and the Guarantees may
be amended or supplemented with the written consent of the Holders of at least a
majority in aggregate principal amount of the Notes then outstanding, and any
existing Default or Event of Default or compliance with any provision may be
waived with the consent of the Holders of a majority in aggregate principal
amount of the Notes then outstanding. Without notice to or consent of any
Holder, the parties thereto may amend or supplement the Indenture, the Notes and
the Guarantees to, among other things, cure any ambiguity, defect or
inconsistency, provide for uncertificated Notes in addition to or in place of
certificated Notes or comply with any requirements of the SEC in connection with
the qualification of the Indenture under the TIA, or make any other change that
does not adversely affect the rights of any Holder of a Note.
16. Restrictive Covenants.
----------------------
The Indenture contains certain covenants that, among other things, limit the
ability of the Company and its Restricted Subsidiaries to make restricted
payments, to incur indebtedness, to create liens, to sell assets, to permit
restrictions on dividends and other payments by Restricted Subsidiaries of the
Company to the Company, to consolidate, merge or sell all or substantially all
of its assets or to engage in transactions with affiliates. The limitations are
subject to a number of important qualifications and exceptions. The Company
must annually report to the Trustee on compliance with such limitations.
17. Defaults and Remedies.
-----------------------
If an Event of Default occurs and is continuing, the Trustee or the Holders of
at least 25% in aggregate principal amount of Notes then outstanding may declare
all the Notes to be due and payable immediately in the manner and with the
effect provided in the Indenture. Holders of Notes may not enforce the
Indenture, the Notes or the Guarantees except as provided in the Indenture. The
Trustee is not obligated to enforce the Indenture, the Notes or the Guarantees
unless it
A-2-10
has received indemnity satisfactory to it. The Indenture permits, subject to
certain limitations therein provided, Holders of a majority in aggregate
principal amount of the 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 certain continuing Defaults or Events of Default if it determines that
withholding notice is in their interest.
18. 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.
19. No Recourse Against Others.
-----------------------------
No stockholder, director, officer, employee or incorporator, as such, of the
Company or any Guarantor shall have any liability for any obligation of the
Company or any Guarantor under the Notes, the Guarantees or the Indenture or for
any claim based on, in respect of or by reason of, such obligations or their
creation. Each Holder of a Note 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.
20. Authentication.
--------------
This Note shall not be valid until the Trustee or authenticating agent signs the
certificate of authentication on this Note.
21. 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).
22. Governing Law.
--------------
This Note shall be governed by, and construed in accordance with, the laws of
the State of New York but without giving effect to applicable principles of
conflicts of laws to the extent that the application of the laws of another
jurisdiction would be required thereby.
A-2-11
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.
A-2-12
ASSIGNMENT FORM
I or we assign and transfer this Note to
_______________________________________________________________________________
_______________________________________________________________________________
(Print or type name, address and zip code of assignee or transferee)
_______________________________________________________________________________
(Insert Social Security or other identifying number of assignee or transferee)
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 name
appears on the other
side of this Note)
Signature Guarantee: _______________________________________
----------------------------------
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
In connection with any transfer of this Note occurring prior to the date which
is the earlier of (i) the date of the declaration by the SEC of the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act") covering resales of this Note (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) April 24, 2000, the undersigned confirms that it has not
utilized any general solicitation or general advertising in connection with the
transfer and that this Note is being transferred:
A-2-13
[Check One]
(1) ___ to the Company or a subsidiary thereof; or
(2) ___ pursuant to and in compliance with Rule 144A under
the Securities Act; or
(3) ___ to an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act) that has furnished to the
Trustee a signed letter containing certain
representations and agreements (the form of which
letter can be obtained from the Trustee); or
(4) ___ outside the United states to a "foreign person" in
compliance with Rule 904 of Regulation S under the
Securities Act; or
(5) ___ pursuant to the exemption from registration
provided by Rule 144 under the Securities Act; or
(6) ___ pursuant to an effective registration statement
under the Securities Act; or
(7) ___ pursuant to another available exemption from the
registration requirements of the Securities Act;
and unless the box below is checked, the undersigned confirms that such Note is
not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate"):
___ The transferee is an Affiliate of the Company.
Unless one of the items is checked, the Trustee will refuse to register any of
the Notes evidenced by this certificate in the name of any person other than the
registered Holder thereof; provided that if box (3), (4), (5) or (7) is checked,
the Company or the Trustee may require, prior to registering any such transfer
of the Notes, in its sole discretion, such legal opinions, certifications
(including an investment letter in the case of box (3) or (4)) and other
information as the Trustee or the Company has reasonably requested to confirm
that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act.
A-2-14
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Note in the name of any person other than the Holder
hereof unless and until the conditions to any such transfer of registration set
forth herein and in Section 2.17 of the Indenture shall have been satisfied.
Dated: _____________________ Signed: _____________________
(Sign exactly as name
appears on the other
side of this Security)
Signature Guarantee: _________________________________________
-----------------------------------------
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this Note for
its own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act and is aware that the
sale to it is being made in reliance on Rule 144A and acknowledges that it has
received such information regarding the Company as the undersigned has requested
pursuant to Rule 144A or has determined not to request such information and that
it is aware that the transferor is relying upon the undersigned's foregoing
representations in order to claim the exemption from registration provided by
Rule 144A.
Dated: _____________________ ______________________________
--------------------- -----------------------------
NOTICE: To be executed by
an executive officer
A-2-15
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.6 or Section 4.8 of the Indenture, check the appropriate box:
Section 4.6 [ ] Section 4.8 [ ]
If you want to elect to have only part of this Note purchased by the Company
pursuant to Section 4.6 or Section 4.8 of the Indenture, state the amount:
$___________
-------
Dated: _______________ Signed: _______________________
--------------- -----------------------
(Sign exactly as name
appears on the other
side of this Note)
Signature Guarantee: ___________________________________
-----------------------------------
Participant in a recognized Signature
Guarantee Medallion Program (or other
signature guarantor program reasonably
acceptable to the Trustee)
X-0-00
XXXXXXX X-0
-----------
[FORM OF EXCHANGE FIXED RATE NOTE]
EYE CARE CENTERS OF AMERICA, INC.
9 1/8% Senior Subordinated Note due 2008
CUSIP No.
No. $
EYE CARE CENTERS OF AMERICA, INC., a Texas corporation (the "Company", which
term includes any successor corporation), for value received promises to pay to
or registered assigns, the principal sum of $ Dollars, on May 1, 2008.
Interest Payment Dates: May 1 and November 1, commencing November 1, 1998.
Interest 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.
Dated:
EYE CARE CENTERS OF AMERICA, INC.
By: ____________________________
----------------------------
Name:
Title:
By: ____________________________
----------------------------
Name:
Title:
B-1-1
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 9 1/8% Senior Subordinated Notes due 2008 described in the
within-mentioned Indenture.
Dated: UNITED STATES TRUST COMPANY OF
NEW YORK,
as Trustee
By: _________________________
-------------------------
Authorized Signatory
B-1-2
(REVERSE OF SECURITY)
EYE CARE CENTERS OF AMERICA, INC.
9 1/8% Senior Subordinated Note
due 2008
1. Interest.
--------
EYE CARE CENTERS OF AMERICA, INC., a Texas corporation (the "Company"), promises
to pay interest on the principal amount of this Note at the rate per annum shown
above. The Company will pay interest semi-annually on May 1 and November 1 of
each year (the "Interest Payment Date"), commencing November 1, 1998. Interest
on this Note will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from the date of issuance. Interest on
this Note will be computed on the basis of a 360-day year of twelve 30-day
months.
The Company shall pay interest on overdue principal from time to time on demand
at the rate borne by this Note 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 Interest
Record Date immediately preceding the Interest Payment Date even if the Notes
are canceled on registration of transfer or registration of exchange after such
Interest Record Date. Holders must surrender Notes to a Paying Agent to collect
principal payments. The Company shall pay principal and interest in money of
the United States that at the time of payment is legal tender for payment of
public and private debts ("U.S. Legal Tender"). However, the Company may pay
principal and interest by wire transfer of Federal funds, or interest by check
payable in such U.S. Legal Tender. The Company may deliver any such interest
payment to the Paying Agent or to a Holder at the Holder's registered address.
3. Paying Agent and Registrar.
-----------------------------
Initially, United States Trust Company of New York (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.
B-1-3
4. Indenture.
---------
The Company issued the Notes under an Indenture, dated as of April 24, 1998 (the
"Indenture"), among the Company, the Guarantors named therein and the Trustee.
This Note is one of a duly authorized issue of Notes of the Company designated
as its 9 1/8% Senior Subordinated Notes due 2008 (the "Fixed Rate Notes"). The
"Notes" include the Fixed Rate Notes and the Floating Rate Notes (as defined in
the Indenture). The Fixed Rate Notes and the Floating Rate Notes are treated as
a single class of securities under the Indenture unless otherwise specified in
the Indenture. Capitalized terms herein are used as defined in the Indenture
unless otherwise defined herein. 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.C. 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 them. The Notes are general
obligations of the Company limited in aggregate principal amount to
$150,000,000.
5. 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 Senior Indebtedness of the Company, whether outstanding on
the date of the Indenture or thereafter created, incurred, assumed or
guaranteed. Each Holder by his acceptance hereof agrees to be bound by such
provisions and authorizes and expressly directs the Trustee, on his behalf, to
take such action as may be necessary or appropriate to effectuate the
subordination provided for in the Indenture and appoints the Trustee his
attorney-infact for such purposes.
6. Optional Redemption.
--------------------
(a) The Fixed Rate Notes will be redeemable, at the Company's option, in whole
at any time or in part from time to time, on and after May 1, 2003, upon not
less than 30 nor more than 60 days' notice, at the following redemption prices
(expressed as percentages of the principal amount) if redeemed during the
twelve-month period commencing on May 1 of the years set forth below, plus, in
each case, accrued and unpaid interest thereon, if any, to the date of
redemption:
B-1-4
Year Percentage
---- ----------
2003 104.563%
2004 103.042%
2005 101.521%
2006 and thereafter 100.000%
(b) At any time, or from time to time, on or prior to May 1, 2001, the
Company may, at its option, use the net cash proceeds of one or more Equity
Offerings to redeem up to 35% of the aggregate principal amount of Fixed Rate
Notes at a redemption price equal to 109.125% of the principal amount thereof,
plus accrued interest to the date of redemption; provided that at least 65% of
the original principal amount of Fixed Rate Notes remains outstanding
immediately after any such redemption (excluding any of the Fixed Rate Notes
owned by the Company). In order to effect the foregoing redemption with the net
cash proceeds of any Equity Offering, the Company must mail a notice of
redemption no later than 60 days after the related Equity Offering and must
consummate such redemption within 90 days of the closing of the Equity Offering.
"Equity Offering" means a sale of Qualified Capital Stock of the Company.
7. Notice of Redemption.
----------------------
Notice of redemption will be mailed at least 30 days but not more than 60 days
before the Redemption Date to each Holder of Notes to be redeemed at such
Holder's registered address. Notes in denominations of $1,000 may be redeemed
only in whole. The Trustee may select for redemption portions (equal to $1,000
or any integral multiple thereof) of the principal of Notes that have
denominations larger than $1,000.
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.
8. Change of Control Offer.
--------------------------
Upon the occurrence of a Change of Control Triggering Event, the Company will be
required to offer to purchase all of the outstanding Notes at a purchase price
equal to 101% of the principal amount thereof, plus accrued and unpaid interest,
if any, thereon to the date of purchase.
B-1-5
9. Net Proceeds Offer.
--------------------
The Company is, subject to certain conditions, obligated to make an offer to
purchase Notes at 100% of their principal amount, plus accrued and unpaid
interest, if any, thereon to the date of purchase with certain of the Net Cash
Proceeds of certain Asset Sales in accordance with the Indenture.
10. Denominations; Transfer; Exchange.
-----------------------------------
The Notes are in registered form, without coupons, in denominations of $1,000
and integral multiples of $1,000. A Holder shall register the transfer of or
exchange 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 permitted by the Indenture. The Registrar
need not register the transfer of or exchange any Notes or portions thereof
selected for redemption, except the unredeemed portion of any security 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 Funds.
----------------
If funds for the payment of principal or interest remain unclaimed for two
years, the Trustee and the Paying Agent will repay the funds to the Company at
its request. After that, all liability of the Trustee and such Paying Agent
with respect to such funds shall cease.
13. Discharge Prior to Redemption or Maturity.
----------------------------------------------
The Company and the Guarantors may be discharged from their obligations under
the Indenture, the Notes and the Guarantees except for certain provisions
thereof, and may be discharged from obligations to comply with certain covenants
contained in the Indenture, the Notes and the Guarantees, in each case upon
satisfaction of certain conditions specified in the Indenture.
14. Amendment; Supplement; Waiver.
-------------------------------
Subject to certain exceptions, the Indenture, the Notes and the Guarantees may
be amended or supplemented with the written consent of the Holders of at least a
majority in aggregate principal amount of the Notes then outstanding, and
B-1-6
any existing Default or Event of Default or compliance with any provision may be
waived with the consent of the Holders of a majority in aggregate principal
amount of the Notes then outstanding. Without notice to or consent of any
Holder, the parties thereto may amend or supplement the Indenture, the Notes and
the Guarantees to, among other things, cure any ambiguity, defect or
inconsistency, provide for uncertificated Notes in addition to or in place of
certificated Notes or comply with any requirements of the SEC in connection with
the qualification of the Indenture under the TIA, or make any other change that
does not adversely affect the rights of any Holder of a Note.
15. Restrictive Covenants.
----------------------
The Indenture contains certain covenants that, among other things, limit the
ability of the Company and its Restricted Subsidiaries to make restricted
payments, to incur indebtedness, to create liens, to sell assets, to permit
restrictions on dividends and other payments by Restricted Subsidiaries of the
Company to the Company, to consolidate, merge or sell all or substantially all
of its assets or to engage in transactions with affiliates. The limitations are
subject to a number of important qualifications and exceptions. The Company
must annually report to the Trustee on compliance with such limitations.
16. Defaults and Remedies.
-----------------------
If an Event of Default occurs and is continuing, the Trustee or the Holders of
at least 25% in aggregate principal amount of Notes then outstanding may declare
all the Notes to be due and payable immediately in the manner and with the
effect provided in the Indenture. Holders of Notes may not enforce the
Indenture, the Notes or the Guarantees except as provided in the Indenture. The
Trustee is not obligated to enforce the Indenture, the Notes or the Guarantees
unless it has received indemnity satisfactory to it. The Indenture permits,
subject to certain limitations therein provided, Holders of a majority in
aggregate principal amount of the 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 certain continuing Defaults or Events of Default if it
determines that withholding notice is in their interest.
17. Trustee Dealings with Company.
--------------------------------
The Trustee under the Indenture, in its individual or any other capacity, may
become the owner or pledgee of Notes and may otherwise deal with the Company,
its
B-1-7
Subsidiaries or their respective Affiliates as if it were not the Trustee.
18. No Recourse Against Others.
-----------------------------
No stockholder, director, officer, employee or incorporator, as such, of the
Company or any Guarantor shall have any liability for any obligation of the
Company or any Guarantor under the Notes, the Guarantees or the Indenture or for
any claim based on, in respect of or by reason of, such obligations or their
creation. Each Holder of a Note 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. Authentication.
--------------
This Note shall not be valid until the Trustee or authenticating agent signs the
certificate of authentication on this Note.
20. 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).
21. Governing Law.
--------------
This Note shall be governed by, and construed in accordance with, the laws of
the State of New York but without giving effect to applicable principles of
conflicts of laws to the extent that the application of the laws of another
jurisdiction would be required thereby.
22. CUSIP Numbers.
--------------
Pursuant to a recommendation promulgated by the Committee on Uniform Note
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.
B-1-8
ASSIGNMENT FORM
I or we assign and transfer this Note to
_______________________________________________________________________________
_______________________________________________________________________________
(Print or type name, address and zip code of assignee or transferee)
_______________________________________________________________________________
(Insert Social Security or other identifying number of assignee or transferee)
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 name
appears on the other
side of this Note)
Signature Guarantee: __________________________________
----------------------------------
Participant in a recognized Signature
Guarantee Medallion Program (or other
signature guarantor program reasonably
acceptable to the Trustee)
B-1-9
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.6 or Section 4.8 of the Indenture, check the appropriate box:
Section 4.6 [ ] Section 4.8 [ ]
If you want to elect to have only part of this Note purchased by the Company
pursuant to Section 4.6 or Section 4.8 of the Indenture, state the amount:
$___________
-------
Dated: _______________ ____ Signed: ______________________
--------------------- ----------------------
(Sign exactly as name
appears on the other
side of this Note)
Signature Guarantee: ___________________________________
-----------------------------------
Participant in a recognized Signature
Guarantee Medallion Program (or other
signature guarantor program reasonably
acceptable to the Trustee)
X-0-00
XXXXXXX X-0
-----------
[FORM OF EXCHANGE FLOATING RATE NOTE]
EYE CARE CENTERS OF AMERICA, INC.
Floating Interest Rate Subordinated
Term Securities due 2008 (FIRSTSsm(a))
CUSIP No.
No. $
EYE CARE CENTERS OF AMERICA, INC., a Texas corporation (the "Company" which term
includes any successor corporation), for value received, promises to pay to or
registered assigns, the principal sum of $ Dollars, on May 1, 2008.
Interest Payment Dates: May 1 and November 1, commencing November 1, 1998.
Interest 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.
Dated: EYE CARE CENTERS OF AMERICA, INC.
By: ________________________________
Name:
Title:
By: ________________________________
Name:
Title:
______________________________
(a) FIRSTS is a service xxxx of BT Alex. Xxxxx Incorporated.
B-2-1
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Floating Interest Rate Subordinated Term Securities due
2008 described in the within-mentioned Indenture.
Dated:
UNITED STATES TRUST COMPANY OF
NEW YORK, as Trustee
By:_____________________
Authorized Signatory
B-2-2
(REVERSE OF SECURITY)
EYE CARE CENTERS OF AMERICA, INC.
Floating Interest Rate Subordinated Term Securities due 2008
1. Interest.
--------
EYE CARE CENTERS OF AMERICA, INC., a Texas corporation (the "Company"), promises
to pay interest on the principal amount of this Note at the rate per annum,
reset semi-annually, equal to LIBOR (as defined below) plus 3.98%, as determined
by the Calculation Agent. Interest on this Note will accrue from the most recent
date on which interest has been paid or, if no interest has been paid, from the
date of issuance. The Company will pay interest semi-annually on each May 1 and
November 1 (each, an "Interest Payment Date"), commencing November 1, 1998, for
the period commencing on and including the immediately preceding Interest
Payment Date and ending on and including the day immediately preceding the next
succeeding Interest Payment Date (an "Interest Period"), with the exception that
the first Interest Period shall commence on and include April 24, 1998 and end
on and include October 31, 1998. Interest on this Note will be computed on the
basis of a 360-day year of twelve 30-day months.
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 this Note and on
overdue installments of interest (without regard to any applicable grace
periods) to the extent lawful.
"LIBOR", with respect to an Interest Period, will be the rate (expressed as a
-----
percentage per annum) for deposits in United States dollars for a six-month
period beginning on the second London Banking Day (as defined) after the
Determination Date (as defined) that appears on Telerate Page 3750 (as defined)
as of 11:00 a.m., London time, on the Determination Date. If Telerate Page 3750
does not include such a rate or is unavailable on a Determination Date, LIBOR
for the Interest Period shall be the arithmetic mean of the rates (expressed as
a percentage per annum) for deposits in a Representative Amount (as defined) in
United States dollars for a six-month period beginning on the second London
Banking Day after the Determination Date that appears on Reuters Screen LIBO
Page (as defined) as of 11:00 a.m., London time, on the Determination Date. If
Reuters Screen LIBO Page does not include two or more rates or is unavailable on
a Determination Date, the Calculation Agent will request the principal London
office of each of four major banks in the London interbank market, as selected
by the Calculation Agent, to provide such bank's offered quotation (expressed as
a percentage per annum), as of approximately 11:00 a.m., London time,
B-2-3
on such Determination Date, to prime banks in the London interbank market for
deposits in a Representative Amount in United States dollars for a six-month
period beginning on the second London Banking Day after the Determination Date.
If at least two such offered quotations are so provided, LIBOR for the Interest
Period will be the arithmetic mean of such quotations. If fewer than two such
quotations are so provided, the Calculation Agent will request each of three
major banks in New York City, as selected by the Calculation Agent, to provide
such bank's rate (expressed as a percentage per annum), as of approximately
11:00 a.m., New York City time, on such Determination Date, for loans in a
Representative Amount in United States dollars to leading European banks for a
six-month period beginning on the second London Banking Day after the
Determination Date. If at least two such rates are so provided, LIBOR for the
Interest Period will be the arithmetic mean of such rates. If fewer than two
such rates are so provided, then LIBOR for the Interest Period will be LIBOR in
effect with respect to the immediately preceding Interest Period.
"Determination Date," with respect to an Interest Period, will be the second
-------------------
London Banking Day preceding the first day of the Interest Period.
"London Banking Day" is any day in which dealings in United States dollars are
--------------------
transacted or, with respect to any future date, are expected to be transacted in
the London interbank market.
"Representative Amount" means a principal amount of not less than U.S.
----------------------
$1,000,000 for a single transaction in the relevant market at the relevant time.
"Telerate Page 3750" means the display designated as "Page 3750" on the Dow
--------
Xxxxx Telerate Service (or such other page as may replace Page 3750 on that
service).
"Reuters Screen LIBO Page" means the display designated as page "LIBO" on The
---------------------------
Reuters Monitor Money Rates Service (or such other page as may replace the LIBO
page on that service).
The amount of interest for each day that this Note is outstanding (the "Daily
Interest Amount") will be calculated by dividing the interest rate in effect for
such day by 360 and multiplying the result by the principal amount of this Note.
The amount of interest to be paid on this Note for each Interest Period will be
calculated by adding the Daily Interest Amounts for each day in the Interest
Period.
All percentages resulting from any of the above calculations will be rounded, if
necessary, to the nearest one
B-2-4
hundred-thousandth of a percentage point, with five one-millionths of a
percentage point rounded upwards (e.g., 9.876545% (or .09876545) being rounded
to 9.87655% (or .0987655)) and all dollar amounts used in or resulting from such
calculations will be rounded to the nearest cent (with one-half cent being
rounded upwards).
The interest rate on this Note will in no event be higher than the maximum rate
permitted by New York law as the same may be modified by United States law of
general application. Under current New York law, the maximum rate of interest is
25% per annum on a simple interest basis. This limit may not apply to Floating
Rate Notes in which $2,500,000 or more has been invested.
The Calculation Agent will, upon the request of the holder of any Floating Rate
Note, provide the interest rate then in effect with respect to the Floating Rate
Notes. All calculations made by the Calculation Agent in the absence of manifest
error shall be conclusive for all purposes and binding on the Company, the
Guarantors and the Holders of the Floating Rate Notes.
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 Interest
Record Date immediately preceding the Interest Payment Date even if the Notes
are canceled on registration of transfer or registration of exchange after such
Interest Record Date. Holders must surrender Notes to a Paying Agent to collect
principal payments. The Company shall pay principal and interest in money of the
United States that at the time of payment is legal tender for payment of public
and private debts ("U.S. Legal Tender"). However, the Company may pay principal
and interest by wire transfer of Federal funds, or interest by check payable in
such U.S. Legal Tender. The Company may deliver any such interest payment to the
Paying Agent or to a Holder at the Holder's registered address.
3. Paying Agent, Registrar and Calculation Agent.
--------------------------------------------------
Initially, United States Trust Company of New York (the "Trustee") will act as
Paying Agent, Registrar and Calculation Agent. The Company may change any Paying
Agent, Registrar, co-Registrar or Calculation Agent without notice to the
Holders.
B-2-5
4. Indenture.
---------
The Company issued the Notes under an Indenture, dated as of April 24, 1998 (the
"Indenture"), among the Company, each of the Guarantors named therein and the
Trustee. This Securities is one of a duly authorized issue of Notes of the
Company designated as its Floating Interest Rate Subordinated Term Securities
due 2008 (the "Floating Rate Notes"). The "Notes" include the Floating Rate
Notes and the Fixed Rate Notes (as defined in the Indenture). The Floating Rate
Notes and the Fixed Rate Notes are treated as a single class of securities under
the Indenture unless otherwise specified in the Indenture. Capitalized terms
used herein shall have the meanings assigned to them in the Indenture unless
otherwise defined herein. 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.C. 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 them. The Notes are general obligations
of the Company limited in aggregate principal amount to $150,000,000.
5. 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 Senior Indebtedness of the Company, whether outstanding on
the date of the Indenture or thereafter created, incurred, assumed or
guaranteed. Each Holder by his acceptance hereof agrees to be bound by such
provisions and authorizes and expressly directs the Trustee, on his behalf, to
take such action as may be necessary or appropriate to effectuate the
subordination provided for in the Indenture and appoints the Trustee his
attorney-infact for such purposes.
6. Optional Redemption.
--------------------
The Floating Rate Notes will be redeemable, at the Company's option, in whole at
any time or in part from time to time, 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 May 1 of the year set forth below, plus, in each case, accrued and
unpaid interest thereon, if any, to the date of redemption:
B-2-6
Year Percentage
---- ----------
1998 105.000%
1999 104.000%
2000 103.000%
2001 102.000%
2002 101.000%
2003 and thereafter 100.000%
7. Notice of Redemption.
----------------------
Notice of redemption will be mailed at least 30 days but not more than 60 days
before the Redemption Date to each Holder of Notes to be redeemed at such
Holder's registered address. Notes in denominations larger than $1,000 may be
redeemed only in whole. The Trustee may select for redemption portions (equal to
$1,000 or any integral multiple thereof) of the principal of Notes that have
denominations larger than $1,000.
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.
8. Change of Control Offer.
--------------------------
Upon the occurrence of a Change of Control Triggering Event, the Company will be
required to offer to purchase all of the outstanding Notes at a purchase price
equal to 101% of the principal amount thereof, plus accrued and unpaid interest,
if any, thereon to the date of purchase.
9. Net Proceeds Offer.
--------------------
The Company is, subject to certain conditions, obligated to make an offer to
purchase Notes at 100% of their principal amount, plus accrued and unpaid
interest, if any, thereon to the date of purchase with certain of the Net Cash
Proceeds of certain Asset Sales in accordance with the Indenture.
10. Denominations; Transfer; Exchange.
-----------------------------------
The Notes are in registered form, without coupons, in denominations of $1,000
and integral multiples of $1,000. A Holder shall register the transfer of or
exchange Notes in accordance with the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate
B-2-7
endorsements and transfer documents and to pay certain transfer taxes or similar
governmental charges payable in connection therewith as permitted by the
Indenture. The Registrar need not register the transfer of or exchange any Notes
or portions thereof selected for redemption, except the unredeemed portion of
any security 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 Funds.
----------------
If funds for the payment of principal or interest remain unclaimed for two
years, the Trustee and the Paying Agent will repay the funds to the Company at
its request. After that, all liability of the Trustee and such Paying Agent with
respect to such funds shall cease.
13. Discharge Prior to Redemption or Maturity.
----------------------------------------------
The Company and the Guarantors may be discharged from their obligations under
the Indenture, the Notes and the Guarantees except for certain provisions
thereof, and may be discharged from obligations to comply with certain covenants
contained in the Indenture, the Notes and the Guarantees, in each case upon
satisfaction of certain conditions specified in the Indenture.
14. Amendment; Supplement; Waiver.
-------------------------------
Subject to certain exceptions, the Indenture, the Notes and the Guarantees may
be amended or supplemented with the written consent of the Holders of at least a
majority in aggregate principal amount of the Notes then outstanding, and any
existing Default or Event of Default or compliance with any provision may be
waived with the consent of the Holders of a majority in aggregate principal
amount of the Notes then outstanding. Without notice to or consent of any
Holder, the parties thereto may amend or supplement the Indenture, the Notes and
the Guarantees to, among other things, cure any ambiguity, defect or
inconsistency, provide for uncertificated Notes in addition to or in place of
certificated Notes or comply with any requirements of the SEC in connection with
the qualification of the Indenture under the TIA, or make any other change that
does not adversely affect the rights of any Holder of a Note.
15. Restrictive Covenants.
----------------------
The Indenture contains certain covenants that, among other things, limit the
ability of the Company and its
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Restricted Subsidiaries to make restricted payments, to incur indebtedness, to
create liens, to sell assets, to permit restrictions on dividends and other
payments by Restricted Subsidiaries of the Company to the Company, to
consolidate, merge or sell all or substantially all of its assets or to engage
in transactions with affiliates. The limitations are subject to a number of
important qualifications and exceptions. The Company must annually report to the
Trustee on compliance with such limitations.
16. Defaults and Remedies.
-----------------------
If an Event of Default occurs and is continuing, the Trustee or the Holders of
at least 25% in aggregate principal amount of Notes then outstanding may declare
all the Notes to be due and payable immediately in the manner and with the
effect provided in the Indenture. Holders of Notes may not enforce the
Indenture, the Notes or the Guarantees except as provided in the Indenture. The
Trustee is not obligated to enforce the Indenture, the Notes or the Guarantees
unless it has received indemnity satisfactory to it. The Indenture permits,
subject to certain limitations therein provided, Holders of a majority in
aggregate principal amount of the 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 certain continuing Defaults or Events of Default if it
determines that withholding notice is in their interest.
17. Trustee Dealings with Company.
--------------------------------
The Trustee under the Indenture, in its individual or any other capacity, may
become the owner or pledgee of 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 stockholder, director, officer, employee or incorporator, as such, of the
Company or any Guarantor shall have any liability for any obligation of the
Company or any Guarantor under the Notes, the Guarantees or the Indenture or for
any claim based on, in respect of or by reason of, such obligations or their
creation. Each Holder of a Note 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.
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19. Authentication.
--------------
This Note shall not be valid until the Trustee or authenticating agent signs the
certificate of authentication on this Note.
20. 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).
21. Governing Law.
--------------
This Note shall be governed by, and construed in accordance with, the laws of
the State of New York but without giving effect to applicable principles of
conflicts of laws to the extent that the application of the laws of another
jurisdiction would be required thereby.
22. 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.
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ASSIGNMENT FORM
I or we assign and transfer this Note to
______________________________________________________________________________
_______________________________________________________________________________
(Print or type name, address and zip code of assignee or transferee)
________________________________________________________________________________
(Insert Social Security or other identifying number of assignee or transferee)
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 name
appears on the other
side of this Note)
Signature Guarantee: ___________________________________
--------------------------------------
Participant in a recognized Signature
Guarantee Medallion Program (or other
signature guarantor program reasonably
acceptable to the Trustee)
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.6 or Section 4.8 of the Indenture, check the appropriate box:
Section 4.6 [ ] Section 4.8 [ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.6 or Section 4.8 of the Indenture, state the
amount: $___________
Dated: _________________ Signed: _________________________
----------------- -----------------------
(Sign exactly as name
appears on the other
side of this Note)
Signature Guarantee: _____________________________________
-------------------------------------
Guarantee Medallion Program (or other
signature guarantor program reasonably
acceptable to the Trustee)
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EXHIBIT C
---------
Form of Certificate To Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
-----------------------------------------
[ ], [ ]
United States Trust Company
of New York
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust Administration
Re: Eye Care Centers of America, Inc. (the "Company") 9 1/8% Senior
Subordinated Notes due 2008 (the "Fixed Rate Notes") or Floating Interest
Rate Subordinated Term Securities due 2008 (the "Floating Rate Notes," and
together with the Fixed Rate Notes, the "Notes")
Ladies and Gentlemen:
In connection with our proposed purchase of [Fixed Rate Notes] [Floating
Rate Notes] of Eye Care Centers of America, Inc. (the "Company"), we confirm
that:
1. We have received a copy of the Offering Memorandum (the "Offering
Memorandum"), dated April 17, 1998 relating to the Notes and such other
information as we deem necessary in order to make our investment decision. We
acknowledge that we have read and agreed to the matters stated on pages
(i)-(iii) of the Offering Memorandum and in the section entitled "Transfer
Restrictions" of the Offering Memorandum, including the restrictions on
duplication and circulation of the Offering Memorandum.
2. 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 (as
described in the Offering Memorandum) 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").
3. We understand that the offer and sale of the Notes have not been registered
under the Securities Act, and that the Notes may not be offered or sold except
as permitted in the following sentence. We agree, on our own behalf and on
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behalf of any accounts for which we are acting as hereinafter stated, that if we
should sell or otherwise transfer any Notes prior to the date which is two years
after the original issuance of the Notes, we will do so only (i) to the Company
or any of its subsidiaries, (ii) inside the United States in accordance with
Rule 144A under the Securities Act to a "qualified institutional buyer" (as
defined in Rule 144A 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 relating to the Notes), a signed letter
containing certain representations and agreements relating to the restrictions
on transfer of the Notes, (iv) outside the United States in accordance with Rule
904 of Regulation S 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.
4. We are not acquiring the Notes for or on behalf of, and will not transfer the
Notes to, any pension or welfare plan (as defined in Section 3 of the Employee
Retirement Income Security Act of 1974), except as permitted in the section
entitled "Transfer Restrictions" of the Offering Memorandum.
5. We understand that, on any proposed resale of any Notes, we will be required
to furnish to the Trustee and 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.
6. 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.
7. 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.
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You and 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 proceeding or official inquiry with respect to the
matters covered hereby.
Very truly yours,
By:__________________________
Name:
Title:
C-3
EXHIBIT D
---------
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
-----------------------------
[ ], [ ]
United States Trust Company
of New York
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust Administration
Re: Eye Care Centers of America, Inc. (the "Company") 9 1/8% Senior
Subordinated Notes due 2008 (the "Fixed Rate Notes") or Floating Interest
Rate Subordinated Term Securities due 2008 (the "Floating Rate Notes," and
together with the Fixed Rate Notes, the "Notes")
Ladies and Gentlemen:
In connection with our proposed sale of $__________ aggregate principal
amount of the [Fixed Rate Notes] [Floating Rate 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
off-shore securities market and neither we nor any person acting on our behalf
knows that the transaction has been pre-arranged 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;
D-1
(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.
You and 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 Transferor]
By:____________________________
Authorized Signature
D-2
EXHIBIT E
---------
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 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 (as defined below) 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 XI and XII of the Indenture and this Guarantee. This
Guarantee will become effective in accordance with Article XI of the Indenture
and its terms shall be evidenced therein. The validity and enforceability of any
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 April 24, 1998, among Eye Care Centers of
America, Inc., a Texas corporation, as issuer (the "Company"), the Guarantors
named therein and United States Trust Company of New York, 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
XI of the Indenture, and are expressly subordinated in right of payment to the
prior payment in full of all Guarantor Senior Indebtedness (as defined in the
Indenture) to the extent set forth in Article XII 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. The undersigned 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.
E-1
IN WITNESS WHEREOF, each Guarantor has caused its Guarantee to be duly executed.
Date:
ENCLAVE ADVANCEMENT GROUP, INC.
ECCA MANAGED VISION CARE, INC.
VISIONWORKS HOLDINGS, INC.
VISIONWORKS, INC.
VISIONWORKS PROPERTIES, INC.
EYE CARE HOLDINGS, INC.
VISIONARY RETAIL MANAGEMENT, INC.
VISIONARY PROPERTIES, INC.
VISIONARY MSO, INC.
THE XXXXX GROUP, INC.
HOUR EYES, INC.
SKYLAB OPTICAL, INC.
METROPOLITAN VISION SERVICES, INC.
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
E-2
