- --------------------------------------------------------------------------------
EXECUTION VERSION
AMES TRUE TEMPER, INC., AS ISSUER
ATT HOLDING CO., AS PARENT GUARANTOR
10% SENIOR SUBORDINATED NOTES DUE 2012
-------------------------
INDENTURE
DATED AS OF JUNE 28, 2004
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THE BANK OF NEW YORK
TRUSTEE
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CROSS-REFERENCE TABLE*
----------------------
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
- --------------- -----------------
310(a)(1)............................................................................... 7.10
(a)(2)............................................................................... 7.10
(a)(3)............................................................................... N.A.
(a)(4)............................................................................... N.A.
(a)(5)............................................................................... 7.10
(b).................................................................................. 7.10
(c).................................................................................. N.A.
311(a).................................................................................. 7.11
(b).................................................................................. 7.11
(c).................................................................................. N.A.
312(a).................................................................................. 2.06
(b).................................................................................. 13.03
(c).................................................................................. 13.03
313(a).................................................................................. 7.06
(b)(1)............................................................................... N.A.
(b)(2)............................................................................... 7.06, 7.07
(c).................................................................................. 7.06, 13.02
(d).................................................................................. 7.06
314(a).................................................................................. 13.05
(b).................................................................................. N.A.
(c)(1)............................................................................... N.A.
(c)(2)............................................................................... N.A.
(c)(3)............................................................................... N.A.
(d).................................................................................. N.A.
(e).................................................................................. 13.05
(f).................................................................................. N.A.
315(a).................................................................................. N.A.
(b).................................................................................. N.A.
(c).................................................................................. N.A.
(d).................................................................................. N.A.
(e).................................................................................. N.A.
316(a) (last sentence).................................................................. N.A.
(a)(1)(A)............................................................................ N.A.
(a)(1)(B)............................................................................ 6.04
(a)(2)............................................................................... N.A.
(b).................................................................................. N.A.
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* N.A. means not applicable.
This Cross-Reference Table is not part of this Indenture
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
- --------------- -----------------
(c).................................................................................. 13.14
317(a)(1)............................................................................... N.A.
(a)(2)............................................................................... N.A.
(b).................................................................................. N.A.
318(a).................................................................................. N.A.
(b).................................................................................. N.A.
(c).................................................................................. 13.01
TABLE OF CONTENTS
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Page
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ARTICLE ONE
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions.........................................................................................1
Section 1.02. Other Definitions..................................................................................29
Section 1.03. Incorporation by Reference of Trust Indenture Act..................................................30
Section 1.04. Rules of Construction..............................................................................30
ARTICLE TWO
THE NOTES
Section 2.01. Form and Dating....................................................................................31
Section 2.02. Execution and Authentication.......................................................................32
Section 2.03. Methods of Receiving Payments on the Notes.........................................................33
Section 2.04. Registrar and Paying Agent.........................................................................33
Section 2.05. Paying Agent to Hold Money in Trust................................................................33
Section 2.06. Holder Lists.......................................................................................34
Section 2.07. Transfer and Exchange..............................................................................34
Section 2.08. Replacement Notes..................................................................................46
Section 2.09. Outstanding Notes..................................................................................47
Section 2.10. Treasury Notes.....................................................................................47
Section 2.11. Temporary Notes....................................................................................47
Section 2.12. Cancellation.......................................................................................48
Section 2.13. Defaulted Interest.................................................................................48
Section 2.14. CUSIP Numbers......................................................................................48
ARTICLE THREE
REDEMPTION AND OFFERS TO
PURCHASE
Section 3.01. Notices to Trustee.................................................................................49
Section 3.02. Selection of Notes to Be Redeemed..................................................................49
Section 3.03. Notice of Redemption...............................................................................49
Section 3.04. Effect of Notice of Redemption.....................................................................50
Section 3.05. Deposit of Redemption Price........................................................................51
Section 3.06. Notes Redeemed in Part.............................................................................51
Section 3.07. Optional Redemption................................................................................51
Section 3.08. Repurchase Offers..................................................................................52
ARTICLE FOUR
COVENANTS
Section 4.01. Payment of Notes...................................................................................54
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Section 4.02. Maintenance of Office or Agency....................................................................55
Section 4.03. Reports............................................................................................55
Section 4.04. Compliance Certificate.............................................................................56
Section 4.05. Taxes..............................................................................................57
Section 4.06. Stay, Extension and Usury Laws.....................................................................57
Section 4.07. Restricted Payments................................................................................57
Section 4.08. Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries..........................63
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock.........................................65
Section 4.10. Asset Sales........................................................................................69
Section 4.11. Transactions with Affiliates.......................................................................71
Section 4.12. Liens..............................................................................................73
Section 4.13. Business Activities................................................................................73
Section 4.14. Offer to Repurchase upon a Change of Control.......................................................73
Section 4.15. Limitation on Senior Subordinated Debt.............................................................74
Section 4.16. Designation of Restricted and Unrestricted Subsidiaries............................................75
Section 4.17. Payments for Consent...............................................................................75
Section 4.18. Guarantees.........................................................................................75
ARTICLE FIVE
SUCCESSORS
Section 5.01. Merger, Consolidation or Sale of Assets............................................................76
Section 5.02. Successor Corporation Substituted..................................................................77
ARTICLE SIX
DEFAULTS AND REMEDIES
Section 6.01. Events of Default..................................................................................77
Section 6.02. Acceleration.......................................................................................79
Section 6.03. Other Remedies.....................................................................................80
Section 6.04. Waiver of Past Defaults............................................................................80
Section 6.05. Control by Majority................................................................................80
Section 6.06. Limitation on Suits................................................................................81
Section 6.07. Rights of Holders of Notes to Receive Payment......................................................81
Section 6.08. Collection Suit by Trustee.........................................................................81
Section 6.09. Trustee May File Proofs of Claim...................................................................82
Section 6.10. Priorities.........................................................................................82
Section 6.11. Undertaking for Costs..............................................................................82
ARTICLE SEVEN
TRUSTEE
Section 7.01. Duties of Trustee..................................................................................83
Section 7.02. Certain Rights of Trustee..........................................................................84
Section 7.03. Individual Rights of Trustee.......................................................................85
Section 7.04. Trustee's Disclaimer...............................................................................85
Section 7.05. Notice of Defaults.................................................................................85
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Section 7.06. Reports by Trustee to Holders of the Notes.........................................................86
Section 7.07. Compensation and Indemnity.........................................................................86
Section 7.08. Replacement of Trustee.............................................................................87
Section 7.09. Successor Trustee by Merger, Etc...................................................................88
Section 7.10. Eligibility; Disqualification......................................................................88
Section 7.11. Preferential Collection of Claims Against Company..................................................89
ARTICLE EIGHT
DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance...........................................89
Section 8.02. Legal Defeasance and Discharge.....................................................................89
Section 8.03. Covenant Defeasance................................................................................90
Section 8.04. Conditions to Legal or Covenant Defeasance.........................................................90
Section 8.05. Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous Provisions......91
Section 8.06. Repayment to the Company...........................................................................92
Section 8.07. Reinstatement......................................................................................92
ARTICLE NINE
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes................................................................93
Section 9.02. With Consent of Holders of Notes...................................................................94
Section 9.03. Compliance with Trust Indenture Act................................................................95
Section 9.04. Revocation and Effect of Consents..................................................................95
Section 9.05. Notation on or Exchange of Notes...................................................................96
Section 9.06. Trustee to Sign Amendments, Etc....................................................................96
ARTICLE TEN
NOTE GUARANTEES
Section 10.01. Guarantee.........................................................................................96
Section 10.02. Limitation on Guarantor Liability.................................................................97
Section 10.03. Execution and Delivery of Note Guarantee..........................................................98
Section 10.04. Guarantors May Consolidate, Etc., on Certain Terms................................................98
Section 10.05. Release of Guarantor..............................................................................99
Section 10.06. Subordination of Note Guarantee...................................................................99
ARTICLE ELEVEN
SATISFACTION AND DISCHARGE
Section 11.01. Satisfaction and Discharge.......................................................................100
Section 11.02. Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous Provisions....101
Section 11.03. Repayment to the Company.........................................................................101
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ARTICLE TWELVE
SUBORDINATION
Section 12.01. Agreement to Subordinate.........................................................................102
Section 12.02. Liquidation; Dissolution; Bankruptcy.............................................................102
Section 12.03. Default on Designated Senior Debt................................................................102
Section 12.04. Acceleration of Notes............................................................................103
Section 12.05. When Distribution Must Be Paid Over..............................................................103
Section 12.06. Notice by the Company............................................................................104
Section 12.07. Subrogation......................................................................................104
Section 12.08. Relative Rights..................................................................................104
Section 12.09. Subordination May Not Be Impaired by the Company.................................................105
Section 12.10. Distribution or Notice to Representative.........................................................105
Section 12.11. Rights of Trustee and Paying Agent...............................................................105
Section 12.12. Authorization to Effect Subordination............................................................105
ARTICLE THIRTEEN
MISCELLANEOUS
Section 13.01. Trust Indenture Act Controls.....................................................................106
Section 13.02. Notices..........................................................................................106
Section 13.03. Communication by Holders of Notes with Other Holders of Notes....................................107
Section 13.04. Certificate and Opinion as to Conditions Precedent...............................................107
Section 13.05. Statements Required in Certificate or Opinion....................................................108
Section 13.06. Rules by Trustee and Agents......................................................................108
Section 13.07. No Personal Liability of Directors, Officers, Employees and Stockholders.........................108
Section 13.08. Governing Law....................................................................................108
Section 13.09. Consent to Jurisdiction..........................................................................109
Section 13.10. No Adverse Interpretation of Other Agreements....................................................109
Section 13.11. Successors.......................................................................................109
Section 13.12. Severability.....................................................................................109
Section 13.13. Counterpart Originals............................................................................109
Section 13.14. Acts of Holders..................................................................................109
Section 13.15. Benefit of Indenture.............................................................................111
Section 13.16. Table of Contents, Headings, Etc.................................................................111
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL
ACCREDITED INVESTOR
iv
Exhibit E FORM OF NOTATION OF GUARANTEE
Exhibit F FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY
SUBSEQUENT GUARANTORS
v
INDENTURE dated as of June 28, 2004 among Ames True Temper,
Inc., a Delaware corporation, the Parent Guarantor (as defined below) listed on
the signature pages hereto and The Bank of New York, a New York banking
corporation, as trustee.
The Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of its 10% Senior
Subordinated Notes due 2012 to be issued in one or more series as provided in
this Indenture. The Parent Guarantor has duly authorized the execution and
delivery of this Indenture to provide for a guarantee of the Notes and of
certain of the Company's obligations hereunder. All things necessary to make
this Indenture a valid agreement of the Company and the Parent Guarantor, in
accordance with its terms, have been done.
The Company (as defined below), the Parent Guarantor and the
Trustee (as defined below) agree as follows for the benefit of each other and
for the equal and ratable benefit of the Holders (as defined below) of the
Company's 10% Senior Subordinated Notes due 2012:
ARTICLE ONE
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions.
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"144A GLOBAL NOTE" means a global Note substantially in the
form of Exhibit A bearing the Global Note Legend (and shall include the
"Schedule of Exchanges of Interests in the Global Note" attached thereto) and
the Private Placement Legend and deposited with or on behalf of, and registered
in the name of, the Depositary or its nominee, that shall be issued in a
denomination equal to the outstanding principal amount at maturity of the Notes
sold in reliance on Rule 144A.
"ACQUIRED DEBT" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such
other Person is merged with or into, or becomes a Subsidiary
of, such specified Person, whether or not such Indebtedness is
incurred in connection with, or in contemplation of, such
other Person merging with or into, or becoming a Subsidiary
of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired
by such specified Person.
"ADDITIONAL NOTES" means an unlimited maximum aggregate
principal amount of Notes (other than the Notes issued on the date hereof,
Exchange Notes, or pursuant to Section 2.08) issued after the date hereof from
time to time in accordance with the terms of this Indenture, including Sections
2.02 and 4.09.
"AFFILIATE" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control," as used with respect to any Person, shall mean
1
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the Voting Stock of a Person shall be
deemed to be control. For purposes of this definition, the terms "controlling,"
"controlled by" and "under common control with" shall have correlative meanings.
"AGENT" means any Registrar or Paying Agent or co-registrar or
additional Paying Agent.
"APPLICABLE PROCEDURES" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary, Euroclear and Clearstream that apply to such
transfer or exchange.
"ASSET ACQUISITION" means (a) an Investment by the Company or
any of its Restricted Subsidiaries in any other Person, if, as a result of such
Investment, such Person shall become a 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 all or substantially all of the assets of any other Person or any
division or line of business of any other Person.
"ASSET SALE" means:
(1) the sale, lease, conveyance or other disposition of any assets
or rights; provided that the sale, conveyance or other
disposition of all or substantially all of the assets of the
Company and its Restricted Subsidiaries taken as a whole will
be governed by Section 4.14 and/or Section 5.01 and not by
Section 4.10; and
(2) the issuance or sale of Equity Interests by any of the
Company's Restricted Subsidiaries or the sale of Equity
Interests in any of its Restricted Subsidiaries, other than
directors' qualifying shares or shares required by applicable
law to be held by a person other than the Company or a
Restricted Subsidiary.
Notwithstanding the preceding, the following items shall not be deemed to be
Asset Sales:
(1) any single transaction or series of related transactions that
involves assets having a fair market value of less than $2.0
million;
(2) a transfer of assets between or among the Company and its
Restricted Subsidiaries;
(3) an issuance of Equity Interests by a Restricted Subsidiary to
the Company or to another Restricted Subsidiary thereof;
(4) the sale, lease, sub-lease, license, sub-license or
consignment of accounts receivable, equipment, inventory or
other assets in the ordinary course of business, including
leases with a duration of no greater than 24 months with
respect to facilities which are temporarily not in use or
pending their disposition;
2
(5) the sale or other disposition of cash or Cash Equivalents;
(6) the creation of a Permitted Lien;
(7) a Restricted Payment that is permitted by Section 4.07 or a
Permitted Investment;
(8) the licensing of intellectual property or other general
intangibles to third persons on customary terms as determined
by the Board of Directors in good faith;
(9) any sale, replacement, abandonment or disposition of any
property or equipment that has become damaged, worn-out,
obsolete, condemned, given over in lieu of deed or otherwise
unsuitable or not required for the ordinary course of business
of the Company and its Restricted Subsidiaries;
(10) leases or subleases to third persons not interfering in any
material respect with the business of the Company or any of
its Restricted Subsidiaries;
(11) the good faith surrender or waiver of contract rights or the
settlement, release or surrender of claims of any kind;
(12) proceeds from the sale of property pursuant to that certain
Purchase Agreement, dated as of January 13, 2004, by and
between Ames True Temper, Inc. and Sirnaik Holdings of WV,
LLC;
(13) Payment remittances due from the U.S. Government pending
settlement on the payment remittance structure of the Byrd
Amendment related to anti-dumping tariff payment paid to ATT
Holding Co. or any of its Subsidiaries as a domestic
manufacturer of striking tools;
(14) Cigna insurance claims in the amount of approximately
$875,000, relating to the lawsuit captioned Ames True Temper
v. Connecticut General Life Insurance Company, et al., No.
1:CV-03-1320, pending in the United States District Court for
the Middle District of Pennsylvania; and
(15) nonrecourse transfers (other than with respect to customary
recourse for customary breach of representations and
warranties) of accounts receivable to a commercial finance
company in the ordinary course of business of the Company or
any of its Restricted Subsidiaries in exchange for the fair
market value thereof, including cash in an amount at least
equal to 75% of the book value thereof.
"ATTRIBUTABLE DEBT" in respect of a sale and leaseback
transaction means, at the time of determination, the present value of the
obligation of the lessee for net rental payments during the remaining term of
the lease included in such sale and leaseback transaction, including any period
for which such lease has been extended or may, at the option of the lessor, be
extended. Such present value shall be calculated using a discount rate equal to
the rate of interest implicit in such transaction, determined in accordance with
GAAP.
3
"BANKRUPTCY LAW" means title 11 of the United States Code or
any similar federal or state law for the relief of debtors.
"BENEFICIAL OWNER" has the meaning assigned to such term in
Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the
beneficial ownership of any particular "person" (as that term is used in Section
13(d)(3) of the Exchange Act), such "person" shall be deemed to have beneficial
ownership of all securities that such "person" has the right to acquire by
conversion or exercise of other securities, whether such right is currently
exercisable or is exercisable only upon the occurrence of a subsequent
condition. The terms "Beneficially Owns" and "Beneficially Owned" shall have a
corresponding meaning.
"BOARD OF DIRECTORS" means:
(1) with respect to a corporation, the board of directors of the
corporation or a committee thereof authorized to exercise the
power of the board of directors of such corporation;
(2) with respect to a partnership, the Board of Directors of the
general partner of the partnership; and
(3) with respect to any other Person, the board or committee of
such Person serving a similar function.
"BOARD RESOLUTION" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors of the Company and to be in full force and effect on
the date of such certification.
"BROKER-DEALER" has the meaning set forth in the Registration
Rights Agreement.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CALCULATION DATE" has the meaning set forth below in the
definition of Fixed Charge Coverage Ratio.
"CAPITAL LEASE OBLIGATION" means, at the time any
determination thereof is to be made, the amount of the liability in respect of a
capital lease that would at that time be required to be capitalized on a balance
sheet in accordance with GAAP.
"CAPITAL STOCK" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents
(however designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or
limited); and
4
(4) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"CASH EQUIVALENTS" means:
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or insured
by the United States government or any agency or
instrumentality thereof (provided that the full faith and
credit of the United States is pledged in support thereof)
having maturities of not more than 360 days from the date of
acquisition, unless such securities are deposited to defease
any Indebtedness;
(3) securities issued by any state of the United States 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
thereof, having one of the two highest ratings obtainable from
either Standard & Poor's Rating Services or Moody's Investors
Service, Inc.;
(4) certificates of deposit and eurodollar time deposits with
maturities of six months or less from the date of acquisition,
bankers' acceptances with maturities not exceeding six months
and overnight bank deposits, in each case, with any commercial
bank organized under the laws of the United States of America
or any state thereof or the District of Columbia or any
foreign country recognized by the United States of America and
having capital and surplus at the time of acquisition thereof,
in excess of $500.0 million (or the foreign currency
equivalent thereof) and a rating at the time of acquisition
thereof of P-1 or better from Moody's Investors Service, Inc.
or A-1 or better from Standard & Poor's Rating Services;
(5) repurchase obligations for underlying securities of the types
described in clauses (2) and (4) above entered into with any
financial institution meeting the qualifications specified in
clause (4) above;
(6) commercial paper having at the time of acquisition the highest
rating obtainable from Moody's Investors Service, Inc. or
Standard & Poor's Rating Services and in each case maturing
within nine months after the date of acquisition;
(7) money market funds at least 95% of the assets of which
constitute Cash Equivalents of the kinds described in clauses
(1) through (6) of this definition; and
(8) in the case of any Foreign Restricted Subsidiary, local
currency held by such Foreign Restricted Subsidiary from time
to time in the ordinary course of business.
"CHANGE OF CONTROL" means the occurrence of any of the
following:
5
(1) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in
one or a series of related transactions, of all or
substantially all of the properties or assets of the Parent
Guarantor and its subsidiaries or the Company and its
Restricted Subsidiaries, in each case, taken as a whole, to
any "person" (as that term is used in Section 13(d)(3) of the
Exchange Act) other than the Principals or Related Parties of
the Principals;
(2) the adoption of a plan relating to the liquidation or
dissolution of the Company;
(3) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which
is that any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act), other than the
Principals and their Related Parties, becomes the Beneficial
Owner, directly or indirectly, of more than 50% of the voting
power of the Voting Stock of the Company or the Parent
Guarantor, as the case may be;
(4) the first day on which a majority of the members of the Board
of Directors of the Parent Guarantor or the Company are not
Continuing Directors; or
(5) the Parent Guarantor or the Company consolidates with, or
merges with or into, any Person, or any Person consolidates
with, or merges with or into, the Parent Guarantor or the
Company, in any such event pursuant to a transaction in which
any of the outstanding Voting Stock of the Parent Guarantor,
the Company or such other Person is converted into or
exchanged for cash, securities or other property, other than
any such transaction where (A) the Voting Stock of the Parent
Guarantor or the Company outstanding immediately prior to such
transaction is converted into or exchanged for Voting Stock
(other than Disqualified Stock) of the surviving or transferee
Person constituting a majority of the outstanding shares of
such Voting Stock of such surviving or transferee Person
(immediately after giving effect to such issuance) and (B)
immediately after such transaction, no "person" or "group" (as
such terms are used in Sections 13(d) and 14(d) of the
Exchange Act), other than the Principals and their Related
Parties, becomes the Beneficial Owner, directly or indirectly,
of more than 50% of the voting power of the Voting Stock of
the surviving or transferee Person.
"CLEARSTREAM" means Clearstream Banking, societe anonyme,
Luxembourg, and any successor thereto.
"COMPANY" means Ames True Temper, Inc., a Delaware
corporation, until a successor replaces it pursuant to Section 5.01 and
thereafter means the successor.
"CONSOLIDATED CASH FLOW" means, with respect to any specified
Person for any period, the Consolidated Net Income of such Person for such
period and, without duplication, plus:
(1) provision for taxes based on income or profits of such Person
and its Restricted Subsidiaries for such period, to the extent
that such provision for taxes was deducted in computing such
Consolidated Net Income; plus
6
(2) Fixed Charges of such Person and its Restricted Subsidiaries
for such period, to the extent that any such Fixed Charges
were deducted in computing such Consolidated Net Income; plus
(3) depreciation, amortization (including amortization of
intangibles but excluding amortization of prepaid cash
expenses that were paid in a prior period) and other non-cash
expenses (excluding any such non-cash expense to the extent
that it represents an accrual of or reserve for cash expenses
in any future period or amortization of a prepaid cash expense
that was paid in a prior period) of such Person and its
Restricted Subsidiaries for such period to the extent that
such depreciation, amortization and other non-cash expense was
deducted in computing such Consolidated Net Income; plus
(4) any management fees paid by the Company to Castle Harlan, Inc.
or any of its Affiliates in such period pursuant to the terms
of the Management Agreement as in effect on the date of this
Indenture and as described in the Offering Memorandum, to the
extent that any such management fees were deducted in
computing Consolidated Net Income; minus
(5) non-cash items increasing such Consolidated Net Income for
such period excluding any such items to the extent they
represent (a) the reversal in such period of an accrual of, or
cash reserve for, cash expenses in a prior period, to the
extent such accrual or reserve did not increase Consolidated
Cash Flow in a prior period, (b) the amortization of income
that was paid in a prior period or (c) the accrual of revenue
or income consistent with past practice;
in each case, on a consolidated basis and determined in accordance with GAAP.
Notwithstanding the preceding, the provision for taxes based
on the income or profits of, the Fixed Charges of and the depreciation and
amortization and other non-cash expenses of, a Restricted Subsidiary of the
Company shall be added to Consolidated Net Income to compute Consolidated Cash
Flow of the Company only to the extent that a corresponding amount would be
permitted at the date of determination to be dividended or distributed to the
Company by such Restricted Subsidiary without prior governmental approval (or to
the extent such approval has been obtained), and without direct or indirect
restriction pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that Restricted Subsidiary or its stockholders.
"CONSOLIDATED NET INCOME" means, with respect to any specified
Person for any period, the aggregate of the Net Income of such Person and its
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:
(1) the Net Income of any Person that is not a Restricted
Subsidiary of the specified Person or that is accounted for by
the equity method of accounting shall be included only to the
extent of the amount of dividends or distributions paid in
cash to the specified Person or a Restricted Subsidiary
thereof;
7
(2) solely for the purposes of calculating Consolidated Net Income
to determine the amount of Restricted Payments permitted under
Section 4.07(a), the Net Income of any Restricted Subsidiary
shall be excluded to the extent that the declaration or
payment of dividends or similar distributions by that
Restricted Subsidiary of that Net Income is not at the date of
determination permitted without any prior governmental
approval (that has not been obtained) or, directly or
indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to that Restricted
Subsidiary or its stockholders;
(3) the Net Income (or loss) of any Person acquired during the
specified period for any period prior to the date of such
acquisition shall be excluded;
(4) the cumulative effect of a change in accounting principles
shall be excluded;
(5) non-cash charges relating to employee benefit or management
compensation plans of the Parent Guarantor (to the extent such
non-cash charges relate to plans of the Parent Guarantor for
the benefit of members of the Board of Directors of the
Company (in their capacity as such) or employees of the
Company and its Restricted Subsidiaries), the Company or any
of its Restricted Subsidiaries or any non-cash compensation
charge arising from any grant of stock, stock options or other
equity-based awards of any Parent (to the extent such non-cash
charges relate to plans of any Parent for the benefit of
members of the Board of Directors of the Company (in their
capacity as such) or employees of the Company and its
Restricted Subsidiaries), the Company or any of its Restricted
Subsidiaries (excluding in each case any non-cash charge to
the extent that it represents an accrual of or reserve for
cash expenses in any future period or amortization of a
prepaid cash expense incurred in a prior period) in each case,
to the extent that such non-cash charges are deducted in
computing such Consolidated Net Income, shall be excluded;
(6) any goodwill impairment charges shall be excluded;
(7) the amortization of the consideration for any non-competition
agreements entered into in connection with the Transactions
shall be excluded;
(8) any non-cash charges from the application of the purchase
method of accounting in connection with the Transactions or
any future acquisition, to the extent that any such charges
are deducted in computing such Consolidated Net Income, shall
be excluded; and
(9) any unrealized non-cash gains or losses in respect of Hedging
Obligations (including those resulting from the application of
FAS 133), to the extent that such non-cash gains or losses are
deducted in computing such Consolidated Net Income, shall be
excluded.
"CONTINUING DIRECTORS" means, as of any date of determination,
any member of the Board of Directors of the Company or any Parent, as the case
may be, who:
8
(1) was a member of such Board of Directors on the date of this
Indenture; or
(2) was nominated for election or elected to such Board of
Directors by one or more of the Principals or with the
approval of a majority of the Continuing Directors who were
members of such Board at the time of such nomination or
election.
"CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the
address of the Trustee specified in Section 13.02 or such other address as to
which the Trustee may give notice to the Company.
"CREDIT AGREEMENT" means the certain Credit Agreement, dated
as of the date of this Indenture, by and among the Company, Bank of America,
N.A., as Administrative Agent, and the other agents and lenders named therein
providing for up to $140.0 million in term loan borrowings and $75.0 million of
revolving credit borrowings, including, in each case, any related notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended, modified, renewed, refunded,
replaced, restated, substituted or refinanced in whole or in part from time to
time, including any agreement extending the maturity of, refinancing, replacing
or otherwise restructuring (including increasing the amount of available
borrowings or letters of credit thereunder or adding Subsidiaries of the Company
as additional borrowers or guarantors thereunder) all or any portion of the
Indebtedness under such agreement or any successor or replacement agreement and
whether by the same or any other agent, lender or group of lenders.
"CREDIT FACILITIES" means one or more debt facilities
(including, without limitation, the Credit Agreement), commercial paper
facilities or indentures, in each case with banks or other lenders or a trustee
providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables), letters
of credit or issuance of notes, in each case as amended, modified, renewed,
refunded, replaced, restated, substituted or refinanced in whole or in part from
time to time.
"CUSTODIAN" means the Trustee, as custodian with respect to
the Notes in global form, or any successor entity thereto.
"DEFAULT" means any event that is, or with the passage of time
or the giving of notice or both would be, an Event of Default.
"DEFINITIVE NOTE" means a certificated Note registered in the
name of the Holder thereof and issued in accordance with Section 2.07,
substantially in the form of Exhibit A, except that such Note shall not bear the
Global Note Legend and shall not have the "Schedule of Exchanges of Interests in
the Global Note" attached thereto.
"DEPOSITARY" means, with respect to the Global Notes, the
Person specified in Section 2.04(b) as the Depositary with respect to the Global
Notes, its nominees and any and all successors thereto appointed as depositary
hereunder and having become such pursuant to the applicable provision of this
Indenture.
9
"DESIGNATED NONCASH CONSIDERATION" means the fair market value
of noncash consideration received by the Company or any of its Restricted
Subsidiaries in connection with an Asset Sale that is so designated as
Designated Noncash Consideration pursuant to an Officers' Certificate, setting
forth the basis of such valuation, less the amount of cash or Cash Equivalents
received in connection with a subsequent sale of such Designated Noncash
Consideration.
"DESIGNATED SENIOR DEBT" means:
(1) any Indebtedness outstanding under the Credit Agreement; and
(2) to the extent permitted under the Credit Agreement, any other
Senior Debt, including under any Credit Facilities, permitted
under this Indenture the principal amount of which is $25.0
million or more and that has been designated by the Company as
"Designated Senior Debt."
"DISQUALIFIED STOCK" means any Capital Stock that, by its
terms (or by the terms of any security into which it is convertible, or for
which it is exchangeable, in each case at the option of the holder thereof), or
upon the happening of any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or redeemable at the option of the
holder thereof, in whole or in part, on or prior to the date that is 91 days
after the date on which the Notes mature; provided that if such Capital Stock is
issued to any employee or to any plan for the benefit of employees of the
Company or any of its Subsidiaries or by any such plan to such employees, such
Capital Stock shall not constitute Disqualified Stock solely because it may be
required to be repurchased by the Company or such Subsidiary in order to satisfy
applicable statutory or regulatory obligations; and provided further that any
Capital Stock that would constitute Disqualified Stock solely because the
holders thereof have the right to require the Company to repurchase such Capital
Stock upon the occurrence of a change of control or an asset sale shall not
constitute Disqualified Stock if the terms of such Capital Stock provide that
the Company may not repurchase or redeem any such Capital Stock pursuant to such
provision unless such repurchase or redemption complies with Section 4.07. The
term "Disqualified Stock" shall also include any options, warrants or other
rights that are convertible into Disqualified Stock or that are redeemable at
the option of the holder, or required to be redeemed, prior to the date that is
one year after the date on which the Notes mature.
"DOMESTIC BORROWING BASE" means, as of any date, an amount
equal to the sum of (i) 80% of the book value of all accounts receivable owned
by the Company or any Domestic Subsidiaries of the Company (excluding any
accounts receivable that are more than 90 days past due) as of the most recent
fiscal quarter for which internal financial statements are available and (ii)
50% of the net book value of all inventory owned by the Company or any Domestic
Subsidiaries of the Company as of the most recent fiscal quarter for which
internal financial statements are available, all calculated on a consolidated
basis and in accordance with GAAP.
"DOMESTIC SUBSIDIARY" means any Restricted Subsidiary that was
formed under the laws of the United States or any state thereof or the District
of Columbia.
"EARN-OUT OBLIGATION" means any purchase price adjustment or
contingent consideration based on future operating performance of the acquired
entity or assets, payable
10
following the consummation of an acquisition based on criteria set forth in the
documentation governing or relating to such acquisition.
"EQUITY INTERESTS" means Capital Stock and all warrants,
options or other rights to acquire Capital Stock (but excluding any debt
security that is convertible into, or exchangeable for, Capital Stock).
"EQUITY OFFERING" means an offering (including in a private
placement) of the Equity Interests (other than Disqualified Stock) of the
Company or any Parent, other than public offerings with respect to the Equity
Interests registered on Form S-8.
"EQUITY SPONSOR" means (i) Castle Harlan Partners IV, L.P., a
Delaware limited partnership or any Affiliate thereof or any fund or account
controlled or managed by or under common control with Castle Harlan Partners IV,
L.P. or any Affiliate thereof, and (ii) Castle Harlan, Inc. and its employees
and directors.
"EUROCLEAR" means Euroclear Bank S.A./N.V., as operator of the
Euroclear system, and any successor thereto.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, or any successor statute or statutes thereto.
"EXCHANGE NOTES" means the Notes issued in the Exchange Offer
in accordance with Section 2.07(f).
"EXCHANGE OFFER" has the meaning set forth in the Registration
Rights Agreement.
"EXCHANGE OFFER REGISTRATION STATEMENT" has the meaning set
forth in the Registration Rights Agreement.
"EXISTING INDEBTEDNESS" means Indebtedness outstanding on the
date of this Indenture, other than under the Credit Agreement and this
Indenture.
"FAIR MARKET VALUE" means the price that would be paid in an
arm's-length transaction between an informed and willing seller under no
compulsion to sell and an informed and willing buyer under no compulsion to buy.
Fair market value will be determined (1) to the extent expressly provided in
this Indenture, in accordance with the applicable provisions of this Indenture,
(2) if with respect to a security registered under the Exchange Act, based on
the average of the closing prices, regular way, of such security for the 20
consecutive trading days immediately preceding the acquisition or sale of such
security, (3) unless specified under this Indenture, with respect to any Person
or assets (other than cash and Cash Equivalents and securities registered under
the Exchange Act), involving consideration equal to or in excess of $15.0
million, based on a written appraisal by an independent accounting, financial
advisory or investment banking firm of national standing delivered to the
Trustee, and (4) in all other cases, by the Company's Board of Directors, acting
reasonably, in good faith and in accordance with any applicable law. To the
extent that an Officer's Certificate is required by this Indenture in
11
connection with the determination of fair market value, such certificate shall
be dated within 30 days of the relevant transaction.
"FIXED CHARGES" means, with respect to any specified Person
for any period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or
accrued, including, without limitation, amortization of debt
issuance costs and original issue discount, non-cash interest
payments, the interest component of any deferred payment
obligations, the interest component of all payments associated
with Capital Lease Obligations, imputed interest with respect
to Attributable Debt, commissions, discounts and other fees
and charges incurred in respect of letter of credit or
bankers' acceptance financings, and net of the effect of all
payments made or received pursuant to Hedging Obligations;
plus
(2) the consolidated interest of such Person and its Restricted
Subsidiaries that was capitalized during such period; plus
(3) any interest expense on Indebtedness of another Person that is
Guaranteed by such Person or one of its Restricted
Subsidiaries or secured by a Lien on assets of such Person or
one of its Restricted Subsidiaries, whether or not such
Guarantee or Lien is called upon; plus
(4) the product of (a) all dividends and distributions, whether
paid or accrued and whether or not in cash, on any series of
Disqualified Stock of such Person or any Disqualified Stock or
preferred stock of any of its Restricted Subsidiaries, other
than dividends on Equity Interests payable solely in Equity
Interests of the Company (other than Disqualified Stock) or to
the Company or a Restricted Subsidiary of the Company, times
(b) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined
federal, state and local statutory tax rate of such Person,
expressed as a decimal,
in each case, on a consolidated basis and in accordance with GAAP.
"FIXED CHARGE COVERAGE RATIO" means with respect to any
specified Person for any period, the ratio of the Consolidated Cash Flow of such
Person for such period to the Fixed Charges of such Person for such period. In
the event that the specified Person or any of its Restricted Subsidiaries
incurs, assumes, Guarantees, repays, repurchases or redeems any Indebtedness or
issues, repurchases or redeems Disqualified Stock or preferred stock subsequent
to the commencement of the period for which the Fixed Charge Coverage Ratio is
being calculated and on or prior to the date on which the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the "CALCULATION DATE"),
then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect
to such incurrence, assumption, Guarantee, repayment, repurchase or redemption
of Indebtedness, or such issuance, repurchase or redemption of Disqualified
Stock or preferred stock, and the use of the proceeds therefrom as if the same
had occurred at the beginning of the applicable four-quarter reference period.
12
In addition, for purposes of calculating the Fixed Charge
Coverage Ratio:
(1) the Transactions, acquisitions, dispositions, mergers,
consolidations and discontinued operations (as determined in
accordance with GAAP) that have been made by the Company or
any Restricted Subsidiary of the Company during the
four-quarter reference period or subsequent to such reference
period and on or prior to or simultaneously with the
Calculation Date shall be calculated on a pro forma basis
including Pro Forma Cost Savings, assuming that the
Transactions and all such acquisitions, dispositions, mergers,
consolidations and discontinued operations (and the change in
any associated fixed charge obligations and the change in
Consolidated Cash Flow resulting therefrom) had occurred on
the first day of the four-quarter reference period. If since
the beginning of such period any Person (that subsequently
became a Restricted Subsidiary of the Company or was merged
with or into the Company or any Restricted Subsidiary of the
Company since the beginning of such period) shall have made
any acquisition, disposition, merger, consolidation or
discontinued operation that would have required adjustment
pursuant to this definition, then the Fixed Charge Coverage
Ratio shall be calculated giving pro forma effect thereto for
such period as if such acquisition, disposition, merger,
consolidation or discontinued operation had occurred at the
beginning of the applicable four-quarter period; and
(2) in calculating Fixed Charges attributable to interest on any
Indebtedness computed on a pro forma basis, (a) interest on
outstanding Indebtedness determined on a fluctuating basis as
of the Calculation 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 Calculation Date; (b) if
interest on any Indebtedness actually incurred on the
Calculation 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 Calculation Date will be deemed
to have been in effect during the four-quarter period; and (c)
notwithstanding clause (a) above, interest in Indebtedness
determined on a fluctuating basis, to the extent such interest
is covered by agreements relating to interest rate swaps, caps
or collars, shall be deemed to accrue at the rate per annum
resulting after giving effect to the operation of such
agreement.
"FOREIGN BORROWING BASE" means, as of any date, an amount
equal to the sum of (i) 80% of the book value of all accounts receivable owned
by Foreign Restricted Subsidiaries of the Company (excluding any accounts
receivable that are more than 90 days past due), as of the most recent fiscal
quarter for which internal financial statements are available, and (ii) 50% of
the net book value of all inventory owned by Foreign Restricted Subsidiaries of
the Company as of the most recent fiscal quarter for which internal financial
statements are available, all calculated on a combined and consolidated basis
and in accordance with GAAP.
"FOREIGN RESTRICTED SUBSIDIARY" means any Restricted
Subsidiary of the Company incorporated in any jurisdiction outside the United
States.
13
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect on the date of this Indenture.
"GLOBAL NOTE LEGEND" means the legend set forth in Section
2.07(g)(ii), which is required to be placed on all Global Notes issued under
this Indenture.
"GLOBAL NOTES" means, individually and collectively, each of
the Restricted Global Notes and the Unrestricted Global Notes, substantially in
the form of Exhibit A, issued in accordance with Section 2.01 or Section 2.07.
"GOVERNMENT SECURITIES" means securities that are direct
obligations of the United States of America for the timely payment of which its
full faith and credit is pledged.
"GUARANTEE" means a guarantee other than by endorsement of
negotiable instruments for collection in the ordinary course of business, direct
or indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"GUARANTORS" means:
(1) the Parent Guarantor; and
(2) the Subsidiary Guarantors.
"HEDGING OBLIGATIONS" means, with respect to any specified
Person, the obligations of such Person under:
(1) interest rate swap agreements, interest rate cap agreements,
interest rate collar agreements and other agreements or
arrangements designed for the purpose of fixing, hedging or
swapping interest rate risk;
(2) commodity swap agreements, commodity option agreements,
forward contracts and other agreements or arrangements
designed for the purpose of fixing, hedging or swapping
commodity price risk; and
(3) foreign exchange contracts, currency swap agreements and other
agreements or arrangements designed for the purpose of fixing,
hedging or swapping foreign currency exchange rate risk.
"HOLDER" means a Person in whose name a Note is registered.
"INDEBTEDNESS" means, with respect to any specified Person,
any indebtedness of such Person, whether or not contingent (without
duplication):
(1) in respect of borrowed money;
14
(2) evidenced by bonds, notes, debentures or similar instruments;
(3) evidenced by letters of credit (or reimbursement agreements in
respect thereof), but excluding obligations with respect to
letters of credit (including trade letters of credit) and
reimbursement agreements in respect thereof to the extent that
any such letter of credit secures obligations (other than
obligations described in clause (1) or (2) above or clause
(5), (6) or (7) below) entered into in the ordinary course of
business of such Person to the extent such letters of credit
are not drawn upon or, if drawn upon, to the extent such
drawing is reimbursed no later than the third Business Day
following receipt by such Person of a demand for
reimbursement;
(4) in respect of banker's acceptances;
(5) in respect of Capital Lease Obligations;
(6) in respect of the balance deferred and unpaid of the purchase
price of any property, except any such balance that
constitutes an accrued expense or trade payable; or
(7) representing Hedging Obligations;
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the Guarantee
by the specified Person of any Indebtedness of any other Person to the extent of
such Guarantee of such Indebtedness provided by such Person. Notwithstanding the
foregoing, Indebtedness shall at any time include all Earn-out Obligations for
which the conditions for payment have been met pursuant to the terms governing
such Earn-out Obligations, to the extent that all such Earn-out Obligations then
outstanding, in the aggregate, exceed $15.0 million.
The amount of any Indebtedness outstanding as of any date
shall be:
(1) the accreted value thereof, in the case of any Indebtedness
issued with original issue discount;
(2) the principal amount thereof, together with any interest
thereon that is more than 30 days past due, in the case of any
other Indebtedness;
(3) with respect to Indebtedness of another Person secured by a
Lien on the assets of the Company or any of its Restricted
Subsidiaries, the lesser of the fair market value of the
property secured or the amount of the secured Indebtedness;
(4) with respect to Indebtedness of others supported by a
Guarantee of the Company or a Restricted Subsidiary, the
lesser of the amount of the primary indebtedness and any
stated limit on recourse under the Guarantee; and
15
(5) the amount of the Indebtedness in respect of any Hedging
Obligations at any time shall be equal to the amount payable
as a result of the termination of such Hedging Obligations at
such time.
"INDENTURE" means this Indenture, as amended or supplemented
from time to time.
"INDIRECT PARTICIPANT" means a Person who holds a beneficial
interest in a Global Note through a Participant.
"INSTITUTIONAL ACCREDITED INVESTOR" means an institution that
is an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act, who is not also a QIB.
"INVESTMENTS" means, with respect to any Person, all direct or
indirect investments by such Person in other Persons (including Affiliates) in
the forms of loans or other extensions of credit (including Guarantees, but
excluding extensions of credit to customers or advances, deposits and payment to
or with suppliers, lessors or utilities or for workers' compensation, in each
case, in the ordinary course of business that are recorded as accounts
receivable, prepaid expenses or deposits on the balance sheet of such Person
prepared in accordance with GAAP), advances or capital contributions (excluding
commission, travel and similar advances to officers and employees made
consistent with past practices), purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities, together
with all items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP. If the Company or any Restricted Subsidiary of
the Company sells or otherwise disposes of any Equity Interests of any direct or
indirect Restricted Subsidiary of the Company such that, after giving effect to
any such sale or disposition, such Person is no longer a Restricted Subsidiary
of the Company, the Company shall be deemed to have made a Restricted Investment
on the date of any such sale or disposition equal to the fair market value of
the Equity Interests of such Restricted Subsidiary not sold or disposed of in an
amount determined as provided in Section 4.07(c). The acquisition by the Company
or any Restricted Subsidiary of the Company of a Person that holds an Investment
in a third Person shall be deemed to be an Investment by the Company or such
Restricted Subsidiary in such third Person in an amount equal to the fair market
value of the Investment held by the acquired Person in such third Person in an
amount determined as provided in Section 4.07(c).
"ISSUE DATE" means the date of the original issuance of the
Notes under this Indenture.
"LEGAL HOLIDAY" means a Saturday, Sunday or a day on which
banking institutions in The City of New York or at a place of payment are
authorized by law, regulation or executive order to remain closed.
"LEGENDED REGULATION S GLOBAL NOTE" means a global Note in the
form of Exhibit A bearing the Global Note Legend (and shall include the
"Schedule of Exchanges of Interests in the Global Note" attached thereto) and
the Private Placement Legend that is deposited with or on behalf of and
registered in the name of the Depositary or its nominee, issued
16
in a denomination equal to the outstanding principal amount at maturity of the
Notes initially sold in reliance on Rule 903 of Regulation S.
"LETTER OF TRANSMITTAL" means the letter of transmittal to be
prepared by the Company and sent to all Holders of the Notes for use by such
Holders in connection with the Exchange Offer.
"LIEN" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law, including any conditional sale or other title retention agreement, any
lease in the nature thereof, and any unconditional agreement to grant a security
interest in such asset.
"LIQUIDATED DAMAGES" means the additional amounts, if any,
payable by the Company in the event of a Registration Default under and as
defined in the Registration Rights Agreement.
"MANAGEMENT AGREEMENT" means the Management Agreement, dated
as of the date of this Indenture, by and among Castle Harlan, Inc., the Parent
Guarantor, the Company and CHATT Holdings LLC.
"NET INCOME" means, with respect to any specified Person, the
net income (loss) of such Person, determined in accordance with GAAP and before
any reduction in respect of preferred stock dividends, excluding, however:
(1) any gain (or loss), together with any related provision for
taxes on such gain (or loss), realized in connection with: (a)
any Asset Sale (without reference to the $2.0 million
limitation) or abandonments or reserves relating thereto; or
(b) the disposition of any other assets by such Person or any
of its Restricted Subsidiaries (other than in the ordinary
course of business) or the extinguishment of any Indebtedness
of such Person or any of its Restricted Subsidiaries;
(2) any extraordinary or nonrecurring gain, loss, income or
expense (including nonrecurring gains, losses, income or
expense of the Company and its Subsidiaries incurred in
connection with the Transactions (including, without
limitation, any one-time non-cash charges or expenses
associated with the write off of deferred debt issuance costs)
and any future acquisitions), together with any related
provision for taxes on such extraordinary or nonrecurring
gain, loss, income or expense; and
(3) any gain (or loss) due solely to fluctuations in currency
values and the related tax effects in accordance with GAAP.
"NET PROCEEDS" means the aggregate cash proceeds received by
the Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of such non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale or disposition of such non-cash
consideration, including, without limitation, legal, accounting and investment
banking fees, and
17
sales commissions, and any relocation expenses incurred as a result thereof,
taxes paid or payable as a result thereof, in each case, after taking into
account any available tax credits or deductions and any tax sharing
arrangements, and amounts required to be applied to the repayment of
Indebtedness (other than revolving credit Indebtedness, unless there is a
required reduction in commitments) secured by a Lien on the asset or assets that
were the subject of such Asset Sale, or required to be paid as a result of such
sale, and any reserve for adjustment in respect of the sale price of such asset
or assets established in accordance with GAAP and any reserve or payment with
respect to any liabilities associated with such asset or assets and retained by
the Company after such sale or other disposition thereof, including, without
limitation, severance costs, pension and other post-employment benefit
liabilities and liabilities related to environmental matters or against any
indemnification obligations associated with such transaction.
"NON-RECOURSE DEBT" means Indebtedness:
(1) as to which neither the Company nor any of its Restricted
Subsidiaries (a) provides credit support of any kind
(including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable
as a guarantor or otherwise, or (c) constitutes the lender;
and
(2) as to which either (a) the explicit terms provide that there
is no recourse against any of the assets of the Company or any
Restricted Subsidiary thereof or (b) the lenders have been
notified in writing that they will not have any recourse to
the stock or assets of the Company or any of its Restricted
Subsidiaries.
"NON-U.S. PERSON" means a Person who is not a U.S. Person, as
defined in Regulation S.
"NOTE GUARANTEE" means a Guarantee of the Notes pursuant to
this Indenture.
"NOTES" means the 10% Senior Subordinated Notes due 2012 of
the Company issued on the date hereof, any Additional Notes and any Exchange
Notes, in each case as amended or supplemented from time to time in accordance
with the terms of this Indenture. The Notes, any Additional Notes and any
Exchange Notes, whether issued as Global Notes or Definitive Notes, shall be
treated as a single class for all purposes under this Indenture.
"OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages, costs, expenses and other liabilities
payable under the documentation governing any Indebtedness.
"OFFERING MEMORANDUM" means the offering memorandum, dated
June 23, 2004, relating to the Company's 10% Senior Subordinated Notes due 2012.
"OFFICER" means, with respect to any Person, the Chairman of
the Board, the Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer,
the Controller, the Secretary, any Senior Vice President, any Vice President or
any Assistant Vice President of such Person, or any other officer designated by
the relevant Board of Directors serving in a similar capacity.
18
"OFFICERS' CERTIFICATE" means a certificate signed on behalf
of the Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Sections 13.04 and 13.05 as they relate to the making of an Officers'
Certificate.
"OPINION OF COUNSEL" means an opinion from legal counsel who
is reasonably acceptable to the Trustee (who may be counsel to or an employee of
the Company) that meets the requirements of this Indenture.
"PARENT" means any direct or indirect parent company of the
Company.
"PARENT GUARANTOR" means ATT Holding Co., a Delaware
corporation.
"PARTICIPANT" means, with respect to the Depositary, Euroclear
or Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and with respect to DTC, shall include Euroclear and
Clearstream).
"PERMITTED BUSINESS" means any business conducted or proposed
to be conducted (as described in the Offering Memorandum) by the Company and its
Restricted Subsidiaries on the date of this Indenture and other businesses
reasonably related or ancillary thereto.
"PERMITTED INVESTMENTS" means:
(1) any Investment in the Company or in a Restricted Subsidiary of
the Company;
(2) any Investment in Cash Equivalents;
(3) any Investment 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 substantially
all of its assets to, or is liquidated into, the
Company or a Restricted Subsidiary of the Company;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and
in compliance with Section 4.10;
(5) any Investment the payment for which consists of Equity
interests (other than Disqualified Stock) of the Company or
any Parent (which Investment, in the case of any Parent, is
contributed to the common equity capital of the Company;
provided that any such contribution shall be excluded from
Section 4.07(a)(iv)(C)(2).
(6) Hedging Obligations;
19
(7) other Investments in any Person having an aggregate fair
market value (measured on the date each such Investment was
made and without giving effect to subsequent changes in
value), when taken together with all other Investments made
pursuant to this clause (7) since the date of this Indenture,
not to exceed $5.0 million;
(8) any Investment of the Company or any of its Restricted
Subsidiaries existing on the date of this Indenture;
(9) loans to officers and employees that are, or are extended
pursuant to a plan, approved in good faith by a majority of
the Board of Directors of the Company in an amount not to
exceed $1.0 million outstanding at any time;
(10) any Investment acquired by the Company or any of its
Restricted Subsidiaries:
(a) in exchange for any other Investment or accounts
receivable held by the Company or any such Restricted
Subsidiary in connection with or as a result of
bankruptcy, workout, reorganization or
recapitalization of a Person or the good faith
settlement of delinquent obligations of a Person, or
(b) as a result of a foreclosure by the Company or any of
its Restricted Subsidiaries with respect to any
secured Investment or other transfer of title with
respect to any secured Investment in default;
(11) Investments consisting of the licensing or contribution of
intellectual property pursuant to joint marketing arrangements
with other Persons;
(12) Investments in Chengde Greenlife Houseware Co., Ltd., Dalian
Greenlife Tools Co., Ltd. and Fujian Greenlife Tools of Garden
Co., Ltd. having an aggregate value (measured on the date each
such Investment was made and without giving effect to
subsequent changes in value), when taken together with all
other Investments made pursuant to this clause (12) since the
date of this Indenture, not to exceed $15.0 million.
(13) Investments in joint ventures engaged in a Permitted Business
having an aggregate value (measured on the date each such
Investment was made and without giving effect to subsequent
changes in value), when taken together with all other
Investments made pursuant to this clause (13) since the date
of this Indenture, not to exceed $10.0 million; and
(14) Investments in the Notes.
"PERMITTED JUNIOR SECURITIES" means:
(1) Equity Interests in the Company or the Parent; or
20
(2) debt securities that are subordinated to all Senior Debt and
any debt securities issued in exchange for Senior Debt at
least to the same extent as, or to a greater extent than, the
Notes and any Note Guarantees are subordinated to Senior Debt
under this Indenture.
"PERMITTED LIENS" means:
(1) Liens on the assets and property of the Company and any
Guarantor securing Senior Debt that was permitted by the terms
of this Indenture to be incurred;
(2) Liens in favor of the Company or any Restricted Subsidiary of
the Company;
(3) Liens on assets and property of a Person existing at the time
such Person is merged with or into or consolidated or
amalgamated with the Company or any Restricted Subsidiary of
the Company; provided that such Liens were in existence prior
to, and were not incurred in connection with or in the
contemplation of, such merger, consolidation or amalgamation
and do not extend to any assets other than those of the Person
merged into or consolidated with the Company or the Restricted
Subsidiary;
(4) Liens on assets and property existing at the time of
acquisition thereof by the Company or any Restricted
Subsidiary of the Company, provided that such Liens were in
existence prior to, and were not incurred in connection with
or in contemplation of, such acquisition and do not extend to
any property other than the property so acquired by the
Company or the Restricted Subsidiary;
(5) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by Section 4.09(b)(iv), covering only
the assets acquired with such Indebtedness;
(6) Liens of the Company and its Restricted Subsidiaries existing
on the date of this Indenture;
(7) Liens incurred in the ordinary course of business of the
Company or any Restricted Subsidiary of the Company with
respect to Indebtedness and other obligations that do not
exceed $10.0 million at any one time outstanding;
(8) Liens to secure the performance of statutory obligations,
surety or appeal bonds, completion guarantees, performance or
bid bonds or other similar obligations (exclusive of
obligations for the payment of borrowed money) incurred in the
ordinary course of business, including letters of credit
issued pursuant to the request of and for the account of the
Company or any Restricted Subsidiary of the Company in respect
of the foregoing in the ordinary course of business;
(9) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in
respect of bankers' acceptances issued or created for the
account of such Person to facilitate the purchase, shipment or
storage of such inventory or goods;
21
(10) Liens incurred or pledges or deposits made in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security,
including any Lien securing letters of credit issued in the
ordinary course of business consistent with past practice in
connection therewith;
(11) Liens to secure Indebtedness of any Foreign Restricted
Subsidiary permitted to be incurred under Section 4.09
covering only the assets of such Foreign Restricted
Subsidiary;
(12) Liens securing Hedging Obligations permitted by Section
4.09(b)(vii); and
(13) Liens on Equity Interests in Unrestricted Subsidiaries that
secure Non-Recourse Debt.
"PERMITTED REFINANCING INDEBTEDNESS" means:
(A) any Indebtedness of the Company or any of its Restricted
Subsidiaries (other than Disqualified Stock) issued in exchange for, or
the net proceeds of which are used to extend, refinance, renew,
replace, defease or refund other Indebtedness of the Company or any of
its Restricted Subsidiaries (other than Disqualified Stock and
intercompany Indebtedness); provided that:
(1) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the
principal amount (or accreted value, if applicable) of the
Indebtedness so extended, refinanced, renewed, replaced,
defeased or refunded (plus all accrued interest thereon and
the amount of any reasonably determined premium and other
amounts necessary to accomplish such refinancing and such
reasonable fees and expenses incurred in connection
therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity
date later than the final maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted
Average Life to Maturity of, the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded;
(3) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of
payment to the Notes or the Note Guarantees, such Permitted
Refinancing Indebtedness has a final maturity date later than
the final maturity date of, and is subordinated in right of
payment to, the Notes on terms at least as favorable to the
Holders of Notes as those contained in the documentation
governing the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded;
(4) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is pari passu in right of
payment with the Notes or any Note Guarantees, such Permitted
Refinancing Indebtedness is pari passu in right of payment
with, or subordinated in right of payment to, the Notes or
such Note Guarantees; and
22
(5) such Indebtedness is incurred either by the Company or by the
Restricted Subsidiary who is the obligor on the Indebtedness
being extended, refinanced, renewed, replaced, defeased or
refunded; and
(B) any Disqualified Stock of the Company or any of its
Restricted Subsidiaries issued in exchange for, or the net proceeds of
which are used to extend, refinance, renew, replace or refund other
Indebtedness or Disqualified Stock of the Company or any of its
Restricted Subsidiaries (other than Indebtedness or Disqualified Stock
held by the Company or any of its Restricted Subsidiaries); provided
that:
(1) the liquidation or face value of such Permitted Refinancing
Indebtedness does not exceed the principal amount (or accreted
value, if applicable) of the Indebtedness, or the liquidation
or face value of the Disqualified Stock, as applicable, so
extended, refinanced, renewed, replaced or refunded (plus all
accrued dividends thereon and the amount of any reasonably
determined premium and other amounts necessary to accomplish
such refinancing and such reasonable fees and expenses
incurred in connection therewith);
(2) such Permitted Refinancing Indebtedness has a final redemption
date equal to or later than the final maturity or redemption
date of, and has a Weighted Average Life to Maturity equal to
or greater than the Weighted Average Life to Maturity of, the
Indebtedness or Disqualified Stock being extended, refinanced,
renewed, replaced or refunded;
(3) such Permitted Refinancing Indebtedness has a final redemption
date equal to or later than the final maturity date of, and is
subordinated in right of payment to, the Notes on terms at
least as favorable to the Holders of Notes as those contained
in the documentation governing the Indebtedness or
Disqualified Stock being extended, refinanced, renewed,
replaced or refunded;
(4) such Permitted Refinancing Indebtedness is not redeemable at
the option of the holder thereof or mandatorily redeemable
prior to the final maturity or redemption date of the
Indebtedness or Disqualified Stock being extended, refinanced,
renewed, replaced or refunded; and
(5) such Disqualified Stock is issued either by the Company or by
the Restricted Subsidiary who is the issuer of the
Indebtedness or Disqualified Stock being extended, refinanced,
renewed, replaced or refunded.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company or government or other entity.
"PREFERRED STOCK" means, with respect to any Person, any
Capital Stock of such Person that has preferential rights to any other Capital
Stock of such Person with respect to dividends or redemptions upon liquidation.
23
"PRINCIPALS" means (1) the Equity Sponsor, (2) Richard Dell,
(3) Duane Greenly and (4) Judy Schuchart.
"PRIVATE PLACEMENT LEGEND" means the legend set forth in
Section 2.07(g)(i) to be placed on all Notes issued under this Indenture except
where otherwise permitted by the provisions of this Indenture.
"PRO FORMA COST SAVINGS" means, with respect to any period,
the reduction in net costs and related adjustments that (i) were directly
attributable to an Asset Acquisition that occurred during the four-quarter
period or after the end of the four-quarter period and on or prior to the
Calculation Date and calculated on a basis that is consistent with Regulation
S-X under the Securities Act as in effect and applied as of the date of this
Indenture, (ii) were actually implemented by the business that was the subject
of any such Asset Acquisition within six months after the date of the Asset
Acquisition and prior to the Calculation Date that are supportable and
quantifiable by the underlying accounting records of such business or (iii)
relate to the business that is the subject of any such Asset Acquisition and
that the Company reasonably determines are probable based upon specifically
identifiable actions to be taken within six months of the date of the Asset
Acquisition and, in the case of each of (i), (ii) and (iii), are described, as
provided below, in an Officers' Certificate, as if all such reductions in costs
had been effected as of the beginning of such period. Pro Forma Cost Savings
described above shall be accompanied by a certificate delivered to the Trustee
from the Company's Chief Financial Officer that outlines the specific actions
taken or to be taken, the net cost savings achieved or to be achieved from each
such action and that, in the case of clause (iii) above, such savings have been
determined to be probable.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of the date hereof, by and among the Company and the other
parties named on the signature pages thereof, as such agreement may be amended,
modified or supplemented from time to time and, with respect to any Additional
Notes, one or more registration rights agreements between the Company and the
other parties thereto, as such agreement(s) may be amended, modified or
supplemented from time to time, relating to rights given by the Company to the
purchasers of Additional Notes to register such Additional Notes under the
Securities Act.
"REGULATION S" means Regulation S promulgated under the
Securities Act.
"REGULATION S GLOBAL NOTE" means a Legended Regulation S
Global Note or an Unlegended Regulation S Global Note, as appropriate.
"RELATED PARTY" means
(1) any controlling stockholder, partner, member, 80% (or more)
owned Subsidiary, or immediate family member (in the case of
an individual) of any Principal; or
(2) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons
beneficially holding an 80% or more controlling
24
interest of which consist of any one or more Principals and/or
such other Persons referred to in the immediately preceding
clause.
"REPLACEMENT ASSETS" means (1) assets that will be used or
useful in a Permitted Business, (2) all or substantially all of the assets of a
Permitted Business or a majority of the Voting Stock of any Person engaged in a
Permitted Business that will become on the date of acquisition thereof a
Restricted Subsidiary or (3) a Permitted Investment under clauses (12) or (13)
of the definition of Permitted Investment that is otherwise permitted under this
Indenture.
"REPRESENTATIVE" means the trustee, agent or representative
for any Senior Debt.
"RESPONSIBLE OFFICER," when used with respect to the Trustee,
means any officer within the Corporate Trust Office of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject and who shall have direct
responsibility for the administration of this Indenture.
"RESTRICTED DEFINITIVE NOTE" means a Definitive Note bearing
the Private Placement Legend.
"RESTRICTED GLOBAL NOTE" means a 144A Global Note or a
Legended Regulation S Global Note, in each case bearing the Private Placement
Legend.
"RESTRICTED INVESTMENT" means an Investment other than a
Permitted Investment.
"RESTRICTED PERIOD" means the 40-day distribution compliance
period as defined in Regulation S.
"RESTRICTED SUBSIDIARY" of a Person means any Subsidiary of
such Person that is not an Unrestricted Subsidiary.
"RULE 144" means Rule 144 promulgated under the Securities
Act.
"RULE 144A" means Rule 144A promulgated under the Securities
Act.
"RULE 903" means Rule 903 promulgated under the Securities
Act.
"RULE 904" means Rule 904 promulgated under the Securities
Act.
"SALE AND LEASEBACK TRANSACTION" means, with respect to any
Person, any transaction involving any of the assets or properties of such Person
whether now owned or hereafter acquired, whereby such Person sells or transfers
such assets or properties and then or thereafter leases such assets or
properties or any part thereof.
"SEC" means the Securities and Exchange Commission.
25
"SECURITIES ACT" means the Securities Act of 1933, as amended,
or any successor statute or statutes thereto.
"SENIOR DEBT" means:
(1) all Indebtedness of the Company or any Guarantor outstanding
under the Credit Agreement and all Hedging Obligations with
respect thereto, whether outstanding on the date of this
Indenture or incurred thereafter;
(2) any other Indebtedness (including under Credit Facilities) of
the Company or any Guarantor permitted to be incurred under
the terms of this Indenture, unless the instrument under which
such Indebtedness is incurred expressly provides that it is on
a parity with or subordinated in right of payment to the Notes
or any Note Guarantee; and
(3) all Obligations with respect to the items listed in the
preceding clauses (1) and (2) (including, without limitation,
any interest accruing subsequent to the filing of a petition
of bankruptcy at the rate provided for in the documentation
with respect thereto, whether or not such interest is an
allowed claim under applicable law).
Notwithstanding anything to the contrary in the preceding
paragraph, Senior Debt will not include:
(1) any Indebtedness that is, by its express terms, subordinated
in right of payment to any other Indebtedness of the Company
or any Guarantor;
(2) any liability for federal, state, local or other taxes owed or
owing by the Company;
(3) any Indebtedness of the Company to any of its Subsidiaries or
other Affiliates;
(4) any trade payables;
(5) the portion of any Indebtedness that is incurred in violation
of this Indenture; or
(6) any repurchase, redemption or other obligation in respect of
Disqualified Stock.
"SHELF REGISTRATION STATEMENT" means the Shelf Registration
Statement as defined in the Registration Rights Agreement.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a
"significant subsidiary", as defined in Article I, Rule 1-02(w) of Regulation
S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect
on the date of this Indenture.
"STATED MATURITY" means, with respect to any installment of
interest or principal on any series of Indebtedness, the date on which such
payment of interest or principal was scheduled to be paid in the original
documentation governing such Indebtedness, and shall not
26
include any contingent obligations to repay, redeem or repurchase any such
interest or principal prior to the date originally scheduled for the payment
thereof.
"STOCK PURCHASE AGREEMENT" means the Stock Purchase Agreement,
dated as of June 1, 2004, by and among ATT Holding Co, the shareholders of ATT
Holding Co., the warrant holders of ATT Holding Co., Wind Point Investors V,
L.P., as sellers' representative, CHATT Holdings LLC, as buyer parent and CHATT
Holdings Inc., as buyer.
"SUBSIDIARY" means, with respect to any specified Person:
(1) any corporation, association or other business entity of which
more than 50% of the total voting power of shares of Capital
Stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly
or indirectly, by such Person or one or more of the other
Subsidiaries of that Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of
such Person or (b) the only general partners of which are such
Person or one or more Subsidiaries of such Person (or any
combination thereof).
"SUBSIDIARY GUARANTORS" means any Restricted Subsidiary of the
Company that executes a Guarantee in accordance with the provisions of this
Indenture and its respective successors and assigns.
"TIA" means the Trust Indenture Act of 1939, as amended, as in
effect on the date on which this Indenture is qualified under the TIA, except as
otherwise set forth in Section 9.03.
"TOTAL TANGIBLE ASSETS" means the total consolidated assets,
less applicable depreciation, amortization and other valuation reserves and less
all goodwill and intangibles, of the Company and its Restricted Subsidiaries, as
shown on the most recent balance sheet of the Company prepared in conformity
with GAAP.
"TRANSACTIONS" means the transactions described in the
Offering Memorandum under the caption "Summary--The Transactions."
"TREASURY REGULATIONS" means the Treasury regulations
promulgated under the Internal Revenue Code of 1986, as amended from time to
time (including any successor law).
"TRUSTEE" means The Bank of New York, a New York banking
corporation, until a successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means the successor serving
hereunder.
"UNLEGENDED REGULATION S GLOBAL NOTE" means a permanent global
Note in the form of Exhibit A bearing the Global Note Legend, that has the
"Schedule of Exchanges of
27
Interests in the Global Note" attached hereto, that is deposited with or on
behalf of and registered in the name of the Depositary or its nominee and issued
upon expiration of the Restricted Period.
"UNRESTRICTED DEFINITIVE NOTE" means one or more Definitive
Notes that do not bear and are not required to bear the Private Placement
Legend.
"UNRESTRICTED GLOBAL NOTE" means a permanent 144A Global Note
or Unlegended Regulation S Global Note that is deposited with or on behalf of
and registered in the name of the Depositary or its nominee, representing a
series of Notes, and that does not bear the Private Placement Legend.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary of the Company
that is designated by the Board of Directors of the Company as an Unrestricted
Subsidiary pursuant to a Board Resolution, but only to the extent that such
Subsidiary:
(1) has no indebtedness other than Non-Recourse Debt;
(2) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of
the Company unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the
Company or such Restricted Subsidiary than those that might be
obtained at the time from Persons who are not Affiliates of
the Company;
(3) is a Person with respect to which neither the Company nor any
of its Restricted Subsidiaries has any direct or indirect
obligation (a) to subscribe for additional Equity Interests or
(b) to maintain or preserve such Person's financial condition
or to cause such Person to achieve any specified levels of
operating results; and
(4) is not a guarantor or otherwise directly or indirectly
provides credit support for any Indebtedness of the Company or
any of its Restricted Subsidiaries at the time of such
designation unless such guarantee or credit support is
released upon such designation.
Any designation of a Restricted Subsidiary of the Company as
an Unrestricted Subsidiary shall be evidenced to the Trustee by filing with the
Trustee a certified copy of the Board Resolution giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the preceding conditions and was permitted by Section 4.07. The
amount of the Investment deemed made in such Subsidiary at the time it is
designated as an Unrestricted Subsidiary shall be the fair market value of the
net assets of such Subsidiary at the time of such designation or, if less, the
amount of the Company's Investment in such Subsidiary when made. If, at any
time, any Unrestricted Subsidiary would fail to meet the preceding requirements
as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.09, the Company shall be in Default of
such Section.
28
"U.S. PERSON" means a U.S. person as defined in Rule 902(o)
under the Securities Act.
"VOTING STOCK" of any Person as of any date means the Capital
Stock of such Person that is at the time entitled to vote in the election of the
Board of Directors of such Person.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness or Disqualified Stock at any date, the number of years obtained by
dividing:
(1) the sum of the products obtained by multiplying (a) the amount
of each then remaining installment, sinking fund, serial
maturity or other required payments of principal or
liquidation or face value, including payment at final maturity
or redemption, in respect thereof, by (b) the number of years
(calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment; by
(2) the then outstanding principal or liquidation or face value
amount of such Indebtedness or Disqualified Stock.
Section 1.02. Other Definitions.
DEFINED IN
TERM SECTION
---- -------
"AFFILIATE TRANSACTION".........................................................................4.11(a)
"ASSET SALE OFFER"..............................................................................4.10(c)
"AUTHENTICATION ORDER".......................................................................... 2.02
"CHANGE OF CONTROL OFFER".......................................................................4.14(a)
"CHANGE OF CONTROL PAYMENT".....................................................................4.14(a)
"CHANGE OF CONTROL PAYMENT DATE"................................................................4.14(a)
"COVENANT DEFEASANCE"........................................................................... 8.03
"DTC"...........................................................................................2.01(c)
"EVENT OF DEFAULT".............................................................................. 6.01
"LEGAL DEFEASANCE".............................................................................. 8.02
"NONPAYMENT DEFAULT"............................................................................12.03(b)
"OFFER AMOUNT".................................................................................. 3.08
"OFFER PERIOD".................................................................................. 3.08
"OFFSHORE TRANSACTION".......................................................................2.07(d)(i)(C)
"PAYING AGENT"..................................................................................2.04(a)
"PAYMENT BLOCKAGE NOTICE".......................................................................12.03(b)
"PAYMENT DEFAULT"............................................................................... 6.01
"PERMITTED DEBT"................................................................................4.09(b)
"PURCHASE DATE"................................................................................. 3.08
"REGISTRAR".....................................................................................2.04(a)
"RELATED PROCEEDINGS"........................................................................... 13.09
"REPURCHASE OFFER".............................................................................. 3.08
"RESTRICTED PAYMENTS".........................................................................4.07(a)(iv)
"SPECIFIED COURTS".............................................................................. 13.09
29
Section 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the
following meanings:
"INDENTURE SECURITIES" means the Notes;
"INDENTURE SECURITY HOLDER" means a Holder of a Note;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the
Trustee; and
"OBLIGOR" on the Notes means the Company and any successor
obligor upon the Notes.
All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule under
the TIA have the meanings so assigned to them.
Section 1.04. Rules of Construction. Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and in the
plural include the singular;
(e) "herein", "hereof" and other word of similar import
refer to this Indenture as a whole and not to any
particular Section, Article or other subdivision;
(f) all references to Sections or Articles or Exhibits
refer to Sections or Articles or Exhibits of or to
this Indenture unless otherwise indicated; and
(g) references to sections of or rules under the
Securities Act shall be deemed to include substitute,
replacement of successor sections or rules adopted by
the SEC from time to time.
30
ARTICLE TWO
THE NOTES
Section 2.01. Form and Dating.
(a) General. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A. The Notes may
have notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication. The Notes shall
be issued in registered form without interest coupons in minimum denominations
of $1,000 and integral multiples of $1,000 in excess thereof.
The terms and provisions contained in the Notes shall
constitute, and are hereby expressly made, a part of this Indenture, and the
Company, the Parent Guarantor and the Trustee, by their execution and delivery
of this Indenture, expressly agree to such terms and provisions and to be bound
thereby. However, to the extent any provision of any Note conflicts with the
express provisions of this Indenture, the provisions of this Indenture shall
govern and be controlling.
(b) Global Notes. Notes issued in global form shall be
substantially in the form of Exhibit A (and shall include the Global Note Legend
thereon and the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Notes issued in definitive form shall be substantially in the form of
Exhibit A (but without the Global Note Legend thereon and without the "Schedule
of Exchanges of Interests in the Global Note" attached thereto). Each Global
Note shall represent such of the outstanding Notes as shall be specified therein
and each shall provide that it represents the aggregate principal amount of
outstanding Notes from time to time endorsed thereon and that the aggregate
principal amount of outstanding Notes represented thereby may from time to time
be reduced or increased, as appropriate, to reflect exchanges and redemptions.
Any endorsement of a Global Note to reflect the amount of any increase or
decrease in the aggregate principal amount of outstanding Notes represented
thereby shall be made by the Trustee or, if the Custodian and the Trustee are
not the same Person, by the Custodian at the direction of the Trustee, in
accordance with instructions given by the Holder thereof as required by Section
2.07 hereof.
(c) Regulation S Global Notes. Notes offered and sold in
reliance on Regulation S shall be issued initially in the form of the Legended
Regulation S Global Note, which shall be deposited on behalf of the purchasers
of the Notes represented thereby with the Trustee, as custodian for The
Depository Trust Company ("DTC") in New York, New York, and registered in the
name of the Depositary or the nominee of the Depositary for the accounts of
designated agents holding on behalf of Euroclear or Clearstream, duly executed
by the Company and authenticated by the Trustee as hereinafter provided and
shall bear the legend set forth in Section 2.07(h). Following the termination of
the Restricted Period, beneficial interests in the Legended Regulation S Global
Note may be exchanged for beneficial interests in Unlegended Regulation S Global
Notes pursuant to Section 2.07 and the Applicable Procedures. Simultaneously
with the authentication of Unlegended Regulation S Global Notes, the Trustee
shall cancel the Legended Regulation S Global Note. The aggregate principal
amount of the Regulation S Global Notes may from time to time be increased or
decreased by adjustments
31
made on the records of the Trustee and the Depositary or its nominee, as the
case may be, in connection with transfers of interest as hereinafter provided.
(d) Euroclear and Clearstream Procedures Applicable. The
provisions of the "Operating Procedures of the Euroclear System" and "Terms and
Conditions Governing Use of Euroclear" and the "General Terms and Conditions of
Clearstream Banking" and "Customer Handbook" of Clearstream shall be applicable
to transfers of beneficial interests in the Regulation S Global Notes that are
held by Participants through Euroclear or Clearstream.
Section 2.02. Execution and Authentication.
One Officer of the Company shall sign the Notes for the
Company by manual or facsimile signature.
If an Officer whose signature is on a Note was an Officer at
the time of such execution but no longer holds that office at the time a Note is
authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual
signature of the Trustee or its authenticating agent as provided below. Such
signature shall be conclusive evidence that the Note has been authenticated in
accordance with this Indenture.
The aggregate principal amount of Notes which may be
authenticated and delivered under this Indenture is unlimited.
The Company may, subject to Article Four of this Indenture and
applicable law, issue Additional Notes and Exchange Notes under this Indenture.
The Notes issued on the Issue Date and any Additional Notes subsequently issued
shall be treated as a single class for all purposes under this Indenture.
On the date hereof $150.0 million in aggregate principal
amount of Notes will be authenticated by the Trustee and issued by the Company
under this Indenture.
At any time and from time to time after the execution of this
Indenture, the Trustee shall, upon receipt of a written order of the Company
signed by one Officer of the Company (an "AUTHENTICATION ORDER"), authenticate
Notes for original issue in an aggregate principal amount specified in such
Authentication Order. Such Authentication Order shall specify the amount of
Notes to be authenticated, whether the Notes are to be Global Notes or
Definitive Notes, and the date on which the original issue of such Notes is to
be authenticated.
The Trustee may appoint an authenticating agent 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 agent. An authenticating agent has the same rights as an
Agent to deal with Holders or an Affiliate of the Company.
32
Section 2.03. Methods of Receiving Payments on the Notes.
If a Holder has given wire transfer instructions to the
Company, the Company shall pay all principal, interest and premium and
Liquidated Damages, if any, on that Holder's Notes in accordance with those
instructions. All other payments on Notes shall be made at the office or agency
of the Paying Agent and Registrar within the City and State of New York unless
the Company elects to make interest payments by check mailed to the Holders at
their addresses set forth in the register of Holders.
Section 2.04. Registrar and Paying Agent.
(a) The Company shall maintain an office or agency (which
shall initially be the Corporate Trust Office of the Trustee) where (i) Notes
may be presented for registration of transfer or for exchange ("REGISTRAR") and
(ii) Notes may be presented for payment ("PAYING AGENT") and (iii) notices and
demands to or upon the Company in respect of the Notes under this Indenture may
be secured. The Registrar shall keep a register of the Notes and of their
transfer and exchange. The Company may appoint one or more co-registrars and one
or more additional paying agents. The term "Registrar" includes any co-registrar
and the term "Paying Agent" includes any additional paying agent. The Company
may change any Paying Agent or Registrar without prior notice to any Holder. The
Company shall notify the Trustee in writing of the name and address of any Agent
not a party to this Indenture. If the Company fails to appoint or maintain
another entity as Registrar or Paying Agent, the Trustee shall act as such. The
Company or any of its Subsidiaries may act as Paying Agent or Registrar.
(b) The Company initially appoints DTC to act as Depositary
with respect to the Global Notes.
(c) The Company initially appoints the Trustee to act as the
Registrar and Paying Agent and to act as Custodian with respect to the Global
Notes, and an agent for service of demands and notices in connection with the
Notes.
Section 2.05. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent shall hold in trust for the
benefit of Holders or the Trustee all money held by the Paying Agent for the
payment of principal, premium or Liquidated Damages, if any, or interest on the
Notes, and shall notify the Trustee in writing of any default by the Company in
making any such payment. While any such Default continues, the Trustee may
require a Paying Agent to pay all money held by it for the purpose of making
payments on the Notes to the Trustee. The Company at any time may require a
Paying Agent to pay all money held by it to the Trustee. Upon payment over to
the Trustee, the Paying Agent shall have no further liability for the money, as
Paying Agent, other than to account to the Trustee and the Company for any funds
disbursed. If the Company or one of its Subsidiaries acts as Paying Agent, it
shall segregate and hold in a separate trust fund for the benefit of the Holders
all money held by it as Paying Agent. Upon any bankruptcy or reorganization
proceedings relating to the Company, the Trustee shall serve as Paying Agent for
the Notes.
33
Section 2.06. Holder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of all Holders and shall otherwise comply with TIA Section 312(a). If
the Trustee is not the Registrar, the Company shall furnish or cause the
Registrar to furnish to the Trustee at least seven Business Days before each
interest payment date and at such other times as the Trustee may request in
writing, a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of the Holders of Notes and the Company shall
otherwise comply with TIA Section 312(a).
Section 2.07. Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may
not be transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. All Global Notes
shall be exchanged by the Company for Definitive Notes if (i) DTC (A) notifies
the Company that it is unwilling or unable to continue as Depositary for the
Global Notes and the Company fails to appoint a successor Depositary within 120
days after receiving such notice or (B) has ceased to be a clearing agency
registered under the Exchange Act and the Company fails to appoint a successor
Depositary within 120 days after becoming aware of such condition; (ii) the
Company, at its option, notifies the Trustee in writing that it elects to cause
the issuance of Definitive Notes; provided that in no event shall the Legended
Regulation S Global Note be exchanged by the Company for Definitive Notes other
than in accordance with Section 2.07(c)(ii); or (iii) there shall have occurred
and be continuing a Default or Event of Default with respect to the Notes. Upon
the occurrence of any of the preceding events in (i), (ii) or (iii) above,
Definitive Notes shall be issued in such names as the Depositary shall instruct
the Trustee. Global Notes also may be exchanged or replaced, in whole or in
part, as provided in Sections 2.08 and 2.11 hereof. Every Note authenticated and
delivered in exchange for, or in lieu of, a Global Note or any portion thereof,
pursuant to this Section 2.07 or Section 2.08 or 2.11 hereof, shall be
authenticated and delivered in the form of, and shall be, a Global Note. A
Global Note may not be exchanged for another Note other than as provided in this
Section 2.07(a); however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.07(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the
Global Notes. The transfer and exchange of beneficial interests in the Global
Notes shall be effected through the Depositary, in accordance with the
provisions of this Indenture and the Applicable Procedures. Beneficial interests
in the Restricted Global Notes shall be subject to restrictions on transfer
comparable to those set forth herein to the extent required by the Securities
Act. None of the Company, the Trustee nor any agent of the Company or the
Trustee will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests of a
Global Note or maintaining, supervising or reviewing any records relating to
such beneficial ownership interests. Transfers of beneficial interests in the
Global Notes also shall require compliance with either subparagraph (i) or (ii)
below, as applicable, as well as one or more of the other following
subparagraphs, as applicable:
34
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to Persons
who take delivery thereof in the form of a beneficial interest in the same
Restricted Global Note in accordance with the transfer restrictions set forth in
the Private Placement Legend; provided, however, that prior to the expiration of
the Restricted Period, transfers of beneficial interests in the Legended
Regulation S Global Note may not be made to a U.S. Person or for the account or
benefit of a U.S. Person (other than an Initial Purchaser, as defined in the
Registration Rights Agreement). Beneficial interests in any Unrestricted Global
Note may be transferred to Persons who take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note. No written orders or
instructions shall be required to be delivered to the Registrar to effect the
transfers described in this Section 2.07(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in
Global Notes. In connection with all transfers and exchanges of beneficial
interests that are not subject to Section 2.07(b)(i) above, the transferor of
such beneficial interest must deliver to the Registrar either (A) (1) a written
order from a Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to credit or
cause to be credited a beneficial interest in another Global Note in an amount
equal to the beneficial interest to be transferred or exchanged and (2)
instructions given in accordance with the Applicable Procedures containing
information regarding the Participant account to be credited with such increase
or (B) (1) a written order from a Participant or an Indirect Participant given
to the Depositary in accordance with the Applicable Procedures directing the
Depositary to cause to be issued a Definitive Note in an amount equal to the
beneficial interest to be transferred or exchanged and (2) instructions given by
the Depositary to the Registrar containing information regarding the Person in
whose name such Definitive Note shall be registered to effect the transfer or
exchange referred to in (1) above; provided that in no event shall Definitive
Notes be issued upon the transfer or exchange of beneficial interests in the
Legended Regulation S Global Note other than in accordance with Section
2.07(c)(ii). Upon consummation of an Exchange Offer by the Company in accordance
with Section 2.07(f), the requirements of this Section 2.07(b)(ii) shall be
deemed to have been satisfied upon receipt by the Registrar of the instructions
contained in the Letter of Transmittal delivered by the holder of such
beneficial interests in the Restricted Global Notes. Upon satisfaction of all of
the requirements for transfer or exchange of beneficial interests in Global
Notes contained in this Indenture and the Notes or otherwise applicable under
the Securities Act, the Trustee shall adjust the principal amount at maturity of
the relevant Global Notes pursuant to Section 2.07(i).
(iii) Transfer of Beneficial Interests to Another Restricted Global
Note. A beneficial interest in any Restricted Global Note may be transferred to
a Person who takes delivery thereof in the form of a beneficial interest in
another Restricted Global Note if the transfer complies with the requirements of
Section 2.07(b)(ii) above and the Registrar receives the following:
35
(A) if the transferee shall take delivery in the form
of a beneficial interest in the 144A Global Note, then the
transferor must deliver a certificate in the form of Exhibit
B, including the certifications in item (1) thereof; and
(B) if the transferee shall take delivery in the form
of a beneficial interest in a Legended Regulation S Global
Note, then the transferor must deliver a certificate in the
form of Exhibit B, including the certifications in item (2)
thereof.
(iv) Transfer and Exchange of Beneficial Interests in a
Restricted Global Note for Beneficial Interests in an Unrestricted Global Note.
A beneficial interest in any Restricted Global Note may be exchanged by any
Holder thereof for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form of a beneficial
interest in an Unrestricted Global Note if the exchange or transfer complies
with the requirements of Section 2.07(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the Holder of the beneficial interest to be
transferred, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of
Transmittal (1) it is not an affiliate (as defined in Rule
144) of the Company, (2) it is not engaged in, and does not
intend to engage in, and has no arrangement or understanding
with any Person to participate in, a distribution of the
Exchange Notes to be issued in the Exchange Offer and (3) it
is acquiring the Exchange Notes in its ordinary course of
business;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such
beneficial interest for a beneficial interest in an
Unrestricted Global Note, a certificate from such
holder in the form of Exhibit C, including the
certifications in item (1)(a) thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such
beneficial interest to a Person who shall take
delivery thereof in the form of a beneficial interest
in an Unrestricted Global Note, a certificate from
such holder in the form of Exhibit B, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar or the Company so requests or if the Applicable
Procedures so require, an opinion of
36
counsel in form reasonably acceptable to the Registrar and the
Company to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions
on transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain compliance
with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B)
or (D) above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the form
of, a beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for
Definitive Notes.
(i) Beneficial Interests in Restricted Global Notes to
Restricted Definitive Notes. If any holder of a beneficial interest in
a Restricted Global Note proposes to exchange such beneficial interest
for a Restricted Definitive Note or to transfer such beneficial
interest to a Person who takes delivery thereof in the form of a
Restricted Definitive Note, then, upon receipt by the Registrar of the
following documentation:
(A) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Restricted Definitive Note, a certificate from
such holder in the form of Exhibit C, including the
certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred
to a QIB in accordance with Rule 144A under the Securities
Act, a certificate to the effect set forth in Exhibit B,
including the certifications in item (1) thereof;
(C) [INTENTIONALLY OMITTED];
(D) [INTENTIONALLY OMITTED];
(E) if such beneficial interest is being transferred
to an Institutional Accredited Investor in reliance on an
exemption from the registration requirements of the Securities
Act other than that listed in subparagraph (B) above, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications, certificates and Opinion of
Counsel required by item (3) thereof, if applicable; or
(F) if such beneficial interest is being transferred
to the Company or any of its Subsidiaries, a certificate to
the effect set forth in Exhibit B, including the
certifications in item (3)(a) thereof,
37
the Trustee shall cause the aggregate principal amount of the
applicable Global Note to be reduced accordingly pursuant to Section
2.07(i) hereof, and the Company shall execute and the Trustee shall
authenticate and deliver to the Person designated in the instructions a
Definitive Note in the appropriate principal amount. Any Definitive
Note issued in exchange for a beneficial interest in a Restricted
Global Note pursuant to this Section 2.07(c) shall be registered in
such name or names and in such authorized denomination or denominations
as the holder of such beneficial interest shall instruct the Registrar
through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes
to the Persons in whose names such Notes are so registered. Any
Definitive Note issued in exchange for a beneficial interest in a
Restricted Global Note pursuant to this Section 2.07(c)(i) shall bear
the Private Placement Legend and shall be subject to all restrictions
on transfer contained therein.
(ii) Beneficial Interests in Legended Regulation S Global Note
to Definitive Notes. A beneficial interest in the Legended Regulation S
Global Note may not be exchanged for a Definitive Note or transferred
to a Person who takes delivery thereof in the form of a Definitive Note
prior to the expiration of the Restricted Period, except in the case of
a transfer pursuant to an exemption from the registration requirements
of the Securities Act other than Rule 903 or Rule 904.
(iii) Beneficial Interests in Restricted Global Notes to
Unrestricted Definitive Notes. A holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial interest
to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note only if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the holder of such beneficial interest, in the
case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal
that (1) it is not an affiliate (as defined in Rule 144) of
the Company, (2) it is not engaged in, and does not intend to
engage in, and has no arrangement or understanding with any
Person to participate in, a distribution of the Exchange Notes
to be issued in the Exchange Offer and (3) it is acquiring the
Exchange Notes in its ordinary course of business;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
38
(1) if the holder of such beneficial interest in
a Restricted Global Note proposes to exchange such
beneficial interest for a Definitive Note that does
not bear the Private Placement Legend, a certificate
from such Holder in the form of Exhibit C, including
the certifications in item (1)(b) thereof; or
(2) if the holder of such beneficial interest in
a Restricted Global Note proposes to transfer such
beneficial interest to a Person who shall take
delivery thereof in the form of a Definitive Note that
does not bear the Private Placement Legend, a
certificate from such Holder in the form of Exhibit B,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar or the Company so requests or if the Applicable
Procedures so require, an opinion of counsel in form
reasonably acceptable to the Registrar and the Company to the
effect that such exchange or transfer is in compliance with
the Securities Act and that the restrictions on transfer
contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the
Securities Act.
(iv) Beneficial Interests in Unrestricted Global Notes to
Unrestricted Definitive Notes. If any holder of a beneficial interest
in an Unrestricted Global Note proposes to exchange such beneficial
interest for a Definitive Note or to transfer such beneficial interest
to a Person who takes delivery thereof in the form of a Definitive
Note, then, upon satisfaction of the conditions set forth in Section
2.07(b)(ii), the Trustee shall cause the aggregate principal amount of
the applicable Global Note to be reduced accordingly pursuant to
Section 2.07(i), and the Company shall execute and the Trustee shall
authenticate and deliver to the Person designated in the instructions a
Definitive Note in the appropriate principal amount. Any Definitive
Note issued in exchange for a beneficial interest pursuant to this
Section 2.07(c)(iv) shall be registered in such name or names and in
such authorized denomination or denominations as the holder of such
beneficial interest shall instruct the Registrar through instructions
from the Depositary and the Participant or Indirect Participant. The
Trustee shall deliver such Definitive Notes to the Persons in whose
names such Notes are so registered. Any Definitive Note issued in
exchange for a beneficial interest pursuant to this Section 2.07(c)(iv)
shall not bear the Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial
Interests.
(i) Restricted Definitive Notes to Beneficial Interests in
Restricted Global Notes. If any Holder of a Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note or to transfer such Restricted Definitive Notes
to a Person who takes delivery thereof in the form of a beneficial
interest in a Restricted Global Note, then, upon receipt by the
Registrar of the following documentation:
39
(A) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note, a certificate from such Holder in the
form of Exhibit C, including the certifications in item (2)(b)
thereof;
(B) if such Restricted Definitive Note is being
transferred to a QIB in accordance with Rule 144A, a
certificate to the effect set forth in Exhibit B, including
the certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being
transferred to a Non-U.S. Person in an "OFFSHORE TRANSACTION"
in accordance with Rule 903 or Rule 904, a certificate to the
effect set forth in Exhibit B, including the certifications in
item (2) thereof; or
(D) if such Restricted Definitive Note is being
transferred to the Company or any of its Subsidiaries, a
certificate to the effect set forth in Exhibit B, including
the certifications in item (3)(a) thereof,
the Trustee shall cancel the Restricted Definitive Note, and increase
or cause to be increased the aggregate principal amount of, in the case
of clause (A) above, the appropriate Restricted Global Note, in the
case of clause (B) above, the 144A Global Note, and in the case of
clause (C) above, the Regulation S Global Note.
(ii) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global
Note or transfer such Restricted Definitive Note to a Person who takes
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note only if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal (1) it is not an affiliate
(as defined in Rule 144) of the Company, (2) it is not engaged
in, and does not intend to engage in, and has no arrangement
or understanding with any Person to participate in, a
distribution of the Exchange Notes to be issued in the
Exchange Offer and (3) it is acquiring the Exchange Notes in
its ordinary course of business;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
40
(1) if the Holder of such Restricted Definitive
Note proposes to exchange such Note for a beneficial
interest in the Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit C,
including the certifications in item (1)(c) thereof;
or
(2) if the Holder of such Restricted Definitive
Note proposes to transfer such Note to a Person who
shall take delivery thereof in the form of a
beneficial interest in the Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit B,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar or the Company so requests or if the Applicable
Procedures so require, an opinion of counsel in form
reasonably acceptable to the Registrar and the Company to the
effect that such exchange or transfer is in compliance with
the Securities Act and that the restrictions on transfer
contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the
Securities Act.
Upon satisfaction of the conditions of any of the
subparagraphs in this Section 2.07(d)(ii), the Trustee shall cancel the
Definitive Notes and increase or cause to be increased the aggregate
principal amount of the Unrestricted Global Note.
(iii) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note
may exchange such Note for a beneficial interest in an Unrestricted
Global Note or transfer such Unrestricted Definitive Note to a Person
who takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note at any time. Upon receipt of a request for
such an exchange or transfer, the Trustee shall cancel the applicable
Unrestricted Definitive Note and increase or cause to be increased the
aggregate principal amount of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or
(iii) above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of Definitive Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive
Notes. Upon request by a Holder of Definitive Notes and such Holder's compliance
with the provisions of this Section 2.07(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional
41
certifications, documents and information, as applicable, required pursuant to
the following provisions of this Section 2.07(e).
(i) Restricted Definitive Notes to Restricted Definitive
Notes. Any Restricted Definitive Note may be transferred to and
registered in the name of Persons who take delivery thereof in the form
of a Restricted Definitive Note if the Registrar receives the
following:
(A) if the transfer shall be made pursuant to Rule 144A
under the Securities Act, then the transferor must deliver a
certificate in the form of Exhibit B, including the
certifications in item (1) thereof;
(B) [INTENTIONALLY OMITTED]; and
(C) if the transfer shall be made pursuant to any other
exemption from the registration requirements of the Securities
Act, then the transferor must deliver a certificate in the
form of Exhibit B, including the certifications, certificates
and Opinion of Counsel required by item (3) thereof, if
applicable.
(ii) Restricted Definitive Notes to Unrestricted Definitive
Notes. Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted Definitive Note or transferred to a Person
or Persons who take delivery thereof in the form of an Unrestricted
Definitive Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that (1) it is not an
affiliate (as defined in Rule 144) of the Company, (2) it is
not engaged in, and does not intend to engage in, and has no
arrangement or understanding with any Person to participate
in, a distribution of the Exchange Notes to be issued in the
Exchange Offer and (3) it is acquiring the Exchange Notes in
its ordinary course of business;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(C) any such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for an Unrestricted
Definitive Note, a certificate from such Holder in the
form of Exhibit C, including the certifications in item
(1)(d) thereof; or
42
(2) if the Holder of such Restricted Definitive Note
proposes to transfer such Note to a Person who shall take
delivery thereof in the form of an Unrestricted Definitive
Note, a certificate from such Holder in the form of
Exhibit B, including the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests, an opinion of counsel in form
reasonably acceptable to the Company to the effect that such
exchange or transfer is in compliance with the Securities Act
and that the restrictions on transfer contained herein and in
the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
(iii) Unrestricted Definitive Notes to Unrestricted Definitive
Notes. A Holder of Unrestricted Definitive Notes may transfer such
Notes to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note. Upon receipt of a request to register
such a transfer, the Registrar shall register the Unrestricted
Definitive Notes pursuant to the instructions from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer
in accordance with the Registration Rights Agreement, the Company shall issue
and, upon receipt of an Authentication Order in accordance with Section 2.02,
the Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by Persons that
certify in the applicable Letters of Transmittal that (x) they are not
affiliates (as defined in Rule 144) of the Company, (y) they are not engaged in,
and do not intend to engage in, and have no arrangement or understanding with
any Person to participate in, a distribution of the Exchange Notes to be issued
in the Exchange Offer and (z) they are acquiring the Exchange Notes in their
ordinary course of business and (ii) Unrestricted Definitive Notes in an
aggregate principal amount equal to the principal amount of the Restricted
Definitive Notes accepted for exchange in the Exchange Offer. Concurrently with
the issuance of such Notes, the Trustee shall cause the aggregate principal
amount of the applicable Restricted Global Notes to be reduced accordingly, and
the Company shall execute and the Trustee shall authenticate and deliver to the
Persons designated by the Holders of Restricted Global Notes so accepted
Unrestricted Global Notes in the appropriate principal amount.
(g) Legends. The following legends shall appear on the face of
all Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend. Except as permitted below, each
Global Note and each Definitive Note (and all Notes issued in exchange
therefor or substitution thereof) shall bear the legend in
substantially the following form:
THIS NOTE AND THE GUARANTEE ENDORSED HEREON HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE
NOR THE GUARANTEE ENDORSED
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HEREON NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS NOTE AND
THE GUARANTEE ENDORSED HEREON, BY ITS ACCEPTANCE HEREOF, AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE
WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE
HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF
THE COMPANY WAS THE OWNER OF THIS NOTE AND THE GUARANTEE ENDORSED
HEREON (OR ANY PREDECESSOR OF THIS NOTE AND THE GUARANTEE ENDORSED
HEREON) (THE "RESALE RESTRICTION TERMINATION DATE") ONLY (A) TO
THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) FOR
SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO
OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED
STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT
OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE
COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER (i) PURSUANT TO CLAUSE (D) PRIOR TO THE END OF THE 40 DAY
DISTRIBUTION COMPLIANCE PERIOD WITHIN THE MEANING OF REGULATION S
UNDER THE SECURITIES ACT OR PURSUANT TO CLAUSE (E) PRIOR TO THE
RESALE RESTRICTION TERMINATION DATE TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND (ii) IN EACH OF THE FOREGOING
CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THIS NOTE IS COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE
REQUEST OF A HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
Notwithstanding the foregoing, any Global Note or Definitive
Note issued pursuant to subparagraph (b)(iv), (c)(iii), (c)(iv),
(d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to this Section 2.07 (and
all Notes issued in exchange therefor or substitution thereof) shall
not bear the Private Placement Legend.
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(ii) Global Note Legend. Each Global Note shall bear a legend
in substantially the following form:
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR
THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT
TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT
(I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE
REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS
GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT
TO SECTION 2.07(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE
MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO
SECTION 2.12 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE
TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN
CONSENT OF THE COMPANY.
(h) Regulation S Global Note Legend. The Regulation S Global
Note shall bear a legend in substantially the following form:
THE RIGHTS ATTACHING TO THIS REGULATION S GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR
DEFINITIVE NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS
DEFINED HEREIN).
(i) Cancellation and/or Adjustment of Global Notes. At such
time as all beneficial interests in a particular Global Note have been exchanged
for Definitive Notes or a particular Global Note has been redeemed, repurchased
or canceled in whole and not in part, each such Global Note shall be returned to
or retained and canceled by the Trustee in accordance with Section 2.12 hereof.
At any time prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for or transferred to a Person who shall take delivery thereof
in the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who shall take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note shall be increased accordingly
and an endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(j) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Global Notes
and Definitive Notes upon the Company's order or at the Registrar's
request.
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(ii) No service charge shall be made to a Holder of a
beneficial interest in a Global Note or to a Holder of a Definitive
Note for any registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than
any such transfer taxes or similar governmental charge payable upon
exchange or transfer pursuant to Sections 2.11, 3.06, 3.08, 4.10, 4.14
and 9.05).
(iii) The Registrar shall not be required to register the
transfer of or exchange any Note selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive
Notes shall be the valid and legally binding obligations of the
Company, evidencing the same debt, and entitled to the same benefits
under this Indenture, as the Global Notes or Definitive Notes
surrendered upon such registration of transfer or exchange.
(v) The Company shall not be required (A) to issue, to
register the transfer of or to exchange any Notes during a period
beginning at the opening of business 15 days before the day of any
selection of Notes for redemption under Section 3.02 and ending at the
close of business on the day of selection, (B) to register the transfer
of or to exchange any Note so selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part,
(C) to register the transfer of or to exchange a Note between a record
date and the next succeeding interest payment date or (D) to register
the transfer of or to exchange a Note tendered and not withdrawn in
connection with a Change of Control Offer or an Asset Sale Offer.
(vi) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Company may deem
and treat the Person in whose name any Note is registered as the
absolute owner of such Note for the purpose of receiving all payments
of principal of and interest on such Notes and for all other purposes,
and none of the Trustee, any Agent or the Company shall be affected by
notice to the contrary.
(vii) The Trustee shall authenticate Global Notes and
Definitive Notes in accordance with the provisions of Section 2.02.
(viii) All certifications, certificates and Opinions of
Counsel required to be submitted to the Registrar pursuant to this
Section 2.07 to effect a registration of transfer or exchange may be
submitted by facsimile.
Section 2.08. Replacement Notes.
(a) If any mutilated Note is surrendered to the Trustee or the
Company and the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Note, the Company shall issue and the Trustee,
upon receipt of an Authentication Order, shall authenticate a replacement Note
of like tenor and principal amount and bearing a number not contemporaneously
outstanding if the Trustee's requirements are met. If required by the Trustee or
the Company, an affidavit of loss certificate and an indemnity bond must be
supplied by the
46
Holder that is sufficient in the judgment of the Trustee and the Company to
protect the Company, the Trustee, any Agent and any authenticating agent from
any loss that any of them may suffer if a Note is replaced. The Company may
charge for its expenses in replacing a Note, including reasonable fees and
expenses of its counsel and of the Trustee and its counsel.
(b) Every replacement Note is an additional obligation of the
Company and shall be entitled to all of the benefits of this Indenture equally
and proportionately with all other Notes duly issued hereunder.
Section 2.09. Outstanding Notes.
(a) The Notes outstanding at any time are all the Notes
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, those reductions in the interest in a Global Note effected
by the Trustee in accordance with the provisions hereof, and those described in
this Section as not outstanding. Except as set forth in Section 2.10, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note; however, Notes held by the Company or a Subsidiary of
the Company shall not be deemed to be outstanding for purposes of Section
3.07(b).
(b) If a Note is replaced pursuant to Section 2.08, it ceases
to be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser or protected purchaser.
(c) If the principal amount of any Note is considered paid
under Section 4.01, it ceases to be outstanding and interest on it ceases to
accrue.
(d) If the Paying Agent holds, as Paying Agent, on a
redemption date or maturity date, money sufficient to pay Notes payable on that
date, then on and after that date such Notes shall be deemed to be no longer
outstanding and shall cease to accrue interest.
Section 2.10. Treasury Notes.
In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Company, or any of its Affiliates, shall be considered as though not
outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes that the Trustee knows are so owned shall be so disregarded.
Section 2.11. Temporary Notes.
(a) Until certificates representing definitive Notes are ready
for delivery, the Company may prepare and the Trustee, upon receipt of an
Authentication Order, shall authenticate temporary Notes. Temporary Notes shall
be substantially in the form of Definitive Notes but may have variations that
the Company considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company shall prepare
and the Trustee shall authenticate definitive Notes in exchange for temporary
Notes upon receipt of an Authentication Order in accordance with Section 2.02.
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(b) Until so exchanged, Holders of temporary Notes shall be
entitled to all of the benefits of this Indenture.
Section 2.12. Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of 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 all Notes surrendered for registration of transfer,
exchange, payment, replacement or cancellation and shall dispose of canceled
Notes in accordance with its procedures for the disposition of canceled
securities in effect as of the date of such disposition (subject to the record
retention requirement of the Exchange Act). Certification of the disposition of
all canceled Notes shall be delivered to the Company. The Company may not issue
new Notes to replace Notes that it has paid or that have been delivered to the
Trustee for cancellation.
Section 2.13. Defaulted Interest.
If the Company defaults in a payment of interest on the Notes,
it shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Notes and in Section 4.01. The Company shall notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note and
the date of the proposed payment. The Company shall fix or cause to be fixed
each such special record date and payment date, provided that no such special
record date shall be less than 10 days prior to the related payment date for
such defaulted interest. At least 15 days before the special record date, the
Company (or, upon the written request of the Company, the Trustee in the name
and at the expense of the Company) shall mail or cause to be mailed to Holders a
notice that states the special record date, the related payment date and the
amount of such interest to be paid.
Section 2.14. CUSIP Numbers.
The Company in issuing the Notes may use "CUSIP" numbers, and,
if so, the Trustee shall use "CUSIP" numbers in notices of redemption or
exchanges as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness or accuracy of such numbers
either as printed on the Notes or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed on
the Notes, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company shall promptly notify the Trustee of any
change in the "CUSIP" numbers.
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ARTICLE THREE
REDEMPTION AND OFFERS TO
PURCHASE
Section 3.01. Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07, it shall furnish to the Trustee, at least
30 days but not more than 60 days before a redemption date, an Officers'
Certificate setting forth (i) the clause of this Indenture pursuant to which the
redemption shall occur, (ii) the redemption date, (iii) the principal amount of
Notes to be redeemed and (iv) the redemption price.
Section 3.02. Selection of Notes to Be Redeemed.
(a) If less than all of the Notes are to be redeemed at any
time, the Trustee shall select the Notes to be redeemed among the Holders of the
Notes in compliance with the requirements of the principal national securities
exchange, if any, on which the Notes are listed or, if the Notes are not so
listed, on a pro rata basis, by lot or in accordance with any other method the
Trustee shall deem fair and appropriate and in such manner as complies with any
applicable legal requirements. In the event of partial redemption by lot, the
particular Notes to be redeemed shall be selected, unless otherwise provided
herein, not less than 30 nor more than 60 days prior to the redemption date by
the Trustee from the outstanding Notes not previously called for redemption.
(b) The Trustee shall promptly notify the Company in writing
of the Notes selected for redemption and, in the case of any Note selected for
partial redemption, the principal amount at maturity thereof to be redeemed. No
Notes in amounts of $1,000 or less shall be redeemed in part. Notes and portions
of Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
Section 3.03. Notice of Redemption.
(a) At least 30 days but not more than 60 days before a
redemption date, the Company shall mail or cause to be mailed, by first class
mail, a notice of redemption to each Holder whose Notes are to be redeemed at
its registered address, except that redemption notices may be mailed more than
60 days prior to a redemption date if the notice is issued in connection with a
defeasance of the Notes or a satisfaction and discharge of this Indenture.
Failure to give notice of redemption, or any defect therein to any Holder of any
Note selected for redemption shall not impair or affect the validity of the
redemption of any other Note.
The notice shall identify the Notes to be redeemed and shall
state:
(i) the redemption date;
49
(ii) the redemption price (including the amount of accrued and
unpaid interest or Liquidated Damages, if any, to be paid);
(iii) if any Note is being redeemed in part, the portion of
the principal amount at maturity of such Note to be redeemed and that,
after the redemption date upon surrender of such Note, a new Note or
Notes in principal amount equal to the unredeemed portion of the
original Note shall be issued in the name of the Holder thereof upon
cancellation of the original Note;
(iv) the name and address of the Paying Agent;
(v) that Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price and become due on the
date fixed for redemption;
(vi) that, unless the Company defaults in making such
redemption payment, interest, if any, on Notes called for redemption
ceases to accrue on and after the redemption date;
(vii) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are being
redeemed; and
(viii) 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.
(b) At the Company's request, the Trustee shall give the
notice of redemption to each Holder in the Company's name and at its expense;
provided, however, that the Company shall have delivered to the Trustee, at
least 45 days prior to the redemption date, an Officers' Certificate requesting
that the Trustee give such notice and setting forth the information to be stated
in such notice as provided in the preceding paragraph. The notice, if mailed in
the manner provided herein shall be presumed to have been given, whether or not
the Holder receives such notice.
(c) If the Company has not delivered to the Trustee an
Officers' Certificate pursuant to a request made under Section 3.03(b), the
Company shall nonetheless deliver to the Trustee, at least 45 days prior to the
redemption date, written notice of such redemption.
Section 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section
3.03 hereof, Notes called for redemption become irrevocably due and payable on
the redemption date at the redemption price. Interest and Liquidated Damages, if
any, on Notes (or portions of therein) called for redemption ceases to accrue on
and after the redemption date, unless the Company defaults in making the
applicable redemption payment. A notice of redemption may not be conditional.
50
Section 3.05. Deposit of Redemption Price.
(a) Not later than 12:00 p.m. (noon) Eastern Time on the
redemption date, the Company shall deposit with the Trustee or with the Paying
Agent money sufficient to pay the redemption price of and accrued and unpaid
interest and Liquidated Damages, if any, on all Notes (or portions therein) to
be redeemed on that date. The Trustee or the Paying Agent shall promptly return
to the Company any money deposited with the Trustee or the Paying Agent by the
Company in excess of the amounts necessary to pay the redemption price
(including accrued and unpaid interest and any Liquidated Damages) for all Notes
to be redeemed.
(b) If the Company complies with the provisions of the
preceding paragraph, on and after the redemption date, accrued and unpaid
interest and Liquidated Damages, if any, shall cease to accrue on the Notes or
the portions of Notes called for redemption, whether or not such Notes are
presented for payment. If a Note is redeemed on or after an interest record date
but on or prior to the related interest payment date, then any accrued and
unpaid interest shall be paid to the Person in whose name such Note was
registered at the close of business on such record date. If any Note called for
redemption shall not be so paid upon surrender for redemption because of the
failure of the Company to comply with the preceding paragraph, interest shall be
paid on the unpaid principal from the redemption date until such principal is
paid and to the extent lawful on any interest not paid on such unpaid principal,
in each case at the rate provided in the Notes and in Section 4.01.
Section 3.06. Notes Redeemed in Part.
Upon surrender and cancellation of a Note that is redeemed in
part, the Company shall issue and the Trustee shall authenticate for the Holder
at the expense of the Company a new Note equal in principal amount to the
unredeemed portion of the Note surrendered. No Notes in denominations of $1,000
or less shall be redeemed in part.
Section 3.07. Optional Redemption.
(a) Except as set forth in clause (b) of this Section 3.07,
the Company shall not have the option to redeem the Notes pursuant to this
Section 3.07 prior to July 15, 2008. On or after July 15, 2008, the Company may
redeem all or a part of the Notes upon not less than 30 nor more than 60 days'
notice mailed to each Holder of the Notes being redeemed, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest and Liquidated Damages, if any, on the Notes, to the
applicable redemption date, if redeemed during the twelve-month period beginning
on July 15 of the years indicated below:
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YEAR PERCENTAGE
---- ----------
2008.......................................... 105.000%
2009.......................................... 102.500%
2010 and thereafter........................... 100.000%
(b) At any time prior to July 15, 2007, the Company may, on
any one or more occasions, redeem up to 35% of the aggregate principal amount of
Notes issued hereunder at a redemption price of 110.000% of the principal amount
thereof, plus accrued and unpaid interest and Liquidated Damages, if any,
thereon to the applicable redemption date, with the net cash proceeds of one or
more Equity Offerings of the Company (or any Parent to the extent such proceeds
are contributed to the common equity of the Company); provided that (1) at least
65% of the aggregate principal amount of Notes initially issued under this
Indenture remains outstanding immediately after the occurrence of such
redemption, excluding Notes held by the Company and its Subsidiaries; and (2)
the redemption must occur within 90 days of the date of the closing of such
Equity Offering (or, in the case of any Equity Offering by any Parent, the
contribution to the issuer).
(c) Any redemption pursuant to this Section 3.07 shall be made
in accordance with the provisions of Sections 3.01 through 3.06.
(d) The Company may at any time and from time to time purchase
or otherwise acquire Notes whether pursuant to open market transactions or
otherwise.
Section 3.08. Repurchase Offers.
In the event that, pursuant to Section 4.10 or Section 4.14,
the Company shall be required to commence an offer to all Holders to purchase
all or a portion of their respective Notes (a "REPURCHASE OFFER"), it shall
follow the procedures specified in such Sections and, to the extent not
inconsistent therewith, the procedures specified below.
The Repurchase Offer shall remain open for a period of no less
than 30 days and no more than 60 days following its commencement, except to the
extent that a longer period is required by applicable law (the "OFFER PERIOD").
No later than three Business Days after the termination of the Offer Period (the
"PURCHASE DATE"), the Company shall purchase the principal amount of Notes
required to be purchased pursuant to Section 4.10 or 4.14 hereof (the "OFFER
AMOUNT") or, if less than the Offer Amount has been tendered, all Notes tendered
in response to the Repurchase Offer. Payment for any Notes so purchased shall be
made in accordance with Section 2.03.
If the Purchase Date is on or after an interest record date
and on or before the related interest payment date, any accrued and unpaid
interest and any Liquidated Damages shall be paid to the Person in whose name a
Note is registered at the close of business on such record
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date, and no additional interest shall be payable to Holders who tender Notes
pursuant to the Repurchase Offer.
Upon the commencement of a Repurchase Offer, the Company shall
send, by first class mail, a notice to the Trustee and each of the Holders, with
a copy to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Repurchase
Offer. The Repurchase Offer shall be made to all Holders. The notice, which
shall govern the terms of the Repurchase Offer, shall state:
(i) that the Repurchase Offer is being made pursuant to this
Section 3.08 and Section 4.10 or Section 4.14 hereof, and the length of
time the Repurchase Offer shall remain open;
(ii) the Offer Amount, the purchase price and the Purchase
Date;
(iii) that any Note not tendered or accepted for payment shall
continue to accrue interest and Liquidated Damages, if any;
(iv) that, unless the Company defaults in making such payment,
any Note (or portion thereof) accepted for payment pursuant to the
Repurchase Offer shall cease to accrue interest and Liquidated Damages,
if any, on and after the Purchase Date;
(v) that Holders electing to have a Note purchased pursuant to
a Repurchase Offer may elect to have Notes purchased in integral
multiples of $1,000 only;
(vi) that Holders electing to have a Note purchased pursuant
to any Repurchase Offer shall be required to surrender the Note, with
the form entitled "Option of Holder to Elect Purchase" on the reverse
of the Note completed, or transfer by book-entry transfer, to the
Company, a depository, if appointed by the Company, or a Paying Agent
at the address specified in the notice at least three days before the
Purchase Date;
(vii) that Holders shall be entitled to withdraw their
election if the Company, the Depositary or the Paying Agent, as the
case may be, receives, not later than the expiration of the Offer
Period, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Note the
Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Note purchased;
(viii) that, if the aggregate amount of Notes surrendered by
Holders exceeds the Offer Amount, the Trustee shall, subject in the
case of a Repurchase Offer made pursuant to Section 4.10 to the
provisions of Section 4.10, select the Notes to be purchased on a pro
rata basis (with such adjustments as may be deemed appropriate by the
Trustee so that only Notes in denominations of $1,000, or integral
multiples thereof, shall be purchased); and
53
(ix) that Holders whose Notes were purchased only in part
shall be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered (or transferred by book-entry
transfer).
On the Purchase Date, the Company shall, to the extent lawful,
subject in the case of a Repurchase Offer made pursuant to Section 4.10 to the
provisions of Section 4.10, accept for payment on a pro rata basis to the extent
necessary, the Offer Amount of Notes (or portions thereof) tendered pursuant to
the Repurchase Offer, or if less than the Offer Amount has been tendered, all
Notes tendered, and shall deliver to the Trustee an Officers' Certificate
stating that such Notes (or portions thereof) were accepted for payment by the
Company in accordance with the terms of this Section 3.08. The Company, the
Depositary or the Paying Agent, as the case may be, shall promptly mail or
deliver to each tendering Holder an amount equal to the purchase price of Notes
tendered by such Holder, as the case may be, and accepted by the Company for
purchase, and the Company shall promptly issue a new Note equal in principal
amount at maturity to any unpurchased portion of the Note surrendered, if any.
The Trustee, upon written request from the Company, shall authenticate and mail
or deliver (or cause to be transferred by book-entry) such new Note to such
Holder, in a principal amount at maturity equal to any unpurchased portion of
the Note surrendered. Any Note not so accepted shall be promptly returned by
mail or delivered by the Company (or at the request of the Company, the Trustee)
to the respective Holder thereof. The Company shall publicly announce the
results of the Repurchase Offer on the Purchase Date.
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 or regulations are applicable in connection with the
repurchase of the Notes pursuant to a Repurchase Offer. To the extent that the
provisions of any securities laws or regulations conflict with Section 3.08,
4.10 or 4.14, the Company will comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under
Section 3.08, 4.10 or 4.14 by virtue of such compliance with such securities
laws and regulations.
ARTICLE FOUR
COVENANTS
Section 4.01. Payment of Notes.
(a) The Company shall pay or cause to be paid the principal
of, premium, if any, and interest on the Notes on the dates and in the manner
provided in the Notes. Principal, premium, if any, and interest shall be
considered paid on the date it is due if the Paying Agent, if other than the
Company or one of its Subsidiaries, holds as of 12:00 p.m. (noon) Eastern Time
on the due date money deposited by the Company in immediately available funds
and designated for and sufficient to pay all principal, premium, if any, and
interest then due. The Company shall pay all Liquidated Damages, if any, in the
amounts set forth in the Registration Rights Agreement and in the same manner
and on the same dates as interest is payable on the Notes.
(b) The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal from
time to time on demand at the rate equal to the then applicable interest rate on
the Notes to the extent lawful; it shall pay
54
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest, and Liquidated Damages
(without regard to any applicable grace period) at the same rate and at the same
times to the extent lawful.
Section 4.02. Maintenance of Office or Agency.
(a) The Company shall maintain in the Borough of Manhattan,
The City of New York, an office or agency (which may be an office of the Trustee
or Registrar or agent of the Trustee or Registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.
(b) The Company may also from time to time designate one or
more other offices or agencies where the Notes may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in the Borough of Manhattan, The City of New York for such purposes. The Company
shall give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.
(c) The Company hereby designates the Corporate Trust Office
of the Trustee as one such office or agency of the Company in accordance with
Section 2.04 of this Indenture.
Section 4.03. Reports.
(a) Whether or not required by the SEC, so long as any Notes
are outstanding, the Company shall furnish, upon request, to the Trustee on
behalf of the Holders of Notes, within the time periods specified in the SEC's
rules and regulations (together with any extensions granted by the SEC):
(i) all quarterly and annual financial information that would
be required to be contained in a filing with the SEC on Forms 10-Q and
10-K if the Company were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" and, with respect to the annual information
only, a report on the annual financial statements by the Company's
certified independent accountants; and
(ii) all current reports that would be required to be filed
with the SEC on Form 8-K if the Company were required to file such
reports;
provided, however, that (x) if the SEC will accept the filings of the Company as
provided in the next succeeding paragraph, the Company need not furnish such
reports to the Trustee and (y) the Company shall not be required to furnish
financial information for the period ended June 26, 2004 prior to September 30,
2004.
55
(b) Following the date by which the Company is required to
consummate the Exchange Offer, whether or not required by the SEC, the Company
shall file a copy of all of the information and reports referred to in Section
4.03(a)(i) and Section 4.03(a)(ii) with the SEC for public availability within
the time periods specified in the SEC's rules and regulations (unless the SEC
will not accept such a filing) and make such information available to securities
analysts and prospective investors upon request.
(c) If the Company has designated any of its Subsidiaries as
Unrestricted Subsidiaries, then the quarterly and annual financial information
required by this Section 4.03 shall include a reasonably detailed presentation,
either on the face of the financial statements or in the footnotes thereto, and
in "Management's Discussion and Analysis of Financial Condition and Results of
Operations," of the financial condition and results of operations of the Company
and its Restricted Subsidiaries separate from the financial condition and
results of operations of the Unrestricted Subsidiaries of the Company.
(d) For so long as any Notes (but not the Exchange Notes)
remain outstanding, the Company and the Parent Guarantor shall furnish to the
Holders and to securities analysts and prospective investors, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.
(e) Notwithstanding the foregoing, so long as the Parent
Guarantor is a Guarantor, the reports, information and other documents required
to be filed and provided as described above shall be those of the Parent
Guarantor, rather than those of the Company, so long as such filings would
satisfy the SEC's requirements. In such event, the quarterly and annual
financial information required by this Section 4.03 shall include a reasonably
detailed presentation, either on the face of the financial statements or in the
footnotes thereto, and in "Management's Discussion and Analysis of Financial
Condition and Results of Operations," of the financial condition and results of
operations of the Company and its Restricted Subsidiaries separate from the
financial condition and results of operations of both (x) any Unrestricted
Subsidiaries of the Company and (y) any Subsidiaries of the Parent Guarantor
(other than the Company) that are not Subsidiaries of the Company.
(f) The receipt by the Trustee of any such reports and
statements pursuant to this Section 4.03 shall not constitute notice or
constructive notice of any information contained in such reports and statements
or determinable from information contained in such reports and statements,
including the Issuer's compliance with any covenants hereunder (as to which the
Trustee is entitled to rely exclusively on an Officer's Certificate).
Section 4.04. Compliance Certificate.
(a) The Company and each Guarantor (to the extent that such
Guarantor is so required under the TIA) shall deliver to the Trustee, within 120
days after the end of the first fiscal year following the date hereof, and
within 90 days after the end of each fiscal year thereafter, an Officers'
Certificate stating that a review of the activities of the Company and its
Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under this
Indenture, and further stating, as to each such Officer signing
56
such certificate, that to his or her knowledge, the Company has complied with
all conditions and covenants under this Indenture (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of Default
of which he or she may have knowledge and what action the Company is taking or
proposes to take with respect thereto) and that to his or her knowledge no event
has occurred and remains in existence by reason of which payments on account of
the principal of or interest, if any, on the Notes is prohibited or if such
event has occurred, a description of the event and what action the Company is
taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current
recommendations of the American Institute of Certified Public Accountants, the
year-end financial statements delivered pursuant to Section 4.03(a)(i) above
shall be accompanied by a written statement of the Company's independent public
accountants (which shall be a firm of established national reputation) that in
making the examination necessary for certification of such financial statements,
nothing has come to their attention that would lead them to believe that the
Company has failed to comply with the provisions of Article Four or Article Five
hereof in so far as they relate to financial or accounting matters or, if an
event of noncompliance has come to their attention, 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) The Company shall, so long as any of the Notes are
outstanding, deliver to the Trustee, within five Business Days after any Officer
becomes aware of any Default or Event of Default, an Officers' Certificate
specifying such Default or Event of Default and what action the Company is
taking or proposes to take with respect thereto.
Section 4.05. Taxes.
The Company shall pay, and shall cause each of its
Subsidiaries to pay, prior to delinquency, any taxes, assessments, and
governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders of the Notes.
Section 4.06. Stay, Extension and Usury Laws.
The Company and each of the Guarantors covenant (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,
extension or usury law wherever enacted, now or at any time hereafter in force,
that may affect the covenants or the performance of this Indenture; and the
Company and each of the Guarantors (to the extent that it may lawfully do so)
hereby expressly waive all benefit or advantage of any such law, and covenants
that it shall not, by resort to any such law, hinder, delay or impede the
execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law has been enacted.
57
Section 4.07. Restricted Payments.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend or make any other payment or
distribution on account of the Company's or any of its Restricted
Subsidiaries' Equity Interests (including, without limitation, any
payment in connection with any merger or consolidation involving the
Company or any of its Restricted Subsidiaries) or to the direct or
indirect holders of the Company's or any of its Restricted
Subsidiaries' Equity Interests in their capacity as such, other than
dividends, payments or distributions (a) payable in Equity Interests
(other than Disqualified Stock) of the Company or (b) to the Company or
a Restricted Subsidiary of the Company;
(ii) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or
consolidation) any Equity Interests of the Company, any Parent or any
Restricted Subsidiary held by Persons other than the Company or any of
its Restricted Subsidiaries;
(iii) purchase, redeem, defease or otherwise acquire or retire
for value any Indebtedness that is subordinated to the Notes or the
Note Guarantees, except (1) a payment of interest or principal at the
Stated Maturity thereof or (2) the purchase, repurchase or other
acquisition of any such Indebtedness in anticipation of satisfying a
sinking fund obligation, principal installment or final maturity, in
each case, due within one year of the date of such purchase, repurchase
or other acquisition; or
(iv) make any Restricted Investment (all such payments and
other actions set forth in Section 4.07(a)(i) through (iv) being
collectively referred to as "RESTRICTED PAYMENTS"), unless, at the time
of and after giving effect to such Restricted Payment:
(A) no Default or Event of Default shall have occurred
and be continuing or would occur as a consequence thereof;
(B) the Company would, at the time of such Restricted
Payment and after giving pro forma effect thereto as if such
Restricted Payment had been made at the beginning of the
applicable four-quarter period, have been permitted to incur
at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in Section 4.09(a);
and
(C) such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by the Company
and its Restricted Subsidiaries after the date of this
Indenture (excluding Restricted Payments permitted by clauses
(2), (3), (4), (5), (6), (7), (8), (14) and (15) of Section
4.07(b)), is less than the sum, without duplication, of:
(1) 50% of the Consolidated Net Income of the Company
for the period (taken as one accounting period) from the
beginning of the first fiscal quarter commencing after
the date of this Indenture to the end of the
58
Company's most recently ended fiscal quarter for which
internal financial statements are available at the time
of such Restricted Payment (or, if such Consolidated Net
Income for such period is a deficit, less 100% of such
deficit), plus
(2) 100% of the aggregate net proceeds, including the
fair market value of property, received by the Company
subsequent to the date of this Indenture as a
contribution to its common equity capital or from the
issue or sale of Equity Interests of the Company or net
cash proceeds received by the Company subsequent to the
date of this Indenture from the issue or sale of
Disqualified Stock or debt securities of the Company that
have been converted into or exchanged, including the
aggregate cash received upon issuance and at the time of
such conversion or exchange of such Disqualified Stock or
debt securities, for such Equity Interests (other than
Equity Interests (or Disqualified Stock or debt
securities) sold to a Restricted Subsidiary of the
Company), plus
(3) an amount equal to the net reduction in
Restricted Investments made by the Company and its
Restricted Subsidiaries subsequent to the date of this
Indenture, resulting from payments of interest on
Indebtedness, dividends, repayments of loans or advances
or other transfers of assets, in each case to the Company
or any such Restricted Subsidiary from any such
Investment, from the net cash proceeds from return of
capital on, redemption of or the sale of any such
Investment, from the release of any guarantee (except to
the extent of any amounts paid under such guarantee) or
from a redesignation of an Unrestricted Subsidiary to a
Restricted Subsidiary, but only if and to the extent such
amounts are not included in the calculation of
Consolidated Net Income and not to exceed in the case of
any Investment the amount of the Investment previously
made by the Company or any Restricted Subsidiary in such
Person or Unrestricted Subsidiary; provided that any
amounts in excess of the amount of the Investment
previously made may be added to the amounts otherwise
available under this Section 4.07(a)(iv)(C)(3) to make
Restricted Investments pursuant to this Section
4.07(a)(iv)(C).
(b) Section 4.07(a) shall not prohibit:
(1) the payment of any dividend within 60 days after the date
of declaration thereof, if at said date of declaration such payment
would have complied with the provisions of this Indenture;
(2) the redemption, repurchase, retirement, defeasance or
other acquisition of any subordinated Indebtedness of the Company or
any Restricted Subsidiary or of any Equity Interests of the Company or
any Parent (x) in exchange for, or out of the net cash proceeds of the
substantially concurrent sale (other than to a Restricted Subsidiary of
the Company) of, Equity Interests of the Company, other than
Disqualified Stock or (y) from
59
the substantially concurrent contribution of cash to the Company's
common equity capital; provided that the amount of any such net
proceeds that are utilized for any such redemption, repurchase,
retirement, defeasance or other acquisition shall be excluded from
Section 4.07(a)(iv)(C)(2);
(3) the repayment, defeasance, redemption, repurchase or other
acquisition of Indebtedness of the Company or any Restricted Subsidiary
subordinated to the Notes or any Note Guarantee with the net cash
proceeds from an incurrence of Permitted Refinancing Indebtedness;
(4) the payment of any dividend by a Restricted Subsidiary of
the Company to the holders of its common Equity Interests on a pro rata
basis;
(5) the repurchase, redemption or other acquisition or
retirement for value of any Equity Interests of the Company and any
distribution, loan or advance to any Parent for the repurchase,
redemption or other acquisition or retirement for value of any Equity
Interests of any Parent, in each case held by any former or current
employees, officers, directors or consultants of any Parent or the
Company or any of its Restricted Subsidiaries or their respective
estates, spouses, former spouses or family members under any management
equity plan or stock option or other management or employee benefit
plan upon the death, disability or termination of employment of such
Persons, in an amount not to exceed $2.0 million in any calendar year;
provided that the Company may carry over and make in subsequent
calendar years, in addition to the amounts permitted for such calendar
year, the amount of such purchases, redemptions or other acquisitions
or retirements for value permitted to have been made but not made in
any preceding calendar year up to a maximum of $6.0 million in any
calendar year; provided further that such amount in any calendar year
may be increased by an amount not to exceed (i) the net cash proceeds
from the sale of Equity Interests (other than Disqualified Stock) of
the Company (or any Parent to the extent such net cash proceeds are
contributed to the common equity of the Company) to employees,
officers, directors or consultants of the Company and its Restricted
Subsidiaries that occurs after the date of this Indenture (to the
extent the cash proceeds from the sale of such Equity Interests have
not otherwise been applied to the payment of Restricted Payments) plus
(ii) the cash proceeds of key man life insurance policies received by
the Company and its Restricted Subsidiaries after the date of this
Indenture less any amounts previously applied to the payment of
Restricted Payments pursuant to this Section 4.07(b)(5); provided
further that cancellation of Indebtedness owing to the Company from
employees, officers, directors and consultants of the Company or any of
its Restricted Subsidiaries in connection with a repurchase of Equity
Interests of the Company from such Persons shall not be deemed to
constitute a Restricted Payment for purposes of this covenant or any
other provisions of this Indenture; and provided further that the net
cash proceeds from such sales of Equity Interests described in clause
(i) of this Section 4.07(b)(5) shall be excluded from Section
4.07(a)(iv)(C)(2) to the extent such proceeds have been or are applied
to the payment of Restricted Payments pursuant to this Section
4.07(b)(5);
(6) the payment of dividends or other distributions or the
making of loans or advances to any Parent in amounts required for any
Parent to pay franchise taxes and
60
other fees required to maintain its existence and provide for all other
operating costs of any Parent to the extent attributable to the
ownership or operation of the Company and its Restricted Subsidiaries,
including, without limitation, in respect of director fees and
expenses, administrative, legal and accounting services provided by
third parties and other costs and expenses including all costs and
expenses with respect to filings with the SEC, of up to an aggregate
amount under this Section 4.07(b)(6) of $500,000 per fiscal year
(provided that the Company may carry over and make in subsequent fiscal
years, in addition to the amounts permitted for such fiscal year, the
amount of such dividends, distributions, loans or advances permitted to
have been made but not made in any preceding fiscal year up to a
maximum of $1.5 million in any fiscal year), plus any indemnification
claims made by directors or officers of any Parent attributable to the
ownership or operation of the Company and its Restricted Subsidiaries,
plus any amount necessary to enable any Parent to pay sums (x) owing
under the Management Agreement and (y) described in clauses (12), (13)
and (14) of the definition of "Asset Sale" herein;
(7) the payment of dividends or other distributions by the
Company to any Parent in amounts required to pay the tax obligations of
any Parent attributable to the Company and its Subsidiaries determined
as if the Company and its Subsidiaries had filed a separate
consolidated, combined or unitary return for the relevant taxing
jurisdiction; provided that any refunds received by any Parent
attributable to the Company or any of its Subsidiaries shall promptly
be returned by such Parent to the Company through a contribution to the
common equity of, or the purchase of common stock (other than
Disqualified Stock) of the Company from, the Company; and provided
further that the amount of any such contribution or purchase shall be
excluded from Section 4.07(a)(iv)(C)(2);
(8) repurchases of Capital Stock deemed to occur upon the
cashless exercise of stock options and warrants;
(9) other Restricted Payments not otherwise permitted pursuant
to this Section 4.07 in an aggregate amount not to exceed $7.5 million;
(10) the declaration and payment of dividends and
distributions to holders of any class or series of Disqualified Stock
of the Company or any of its Restricted Subsidiaries issued or incurred
in accordance with Section 4.09;
(11) upon the occurrence of a Change of Control and within 60
days after completion of the offer to repurchase Notes pursuant to
Section 4.14 (including the purchase of all Notes tendered), any
purchase or redemption of Indebtedness of the Company subordinated to
the Notes that is required to be repurchased or redeemed pursuant to
the terms thereof as a result of such Change of Control, at a purchase
price not greater than 101% of the outstanding principal amount thereof
(plus accrued and unpaid interest);
(12) within 60 days after the completion of any Asset Sale
Offer pursuant to Section 4.10 (including the purchase of all Notes
tendered), any purchase or redemption of Indebtedness of the Company
subordinated to the Notes that is required to be
61
repurchased or redeemed pursuant to the terms thereof as a result of
such Asset Sale, at a purchase price not greater than 100% of the
outstanding principal amount thereof (plus accrued and unpaid
interest);
(13) payments or distributions to dissenting stockholders, not
to exceed $1.0 million, pursuant to applicable law, pursuant to or in
connection with a consolidation, merger or transfer of assets that
complies with the provisions of this Indenture applicable to mergers,
consolidations and transfers of all or substantially all of the
property and assets of the Company;
(14) Investments acquired as a contribution to the common
equity capital of the Company, or in exchange for, or out of the net
cash proceeds of a substantially concurrent offering of, Equity
Interests (other than Disqualified Stock) of the Company; provided that
the amount of any such net cash proceeds that are utilized for any such
acquisition or exchange shall be excluded from Section
4.07(a)(iv)(C)(2);
(15) payments not to exceed $100,000 in the aggregate since
date of this Indenture to enable the Company to make payments to
holders of its Capital Stock in lieu of issuance of fractional shares
of its Capital Stock; or
(16) the redemption, repurchase or other acquisition for value
of any common Equity Interests of any Restricted Subsidiary of the
Company that are held by a Person that is not an Affiliate of the
Company to the extent required to satisfy applicable laws, rules or
regulations; provided that the consideration for such redemption,
repurchase or other acquisition is not in excess of either (x) the fair
market value of such common Equity Interests or (y) such amount
required by applicable laws, rules or regulations;
provided, however, that in the case of clauses (5), (9), (11),
(12) and (15) above, no Default or Event of Default has occurred and is
continuing.
(c) The amount of all Restricted Payments (other than cash)
shall be the fair market value on the date of the Restricted Payment of the
asset(s) or securities proposed to be transferred or issued to or by the Company
or any Restricted Subsidiary, as the case may be, pursuant to the Restricted
Payment. The fair market value of any assets or securities that are required to
be valued by this covenant shall, if the fair market value thereof exceeds $1.0
million, be determined by the Board of Directors of the Company, whose
resolution with respect thereto shall be delivered to the Trustee. The Board of
Directors' determination must be based upon an opinion or appraisal issued by an
accounting, appraisal or investment banking firm of national standing if the
fair market value exceeds $5.0 million. Not later than the date of making any
Restricted Payment, the Company shall deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by this Section 4.07 were
computed, together with a copy of any fairness opinion or appraisal required by
this Indenture.
(d) Notwithstanding anything to the contrary in this Section
4.07, the payment of dividends or other distributions to any Parent in amounts
required for such Parent to make payments (or the payment directly by the
Company of amounts) in respect of post-closing
62
purchase price adjustments, earn-outs or indemnification under the Stock
Purchase Agreement, as such agreement is in effect on the date of the Indenture,
shall not be deemed to be a Restricted Payment.
Section 4.08. Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or permit to exist or
become effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(i) pay dividends or make any other distributions on its
Capital Stock to the Company or any of its Restricted Subsidiaries or
pay any liabilities owed to the Company or any of its Restricted
Subsidiaries;
(ii) make loans or advances to the Company or any of its
Restricted Subsidiaries; or
(iii) transfer any of its properties or assets to the Company
or any of its Restricted Subsidiaries.
(b) However, the preceding restrictions shall not apply to
encumbrances or restrictions existing under or by reason of:
(i) Existing Indebtedness, and the Credit Agreement as in
effect on the date of this Indenture and any amendments, modifications,
restatements, renewals, increases, supplements, refundings,
replacements or refinancings thereof, provided that such amendments,
modifications, restatements, renewals, increases, supplements,
refundings, replacement or refinancings are not materially more
restrictive, taken as a whole, with respect to such encumbrances than
those contained in such Existing Indebtedness and the Credit Agreement,
as in effect on the date of this Indenture;
(ii) this Indenture, the Notes and any Note Guarantees or by
other Indebtedness of the Company or of a Subsidiary Guarantor which is
pari passu in right of payment with the Notes or Note Guarantees, as
applicable, incurred under an indenture pursuant to Section 4.09;
provided that the encumbrances and restrictions are no more
restrictive, taken as a whole, than those contained in this Indenture;
(iii) applicable law, rule, regulation or order;
(iv) any agreements or instrument governing Indebtedness or
Equity Interests of a Person acquired by the Company or any of its
Restricted Subsidiaries as in effect at the time of such acquisition
(except to the extent such Indebtedness was or Equity Interests were
incurred or issued in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the
Person, or the property or assets of the Person, so acquired; provided
that, in the case of Indebtedness, such Indebtedness was permitted by
the terms of this Indenture to be incurred;
63
(v) customary non-assignment provisions in contracts,
licenses, leases and other agreements entered into in the ordinary
course of business;
(vi) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions on the property so
acquired of the nature described in Section 4.08(a)(iii);
(vii) an agreement entered into for the sale or disposition of
Equity Interests or assets of a Restricted Subsidiary or an agreement
entered into for the sale of specified assets (in either case, so long
as such encumbrance or restriction, by its terms, terminates on the
earlier of the termination of such agreement or the consummation of
such agreement and so long as such restriction applies only to the
Equity Interest or assets to be sold);
(viii) Permitted Refinancing Indebtedness, provided that the
encumbrances and restrictions contained in the agreements governing
such Permitted Refinancing Indebtedness are not materially more
restrictive, taken as a whole, than those contained in the agreements
governing the Indebtedness being refinanced;
(ix) Permitted Liens securing Indebtedness that limit the
right of the debtor to dispose of the assets subject to such Lien;
(x) customary limitations on the disposition or distribution
of assets or property in joint venture agreements, partnership
agreements, limited liability company operating agreements, asset or
stock sale agreements, and other similar agreements entered into (a) in
the ordinary course of business or (b) with the approval of the Board
of Directors; provided, however, that, with respect to Section
4.08(b)(x)(b) only, the Board of Directors shall have determined in
good faith that such limitations shall not impair the ability of the
Company to satisfy its payment obligations with respect to the Notes;
(xi) cash or other deposits or net worth requirements imposed
by customers or agreements entered into in the ordinary course of
business;
(xii) in the case of Section 4.08(a)(iii):
(a) that restrict in a customary manner the subletting,
assignment or transfer of any property or asset that is a
lease, license, conveyance or contract or similar property or
asset,
(b) existing by virtue of any transfer of, agreement to
transfer, option or right with respect to, or Lien on, any
property or assets of the Company or any of its Restricted
Subsidiaries not otherwise prohibited by this Indenture, or
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(c) arising or agreed to in the ordinary course of
business, not relating to any Indebtedness, and that do not,
individually or in the aggregate, detract from the value of
property or assets of the Company or any of its Restricted
Subsidiaries in any manner material to the Company or any of
its Restricted Subsidiaries;
(xiii) provisions in agreements or instruments that prohibit
the payment of dividends or the making of other distributions with
respect to any Capital Stock of a Person other than on a pro rata
basis; and
(xiv) restrictions in other Indebtedness incurred in
compliance with Section 4.09; provided that such restrictions, taken as
a whole, are, in the good faith judgment of the Company's Board of
Directors, no more materially restrictive with respect to such
encumbrances and restrictions than those contained in the existing
agreements referenced in clauses (i) and (ii) of this Section 4.08(b).
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "incur") any
Indebtedness (including Acquired Debt), and the Company shall not issue any
Disqualified Stock and the Company shall not permit any of its Restricted
Subsidiaries to issue any Disqualified Stock or preferred stock; provided,
however, that the Company and any Subsidiary Guarantors may incur Indebtedness
(including, without limitation, Acquired Debt) or issue Disqualified Stock and
any Subsidiary Guarantors may issue preferred stock, if the Fixed Charge
Coverage Ratio for the Company's most recently ended four full fiscal quarters
for which internal financial statements are available immediately preceding the
date on which such additional Indebtedness is incurred or such Disqualified
Stock or preferred stock is issued would have been at least 2.00 to 1,
determined on a pro forma basis (including a pro forma application of the net
proceeds therefrom), as if the additional Indebtedness had been incurred or
Disqualified Stock or preferred stock had been issued, as the case may be, at
the beginning of such four-quarter period.
(b) Section 4.09(a) shall not prohibit the incurrence of any
of the following items of Indebtedness (collectively, "PERMITTED DEBT"):
(i) the incurrence by the Company, any Subsidiary Guarantor or
Ames True Temper Properties, Inc. of Indebtedness under Credit
Facilities in an aggregate principal amount at any one time outstanding
pursuant to this clause (i) (with letters of credit being deemed to
have a principal amount equal to the maximum potential liability of the
Company and any Subsidiary Guarantors and Ames True Temper Properties,
Inc. thereunder) not to exceed the greater of (x) $215.0 million, plus
the amount of reasonable fees and expenses incurred in connection with
extending, refinancing, renewing, replacing or refunding any Credit
Facility under which Indebtedness is incurred pursuant to this clause
(i), less the aggregate amount of all Net Proceeds of Asset Sales
applied by the Company, any Subsidiary Guarantors or Ames True Temper
Properties, Inc. to permanently repay any Indebtedness under Credit
Facilities (and, in the case of any
65
revolving credit Indebtedness under a Credit Facility, to effect a
corresponding commitment reduction thereunder) pursuant to Section 4.10
and (y) the Domestic Borrowing Base on such date of incurrence;
(ii) the incurrence of Existing Indebtedness by the Company
and its Restricted Subsidiaries;
(iii) the incurrence by the Company and any Subsidiary
Guarantors of Indebtedness represented by the Notes to be issued on the
date of this Indenture and any related Note Guarantees and the Exchange
Notes and any related Note Guarantees to be issued therefor pursuant to
the Registration Rights Agreement;
(iv) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case,
incurred for the purpose of financing all or any part of the purchase
price, or cost of construction or improvement, of property (real or
personal), plant or equipment used in the business of the Company or
any of its Restricted Subsidiaries (whether through the direct
acquisition of such assets or the acquisition of Equity Interests of
any Person owning such assets) in an aggregate principal amount,
including all Permitted Refinancing Indebtedness incurred to refund,
refinance or replace any Indebtedness incurred pursuant to this clause
(iv), not to exceed, at any time outstanding, the greater of (x) $10.0
million and (y) 5% of Total Tangible Assets;
(v) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or
the net proceeds of which are used to refund, refinance or replace
Indebtedness (other than intercompany Indebtedness) that was permitted
by this Indenture to be incurred under Section 4.09(a) or clauses (ii),
(iii), (iv), (v), (xiv), (xvi) or (xviii) of this Section 4.09(b);
(vi) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company
or any of its Restricted Subsidiaries; provided, however, that:
(a) if the Company or any Subsidiary Guarantor is the
obligor on such Indebtedness and the payee is not the
Company or a Subsidiary Guarantor, such Indebtedness
must be expressly subordinated to the prior payment in
full in cash of all Obligations with respect to the
Notes, in the case of the Company, or a Note Guarantee,
in the case of a Subsidiary Guarantor; and
(b) (i) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness being
held by a Person other than the Company or a Restricted
Subsidiary thereof and (ii) any sale or other transfer
of any such Indebtedness (other than solely as a result
of the creation of a Permitted Lien upon such
intercompany Indebtedness) to a Person that is not
either the Company or a Restricted Subsidiary thereof,
shall be deemed, in each case, to constitute an
incurrence of such Indebtedness by
66
the Company or such Restricted Subsidiary, as the case
may be, that was not permitted by this clause (vi);
(vii) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred in the ordinary
course of business for the purpose of fixing, hedging or swapping
interest rate, commodity price or foreign currency exchange rate risk
(or to reverse or amend any such agreements previously made for such
purposes), and not for speculative purposes;
(viii) the Guarantee by the Company or any of its Restricted
Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary
of the Company that was permitted to be incurred by another provision
of this Section 4.09;
(ix) the accrual of interest, the accretion or amortization of
original issue discount, the payment of interest on any Indebtedness in
the form of additional Indebtedness with the same terms, and the
payment of dividends on Disqualified Stock or preferred stock in the
form of additional shares of the same class of Disqualified Stock or
preferred stock shall not be deemed to be an incurrence of Indebtedness
or an issuance of Disqualified Stock or preferred stock for purposes of
this Section 4.09; provided, in each such case, that the amount thereof
is included in Fixed Charges of the Company as accrued;
(x) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness 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 or self-insurance; provided, however,
that, upon the drawing of such instruments or the incurrence of such
Indebtedness, such obligations are reimbursed within 30 days following
such drawing or incurrence;
(xi) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness arising from agreements of the Company or
such Restricted Subsidiary providing for indemnification, adjustment of
purchase price or similar obligations, in each case, incurred or
assumed in connection with the sale or other disposition of any
business, assets or Capital Stock of the Company 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 a Subsidiary for the purpose of financing such acquisition;
provided that the maximum assumable liability in respect of that
Indebtedness shall at no time exceed the gross proceeds including
noncash proceeds (the fair market value of those noncash proceeds being
measured at the time received and without giving effect to any
subsequent changes in value) actually received by the Company and/or
that Restricted Subsidiary in connection with that disposition;
(xii) the issuance of Disqualified Stock or preferred stock by
any of the Company's Restricted Subsidiaries issued to the Company or
another Restricted Subsidiary of the Company; provided that (x) any
subsequent issuance or transfer of any
67
Equity Interests that results in such Disqualified Stock or preferred
stock being held by a Person other than the Company or a Restricted
Subsidiary thereof and (y) any sale or other transfer of any such
shares of Disqualified Stock or preferred stock (in each case, other
than solely as a result of the creation of a Permitted Lien upon such
Equity Interests, Disqualified Stock or preferred stock) to a Person
that is not either the Company or a Restricted Subsidiary thereof shall
be deemed, in each case, to constitute an issuance of such shares of
Disqualified Stock or preferred stock that was not permitted by this
clause (xii);
(xiii) the incurrence by the Company or any of its Restricted
Subsidiaries of obligations (including letters of credit) in respect of
performance, completion and surety bonds, completion guarantees and
similar obligations provided by the Company or such Restricted
Subsidiary in the ordinary course of business;
(xiv) the incurrence by the Company or any Restricted
Subsidiary of Indebtedness in an aggregate principal amount (or
accreted value, as applicable) at any time outstanding, including all
Permitted Refinancing Indebtedness incurred to refund, refinance or
replace any Indebtedness incurred pursuant to this clause (xiv), not to
exceed $10.0 million;
(xv) contingent liabilities arising out of endorsements of
checks and other negotiable instruments for deposit or collection in
the ordinary course of business;
(xvi) the incurrence by the Company or a Restricted Subsidiary
of the Company of Acquired Debt in an aggregate principal amount at any
time outstanding, including all Permitted Refinancing Indebtedness
incurred to refund, refinance or replace any Indebtedness incurred
pursuant to this clause (xvi), not to exceed $7.5 million;
(xvii) the incurrence by the Company of Indebtedness that is
subordinated to the Notes in an aggregate principal amount (or accreted
value, as applicable) at any time outstanding, including all Permitted
Refinancing Indebtedness incurred to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (xvii), not to exceed
$5.0 million;
(xviii) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness arising from the honoring by a bank or
other financial institution of a check, draft or similar instrument
inadvertently drawn against insufficient funds, so long as such
Indebtedness is covered within (5) five Business Days; and
(xix) the incurrence by any Foreign Restricted Subsidiary of
Indebtedness in an aggregate principal amount (or accreted value, as
applicable) at any time outstanding, including all Permitted
Refinancing Indebtedness incurred to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (xix), not to exceed the
sum of (x) $10.0 million and (y) the amount of the Foreign Borrowing
Base as of the date of any such incurrence.
Notwithstanding any other provision of this Section 4.09, the
maximum amount of Indebtedness that the Company or any Restricted Subsidiary may
incur pursuant to this
68
Section 4.09 shall not be deemed to be exceeded solely as a result of
fluctuations in the exchange rate of currencies. For purposes of determining
compliance with this Section 4.09, in the event that any proposed Indebtedness
(or portion thereof) meets the criteria of more than one of the categories of
Permitted Debt described in Sections 4.09(b)(i) through (xix) above, or is
entitled to be incurred or issued pursuant to Section 4.09(a), the Company, in
its sole discretion, shall be permitted to divide and to classify such item of
Indebtedness on the date of its incurrence, and at any time and from time to
time may reclassify, in any manner that complies with this Section 4.09 at such
time. Indebtedness under the Credit Agreement outstanding immediately following
the Transactions shall be deemed to have been incurred on such date in reliance
on the exception provided by clause (i) of the definition of Permitted Debt.
Section 4.10. Asset Sales.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, consummate an Asset Sale unless:
(i) the Company (or the 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 or Equity Interests issued
or sold or otherwise disposed of;
(ii) such fair market value is determined by the Company's
Board of Directors and evidenced by a resolution of the Board of
Directors set forth in an Officers' Certificate delivered to the
Trustee; and
(iii) at least 75% of the consideration therefor received by
the Company or such Restricted Subsidiary is in the form of cash, Cash
Equivalents or Replacement Assets or a combination thereof. For
purposes of this Section 4.10(a)(iii), each of the following shall be
deemed to be cash:
(A) Indebtedness or other liabilities (as shown on the
Company's or such Restricted Subsidiary's most recent
consolidated balance sheet) of the Company or any Restricted
Subsidiary (other than contingent liabilities and Indebtedness
or other liabilities that are by their terms subordinated to
the Notes or any Note Guarantee) that are assumed by the
transferee of any such assets and, in the case of liabilities
other than Non-Recourse Debt, where the Company and all
Restricted Subsidiaries are released from any further
liability in connection therewith; and
(B) any securities, notes or other obligations received
by the Company or any such Restricted Subsidiary from such
transferee or any other Person on account of such Asset Sale
that are converted by the Company or such Restricted
Subsidiary into cash within 180 days after the date of such
Asset Sale (to the extent of the cash received in that
conversion).
(C) cash held in escrow as security for any purchase
price settlement, for damages in respect of a breach of
representations and warranties or covenants or for payment of
other contingent obligations in connection with the Asset
Sale; and
69
(D) any Designated Noncash Consideration received by the
Company or any Restricted Subsidiary thereof in such Asset
Sale having a fair market value, taken together with all other
Designated Noncash Consideration received pursuant to this
clause (D) that is at that time outstanding, not to exceed
$10.0 million at the time of receipt of such Designated
Noncash Consideration, with the fair market value of each item
of Designated Noncash Consideration being measured at the time
received without giving effect to subsequent changes in value.
For purposes of clause (iii) above, any liabilities of the
Company or any Restricted Subsidiary that are not assumed by the transferee of
such assets in respect of which the Company and all Restricted Subsidiaries are
not released from any future liabilities in connection therewith shall not be
considered consideration.
(b) On or prior to the 366th day following the receipt of any
Net Proceeds from an Asset Sale, the Company or such Restricted Subsidiary may
apply such Net Proceeds at its option:
(i) (A) to repay or prepay Senior Debt or (B) in the case
where the property or asset that was the subject of such Asset Sale is
encumbered by a Lien of the type described in the definition of the
term "Permitted Lien," to repay the Permitted Indebtedness that was
secured by such Lien;
(ii) to purchase Replacement Assets or make a capital
expenditure (or enter into a legally binding agreement to do so) that
is used or useful in a Permitted Business; or
(iii) any combination of the foregoing.
Pending the final application of any such Net Proceeds, the Company or any
Restricted Subsidiary may temporarily reduce revolving credit borrowings or
otherwise invest such Net Proceeds in any manner that is not prohibited by this
Indenture.
(c) Any Net Proceeds from Asset Sales that are not applied or
invested as provided in Section 4.10(b) shall constitute "EXCESS PROCEEDS."
Within 10 days after the aggregate amount of Excess Proceeds exceeds $15.0
million, the Company shall make an offer (an "ASSET SALE OFFER") to all Holders
of Notes and all holders of other Indebtedness that is pari passu with the Notes
or any Note Guarantee containing provisions similar to those set forth in this
Indenture with respect to offers to purchase with the proceeds of sales of
assets, to purchase the maximum principal amount of Notes and such other pari
passu Indebtedness that may be purchased out of the Excess Proceeds. The offer
price in any Asset Sale Offer shall be equal to 100% of the principal amount of
the Notes and such other pari passu Indebtedness plus accrued and unpaid
interest and Liquidated Damages, if any, on the Notes and any pari passu
Indebtedness, to the date of purchase, and shall be payable in cash. If any
Excess Proceeds remain after consummation of an Asset Sale Offer, the Company
may use such Excess Proceeds for any purpose not otherwise prohibited by this
Indenture. If the aggregate principal amount of Notes and such other pari passu
Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess
Proceeds, the Notes and such other pari passu Indebtedness shall be purchased
70
on a pro rata basis based on the principal amount of Notes and such other pari
passu Indebtedness tendered. Upon completion of each Asset Sale Offer, the
amount of Excess Proceeds shall be reset at zero.
(d) 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 each repurchase of Notes pursuant to an Asset Sale Offer. To the extent
that the provisions of any securities laws or regulations conflict with the
Asset Sales provisions of this Indenture, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under the Asset Sale provisions of this Indenture by
virtue of compliance with such securities laws and regulations.
Section 4.11. Transactions with Affiliates.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate on or after the Issue Date (each, an "Affiliate
Transaction"), unless:
(i) such Affiliate Transaction is on terms that are no less
favorable to the Company or the relevant Restricted Subsidiary than
those that would have been obtained in a comparable arm's length
transaction by the Company or such Restricted Subsidiary with an
unrelated Person; and
(ii) the Company delivers to the Trustee:
(A) with respect to any Affiliate Transaction or series
of related Affiliate Transactions involving aggregate
consideration in excess of $3.0 million, a resolution of the
Board of Directors set forth in an Officers' Certificate
certifying that such Affiliate Transaction complies with this
Section 4.11 and that such Affiliate Transaction has been
approved by a majority of the disinterested members of the
Board of Directors; and
(B) with respect to any Affiliate Transaction or series
of related Affiliate Transactions involving aggregate
consideration in excess of $10.0 million, an opinion as to the
fairness to the Company or such Restricted Subsidiary of such
Affiliate Transaction from a financial point of view issued by
an accounting, appraisal or investment banking firm of
national standing.
(b) The following items shall not be deemed to be Affiliate
Transactions and, therefore, shall not be subject to the provisions of Section
4.11(a):
(i) any reasonable consulting or employment agreement or
arrangement, incentive compensation plan, benefit arrangement or plan,
severance or expense reimbursement arrangement entered into by the
Company or any of its Restricted
71
Subsidiaries in the ordinary course of business and approved by a
majority of the members of the Board of Directors of the Company;
(ii) transactions between or among the Company and/or its
Restricted Subsidiaries;
(iii) payment of reasonable directors fees to directors of the
Company and any Parent or any Restricted Subsidiary of the Company and
the provision of customary indemnification to directors, officers and
employees of the Company and any Parent or any Restricted Subsidiary of
the Company;
(iv) sales of Equity Interests (other than Disqualified Stock)
to Affiliates of the Company;
(v) Restricted Payments that are permitted by the provisions
of Section 4.07 or any Permitted Investment, and agreements or
arrangements solely related to the disbursement or distribution of such
Restricted Payment or Permitted Investment;
(vi) the payment (directly or through any Parent) of annual
management, consulting, monitoring and advising fees and related
expenses to the Equity Sponsor and its respective Affiliates pursuant
to management agreements as in effect on the date of this Indenture and
as described in the Offering Memorandum and any amendment, modification
or supplement thereto or replacement thereof, as long as such
amendment, modification, supplement or replacement taken as a whole is
not more disadvantageous to the Company and its Restricted
Subsidiaries;
(vii) loans to officers and employees that are approved in
good faith by a majority of the Board of Directors of the Company in an
amount not to exceed $1.0 million outstanding at any time and advances
and expense reimbursements to employees in the ordinary course of
business;
(viii) transactions with a joint venture engaged in a
Permitted Business; provided that all the outstanding ownership
interests of such joint venture are owned only by the Company, its
Restricted Subsidiaries and Persons that are not Affiliates of the
Company;
(ix) transactions with a Person (other than an Unrestricted
Subsidiary) that is an Affiliate of the Company solely because the
Company owns, directly or through a Subsidiary, an Equity Interest in,
or controls, such Person;
(x) transactions pursuant to the Management Agreement and
other agreements or arrangements in each case in effect on the date of
this Indenture and as described in the Offering Memorandum, or any
amendment, modification or supplement thereto or any replacement
thereof, as long as such agreement or arrangement as so amended,
modified, supplemented or replaced, taken as a whole, is not materially
more disadvantageous to the Company and its Restricted Subsidiaries
than the original agreement or arrangement as in effect on the date of
this Indenture; and
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(xi) the granting or performance of registration rights under
a written registration rights agreement approved by the Board of
Directors of the Company.
Section 4.12. Liens.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, create, incur, assume or otherwise cause or suffer
to exist or become effective any Lien of any kind securing Indebtedness (other
than Permitted Liens) upon any of their property or assets ("PRIMARY LIENS"),
now owned or hereafter acquired, unless all payments due under this Indenture
and the Notes are secured on an equal and ratable basis with the obligations so
secured (or, in the case of subordinated Indebtedness, prior or senior thereto,
with the same relative priority as the Notes shall have with respect to such
subordinated Indebtedness) until such time as such obligations are no longer
secured by a Lien.
(b) Any Lien created for the benefit of the Holders of the
Notes pursuant to Section 4.12(a) shall automatically and unconditionally be
released and discharged upon the release and discharge of the Primary Lien,
without any further action on the part of any Person.
Section 4.13. Business Activities.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, engage in any business other than Permitted
Businesses, except to such extent as would not be material to the Company and
its Restricted Subsidiaries, taken as a whole.
Section 4.14. Offer to Repurchase upon a Change of Control.
(a) If a Change of Control occurs, each Holder of Notes shall
have the right to require the Company to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of that Holder's Notes pursuant to an
offer by the Company (a "CHANGE OF CONTROL OFFER") at an offer price (a "CHANGE
OF CONTROL PAYMENT") in cash equal to 101% of the aggregate principal amount of
the Notes repurchased plus accrued and unpaid interest and Liquidated Damages,
if any, thereon, to the date of purchase. Within 30 days following any Change of
Control, the Company shall mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control and offering
to repurchase Notes on a date specified in such notice (the "CHANGE OF CONTROL
PAYMENT DATE"), which date shall be no earlier than 30 days and no later than 60
days from the date such notice is mailed, pursuant to the procedures described
in Section 3.08 (including the notice required thereby). 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 the Notes as a
result of a Change of Control. To the extent that the provisions of any
securities laws or regulations conflict with the Change of Control provisions of
this Indenture, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under the
Change of Control provisions of this Indenture by virtue of compliance with such
securities laws and regulations.
(b) On the Change of Control Payment Date, the Company shall,
to the extent lawful:
73
(i) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer;
(ii) deposit with the Paying Agent an amount equal to the
Change of Control Payment in respect of all Notes or portions thereof
so tendered; and
(iii) deliver or cause to be delivered to the Trustee the
Notes so accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions thereof being purchased
by the Company.
(c) The Paying Agent shall promptly mail to each Holder of
Notes so tendered the Change of Control Payment for such Notes, and the Trustee
shall promptly authenticate and mail (or cause to be transferred by book entry)
to each Holder a new Note equal in principal amount to any unpurchased portion
of the Notes surrendered, if any; provided that each such new Note shall be in a
principal amount of $1,000 or an integral multiple thereof. Any Note so accepted
for payment shall cease to accrue interest on and after the Change of Control
Payment Date.
(d) The Company shall publicly announce the results of the
Change of Control Offer on or as soon as practicable after the Change of Control
Payment Date.
(e) Notwithstanding anything to the contrary in this Section
4.14, the Company shall not be required to make a Change of Control Offer upon a
Change of Control if (i) a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in this Section 4.14 and all other provisions of this Indenture applicable to a
Change of Control Offer made by the Company and purchases all Notes validly
tendered and not withdrawn under such Change of Control Offer or (ii) a notice
of redemption has been given for all of the Notes pursuant to Section 3.07,
unless and until there is a default in payment of the applicable redemption
price. A Change of Control Offer may be made in advance of a Change of Control,
conditional upon such Change of Control, if a definitive agreement is in place
for the Change of Control at the time of making the Change of Control Offer.
Notes repurchased pursuant to a Change of Control Offer will be retired and
cancelled.
Section 4.15. Limitation on Senior Subordinated Debt.
The Company shall not incur any Indebtedness that is
contractually subordinate or junior in right of payment to any Senior Debt of
the Company unless it is pari passu or contractually subordinate in right of
payment to the Notes. No Subsidiary Guarantor shall incur any Indebtedness that
is contractually subordinate or junior in right of payment to the Senior Debt of
such Subsidiary Guarantor unless it is pari passu or contractually subordinate
in right of payment to such Subsidiary Guarantor's Note Guarantee. For purposes
of the foregoing, no Indebtedness shall be deemed to be subordinated in right of
payment to any other Indebtedness of the Company or any Subsidiary Guarantor, as
applicable, solely by virtue of being unsecured or by virtue of the fact that
the holders of any secured Indebtedness have entered into intercreditor
agreements giving one or more of such holders priority over the other holders in
the collateral held by them.
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Section 4.16. Designation of Restricted and Unrestricted Subsidiaries.
The Board of Directors of the Company may designate any
Restricted Subsidiary to be an Unrestricted Subsidiary if that designation would
not cause a Default; provided that in no event shall there be any Unrestricted
Subsidiaries on or immediately following the date of this Indenture. If a
Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate
fair market value of all outstanding Investments owned by the Company and its
Restricted Subsidiaries in the Subsidiary so designated (after giving effect to
any sale of Equity Interests of such Subsidiary in connection with such
designation) shall be deemed to be a Restricted Investment made as of the time
of such designation and shall either reduce the amount available for Restricted
Payments under Section 4.07(a) or reduce the amount available for future
Investments under one or more clauses of the definition of "Permitted
Investments." That designation shall only be permitted if such Investment would
be permitted at that time and if such Restricted Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary. The Board of Directors of the Company
may at any time designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided that such designation shall be deemed to be an incurrence
of Indebtedness by a Restricted Subsidiary of the Company of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation shall only be
permitted if (1) such Indebtedness is permitted under Section 4.09, calculated
on a pro forma basis as if such designation had occurred at the beginning of the
four-quarter reference period; and (2) no Default or Event of Default would be
in existence following such designation.
Section 4.17. Payments for Consent.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration to or for the benefit of any Holder of Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Notes unless such consideration is offered to be paid
and is paid to all Holders of the Notes that consent, waive or agree to amend in
the time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
Section 4.18. Guarantees.
(a) If the Company or any of its Restricted Subsidiaries
acquires or creates another Domestic Subsidiary on or after the date of this
Indenture, then that newly acquired or created Domestic Subsidiary must become a
Guarantor and execute a supplemental indenture and deliver an Opinion of Counsel
to the Trustee within ten (10) Business Days of such acquisition or creation;
provided that no Domestic Subsidiary shall be required to become a Guarantor
solely as a result of the foregoing sentence so long as the total assets of all
Domestic Subsidiaries (other than Ames True Temper Properties Inc.) that are not
Guarantors, as reflected on their most recent balance sheets prepared in
accordance with GAAP, do not in the aggregate at any time exceed $2.0 million.
In addition, in the event that (i) a Default or Event of Default has occurred or
(ii) Ames True Temper Properties, Inc.'s total assets at any time exceed $5.0
million, as reflected on its most recent balance sheet prepared in accordance
with GAAP, then, in either event, Ames True Temper Properties, Inc. must become
a Guarantor and execute a supplemental indenture and deliver an Opinion of
Counsel to the Trustee within five Business
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Days of the date of such Default or Event of Default or the date of completion
of such balance sheet, as applicable.
(b) The Company shall not permit any of its Restricted
Subsidiaries (other than Ames True Temper Properties, Inc.), directly or
indirectly, to guarantee any other Indebtedness of the Company or any Restricted
Subsidiary thereof unless such Restricted Subsidiary is a Subsidiary Guarantor
or simultaneously executes and delivers a supplemental indenture providing for
the guarantee of the payment of the Notes by such Restricted Subsidiary;
provided, however, that the foregoing shall not apply to any Foreign Restricted
Subsidiary solely as a result of such Foreign Restricted Subsidiary guaranteeing
Indebtedness of any other Foreign Restricted Subsidiary. Such Note Guarantee
shall be senior to or pari passu with such Subsidiary's Guarantee of such other
Indebtedness unless such other Indebtedness is Senior Debt, in which case the
guarantee of the Notes may be subordinated to the guarantee of such Senior Debt
to the same extent as the Notes are subordinated to such Senior Debt.
(c) Notwithstanding Sections 4.18(a) and (b), any Note
Guarantee may provide by its terms that it will be automatically and
unconditionally released and discharged under the circumstances described under
Section 10.05 hereof.
ARTICLE FIVE
SUCCESSORS
Section 5.01. Merger, Consolidation or Sale of Assets.
(a) The Company shall not, directly or indirectly consolidate
or merge with or into another Person (whether or not the Company is the
surviving corporation), and the Company shall not, and shall not cause or permit
any Restricted Subsidiary to, sell, assign, transfer, convey (not including any
conveyance, if any, resulting solely from the creation of any Lien) or otherwise
dispose of all or substantially all of the properties or assets of the Company
and its Restricted Subsidiaries taken as a whole, in one or more related
transactions, to another Person (including by way of consolidation or merger),
unless:
(i) either: (a) the Company is the surviving corporation; or
(b) the Person formed by or surviving any such consolidation or merger
(if other than the Company) or to which such sale, assignment,
transfer, conveyance or other disposition shall have been made is a
corporation, limited liability company or partnership organized or
existing under the laws of the United States, any state thereof or the
District of Columbia; provided that if such Person is a limited
liability company or partnership, a co-obligor of the Notes is a
corporation;
(ii) the Person formed by or surviving any such consolidation
or merger (if other than the Company) or the Person to which such sale,
assignment, transfer, conveyance or other disposition shall have been
made assumes all the obligations of the Company under the Notes, the
Indenture and the Registration Rights Agreement, in each case pursuant
to agreements reasonably satisfactory to the Trustee;
(iii) immediately after giving effect to such transaction, no
Default or Event of Default exists;
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(iv) the Company or the Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such
sale, assignment, transfer, conveyance or other disposition shall have
been made, will, on the date of such transaction after giving pro forma
effect thereto and any related financing transactions as if the same
had occurred at the beginning of the applicable four-quarter period, be
permitted to incur at least $1.00 of additional Indebtedness pursuant
to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) or
if not, the Fixed Charge Coverage Ratio on such basis is equal to or
higher than the Fixed Charge Coverage Ratio immediately prior to such
transactions; and
(v) each Guarantor, unless such Guarantor is the Person with
which the Company has entered into a transaction under this Section
5.01, shall have by amendment to its Note Guarantee confirmed that its
Note Guarantee shall apply to the obligations of the Company or the
surviving Person in accordance with the Notes and this Indenture.
(b) In addition, the Company shall not, and shall not permit
any Restricted Subsidiary of the Company to, directly or indirectly, lease all
or substantially all of the properties or assets of the Company and its
Restricted Subsidiaries considered as a whole, in one or more related
transactions, to any other Person. Section 5.01 shall not apply to the
Transactions. Section 5.01(a)(iv) shall not apply to (i) a merger,
consolidation, amalgamation, sale, assignment, lease, transfer, conveyance or
other disposition of assets between or among the Company and any of its
Restricted Subsidiaries or (ii) any such transaction where the sole purpose and
effect is to reincorporate the Company or any of its Restricted Subsidiaries in
another jurisdiction of the United States.
Section 5.02. Successor Corporation Substituted.
Upon any consolidation, merger or amalgamation, or any sale,
assignment, transfer, lease, conveyance or other disposition of all or
substantially all of the assets of the Company in accordance with Section 5.01
hereof, the successor corporation formed by such consolidation or into or with
which the Company is merged or amalgamated or to which such sale, assignment,
transfer, conveyance or other disposition is made shall succeed to, and be
substituted for (so that from and after the date of such consolidation, merger,
amalgamation, sale, conveyance or other disposition, the provisions of this
Indenture referring to the "Company" shall refer instead to the successor
corporation and not to the Company), and is subject to every obligation and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein.
Upon such substitution, the Company, if surviving, shall be automatically
discharged from all Obligations under this Indenture and the Notes.
ARTICLE SIX
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
Each of the following is an "EVENT OF DEFAULT":
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(i) default for 30 consecutive days in the payment when due of
interest on, or Liquidated Damages with respect to, the Notes whether
or not prohibited by Article Twelve of this Indenture;
(ii) default in payment when due of the principal of, or
premium, if any, on the Notes, whether or not prohibited by Article
Twelve of this Indenture;
(iii) failure by the Company or any of its Restricted
Subsidiaries to comply with Sections 4.10, 4.14, 5.01 or 10.04(a);
(iv) failure by the Company or any of its Restricted
Subsidiaries for 45 days after notice by the Trustee or Holders of 25%
in principal amount of Notes then outstanding to comply with any of the
other agreements in this Indenture;
(v) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced
any Indebtedness for money borrowed by the Company, any of its
Restricted Subsidiaries that would constitute Significant Subsidiaries
(or any group of Restricted Subsidiaries that together would constitute
a Significant Subsidiary of the Company) or any Subsidiary Guarantor,
or the payment of which is Guaranteed by the Company or any of its
Significant Subsidiaries (or any group of Restricted Subsidiaries that
together would constitute a Significant Subsidiary of the Company) or
any Subsidiary Guarantor, whether such Indebtedness or Guarantee now
exists, or is created after the date of this Indenture, if that
default:
(A) is caused by a failure to make any payment when due
at the final maturity of such Indebtedness (a "PAYMENT
DEFAULT"); or
(B) results in the acceleration of such Indebtedness
prior to its express maturity;
and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under
which there has been a Payment Default or the maturity of which has
been so accelerated, aggregates $10.0 million or more;
(vi) failure by the Company or any of its Significant
Subsidiaries (or any group of Restricted Subsidiaries that together
would constitute a Significant Subsidiary of the Company) or any
Subsidiary Guarantor to pay final judgments (to the extent such
judgments are not paid or covered by an insurance carrier that has
acknowledged coverage in writing) aggregating in excess of $10.0
million, which judgments are not paid, discharged or stayed for a
period of 60 days after such judgments have become final and
non-appealable;
(vii) except as permitted by this Indenture, any Note
Guarantee by any Guarantor shall be held in any judicial proceeding to
be unenforceable or invalid or shall cease for any reason to be in full
force and effect or any Guarantor, or any Person acting on behalf of
any Guarantor, shall deny or disaffirm its obligations under its Note
Guarantee; and
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(viii) the Company or any of its Significant Subsidiaries (or
any group of Restricted Subsidiaries that, taken together, would
constitute a Significant Subsidiary) pursuant to or within the meaning
of Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against
it in an involuntary case,
(C) makes a general assignment for the benefit of its
creditors, or
(D) generally is not paying its debts as they become
due; and
(ix) a court of competent jurisdiction enters an order
or decree under any Bankruptcy Law that:
(A) is for relief against the Company or any of its
Significant Subsidiaries (or any group of Restricted
Subsidiaries that, taken together, would constitute a
Significant Subsidiary), in an involuntary case; or
(B) appoints a custodian of the Company or any of its
Significant Subsidiaries (or any group of Restricted
Subsidiaries that, taken together, would constitute a
Significant Subsidiary) or for all or substantially all of the
property of the Company or any of its Significant Subsidiaries
(or any group of Restricted Subsidiaries that, taken together,
would constitute a Significant Subsidiary); or
(C) orders the liquidation of the Company or any of its
Significant Subsidiaries (or any group of Restricted
Subsidiaries that, taken together, would constitute a
Significant Subsidiary);
and the order or decree remains unstayed and in effect for 60
consecutive days.
Section 6.02. Acceleration.
In the case of an Event of Default specified in clause (viii)
or (ix) of Section 6.01, with respect to the Company or any Significant
Subsidiary of the Company (or any group of Restricted Subsidiaries that, taken
together, would constitute a Significant Subsidiary), all outstanding Notes will
become due and payable immediately without further action or notice. If any
other Event of Default occurs and is continuing, the Trustee or the Holders of
at least 25% in principal amount of the then outstanding Notes may declare all
the Notes to be due and payable immediately by notice in writing to the Company
specifying the Event of Default; provided, however, that so long as any
Indebtedness permitted to be incurred pursuant to the Credit Agreement shall be
outstanding, that acceleration shall not be effective until the earlier of (1)
an acceleration of Indebtedness under the Credit Agreement; or (2) five Business
Days after receipt by the Company and the agent under the Credit Agreement of
written notice of the acceleration of the Notes. If any of Designated Senior
Debt is outstanding, the issuer may only pay amounts due on the Notes if
otherwise permitted by Section 12.03 of this Indenture.
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Section 6.03. Other Remedies.
(a) If an Event of Default occurs and is continuing, the
Trustee may pursue any available remedy at law and in equity to collect the
payment of principal, premium, if any, interest, and Liquidated Damages, if any,
with respect to, the Notes or to enforce the performance of any provision of the
Notes or this Indenture.
(b) 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 Holder of a Note in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
Section 6.04. Waiver of Past Defaults.
Holders of a majority in aggregate principal amount of the
Notes then outstanding by notice to the Trustee may, on behalf of the Holders of
all of the Notes, waive any existing Default or Event of Default and its
consequences hereunder except a continuing Default or Event of Default in the
payment of interest or Liquidated Damages on, or the principal of, the Notes. In
the event of a declaration of acceleration of the Notes because an Event of
Default described in clause (v) of Section 6.01 has occurred and is continuing,
the declaration of acceleration of the Notes shall be automatically annulled if
the event of default or Payment Default triggering such Event of Default
pursuant to clause (v) of Section 6.01 shall be remedied or cured by the Company
or a Restricted Subsidiary of the Company or waived by the holders of the
relevant Indebtedness within 20 days after the declaration of acceleration with
respect thereto and if (i) the annulment of the acceleration of the Notes would
not conflict with any judgment or decree of a court of competent jurisdiction
and (ii) all existing Events of Default, except nonpayment of principal, premium
or interest on the Notes that became due solely because of the acceleration of
the Notes, have been cured or waived.
The Company shall deliver to the Trustee an Officers'
Certificate stating that the requisite percentage of Holders have consented to
such waiver and attaching copies of such consents. In case of any such waiver,
the Company, the Trustee and the Holders shall be restored to their former
positions and rights hereunder and under the Notes, respectively. This Section
6.04 shall be in lieu of Section 316(a)(1)(B) of the TIA and such Section
316(a)(1)(B) of the TIA is hereby expressly excluded from this Indenture and the
Notes, as permitted by the TIA. Upon any such waiver, such Default shall cease
to exist, and any Event of Default arising therefrom shall be deemed to have
been cured for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereon.
Section 6.05. Control by Majority.
The Holders of a majority in principal amount of the then
outstanding Notes will have the right to direct the time, method and place of
conducting any proceeding for exercising any remedy available to the Trustee or
exercising any trust or power conferred to the Trustee. However, the Trustee
may, subject to Article Seven, refuse to follow any direction that conflicts
with law or this Indenture, that may involve the Trustee in personal liability,
or that the Trustee
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determines in good faith may be unduly prejudicial to the rights of Holders of
Notes not joining in the giving of such direction and may take any other action
it deems proper that is not inconsistent with any such direction received from
Holders of Notes.
Section 6.06. Limitation on Suits.
(a) A Holder may not pursue any remedy with respect to this
Indenture or the Notes unless:
(i) the Holder gives the Trustee written notice of a
continuing Event of Default;
(ii) the Holders of at least 25% in aggregate principal amount
of the then outstanding Notes make a written request to the Trustee to
pursue the remedy;
(iii) such Holder or Holders offer the Trustee indemnity
satisfactory to the Trustee against any costs, liability or expense;
(iv) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of indemnity; and
(v) during such 60-day period, the Holders of a majority in
aggregate principal amount of the then outstanding Notes do not give
the Trustee a direction that is inconsistent with the request.
(b) A Holder of a Note may not use this Indenture to prejudice
the rights of another Holder of a Note or to obtain a preference or priority
over another Holder of a Note.
Section 6.07. Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the
right of any Holder of a Note to receive payment of the principal of, premium or
Liquidated Damages, if any, or interest on, such Note or to bring suit for the
enforcement of any such payment, on or after the respective due date expressed
in the Notes, which right shall not be impaired or affected without the consent
of such Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(a)(i) or
(a)(ii) occurs and is continuing, the Trustee is authorized to recover judgment
in its own name and as trustee of an express trust against the Company for the
whole amount of principal of, premium, if any, interest, and Liquidated Damages,
if any, remaining unpaid on the Notes and interest on overdue principal and
premium, if any, and, to the extent lawful, interest and Liquidated Damages, if
any, and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
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Section 6.09. Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and
other papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel) and
the Holders of the Notes allowed in any judicial proceedings relative to the
Company or any Guarantor (or any other obligor upon the Notes), its creditors or
its property and shall be entitled and empowered to collect, receive and
distribute any money or other securities or property payable or deliverable on
any such claims and any custodian in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee, and in the event
that the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07. To the
extent that the payment of any such compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel and any other amounts due the
Trustee under Section 7.07 out of the estate in any such proceeding shall be
denied for any reason, payment of the same shall be secured by a Lien in
accordance with Section 7.07. Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf of
any Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder, or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
Section 6.10. Priorities.
(a) If the Trustee collects any money pursuant to this Article
Six, it shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts
due under Section 7.07, including payment of all compensation, expense
and liabilities incurred, and all advances made, by the Trustee and the
costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium, if any, interest and Liquidated Damages,
if any, ratably, without preference or priority of any kind, according
to the amounts due and payable on the Notes for principal, premium, if
any, interest, and Liquidated Damages, if any, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
(b) The Trustee may fix a record date and payment date for any
payment to Holders of Notes pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as a Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable
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attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder of
a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than ten
percent in principal amount of the then outstanding Notes.
ARTICLE SEVEN
TRUSTEE
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such rights and powers vested in it by this Indenture and
use the same degree of care and skill in such exercise as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee need perform only those duties that are
specifically set forth (or incorporated by reference) in this Indenture
and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, in the case of any such certificates or
opinions which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall examine such certificates
and opinions to determine whether or not they conform to the
requirements of this Indenture (but need not confirm or investigate the
accuracy of mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liabilities for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph (c) does not limit the effect of paragraph
(b) of this Section 7.01;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05, and the Trustee
shall be entitled from time to time to request such a direction.
(d) Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b) and (c) of this Section 7.01.
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(e) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or incur any liability. The Trustee shall be
under no obligation to exercise any of its rights and powers under this
Indenture at the request of any Holders, unless such Holder shall have offered
to the Trustee security and indemnity satisfactory to it against any loss,
costs, liability or expense that might be incurred by it in connection with the
request or direction.
(f) 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.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
Section 7.02. Certain Rights of Trustee. Subject to Section 7.01:
(a) The Trustee may conclusively rely on and shall be
protected in acting or refraining from acting upon any document (whether in its
original or facsimile form) believed by it to be genuine and to have been signed
or presented by the proper person. The Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture or other paper or document, but the Trustee in its
discretion may make such further inquiry into such facts or matters as it may
see fit. If the Trustee shall determine to make such further inquiry, it shall
be entitled to examine books, records and premises of the Company personally or
by agent or attorney.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may
consult with counsel and the advice of such counsel or any Opinion of Counsel
shall be full and complete authorization and protection from liability in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.
(e) [Intentionally Omitted]
(f) Unless otherwise specifically provided in this Indenture,
any demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company, and any resolution of the Board of
Directors shall be sufficient if evidenced by a copy of such resolution
certified by an Officer of the Company to have been duly adopted and in full
force and effect on the date of such Officer's Certificate.
(g) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such Holders
shall have offered to the Trustee security or indemnity
84
reasonably satisfactory to it against the costs, expenses and liabilities that
might be incurred by it in compliance with such request or direction.
(h) The Trustee shall not be deemed to have notice of any
Default or Event of Default unless a Responsible Officer of the Trustee has
actual knowledge thereof or unless written notice of any event which is in fact
such a default is received by the Trustee at the Corporate Trust Office of the
Trustee in accordance with Section 12.03, and such notice references the Notes
and this Indenture.
(i) The rights, privileges, protections, immunities and
benefits given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and to each agent, custodian and other Person
employed to act hereunder.
(j) The Trustee may request that the Company deliver an
Officers' Certificate setting forth the names of individuals and/or titles of
officers authorized at such time to take specified actions pursuant to this
Indenture, which Officers' Certificate may be signed by any person authorized to
sign an Officers' Certificate, including any person specified as so authorized
in any such certificate previously delivered and not superseded.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may become a creditor of, or otherwise deal
with, the Company or any of its Subsidiaries or Affiliates with the same rights
it would have if it were not Trustee. However, in the event that the Trustee
acquires any conflicting interest as described in the TIA (as in effect at such
time), it must eliminate such conflict within 90 days, apply to the SEC for
permission to continue as trustee or resign. Any Agent may do the same with like
rights and duties. The Trustee is also subject to Sections 7.10 and 7.11.
Section 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the Notes; it
shall not be accountable for the Company's use of the proceeds from the Notes,
it shall not be responsible for the use of application of any money received by
any Paying Agent (other than the Trustee in such capacity) and it shall not be
responsible for any statement in the Notes or any other document in connection
with the sale of the Notes other than its certificate of authentication.
Section 7.05. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and
if it is known to the Trustee, the Trustee shall mail to Holders of Notes a
notice of the Default or Event of Default within 90 days after it occurs. Except
in the case of a Default or Event of Default relating to the payment of
principal or interest or Liquidated Damages on any Note, the Trustee may
withhold the notice if and so long as the board of directors, executive
committee or a committee of its Responsible Officers in good faith determines
that withholding the notice is in the interests of the Holders of the Notes.
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Section 7.06. Reports by Trustee to Holders of the Notes.
(a) Within 60 days after each May 15 beginning with the May 15
following the date hereof, and for so long as Notes remain outstanding, the
Trustee shall mail to the Holders of the Notes a brief report dated as of such
reporting date that complies with TIA Section 313(a) (but if no event described
in TIA Section 313(a) has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also shall comply
with TIA Section 313(b)(2). The Trustee shall also transmit by mail all reports
as required by TIA Section 313(c).
(b) A copy of each report at the time of its mailing to the
Holders of Notes shall be mailed to the Company and filed with the SEC and each
stock exchange on which the Notes are listed in accordance with TIA Section
313(d). The Company shall promptly notify the Trustee if the Notes are listed on
any national securities exchange or any delisting thereof.
Section 7.07. Compensation and Indemnity.
(a) The Company and each Guarantor jointly and severally agree
to pay the Trustee from time to time such compensation as the Company and the
Trustee shall from time to time agree in writing for its services rendered by it
hereunder (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust). The Company and
each Guarantor jointly and severally agree to reimburse the Trustee upon request
for all reasonable out-of-pocket expenses, disbursements and advances incurred
by it. Such expenses may include the reasonable compensation and expenses of the
Trustee"s agents and counsel.
(b) The Trustee shall not be under any obligation to institute
any suit, or take any remedial action under this Indenture, or to enter any
appearance or in any way defend any suit in which it may be a defendant, or to
take any steps in the execution of the trusts created hereby or thereby or in
the enforcement of any rights and powers under this Indenture, until it shall be
indemnified by the Holders to its satisfaction against any and all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provisions of this Indenture, including compensation for
services, costs, expenses, outlays, counsel fees and other disbursements, and
against all liability not due to its negligence or willful misconduct. The
Company and each Guarantor jointly and severally agree to indemnify each of the
Trustee and any predecessor trustee and their agents for and to hold them
harmless against any and all loss, liability, damage, claim or expense,
including taxes (other than taxes based on the income of Trustee) incurred by it
in connection with the acceptance and administration of the trust and its duties
hereunder as Trustee, Registrar and/or Paying Agent including the costs and
expenses of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder. The
Trustee shall notify the Company and each of the Guarantors of any claim of
which the Trustee has received written notice and for which it may seek
indemnity; provided, however, unless the position of the Company is prejudiced
by such failure, the failure of the Trustee to promptly notify the Company shall
not limit its right to indemnification. The Company shall defend each such claim
and the Trustee shall cooperate in the defense. The Trustee may retain separate
counsel if the Trustee shall have been reasonably advised by such counsel that
there may be one or more legal defenses available to it that are
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different from or additional to those available to the Company and in the
reasonable judgment of such counsel it is advisable for the Trustee to employ
separate counsel, and the Company shall reimburse the Trustee for the reasonable
fees and expenses of such counsel. The Company need not pay for any settlement
made without its consent. Neither the Company nor any Guarantor shall be
obligated to reimburse any expense or indemnify against any loss or liability
determined by a court of competent jurisdiction to have been caused by the
Trustee through the Trustee's own negligence, willful misconduct or breach of
its duties under this Indenture.
(c) The obligations of the Company and each Guarantor under
this Section 7.07 shall survive the satisfaction and discharge of this Indenture
and resignation of removal of the Trustee.
(d) To secure the Company's payment obligations in this
Section 7.07, the Trustee shall have a Lien prior to the Notes on all money or
property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Notes. Such Lien shall survive the
satisfaction and discharge of this Indenture and resignation or removal of the
Trustee.
(e) When the Trustee incurs expenses or renders services after
an Event of Default specified in Section 6.01(a)(viii) and (ix) hereof occurs,
the expenses and the compensation for the services (including the fees and
expenses of its agents and counsel) are intended to constitute expenses of
administration under any Bankruptcy Law.
(f) The Trustee shall comply with the provisions of TIA
Section 313(b)(2) to the extent applicable.
Section 7.08. Replacement of Trustee.
(a) A resignation or removal of the Trustee and appointment of
a successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.08.
(b) The Trustee may resign in writing at any time and be
discharged from the trust hereby created by so notifying the Company. The
Holders of a majority in principal amount of the then outstanding Notes may
remove the Trustee by so notifying the Trustee and the Company in writing. The
Company may remove the Trustee if:
(i) the Trustee fails to comply with Section 7.10;
(ii) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(iii) a custodian, receiver or other public officer takes
charge of the Trustee or its property; or
(iv) the Trustee becomes incapable of acting as Trustee
hereunder.
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(c) If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, the Company shall promptly
appoint a successor Trustee. Within one year after the successor Trustee takes
office, the Holders of a majority in principal amount of the then outstanding
Notes may appoint a successor Trustee to replace the successor Trustee appointed
by the Company.
(d) If a successor Trustee does not take office within 30 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company, or the Holders of at least 10% in principal amount of the then
outstanding Notes may petition at the expense of the Company any court of
competent jurisdiction for the appointment of a successor Trustee.
(e) If the Trustee, after written request by any Holder who
has been a Holder for at least six months, fails to comply with Section 7.10,
any Holder may petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee. Any successor Trustee
shall comply with TIA Section 310(a)(5).
(f) 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 Holders. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, provided all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in Section
7.07. Notwithstanding replacement of the Trustee pursuant to this Section 7.08,
the Company's obligations under Section 7.07 shall continue for the benefit of
the retiring Trustee.
(g) If a Trustee is removed with or without cause, all fees
and expenses (including the reasonable fees and expenses of counsel) of the
Trustee incurred in the administration of the trust or in performing of the
duties hereunder shall be paid to the Trustee.
Section 7.09. Successor Trustee by Merger, Etc..
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
Person, the successor Person without any further act shall be the successor
Trustee; provided that such Person shall be otherwise eligible and qualified
under this Article.
Section 7.10. Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate trust powers, that is subject to supervision or examination by federal
or state authorities and that has a combined capital and surplus of at least
$50.0 million as set forth in its most recent published annual report of
condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2), (3) and (5). The Trustee is subject
to TIA Section 310(b).
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Section 7.11. Preferential Collection of Claims Against Company.
The Trustee is subject to TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein. The Trustee hereby waives any right to set off any claim that it may
have against the Company and/or any Guarantor in any capacity (other than as
Trustee and Paying Agent) against any of the assets of the Company and/or any
Guarantor held by the Trustee; provided, however, that if the Trustee is or
becomes a lender of any other Indebtedness permitted hereunder to be pari passu
with the Notes, then such waiver shall not apply to the extent of such
Indebtedness.
ARTICLE EIGHT
DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at the option of the Board of Directors
evidenced by a resolution set forth in an Officers' Certificate, at any time,
elect to have either Section 8.02 or 8.03 be applied to all outstanding Notes
and all obligations of any Guarantor upon compliance with the conditions set
forth below in this Article Eight.
Section 8.02. Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.02, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to
have been discharged from its obligations with respect to all outstanding Notes
and all obligations of the Guarantors shall be deemed to have been discharged
with respect to their obligations under the Note Guarantees on the date the
conditions set forth below are satisfied (hereinafter, "LEGAL DEFEASANCE"). For
this purpose, Legal Defeasance means that the Company and the Guarantors shall
be deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes and Note Guarantees, respectively, which shall thereafter be
deemed to be "outstanding" only for the purposes of Section 8.05 and the other
Sections of this Indenture referred to in (a) and (b) 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), except for the following provisions which
shall survive until otherwise terminated or discharged hereunder: (a) the rights
of Holders of outstanding Notes to receive solely from the trust fund described
in Section 8.04, and as more fully set forth in such Section, payments in
respect of the principal of, premium, if any, interest and Liquidated Damages,
if any, on such Notes when such payments are due, (b) the Company's obligations
with respect to such Notes under Article Two concerning issuing temporary Notes,
registration of Notes and mutilated, destroyed, lost or stolen Notes and the
Company's obligations under Section 4.02, (c) the rights, powers, trusts, duties
and immunities of the Trustee hereunder and the Company's and the Guarantors'
obligations in connection therewith and (d) this Article Eight. Subject to
compliance with this Article Eight, the Company may exercise its option under
this Section 8.02 notwithstanding the prior exercise of its option under Section
8.03 hereof.
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Section 8.03. Covenant Defeasance.
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.03, the Company and the Guarantors shall,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
be released from their obligations under the covenants contained in Sections
3.08, 4.03, 4.04, 4.05, 4.07 through 4.18, Article Five and Section 10.04 with
respect to the outstanding Notes on and after the date the conditions set forth
in Section 8.04 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). For this purpose, 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 by reason of any reference in
any such covenant to any other provision herein or in any other document and
such omission to comply shall not constitute a Default or an Event of Default
under Section 6.01, but, except as specified above, the remainder of this
Indenture and such Notes shall be unaffected thereby. In addition, upon the
Company's exercise under Section 8.01 of the option applicable to this Section
8.03, subject to the satisfaction of the conditions set forth in Section 8.04,
Sections 6.01(a)(iii) through (vii) shall not constitute Events of Default.
Section 8.04. Conditions to Legal or Covenant Defeasance.
(a) The following shall be the conditions to the application
of either Section 8.02 or 8.03 to the outstanding Notes:
(i) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders of the Notes, cash in U.S.
dollars, non-callable Government Securities, or a combination thereof,
in such amounts as will be sufficient, in the opinion of a nationally
recognized firm of independent public accountants, to pay the principal
of, or interest and premium and Liquidated Damages, if any, on the
outstanding Notes on the Stated Maturity or on the applicable
redemption date, as the case may be, and the Company must specify
whether the Notes are being defeased to maturity or to a particular
redemption date;
(ii) in the case of Legal Defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel reasonably acceptable to
the Trustee confirming that (a) the Company has received from, or there
has been published by, the Internal Revenue Service a ruling or (b)
since the date of this Indenture, there has been a change in the
applicable federal income tax law, in either case, to the effect that,
and based thereon such Opinion of Counsel shall confirm that, the
Holders of the outstanding Notes will not recognize income, gain or
loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such Legal Defeasance had not occurred;
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(iii) in the case of Covenant Defeasance, the Company shall
have delivered to the Trustee an Opinion of Counsel reasonably
acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such Covenant Defeasance and will be
subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
(iv) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event
of Default resulting from, or arising in connection with, the borrowing
of funds to be applied to such deposit);
(v) such Legal Defeasance or Covenant Defeasance will not
result in a breach or violation of, or constitute a default under any
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, including the Credit Agreement;
(vi) the Company must deliver to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders of Notes over the other creditors
of the Company with the intent of defeating, hindering, delaying or
defrauding creditors of the Company or others;
(vii) if the Notes are to be redeemed prior to their Stated
Maturity, the Company must deliver to the Trustee irrevocable
instructions to redeem all of the Notes on the specified redemption
date; and
(viii) the Company must deliver to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent relating to the Legal Defeasance or the Covenant Defeasance
have been complied with.
Section 8.05. Deposited Money and Government Securities to Be Held in Trust;
Other Miscellaneous Provisions.
(a) Subject to Section 8.06, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee pursuant to Section 8.04 in respect of the outstanding Notes shall be
held in trust and applied by the Trustee, in accordance with the provisions of
such Notes and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as Paying Agent) as the Trustee may
determine, to the Holders of such Notes of all sums due and to become due
thereon in respect of principal, premium and Liquidated Damages, if any, and
interest, but such money need not be segregated from other funds except to the
extent required by law.
(b) The Company shall pay and indemnify the Trustee against
any tax, fee or other charge imposed on or assessed against the cash or
non-callable Government Securities deposited pursuant to Section 8.04 or the
principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the Holders of the
outstanding Notes.
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(c) Anything in this Article Eight to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company from time to
time upon the request of the Company any money or non-callable Government
Securities held by it as provided in Section 8.04 which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.04(a)), 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 8.06. Repayment to the Company.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of, premium,
if any, interest, or Liquidated Damages, if any, on any Note and remaining
unclaimed for two years after such principal, and premium, if any, interest, or
Liquidated Damages, if any, has become due and payable shall promptly be paid to
the Company on its request or (if then held by the Company) shall be discharged
from such trust; and the Holder of such Note shall thereafter look only to the
Company for payment thereof as a general creditor unless an applicable abandoned
property law designated another person, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the Company
as trustee thereof, shall thereupon cease; provided, however, that the Trustee
or such Paying Agent, before being required to make any such repayment, may at
the reasonable expense of the Company cause to be published once, in the New
York Times and The Wall Street Journal (national edition), notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining shall be repaid to the Company.
Section 8.07. Reinstatement.
If the Trustee or Paying Agent is unable to apply any United
States dollars or non-callable Government Securities in accordance with Section
8.02 or 8.03, as the case may be, by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company's obligations under this Indenture and the
Notes shall be revived and reinstated as though no deposit had occurred pursuant
to Section 8.02 or 8.03 and, in the case of a Legal Defeasance, the Guarantors'
obligations under their respective Note Guarantees shall be revised and
reinstated as though no deposit had occurred pursuant to Section 8.02, in each
case until such time as the Trustee or Paying Agent is permitted to apply all
such money in accordance with Section 8.02 or 8.03, as the case may be;
provided, however, that, if the Company makes any payment of principal of,
premium, if any, or interest on any Note following 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 money held by the Trustee or Paying
Agent.
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ARTICLE NINE
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes.
(a) Notwithstanding Section 9.02, the Company, the Guarantors
and the Trustee may amend or supplement this Indenture or the Notes without the
consent of any Holder of a Note:
(i) to cure any ambiguity, defect or inconsistency;
(ii) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(iii) to provide for the assumption of the Company's or any
Guarantor's obligations to Holders of Notes in the case of a merger or
consolidation or sale of all or substantially all of the Company's or
such Guarantor's assets;
(iv) to make any change that would provide any additional
rights or benefits to the Holders of Notes or that does not adversely
affect the legal rights under this Indenture of any such Holder;
(v) to comply with requirements of the SEC in order to effect
or maintain the qualification of this Indenture under the TIA;
(vi) to provide for the issuance of Additional Notes in
accordance with this Indenture;
(vii) to add Guarantors with respect to the Notes or to secure
the Notes;
(viii) to provide for a successor trustee in accordance with
the terms of this Indenture or to otherwise comply with any requirement
of this Indenture;
(ix) to comply with the rules of any applicable securities
depositary; or
(x) to conform any provision of this Indenture or the Notes to
the text of the section of the Offering Memorandum entitled
"Description of Notes" to the extent that such provision was intended
to be a verbatim recitation of the text of the "Description of Notes."
Upon the request of the Company accompanied by a resolution of
its Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon receipt by the Trustee of any documents
requested under Section 7.02(b) hereof, the Trustee shall join with the Company
and any Guarantors in the execution of any amended or supplemental Indenture
authorized or permitted by the terms of this Indenture and to make any further
appropriate agreements and stipulations that may be therein contained, but the
Trustee shall not be obligated to enter into such amended or supplemental
Indenture that affects its own rights, duties or immunities under this Indenture
or otherwise.
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Section 9.02. With Consent of Holders of Notes.
(a) Except as otherwise provided in this Section 9.02, this
Indenture or the Notes may be amended or supplemented, with the consent of the
Company and the Holders of at least a majority in principal amount of the Notes
then outstanding (including, without limitation, consents obtained in connection
with a purchase of, or tender offer or exchange offer for, Notes), and, subject
to Sections 6.04 and 6.07, any existing Default or Event of Default or
noncompliance with any provision of this Indenture or the Notes may be waived
with the consent of the Holders of a majority in principal amount of the then
outstanding Notes (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for, Notes).
(b) The Company may, but shall not be obligated to, fix a
record date for the purpose of determining the Persons entitled to consent to
any indenture supplemental hereto. If a record date is fixed, the Holders on
such record date, or its duly designated proxies, and only such Persons, shall
be entitled to consent to such supplemental indenture, whether or not such
Holders remain Holders after such record date; provided that unless such consent
shall have become effective by virtue of the requisite percentage having been
obtained prior to the date which is 90 days after such record date, any such
consent previously given shall automatically and without further action by any
Holder be cancelled and of no further effect.
(c) Upon the request of the Company accompanied by a
resolution of its Board of Directors authorizing the execution of any such
amendment or supplement to this Indenture, and upon the filing with the Trustee
of evidence satisfactory to the Trustee of the consent of the Holders of Notes
as aforesaid, and upon receipt by the Trustee of the documents described in
Section 7.02(b), the Trustee shall join with the Company in the execution of
such amendment or supplement unless such amendment or supplement directly
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such amendment or supplement.
(d) It shall not be necessary for the consent of the Holders
of Notes under this Section 9.02 to approve the particular form of any proposed
amendment, supplement, waiver or consent, but it shall be sufficient if such
consent approves the substance thereof.
(e) After an amendment, supplement, waiver or consent under
this Section becomes effective, the Company shall mail to the Holders of Notes
affected thereby a notice briefly describing the amendment, supplement, waiver
or consent. Any failure of the Company to mail such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
such amendment, supplement, waiver or consent. Subject to Sections 6.04 and
6.07, the Holders of a majority in aggregate principal amount of the then
outstanding Notes (including Additional Notes, if any) may waive compliance in a
particular instance by the Company with any provision of this Indenture, or the
Notes. However, without the consent of the Company and each Holder affected, an
amendment or waiver under this Section 9.02 may not (with respect to any Notes
held by a non-consenting Holder):
(i) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
94
(ii) reduce the principal of or change the fixed maturity of
any Note or alter the provisions, or waive any payment, with respect to
the redemption of the Notes other than payment provisions relating to
Sections 4.10 and 4.14;
(iii) reduce the rate of or change the time for payment of
interest on any Note;
(iv) waive a Default or Event of Default in the payment of
principal of, or interest or premium, or Liquidated Damages, if any, on
the Notes (except a rescission of acceleration of the Notes by the
Holders of at least a majority in aggregate principal amount of the
Notes and a waiver of the payment default that resulted from such
acceleration);
(v) make any Note payable in money other than U.S. dollars;
(vi) make any change in the provisions of this Indenture
relating to waivers of past Defaults or the rights of Holders of Notes
to receive payments of principal of, or interest or premium or
Liquidated Damages, if any, on the Notes;
(vii) release any Guarantor from any of its obligations under
its Note Guarantee or this Indenture, except in accordance with the
terms of this Indenture;
(viii) impair the right to institute suit for the enforcement
of any payment on or with respect to the Notes or the Note Guarantees;
or
(ix) make any change in the preceding amendment and waiver
provisions.
In addition, any amendment to, or waiver of, the provisions of
Article Twelve hereof that adversely affects the rights of the Holders of the
Notes will require the consent of the Holders of at least 75% in aggregate
principal amount of Notes then outstanding.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes
shall be set forth in a document that complies with the TIA as then in effect.
Section 9.04. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder of a
Note and every subsequent Holder of a Note or portion of a Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
is not made on any Note. However, any such Holder of a Note or subsequent Holder
of a Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
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Section 9.05. Notation on or Exchange of Notes.
(a) The Trustee may place an appropriate notation about an
amendment, supplement or waiver on any Note thereafter authenticated. The
Company in exchange for all Notes may issue and the Trustee shall, upon receipt
of an Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
(b) Failure to make the appropriate notation or issue a new
Note shall not affect the validity and effect of such amendment, supplement or
waiver.
Section 9.06. Trustee to Sign Amendments, Etc.
The Trustee shall sign any amendment or supplement to this
Indenture or any Note authorized pursuant to this Article Nine if the amendment
or supplement does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. The Company may not sign an amendment or supplemental
Indenture or Note until its Board of Directors approves it. In executing any
amendment or supplement or Note, the Trustee shall be entitled to receive and
(subject to Section 7.01) shall be fully protected in relying upon an Officers'
Certificate and an Opinion of Counsel stating that the execution of such
amendment or supplement is authorized or permitted by this Indenture.
ARTICLE TEN
NOTE GUARANTEES
Section 10.01. Guarantee.
(a) Subject to this Article Ten, each of the Guarantors
hereby, jointly and severally, and fully and unconditionally, guarantees to each
Holder of a Note authenticated and delivered by the Trustee and to the Trustee
and its successors and assigns, irrespective of the validity and enforceability
of, this Indenture, the Notes or the obligations of the Company hereunder or
thereunder, that: (i) the principal of, premium, if any, and accrued and unpaid
interest and Liquidated Damages, if any, on the Notes will be promptly paid in
full when due, whether at maturity, by acceleration, redemption or otherwise,
and interest on the overdue principal of, premium, if any, and interest and
Liquidated Damages, if any, on the Notes (pursuant to Section 2.13), if lawful
(subject in all cases to any applicable grace period provided herein), and all
other obligations of the Company to the Holders or the Trustee hereunder or
thereunder will be promptly paid in full, 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 any of such other obligations, the same will be promptly
paid in full when due in accordance with the terms of the extension or renewal,
whether at stated maturity, by acceleration or otherwise. Failing payment when
due of any amount so guaranteed for whatever reason, the Guarantors shall be
jointly and severally obligated to pay the same immediately. Each Guarantor
agrees that this is a guarantee of payment and not a guarantee of collection.
(b) Each Guarantor hereby agrees that, to the maximum extent
permitted under applicable law, 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
96
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. Subject to
Section 6.06, each Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against the Company,
protest, notice and all demands whatsoever and covenants that this Note
Guarantee shall not be discharged except by complete performance of the
obligations contained in the Notes and this Indenture.
(c) If any Holder or the Trustee is required by any court or
otherwise to return to the Company, the Guarantors or any custodian, trustee,
liquidator or other similar official acting in relation to any of the Company or
the Guarantors, any amount paid by any of them to the Trustee or such Holder,
this Note Guarantee, to the extent theretofore discharged, shall be reinstated
in full force and effect.
(d) Each Guarantor agrees that it shall not be entitled to any
right of subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed hereby.
Each Guarantor further agrees that, as between the Guarantors, 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 Six for
the purposes of this Note 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 declaration of acceleration of
such obligations as provided in Article Six hereof, such obligations (whether or
not due and payable) shall forthwith become due and payable by the Guarantors
for the purpose of this Note Guarantee. The Guarantors shall have the right to
seek contribution from any non-paying Guarantor so long as the exercise of such
right does not impair the rights of the Holders under the Note Guarantee.
Section 10.02. Limitation on Guarantor Liability.
Each Guarantor, and by its acceptance of Notes, each Holder,
hereby confirms that it is the intention of all such parties that the Note
Guarantee of such Guarantor not constitute (i) a fraudulent transfer or
conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance
Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to
the extent applicable to its Note Guarantee or (ii) an unlawful distribution
under any applicable state law prohibiting distributions by an insolvent entity
to the extent applicable to its Note Guarantee. To effectuate the foregoing
intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree
that the obligations of such Guarantor will be limited to the maximum amount as
will, after giving effect to all other contingent and fixed liabilities of such
Guarantor that are relevant under such laws, and after giving effect to any
collections from, rights to receive contribution from or payments made by or on
behalf of any other Guarantor in respect of the obligations of such other
Guarantor under this Article Ten, result in the obligations of such Guarantor
under its Note Guarantee not constituting a fraudulent transfer or conveyance or
such an unlawful distribution.
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Section 10.03. Execution and Delivery of Note Guarantee.
(a) To evidence its Note Guarantee set forth in Section 10.01,
each Guarantor hereby agrees that a notation of such Note Guarantee
substantially in the form included in Exhibit E shall be endorsed by an Officer
of such Guarantor by manual or facsimile signature on each Note authenticated
and delivered by the Trustee and that this Indenture shall be executed on behalf
of such Guarantor by one of its Officers.
(b) Each Guarantor hereby agrees that its Note Guarantee set
forth in Section 10.01 shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Note Guarantee.
(c) If an Officer whose signature is on this Indenture or on
the Note Guarantee no longer holds that office at the time the Trustee
authenticates the Note on which a Note Guarantee is endorsed, the Note Guarantee
shall be valid nevertheless.
(d) The delivery of any Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the Note
Guarantee set forth in this Indenture on behalf of the Guarantors.
(e) If required by Section 4.18, the Company shall cause such
Subsidiaries to execute supplemental indentures to this Indenture and Note
Guarantees in accordance with Section 4.18 and this Article Ten, to the extent
applicable.
Section 10.04. Guarantors May Consolidate, Etc., on Certain Terms.
(a) A Guarantor may not sell or otherwise dispose of all or
substantially all of its assets to, or consolidate with or merge with or into
(whether or not such Guarantor is the surviving Person), another Person, other
than the Company or another Guarantor, unless:
(i) immediately after giving effect to that transaction, no
Default or Event of Default exists; and
(ii) either:
(A) the Person acquiring the property in any such sale
or disposition or the Person formed by or surviving any such
consolidation or merger (if other than the Guarantor) and
assumes all the obligations of that Guarantor under this
Indenture, its Note Guarantee and, if applicable, the
Registration Rights Agreement pursuant to a supplemental
indenture reasonably satisfactory to the Trustee; or
(B) in the case of a Subsidiary Guarantor, such sale or
other disposition or consolidation or merger complies with
Section 4.10.
(b) In case of any such consolidation, merger, sale or
conveyance and upon the assumption by the successor Person, by supplemental
indenture, executed and delivered to the Trustee and satisfactory in form to the
Trustee, of the Note Guarantee endorsed upon the
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Notes and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Parent Guarantor, such
successor Person shall succeed to and be substituted for the Parent Guarantor
with the same effect as if it had been named herein as a Guarantor. Such
successor Person thereupon may cause to be signed the Note Guarantee to be
endorsed upon all of the Notes issuable hereunder which theretofore shall not
have been signed by the Company and delivered to the Trustee. The Note Guarantee
so issued shall in all respects have the same legal rank and benefit under this
Indenture as the Note Guarantee theretofore and thereafter issued in accordance
with the terms of this Indenture as though the Note Guarantee had been issued at
the date of the execution hereof.
(c) Except as set forth in Article Five, and notwithstanding
clauses (i) and (ii) of Section 10.04(a), nothing contained in this Indenture or
in any of the Notes shall prevent any consolidation or merger of the Parent
Guarantor with or into the Company or another Guarantor, or shall prevent any
sale or conveyance of the property of the Parent Guarantor as an entirety or
substantially as an entirety to the Company or another Guarantor.
Section 10.05. Release of Guarantor.
(a) The Note Guarantee of a Subsidiary Guarantor shall be
released and relieved of any obligations under its Note Guarantee, (i) in
connection with any sale or other disposition of Capital Stock of such
Subsidiary Guarantor to a Person that is not (either before or after giving
effect to such transaction) a Restricted Subsidiary of the Company where, after
giving effect to such sale or other disposition, such Subsidiary Guarantor would
no longer constitute a Subsidiary of the Company, if such sale of Capital Stock
of that Guarantor complies with Section 4.10; (ii) if the Company properly
designates any Restricted Subsidiary that is a Subsidiary Guarantor as an
Unrestricted Subsidiary under this Indenture; or (iii) solely in the case of a
Note Guarantee created pursuant to Section 4.18(b), upon the release or
discharge of the Guarantee which resulted in the creation of such Note Guarantee
pursuant to Section 4.18(b), except a discharge or release by or as a result of
payment under such Guarantee. Upon delivery by the Company to the Trustee of an
Officers' Certificate to the effect that one of the foregoing requirements has
been satisfied and the conditions to the release of a Subsidiary Guarantor under
this Section 10.05 have been met, the Trustee shall execute any documents
reasonably required in order to evidence the release of such Subsidiary
Guarantor from its obligations under its Note Guarantee, subject to the right of
the Trustee, in its discretion, to request an Opinion of Counsel pursuant to
Section 7.02(b).
(b) Any Guarantor not released from its obligations under its
Note Guarantee shall remain liable for the full amount of principal of and
accrued and unpaid interest and Liquidated Damages, if any, on the Notes and for
the other obligations of any Guarantor under this Indenture as provided in this
Article Ten.
Section 10.06. Subordination of Note Guarantee.
Payments under the Note Guarantees of each Guarantor shall be
subordinated to the prior payment in full of all Senior Debt of such Guarantor,
including Senior Debt of such Guarantor incurred after the date of this
Indenture, on the same basis as the payments by the Company on the Notes are
subordinated to the prior payment in full of Senior Debt of the
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Company. For the purposes of the foregoing sentence, the Trustee and the Holders
shall have the right to receive and/or retain payments by any of the Guarantors
only at such times as they may receive and/or retain payments in respect of the
Notes pursuant to this Indenture, including Article Twelve.
ARTICLE ELEVEN
SATISFACTION AND DISCHARGE
Section 11.01. Satisfaction and Discharge.
(a) This Indenture shall be discharged and shall cease to be
of further effect as to all Notes issued hereunder, when:
(i) either:
(A) all Notes that have been authenticated (except lost,
stolen or destroyed Notes that have been replaced or paid and
Notes for whose payment money has theretofore been deposited
in trust and thereafter repaid to the Company) have been
delivered to the Trustee for cancellation; or
(B) all Notes that have not been delivered to the
Trustee for cancellation have become due and payable by reason
of the making of a notice of redemption or otherwise or will
become due and payable within one year, including as a result
of a redemption notice properly given pursuant to this
Indenture, and the Company or any Guarantor has irrevocably
deposited or caused to be deposited with the Trustee as trust
funds in trust solely for the benefit of the Holders, cash in
U.S. dollars, non-callable Government Securities, or a
combination thereof, in such amounts as will be sufficient
without consideration of any reinvestment of interest, to pay
and discharge the entire indebtedness on the Notes not
delivered to the Trustee for cancellation for principal,
premium and Liquidated Damages, if any, and accrued interest
to the date of maturity or redemption;
(ii) no Default or Event of Default 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 or any Guarantor is a party or by which the Company or any
Guarantor is bound; and
(iii) the Company has delivered irrevocable instructions to
the Trustee under this Indenture to apply the deposited money toward
the payment of the Notes at maturity or on the redemption date, as the
case may be.
(b) In addition, the Company must deliver an Officers'
Certificate and an Opinion of Counsel to the Trustee stating that all conditions
precedent to satisfaction and discharge have been satisfied.
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(c) Notwithstanding the above, the Trustee shall pay to the
Company from time to time upon its request any cash or Government Securities
held by it as provided in this section which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification delivered to the Trustee, are in excess of the amount thereof that
would then be required to be deposited to effect a satisfaction and discharge
under this Article Eleven.
(d) After the conditions to discharge contained in this
Article Eleven have been satisfied, and the Company has paid or caused to be
paid all other sums payable hereunder by the Company, and delivered to the
Trustee an Officers' Certificate and Opinion of Counsel, each stating that all
conditions precedent to satisfaction and discharge have been satisfied, the
Trustee upon written request shall acknowledge in writing the discharge of the
obligations of the Company and the Guarantors under this Indenture (except for
those surviving obligations specified Section 11.01).
Section 11.02. Deposited Money and Government Securities to Be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 11.03 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee pursuant to Section 11.01 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium and Liquidated Damages, if
any, and interest, but such money need not be segregated from other funds except
to the extent required by law.
Section 11.03. Repayment to the Company.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of, premium
and Liquidated Damages, if any, or interest on any Note and remaining unclaimed
for two years after such principal, and premium or Liquidated Damages, if any,
or interest has become due and payable shall promptly be paid to the Company on
its request or (if then held by the Company) shall be discharged from such
trust; and the Holder of such Note shall thereafter look only to the Company for
payment thereof as a general creditor unless an applicable abandoned property
law designated another person, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the New York Times or The
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining shall be repaid to the Company.
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ARTICLE TWELVE
SUBORDINATION
Section 12.01. Agreement to Subordinate.
The Company agrees, and each Holder 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 Twelve, to the
prior payment in full in cash or Cash Equivalents (which for purposes hereof
excludes any Cash Equivalents specified in clause (8) of the definition of Cash
Equivalents) of all Senior Debt of the Company, including Senior Debt of the
Company incurred, created, assumed or guaranteed after the date hereof.
Section 12.02. Liquidation; Dissolution; Bankruptcy.
The holders of Senior Debt of the Company shall be entitled to
receive payment in full in cash or Cash Equivalents (which for the purposes
hereof excludes any Cash Equivalents specified in clause (8) of the definition
of Cash Equivalents) of all Obligations due in respect of Senior Debt of the
Company (including interest after the commencement of any bankruptcy proceeding
at the rate specified in the documentation for the applicable Senior Debt of the
Company) before the Holders of Notes shall be entitled to receive any payment
with respect to the Notes (except that Holders of Notes may receive and retain
Permitted Junior Securities and payments made from the trust pursuant to Article
Eight hereof), in the event of any distribution to creditors of the Company in
(a) any liquidation or dissolution of the Company; (b) any bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to the
Company or its property; (c) any assignment by the Company for the benefit of
its creditors; or (d) any marshaling of the Company's assets and liabilities.
Section 12.03. Default on Designated Senior Debt.
The Company shall not make any payment in respect of the Notes
(except in Permitted Junior Securities or from the trust pursuant to Article
Eight hereof) if:
(a) a payment default on Designated Senior Debt of the Company
occurs and is continuing; or
(b) any other default (a "NONPAYMENT DEFAULT") occurs and is
continuing on any series of Designated Senior Debt of the Company that
permits holders of that series of Designated Senior Debt of the Company
to accelerate its maturity and the Trustee receives a notice of such
default (a "PAYMENT BLOCKAGE NOTICE") from a representative of the
holders of such Designated Senior Debt of the Company.
(c) Payments on the Notes may and shall be resumed:
(i) in the case of a payment default on Designated
Senior Debt of the Company, upon the date on which such
default is cured or waived; and
(ii) in case of a non-payment default on Designated
Senior Debt of the Company, the earlier of (x) the date on
which such default is cured or waived,
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(y) 179 days after the date on which the applicable Payment
Blockage Notice is received or (z) the date the Trustee
receives notice from the representative for such Designated
Senior Debt rescinding the Payment Blockage Notice, unless the
maturity of such Designated Senior Debt of the Company has
been accelerated.
(d) No new Payment Blockage Notice may be delivered unless and
until:
(i) 360 days have elapsed since the delivery of the
immediately prior Payment Blockage Notice; and
(ii) all scheduled payments of principal, interest and
premium and Liquidated Damages, if any, on the Notes that have
come due have been paid in full in cash.
(e) No non-payment default that existed or was continuing on
the date of delivery of any Payment Blockage Notice to the Trustee
shall be, or be made, the basis for a subsequent Payment Blockage
Notice unless such default has been cured or waived for a period of not
less than 90 days.
(f) If the Trustee or any Holder of the Notes receives a
payment in respect of the Notes (except in Permitted Junior Securities
or from the trust described under Article Eight hereof) when (i) the
payment is prohibited by this Article Twelve and (ii) the Trustee or
the Holder has actual knowledge that the payment is prohibited,
provided that such actual knowledge shall not be required in the case
of any payment default on Designated Senior Debt of the Company, the
Trustee or the Holder, as the case may be, shall hold the payment in
trust for the benefit of the holders of Senior Debt of the Company.
Upon the proper written request of the holders of Senior Debt of the
Company or if there is any payment default on any Designated Senior
Debt, the Trustee or the Holder, as the case may be, shall deliver the
amounts in trust to the holders of Senior Debt of the Company or their
proper Representative.
Section 12.04. Acceleration of Notes.
If payment of the Notes is accelerated because of an Event of
Default, the Company and the Trustee shall promptly notify holders of Senior
Debt of the Company of the acceleration.
Section 12.05. When Distribution Must Be Paid Over.
In the event that the Trustee or any Holder receives any
payment of any Obligations with respect to the Notes (except in Permitted Junior
Securities or from the trust pursuant to Article Eight hereof) at a time when
the Trustee or such Holder, as applicable, has actual knowledge that such
payment is prohibited by Article Twelve, such payment shall be held by the
Trustee or such Holder, as applicable, in trust for the benefit of, and shall be
paid forthwith over and delivered, upon written request, to the holders of
Senior Debt as their interests may appear or their Representative under this
Indenture or other agreement (if any) pursuant to which Senior Debt may have
been issued, as their respective interests may appear, for application to the
payment of all Obligations with respect to Senior Debt remaining unpaid to the
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extent necessary to pay such Obligations in full in accordance with their terms,
after giving effect to any concurrent payment or distribution to or for the
holders of Senior Debt.
With respect to the holders of Senior Debt, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article Twelve, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt, and shall not be liable to any
such holders if the Trustee shall pay over or distribute to or on behalf of
Holders or the Company or any other Person money or assets to which any holders
of Senior Debt shall be entitled by virtue of this Article Twelve, except if
such payment is made as a result of the willful misconduct or negligence of the
Trustee.
Section 12.06. Notice by the Company.
The Company shall promptly notify the Trustee and the Paying
Agent in writing of any facts known to the Company that would cause a payment of
any Obligations with respect to the Notes to violate this Article Twelve, but
failure to give such notice shall not affect the subordination of the Notes to
the Senior Debt as provided in this Article Twelve.
Section 12.07. Subrogation.
After all Senior Debt is paid in full and until the Notes are
paid in full, Holders of Notes shall be subrogated (equally and ratably with all
other Indebtedness pari passu with the Notes) to the rights of holders of Senior
Debt to receive distributions applicable to Senior Debt to the extent that
distributions otherwise payable to the Holders of Notes have been applied to the
payment of Senior Debt. A distribution made under this Article Twelve to holders
of Senior Debt that otherwise would have been made to Holders of Notes is not,
as between the Company and Holders, a payment by the Company on the Notes.
Section 12.08. Relative Rights.
This Article Twelve defines the relative rights of Holders of
Notes and holders of Senior Debt. Nothing in this Indenture shall:
(a) impair, as between the Company and Holders of Notes, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Notes in accordance with their terms;
(b) affect the relative rights of Holders of Notes and
creditors of the Company other than their rights in relation to holders
of Senior Debt; or
(c) prevent the Trustee or any Holder of Notes from exercising
its available remedies upon a Default or Event of Default, subject to
the rights of holders and owners of Senior Debt to receive
distributions and payments otherwise payable to Holders of Notes.
If the Company fails because of this Article Twelve to pay
principal of or interest on a Note on the due date, the failure is still a
Default or Event of Default.
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Section 12.09. Subordination May Not Be Impaired by the Company.
No right of any holder of Senior Debt 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 any Holder or by the failure of the
Company or any Holder to comply with this Indenture.
Section 12.10. Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to
holders of Senior Debt, the distribution may be made and the notice given to
their Representative.
Upon any payment or distribution of assets of the Company
referred to in this Article Twelve, the Trustee and the Holders of Notes shall
be entitled to rely upon any order or decree made by any court of competent
jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders of Notes for the purpose of ascertaining the Persons
entitled to participate in such distribution, the holders of the Senior Debt and
other Indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article Twelve.
Section 12.11. Rights of Trustee and Paying Agent.
Notwithstanding this Article Twelve or any other provision of
this Indenture, the Trustee shall not be charged with knowledge of the existence
of any facts that would prohibit the making of any payment or distribution by
the Trustee, and the Trustee and the Paying Agent may continue to make payments
on the Notes, unless the Trustee shall have received at its Corporate Trust
Office at least five Business Days prior to the date of such payment written
notice of facts that would cause the payment of any Obligations with respect to
the Notes to violate this Article Twelve. Only the Company or a Representative
may give the notice. Nothing in this Article Twelve shall impair the claims of,
or payments to, the Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold
Senior Debt with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights.
Section 12.12. Authorization to Effect Subordination.
Each Holder of Notes, by the Holder's acceptance thereof,
authorizes and directs the Trustee on such Holder's behalf to take such action
as may be necessary or appropriate to effectuate the subordination as provided
in this Article Twelve, and appoints the Trustee to act as such Holder's
attorney-in-fact for any and all such purposes. If the Trustee does not file a
proper proof of claim or proof of debt in the form required in any proceeding
referred to in Section 6.09 hereof at least 30 days before the expiration of the
time to file such claim, the lenders under the Credit Agreement are hereby
authorized to file an appropriate claim for and on behalf of the Holders of the
Notes.
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ARTICLE THIRTEEN
MISCELLANEOUS
Section 13.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or
conflicts with another provision which is required to be included in this
Indenture by the TIA, the required provision shall control. Any provision of the
TIA which is required to be included in a qualified indenture, but not expressly
included herein, shall be deemed to be included by this reference.
Section 13.02. Notices.
(a) Any notice or communication by the Company or any
Guarantor, on the one hand, or the Trustee on the other hand, to the other is
duly given if in writing and delivered in Person or mailed by first class mail
(registered or certified, return receipt requested), telecopier or overnight air
courier guaranteeing next day delivery, to the others' address:
If to the Company and/or any Guarantor:
Ames True Temper, Inc.
465 Railroad Avenue
Camp Hill, Pennsylvania 17011
Facsimile: (717) 737-1500
Attention: Chief Financial Officer
with a copy to:
Schulte Roth & Zabel LLP
919 Third Avenue
New York, New York 10022
Facsimile: (212) 593-5955
Attention: Michael R. Littenberg
If to the Trustee:
The Bank of New York
101 Barclay Street, 8 West
New York, NY 10286
Facsimile: (212) 815-5704
Attention: Corporate Trustee Administration
(b) The Company, the Guarantors or the Trustee, by notice to
the others may designate additional or different addresses for subsequent
notices or communications.
(c) All notices and communications (other than those sent to
Holders) shall be deemed to have been duly given: at the time delivered by hand,
if personally delivered; five
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Business Days after being deposited in the mail, postage prepaid, if mailed;
when receipt acknowledged, if telecopied; and the next Business Day after timely
delivery to the courier, if sent by overnight air courier guaranteeing next day
delivery.
(d) Any notice or communication to a Holder shall be mailed by
first class mail, certified or registered, return receipt requested, or by
overnight air courier guaranteeing next day delivery to its address shown on the
register kept by the Registrar. Any notice or communication shall also be so
mailed to any Person described in TIA Section 313(c), to the extent required by
the TIA. Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders.
(e) Where this Indenture provides for notice in any manner,
such notice may be waived in writing by the Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance on such waiver.
(f) In case by reason of the suspension of regular mail
service or by reason of any other cause it shall be impracticable to give such
notice by mail, then such notification as shall be made with the approval of the
Trustee shall constitute a sufficient notification for every purpose hereunder.
(g) If a notice or communication is mailed in the manner
provided above within the time prescribed, it is duly given, whether or not the
addressee receives it.
(h) If the Company mails a notice or communication to Holders,
it shall mail a copy to the Trustee and each Agent at the same time.
Section 13.03. Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA Section 312(b) with
other Holders with respect to their rights under this Indenture or the Notes.
The Company, the Trustee, the Registrar and any other Person shall have the
protection of TIA Section 312(c).
Section 13.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee
to take any action under this Indenture (other than in connection with the
Exchange Offer, unless required by the TIA), the Company shall furnish to the
Trustee:
(i) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 13.05 hereof) stating that, in the opinion of the
signers, all conditions precedent and covenants, if any, provided for
in this Indenture relating to the proposed action have been satisfied;
and
(ii) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 13.05 hereof) stating
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that, in the opinion of such counsel (who may rely upon an Officers'
Certificate as to matters of fact), all such conditions precedent and
covenants have been satisfied.
Section 13.05. Statements Required in Certificate or Opinion.
(a) Each certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture (other than a
certificate provided pursuant to TIA Section 314(a)(4)) shall comply with the
provisions of TIA Section 314(e) and shall include:
(i) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(ii) 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;
(iii) a statement that, in the opinion of such Person, he or
she 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
(iv) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with.
Section 13.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
Section 13.07. No Personal Liability of Directors, Officers, Employees and
Stockholders.
No past, present or future director, officer, employee,
manager, incorporator, stockholder, agent or member (or Person forming any
limited liability company) of the Company or any Guarantor, as such, shall have
any liability for any obligations of the Company or any Guarantor under the
Notes, this Indenture, any Note Guarantee or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of Notes by
accepting a Note and a Note Guarantee waives and releases all such liability.
This waiver and release are part of the consideration for issuance of the Notes
and the Note Guarantees. The waiver may not be effective to waive liabilities
under the federal securities laws.
Section 13.08. Governing Law.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES.
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Section 13.09. Consent to Jurisdiction.
Any legal suit, action or proceeding arising out of or based
upon this Indenture or the transactions contemplated hereby ("RELATED
PROCEEDINGS") may be instituted in the federal courts of the United States of
America located in the City of New York or the courts of the State of New York
in each case located in the City of New York (collectively, the "SPECIFIED
COURTS"), and each party irrevocably submits to the non-exclusive jurisdiction
of such courts in any such suit, action or proceeding. Service of any process,
summons, notice or document by mail (to the extent allowed under any applicable
statute or rule of court) to such party's address set forth above shall be
effective service of process for any suit, action or other proceeding brought in
any such court. The parties irrevocably and unconditionally waive any objection
to the laying of venue of any suit, action or other proceeding in the Specified
Courts and irrevocably and unconditionally waive and agree not to plead or claim
in any such court has been brought in an inconvenient forum.
Section 13.10. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other
indenture, loan or debt agreement of the Company or any of its Subsidiaries or
of any other Person. Any such indenture, loan or debt agreement may not be used
to interpret this Indenture.
Section 13.11. Successors.
All agreements of the Company in this Indenture and the Notes
shall bind its successors. All agreements of the Trustee in this Indenture shall
bind its successors. All agreements of each Guarantor in this Indenture shall
bind such Guarantor's successors, except as otherwise provided in Section 10.04.
Section 13.12. Severability.
In case any provision in this Indenture or the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 13.13. Counterpart 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.
Section 13.14. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent, waiver or
other action provided by this Indenture to be given or taken by the Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agents duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes
109
referred to as the "ACT" of the Holders signing such instrument or instruments.
Proof of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Indenture and conclusive in
favor of the Trustee and the Company if made in the manner provided in this
Section 13.14.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to such witness, notary or officer the
execution thereof. Where such execution is by a signer acting in a capacity
other than his individual capacity, such certificate or affidavit shall also
constitute sufficient proof of authority. The fact and date of the execution of
any such instrument or writing, or the authority of the Person executing the
same, may also be proved in any other manner which the Trustee deems sufficient.
(c) Notwithstanding anything to the contrary contained in this
Section 13.14, the principal amount and serial numbers of Notes held by any
Holder, and the date of holding the same, shall be proved by the register of the
Notes maintained by the Registrar as provided in Section 2.04.
(d) If the Company shall solicit from the Holders of the Notes
any request, demand, authorization, direction, notice, consent, waiver or other
Act, the Company may, at its option, by or pursuant to a resolution of its Board
of Directors, fix in advance a record date for the determination of Holders
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company shall have no obligation to do so.
Notwithstanding TIA Section 316(c), such record date shall be the record date
specified in or pursuant to such resolution, which shall be a date not earlier
than the date 30 days prior to the first solicitation of Holders generally in
connection therewith or the date of the most recent list of Holders forwarded to
the Trustee prior to such solicitation pursuant to Section 2.06 and not later
than the date such solicitation is completed. If such a record date is fixed,
such request, demand, authorization, direction, notice, consent, waiver or other
Act may be given before or after such record date, but only the Holders of
record at the close of business on such record date shall be deemed to be
Holders for the purposes of determining whether Holders of the requisite
proportion of the then outstanding Notes have authorized or agreed or consented
to such request, demand, authorization, direction, notice, consent, waiver or
other Act, and for that purpose the then outstanding Notes shall be computed as
of such record date; provided that no such authorization, agreement or consent
by the Holders on such record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later than
eleven months after the record date.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Note shall bind every future
Holder of the same Note and the Holder of every Note issued upon the
registration or transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Note.
110
(f) Without limiting the foregoing, a Holder entitled
hereunder to take any action hereunder with regard to any particular Note may do
so itself with regard to all or any part of the principal amount of such Note or
by one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such principal amount.
Section 13.15. Benefit of Indenture.
Nothing in this Indenture, the Notes or the Note Guarantees,
express or implied, shall give to any Person, other than the parties hereto, any
Paying Agent, any Registrar and its successors hereunder, and the Holders, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 13.16. Table of Contents, Headings, Etc.
The Table of Contents, Cross-Reference Table and Headings of
the Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part of this Indenture and shall
in no way modify or restrict any of the terms or provisions hereof.
[SIGNATURE PAGES FOLLOW]
111
IN WITNESS WHEREOF, the parties have executed this Indenture
as of the date first written above.
AMES TRUE TEMPER, INC., a Delaware
corporation
By: /s/ Judy Schuchart
--------------------------------
Name: Judy Schuchart
Title: Chief Financial Officer
ATT HOLDING CO., a Delaware corporation
By: /s/ Judy Schuchart
--------------------------------
Name: Judy Schuchart
Title: Chief Financial Officer
THE BANK OF NEW YORK, as Trustee
By: /s/ Van K. Brown
--------------------------------
Name: Van K. Brown
Title: Vice President
EXHIBIT A
[Face of Note]
[THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.07(a) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.12 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO
A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.]
[THIS NOTE AND THE GUARANTEE ENDORSED HEREON HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. NEITHER THIS NOTE NOR THE GUARANTEE ENDORSED HEREON NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION
OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS NOTE AND THE GUARANTEE
ENDORSED HEREON, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF
THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE AND THE GUARANTEE ENDORSED
HEREON (OR ANY PREDECESSOR OF THIS NOTE AND THE GUARANTEE ENDORSED HEREON) (THE
"RESALE RESTRICTION TERMINATION DATE") ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY
THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND
THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO
CLAUSE (D) PRIOR TO THE END OF THE 40 DAY DISTRIBUTION COMPLIANCE PERIOD WITHIN
THE MEANING OF REGULATION S
A-1
UNDER THE SECURITIES ACT OR PURSUANT TO CLAUSE (E) PRIOR TO THE RESALE
RESTRICTION TERMINATION DATE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (ii) IN
EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE
FORM APPEARING ON THIS NOTE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE
RESALE RESTRICTION TERMINATION DATE.]
[THE RIGHTS ATTACHING TO THIS REGULATION S GLOBAL NOTE, AND THE CONDITIONS AND
PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE NOTES, ARE AS SPECIFIED IN THE
INDENTURE (AS DEFINED HEREIN)].
A-2
CUSIP
No. **$ **
------------
AMES TRUE TEMPER, INC.
10% SENIOR SUBORDINATED NOTES DUE 2012
Issue Date:
Ames True Temper, Inc., a Delaware corporation (the "COMPANY,"
which term includes any successor under the Indenture hereinafter referred to),
for value received, promises to pay to CEDE & CO., or its registered assigns,
the principal sum of ONE HUNDRED FIFTY MILLION DOLLARS ($150,000,000) on July
15, 2012.
Interest Payment Dates: January 15 and July 15, commencing January 15, 2005.
Record Dates: January 1 and July 1.
Reference is hereby made to the further provisions of this
Note set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
[SIGNATURE PAGE FOLLOWS]
[ATTACH NOTATION OF GUARANTEE FOR EACH GUARANTOR]
A-3
IN WITNESS WHEREOF, the Company has caused this Note to be
signed manually or by facsimile by its duly authorized officer.
AMES TRUE TEMPER, INC., a Delaware
corporation
By:
--------------------------------
Name:
Title:
A-4
(Trustee's Certificate of Authentication)
This is one of the 10% Senior Subordinated Notes due 2012 described in the
within-mentioned Indenture.
Dated: [ ], 200[]
THE BANK OF NEW YORK,
as Trustee
By:
-----------------------------------
Authorized Signatory
A-5
[Reverse Side of Note]
AMES TRUE TEMPER, INC.
10% Senior Subordinated Notes due 2012
Capitalized terms used herein shall have the meanings assigned
to them in the Indenture referred to below unless otherwise indicated.
1. Interest. The Company promises to pay interest on the
principal amount of this Note at the rate of 10% per
annum from the date hereof until maturity and shall pay
the Liquidated Damages, if any, payable pursuant to
Section 5 of the Registration Rights Agreement referred
to below. The Company shall pay interest and Liquidated
Damages, if any, semi-annually in arrears on January 15
and July 15 of each year, or if any such day is not a
Business Day, on the next succeeding Business Day (each
an "INTEREST PAYMENT DATE"). Interest on the Notes shall
accrue from the most recent date to which interest has
been paid or, if no interest has been paid, from the
date of original issuance; provided that if there is no
existing Default in the payment of interest, and if this
Note is authenticated between a record date referred to
on the face hereof and the next succeeding Interest
Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; provided further that
the first Interest Payment Date shall be January 15,
2005. The Company shall pay interest (including
post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal from time to time
on demand at the rate equal to the then applicable
interest rate on the Notes to the extent lawful; it
shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue
installments of interest and Liquidated Damages (without
regard to any applicable grace periods) at the same rate
and at the same times to the extent lawful. Interest
shall be computed on the basis of a 360-day year of
twelve 30-day months.
2. Method of Payment. The Company shall pay interest on the
Notes (except defaulted interest) and Liquidated
Damages, if any, to the Persons who are registered
Holders of Notes at the close of business on the record
date immediately preceding the Interest Payment Date,
even if such Notes are canceled after such record date
and on or before such Interest Payment Date, except as
provided in Section 2.13 of the Indenture with respect
to defaulted interest. If a Holder has given wire
transfer instructions to the Company, the Company shall
pay all principal, interest and premium and Liquidated
Damages, if any, on that Holder's Notes in accordance
with those instructions. All other payments on Notes
shall be made at the office or agency of the Paying
Agent and Registrar within the City and State of New
York unless the Company elects to make interest payments
by check mailed to the Holders at their addresses set
forth in the register of
A-6
Holders. Such payment shall be in such coin or currency
of the United States of America as at the time of
payment is legal tender for payment of public and
private debts.
3. Paying Agent and Registrar. Initially, the Trustee under
the Indenture shall act as Paying Agent and Registrar.
The Company may change any Paying Agent or Registrar
without prior notice to any Holder. The Company or any
of its Subsidiaries may act in any such capacity.
4. Indenture. The Company issued the Notes under an
Indenture dated as of June 28, 2004 ("INDENTURE") among
the Company, the Parent Guarantor and the Trustee. 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, as amended. The Notes are
subject to all such terms, and Holders are referred to
the Indenture and such Act for a statement of such
terms. To the extent any provision of this Note
conflicts with the express provisions of the Indenture,
the provisions of the Indenture shall govern and be
controlling. The Indenture pursuant to which this Note
is issued provides that an unlimited aggregate principal
amount of Additional Notes may be issued thereunder.
5. Optional Redemption. (a) Except as set forth in
paragraph 5(b) below, the Company shall not have the
option to redeem the Notes prior to July 15, 2008. On or
after July 15, 2008, the Company may redeem all or part
of the Notes upon not less than 30 nor more than 60
days' notice mailed to each Holder of the Notes being
redeemed, at the redemption prices (expressed as
percentages of principal amount) set forth below plus
accrued and unpaid interest and Liquidated Damages, if
any, thereon to the applicable redemption date, if
redeemed during the twelve-month period beginning on
July 15 of the years indicated below:
Year Percentage
2008................................................ 105.000%
2009................................................ 102.500%
2010 and thereafter................................. 100.000%
(b) At any time prior to July 15, 2007, the Company may,
on any one or more occasions, redeem up to 35% of the
aggregate principal amount of Notes issued under the
Indenture at a redemption price of 110.000% of the
principal amount thereof, plus accrued and unpaid
interest and Liquidated Damages, if any, thereon to the
applicable redemption date, with the net cash proceeds
of one or more Equity Offerings of the Company (or any
Parent to the extent such proceeds are contributed to
the common equity of the Company); provided that (1) at
least 65% of the aggregate principal amount of Notes
initially issued under the Indenture remains outstanding
immediately after the occurrence of such redemption,
excluding Notes held by the Company and its
Subsidiaries; and (2) the redemption must
A-7
occur within 90 days of the date of the closing of such
Equity Offering (or, in the case of any Equity Offering
by any Parent, the contribution to the Company).
6. Repurchase at Option of Holder. (a) If a Change of
Control occurs, each Holder of Notes shall have the
right to require the Company to repurchase all or any
part (equal to $1,000 or an integral multiple thereof)
of that Holder's Notes pursuant to an offer by the
Company (a "CHANGE OF CONTROL OFFER") at an offer price
(a "CHANGE OF CONTROL PAYMENT") in cash equal to 101% of
the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages, if any, thereon,
to the date of purchase. Within 30 days following any
Change of Control, the Company shall mail a notice to
each Holder describing the transaction or transactions
that constitute the Change of Control and offering to
repurchase Notes on a date specified in such notice (the
"CHANGE OF CONTROL PAYMENT DATE"), which shall be no
earlier than 30 days and no later than 60 days from the
date such notice is mailed, pursuant to the procedures
required by the Indenture and described in such notice.
(b) On or prior to the 366th day following the receipt
of any Net Proceeds from an Asset Sale, the Company or
such Restricted Subsidiary may apply such Net Proceeds
at its option: (1) (A) to repay or prepay Senior Debt or
(B) in the case where the property or asset that was the
subject of such Asset Sale is encumbered by a Lien of
the type described in the definition of the term
"Permitted Lien," repay the Permitted Indebtedness that
was secured by such Lien; (2) to purchase Replacement
Assets or make a capital expenditure (or enter into a
legally binding agreement to do so) that is used or
useful in a Permitted Business; or (3) any combination
of the foregoing. Pending the final application of any
such Net Proceeds, the Company or any Restricted
Subsidiary may temporarily reduce revolving credit
borrowings or otherwise invest such Net Proceeds in any
manner that is not prohibited by the Indenture.
(c) Any Net Proceeds from Asset Sales that are not
applied or invested as provided in the preceding
paragraph shall constitute "EXCESS PROCEEDS." Within 10
days after the aggregate amount of Excess Proceeds
exceeds $15.0 million, the Company shall make an offer
(an "ASSET SALE OFFER") to all Holders of Notes and all
holders of other Indebtedness that is pari passu with
the Notes or any Note Guarantee containing provisions
similar to those set forth in this Indenture with
respect to offers to purchase with the proceeds of sales
of assets, to purchase the maximum principal amount of
Notes and such other pari passu Indebtedness that may be
purchased out of the Excess Proceeds. The offer price in
any Asset Sale Offer shall be equal to 100% of the
principal amount of the Notes and such other pari passu
Indebtedness plus accrued and unpaid interest and
Liquidated Damages, if any, on the Notes and any pari
passu Indebtedness, to the date of purchase, and shall
be payable in cash. If any
A-8
Excess Proceeds remain after consummation of an Asset
Sale Offer, the Company may use such Excess Proceeds for
any purpose not otherwise prohibited by the Indenture.
If the aggregate principal amount of Notes and such
other pari passu Indebtedness tendered into such Asset
Sale Offer exceeds the amount of Excess Proceeds, the
Notes and such other pari passu Indebtedness shall be
purchased on a pro rata basis based on the principal
amount of Notes and such other pari passu Indebtedness
tendered. Upon completion of each Asset Sale Offer, the
amount of Excess Proceeds shall be reset at zero.
7. Denominations, Transfer, Exchange. The Notes are in
registered form without coupons in minimum denominations
of $1,000 and integral multiples of $1,000 in excess
thereof. The transfer of Notes may be registered and
Notes may be exchanged as provided in the Indenture. The
Registrar and the Trustee may require a Holder, among
other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder
to pay any taxes and fees required by law or permitted
by the Indenture. The Company is not required to
transfer or exchange any Note selected for redemption.
Also, the Company is not required to transfer or
exchange any Note (1) for a period of 15 days before a
selection of Notes to be redeemed or (2) tendered and
not withdrawn in connection with a Change of Control
Offer or an Asset Sale Offer. Transfer may be restricted
as provided in the Indenture.
8. Persons Deemed Owners. The registered Holder of a Note
will be treated as its owner for all purposes.
9. Amendment, Supplement and Waiver. Subject to certain
exceptions, the Indenture or the Notes may be amended or
supplemented with the consent of the Company and the
Holders of at least a majority in principal amount of
the Notes then outstanding (including, without
limitation, consents obtained in connection with a
purchase of, or tender offer or exchange offer for,
Notes), and, subject to certain limitations, any
existing default or non-compliance with any provision of
the Indenture or the Notes may be waived with the
consent of the Holders of a majority in principal amount
of the then outstanding Notes (including, without
limitation, consents obtained in connection with a
purchase of, or tender offer or exchange offer for,
Notes). Without the consent of any Holder of a Note, the
Indenture or the Notes may be amended or supplemented
to, among other things, cure any ambiguity, defect or
inconsistency, or make any change that does not
adversely affect the legal rights under the Indenture of
any such Holder.
10. Defaults and Remedies. In the case of an Event of
Default arising from events of bankruptcy or insolvency
specified in clause (viii) or (ix) of Section 6.01 of
the Indenture, with respect to the Company or any
Significant Subsidiary of the Company (or any group of
Restricted
A-9
Subsidiaries that, taken together, would constitute a
Significant Subsidiary), all outstanding Notes will
become due and payable immediately without further
action or notice. If any other Event of Default occurs
and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the then outstanding
Notes may declare all the Notes to be due and payable
immediately by notice in writing to the Company
specifying the Event of Default; provided, however, that
so long as any Indebtedness permitted to be incurred
pursuant to the Credit Agreement shall be outstanding,
that acceleration shall not be effective until the
earlier of (1) an acceleration of Indebtedness under the
Credit Agreement; and (2) five Business Days after
receipt by the Company and the agent under the Credit
Agreement of written notice of the acceleration of the
Notes. Holders of the Notes may not enforce the
Indenture or the Notes except as provided in the
Indenture. Subject to certain limitations, Holders of a
majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Holders of
the Notes notice of any Default or Event of Default
(except a Default or Event of Default relating to the
payment of principal or interest or Liquidated Damages)
if and so long as a committee of its Responsible
Officers in good faith determines that withholding the
notice is in the interests of the Holders of the Notes.
If certain conditions are satisfied, Holders of a
majority in aggregate principal amount of the Notes then
outstanding by notice to the Trustee may on behalf of
the Holders of all of the Notes waive any existing
Default or Event of Default and its consequences under
the Indenture, except a continuing Default or Event of
Default in the payment of interest or Liquidated Damages
on, or the principal of, the Notes. In the event of a
declaration of acceleration of the Notes because an
Event of Default described in clause (v) of Section 6.01
of the Indenture has occurred and is continuing, the
declaration of acceleration of the Notes shall be
automatically annulled if the event of default or
Payment Default triggering such Event of Default
pursuant to clause (v) of Section 6.01 of the Indenture
shall be remedied or cured by the Company or a
Restricted Subsidiary of the Company or waived by the
holders of the relevant Indebtedness within 20 days
after the declaration of acceleration with respect
thereto and if (i) the annulment of the acceleration of
the Notes would not conflict with any judgment or decree
of a court of competent jurisdiction and (ii) all
existing Events of Default, except nonpayment of
principal, premium or interest on the Notes that became
due solely because of the acceleration of the Notes,
have been cured or waived.
11. Trustee Dealings with Company. The Trustee in its
individual or any other capacity may become the owner or
pledgee of Notes and may become a creditor of, or
otherwise deal with the Company or any of its
Affiliates, with the same rights it would have if it
were not Trustee.
A-10
12. No Recourse Against Others. No past, present or future
director, officer, employee, manager, incorporator,
stockholder, agent or member (or Person forming any
limited liability company) of the Company or any
Guarantor, as such, shall have any liability for any
obligations of the Company or any Guarantor under the
Notes, the Indenture, any Note Guarantee or for any
claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Notes by
accepting a Note and a Note Guarantee waives and
releases all such liability. This waiver and release are
part of the consideration for issuance of the Notes and
the Note Guarantees. The waiver may not be effective to
waive liabilities under the federal securities laws.
13. Authentication. This Note shall not be valid until
authenticated by the manual signature of the Trustee or
an authenticating agent.
14. Additional Rights of Holders of Restricted Global Notes
and Restricted Definitive Notes. In addition to the
rights provided to Holders under the Indenture, Holders
of Restricted Global Notes and Restricted Definitive
Notes shall have all the rights set forth in the
Registration Rights Agreement dated as of the date of
the Indenture, by and among the Company, the Parent
Guarantor and the parties named on the signature pages
thereof, as such agreement may be amended, modified or
supplemented from time to time and, with respect to any
Additional Notes, one or more registration rights
agreements between the Company and the other parties
thereto, as such agreement(s) may be amended, modified
or supplemented from time to time, relating to rights
given by the Company to the purchasers of Additional
Notes to register such Additional Notes under the
Securities Act (the "REGISTRATION RIGHTS AGREEMENT").
15. 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 and the Trustee shall use CUSIP
numbers in notices of redemption as a convenience to
Holders. No representation is made as to the correctness
or accuracy of such numbers either as printed on the
Notes or as contained in any notice of redemption and
reliance may be placed only on the other identification
numbers placed thereon.
16. Guarantee. The Company's obligations under the Notes are
fully and unconditionally guaranteed by the Parent
Guarantor.
17. Copies of Documents. The Company shall furnish to any
Holder upon written request and without charge a copy of
the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
A-11
Ames True Temper, Inc.
465 Railroad Avenue
Camp Hill, Pennsylvania 17011
Attention: Chief Financial Officer
A-12
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to:
-----------------------------------
(INSERT ASSIGNEE'S LEGAL NAME)
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
---------------------------------------------------------
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date:
-------------------
Your Signature:
---------------------------------
(Sign exactly as your name appears
on the face of this Note)
Signature Guarantee*:
----------------------
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-13
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the
Company pursuant to Section 4.10 or 4.14 of the Indenture, check the appropriate
box below:
[ ] Section 4.10 [ ] Section 4.14
If you want to elect to have only part of the Note purchased
by the Company pursuant to Section 4.10 or Section 4.14 of the Indenture, state
the amount you elect to have purchased:
$
-----------------
Date:
-------------------
Your Signature:
---------------------------------
(Sign exactly as your name appears
on the face of this Note)
Tax Identification No.:
-------------------------
Signature Guarantee*:
----------------------
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-14
[TO BE INSERTED FOR RULE 144A GLOBAL NOTE]
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following exchanges of a part of this Global Note for an
interest in another Global Note or for a Definitive Note, or exchanges of a part
of another Global Note or Definitive Note for an interest in this Global Note,
have been made:
Principal Amount at
Amount of Decrease in Amount of Increase in Maturity Signature of
Principal Amount at Principal Amount at of this Global Note Authorized Officer
Maturity Maturity Following such of Trustee or
Date of Exchange of this Global Note of this Global Note decrease (or increase) Custodian
---------------- ---------------------- ------------------- ---------------------- ------------------
[TO BE INSERTED FOR REGULATION S GLOBAL NOTE]
SCHEDULE OF EXCHANGES OF REGULATION S GLOBAL NOTE
The following exchanges of a part of this Regulation S Global
Note for an interest in another Global Note or of other Restricted Global Notes
for an interest in this Regulation S Global Note, have been made:
Principal Amount at
Amount of Decrease in Amount of Increase in Maturity Signature of
Principal Amount at Principal Amount at of this Global Note Authorized Officer
Maturity Maturity Following such of Trustee or
Date of Exchange of this Global Note of this Global Note decrease (or increase) Custodian
---------------- ------------------- ------------------- ------------------- ------------------
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Ames True Temper, Inc.
465 Railroad Avenue
Camp Hill, Pennsylvania 17011
Attention: Chief Financial Officer
The Bank of New York
101 Barclay Street, 8 West
New York, NY 10286
Attention: Corporate Trust Administration
Re: 10% Senior Subordinated Notes due 2012
Reference is hereby made to the Indenture, dated as of June
28, 2004 (the "INDENTURE"), among Ames True Temper, Inc., a Delaware corporation
(the "Company"), the Parent Guarantor, and The Bank of New York, a New York
banking corporation, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
___________________ (the "TRANSFEROR") owns and proposes to
transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in
the principal amount at maturity of $___________ in such Note[s] or interests
(the "TRANSFER"), to ___________________________ (the "TRANSFEREE"), as further
specified in Annex A hereto. In connection with the Transfer, the Transferor
hereby certifies that:
[CHECK ALL THAT APPLY]
[ ] 1. Check if Transferee will take delivery of a beneficial
interest in the 144A Global Note or a Definitive Note Pursuant to Rule 144A. The
Transfer is being effected pursuant to and in accordance with Rule 144A under
the Securities Act of 1933, as amended (the "SECURITIES ACT"), and, accordingly,
the Transferor hereby further certifies that the beneficial interest or
Definitive Note is being transferred to a Person that the Transferor reasonably
believed and believes is purchasing the beneficial interest or Definitive Note
for its own account, or for one or more accounts with respect to which such
Person exercises sole investment discretion, and such Person and each such
account is a "qualified institutional buyer" within the meaning of Rule 144A in
a transaction meeting the requirements of Rule 144A and such Transfer is in
compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.
[ ] 2. Check if Transferee will take delivery of a beneficial
interest in a Legended Regulation S Global Note, or a Definitive Note pursuant
to Regulation S. The Transfer is being effected pursuant to and in accordance
with Rule 903 or Rule 904 under the
B-1
Securities Act and, accordingly, the Transferor hereby further certifies that
(i) the Transfer is not being made to a person in the United States and (x) at
the time the buy order was originated, the Transferee was outside the United
States or such Transferor and any Person acting on its behalf reasonably
believed and believes that the Transferee was outside the United States or (y)
the transaction was executed in, on or through the facilities of a designated
offshore securities market and neither such Transferor nor any Person acting on
its behalf knows that the transaction was prearranged with a buyer in the United
States, (ii) no directed selling efforts have been made in contravention of the
requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities
Act, (iii) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act and (iv) the transfer is not
being made to a U.S. Person or for the account or benefit of a U.S. Person
(other than an Initial Purchaser). Upon consummation of the proposed transfer in
accordance with the terms of the Indenture, the transferred beneficial interest
or Definitive Note will be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the Legended Regulation S Global Note
and/or the Definitive Note and in the Indenture and the Securities Act.
[ ] 3. Check and complete if Transferee will take delivery of a
Restricted Definitive Note pursuant to any provision of the Securities Act other
than Rule 144, Rule 144A or Regulation S. The Transfer is being effected in
compliance with the transfer restrictions applicable to beneficial interests in
Restricted Global Notes and Restricted Definitive Notes and pursuant to and in
accordance with the Securities Act and any applicable blue sky securities laws
of any state of the United States, and accordingly the Transferor hereby further
certifies that (check one):
[ ] (a) such Transfer is being effected to the Company or a
subsidiary thereof; or
[ ] (b) such Transfer is being effected to an Institutional
Accredited Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A, Rule 144 or Rule 904,
and the Transferor hereby further certifies that it has not engaged in any
general solicitation within the meaning of Regulation D under the Securities Act
and the Transfer complies with the transfer restrictions applicable to
Restricted Definitive Notes and the requirements of the exemption claimed, which
certification is supported by (1) a certificate executed by the Transferee in
the form of Exhibit D to the Indenture and (2) an Opinion of Counsel provided by
the Transferor or the Transferee (a copy of which the Transferor has attached to
this certification), to the effect that such Transfer is in compliance with the
Securities Act. Upon consummation of the proposed transfer in accordance with
the terms of the Indenture, the transferred Definitive Note will be subject to
the restrictions on transfer enumerated in the Private Placement Legend printed
on the Definitive Notes and in the Indenture and the Securities Act.
4. Check if Transferee will take delivery of a beneficial
interest in an Unrestricted Global Note or of an Unrestricted Definitive Note.
[ ] (a) Check if Transfer is Pursuant to Rule 144. (i) The
Transfer is being effected pursuant to and in accordance with Rule 144 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the
B-2
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes, on Restricted Definitive Notes and in the Indenture.
[ ] (b) Check if Transfer is Pursuant to Regulation S. (i) The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of any
state of the United States and, in the case of a transfer from a Restricted
Global Note or a Restricted Definitive Note, the Transferor hereby further
certifies that (a) the Transfer is not being made to a person in the United
States and (x) at the time the buy order was originated, the Transferee was
outside the United States or such Transferor and any Person acting on its behalf
reasonably believed and believes that the Transferee was outside the United
States or (y) the transaction was executed in, on or through the facilities of a
designated offshore securities market and neither such Transferor nor any Person
acting on its behalf knows that the transaction was prearranged with a buyer in
the United States, (b) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S
under the Securities Act, (c) the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities Act and (d) the transfer
is not being made to a U.S. Person or for the account or benefit of a U.S.
Person, and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.
[ ] (c) Check if Transfer is Pursuant to Other Exemption. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
B-3
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.
Dated:
------------------------------------
------------------------------------
[Insert Name of Transferor]
By:
-------------------------------
Name:
Title:
B-4
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
[ ] (a) a beneficial interest in the:
(i) 144A Global Note (CUSIP __________); or
(ii) Regulation S Global Note (CUSIP __________); or
[ ] (b) a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
[ ] (a) a beneficial interest in the:
(i) 144A Global Note (CUSIP __________); or
(ii) Regulation S Global Note (CUSIP __________); or
(iii) Unrestricted Global Note (CUSIP __________); or
[ ] (b) a Restricted Definitive Note; or
[ ] (c) an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-5
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Ames True Temper, Inc.
465 Railroad Avenue
Camp Hill, Pennsylvania 17011
Attention: Chief Financial Officer
The Bank of New York
101 Barclay Street, 8 West
New York, NY 10286
Attention: Corporate Trust Administration
Re: 10% Senior Subordinated Notes due 2012
Reference is hereby made to the Indenture, dated as of June
28, 2004 (the "INDENTURE"), among Ames True Temper, Inc., a Delaware corporation
(the "COMPANY"), the Parent Guarantor and The Bank of New York, a New York
banking corporation, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
__________________________ (the "OWNER") owns and proposes to
exchange the Note[s] or interest in such Note[s] specified herein, in the
principal amount at maturity of $____________ in such Note[s] or interests (the
"EXCHANGE"). In connection with the Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Definitive Notes or Beneficial
Interests in a Restricted Global Note for Unrestricted Definitive Notes or
Beneficial Interests in an Unrestricted Global Note
[ ] (a) Check if Exchange is from beneficial interest in a
Restricted Global Note to beneficial interest in an Unrestricted Global Note. In
connection with the Exchange of the Owner's beneficial interest in a Restricted
Global Note for a beneficial interest in an Unrestricted Global Note in an equal
principal amount at maturity, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer, (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to the Global Notes and pursuant to and in accordance with the United
States Securities Act of 1933, as amended (the "SECURITIES ACT"), (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the beneficial interest in an Unrestricted Global Note is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
[ ] (b) Check if Exchange is from beneficial interest in a
Restricted Global Note to Unrestricted Definitive Note. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for an
Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the
C-1
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.
[ ] (c) Check if Exchange is from Restricted Definitive Note to
beneficial interest in an Unrestricted Global Note. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
[ ] (d) Check if Exchange is from Restricted Definitive Note to
Unrestricted Definitive Note. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. Exchange of Restricted Definitive Notes or Beneficial
Interests in Restricted Global Notes for Restricted Definitive Notes or
Beneficial Interests in Restricted Global Notes
[ ] (a) Check if Exchange is from beneficial interest in a
Restricted Global Note to Restricted Definitive Note. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for a
Restricted Definitive Note with an equal principal amount at maturity, the Owner
hereby certifies that the Restricted Definitive Note is being acquired for the
Owner's own account without transfer. Upon consummation of the proposed Exchange
in accordance with the terms of the Indenture, the Restricted Definitive Note
issued will continue to be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the Restricted Definitive Note and in
the Indenture and the Securities Act.
[ ] (b) Check if Exchange is from Restricted Definitive Note to
beneficial interest in a Restricted Global Note. In connection with the Exchange
of the Owner's Restricted Definitive Note for a beneficial interest in the
[CHECK ONE]:
[ ] 144A Global Note,:
[ ] Regulation S Global Note,:
C-2
with an equal principal amount at maturity, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer and (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Notes and pursuant to
and in accordance with the Securities Act, and in compliance with any applicable
blue sky securities laws of any state of the United States. Upon consummation of
the proposed Exchange in accordance with the terms of the Indenture, the
beneficial interest issued will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the relevant Restricted
Global Note and in the Indenture and the Securities Act.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.
Dated:
------------------------------------
------------------------------------------
[Insert Name of Transferor]
By:
---------------------------------------
Name:
Title:
C-3
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Ames True Temper, Inc.
465 Railroad Avenue
Camp Hill, Pennsylvania 17011
Attention: Chief Financial Officer
The Bank of New York
101 Barclay Street, 8 West
New York, NY 10286
Attention: Corporate Trust Administration
Re: 10% Senior Subordinated Notes due 2012
Reference is hereby made to the Indenture, dated as of June
28, 2004 (the "INDENTURE"), among Ames True Temper, Inc., a Delaware corporation
(the "COMPANY"), the Parent Guarantor and The Bank of New York, a New York
banking corporation, as trustee (the "TRUSTEE"). Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
In connection with our proposed purchase of $____________
aggregate principal amount of:
(a) [ ] beneficial interest in a Global Note, or
(b) [ ] a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or
any interest therein is subject to certain restrictions and conditions set forth
in the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the Securities Act of
1933, as amended (the "SECURITIES ACT").
2. We understand that the offer and sale of the Notes have not
been registered under the Securities Act, and that the Notes and any interest
therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell the Notes or any
interest therein, we shall do so only (A) to the Company or any subsidiary
thereof, (B) in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (C) 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 you and to the
Company a signed letter substantially in the form of this letter and an Opinion
of Counsel in form reasonably acceptable to the Company to the effect that such
transfer is in compliance with
D-1
the Securities Act, (D) outside the United States in accordance with Rule 904 of
Regulation S under the Securities Act, (E) pursuant to the provisions of Rule
144(k) under the Securities Act or (F) pursuant to an effective registration
statement under the Securities Act, and we further agree to provide to any
person purchasing the Definitive Note or beneficial interest in a Global Note
from us in a transaction meeting the requirements of clauses (A) through (E) of
this paragraph a notice advising such purchaser that resales thereof are
restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Notes, and
we and any accounts for which we are acting are acquiring the Notes for
investment purposes and not with a view to, or offer of sale in connection with,
any distribution in violation of the Securities Act, and we are each able to
bear the economic risk of our or its investment.
5. We are acquiring the Notes or beneficial interest therein
purchased by us for our own 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.
The Trustee 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.
Dated:
------------------- ---------------------------------------
[Insert Name of Accredited Investor]
By:
------------------------------------
Name:
Title:
D-2
EXHIBIT E
FORM OF NOTATION OF GUARANTEE
For value received, each Guarantor (which term includes any
successor Person under the Indenture) has, jointly and severally,
unconditionally guaranteed, to the extent set forth in and subject to the
provisions in the Indenture dated as of June 28, 2004 (the "INDENTURE") among
Ames True Temper, Inc., a Delaware corporation, ATT Holding Co., a Delaware
corporation, and The Bank of New York, a New York banking corporation, as
trustee (the "TRUSTEE"), (a) prompt payment of the principal of, premium, if
any, and accrued and unpaid interest and Liquidated Damages, if any, on the
Notes (as defined in the Indenture) when due, whether at maturity, by
acceleration, redemption or otherwise, and the prompt payment of interest on
overdue principal, premium, if any, and interest and Liquidated Damages, if any,
on the Notes (pursuant to Section 2.13 of the Indenture), if lawful (subject in
all cases to any applicable grace periods provided in the Indenture and the
Notes) when due, and all other obligations of the Company to the Holders or the
Trustee under the Indenture and the Notes will be promptly paid in full, all in
accordance with the terms of the Indenture and the Notes and (b) in case of any
extension of time of payment or renewal of any Notes or any of such other
obligations, the same will be promptly paid in full when due in accordance with
the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise. The obligations of the Guarantors to the Holders of
Notes and to the Trustee pursuant to the Note Guarantee and the Indenture are
expressly set forth in Article Ten of the Indenture and reference is hereby made
to the Indenture for the precise terms of the Note Guarantee. Each Holder of a
Note, by accepting the same, agrees to and shall be bound by such provisions.
[SIGNATURE PAGE FOLLOWS]
E-1
IN WITNESS HEREOF, each Guarantor has caused this Notation of
Guarantee to be signed manually or by facsimile by its duly authorized officer.
[NAME OF GUARANTOR]
E-2
EXHIBIT F
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS
Supplemental Indenture (this "SUPPLEMENTAL INDENTURE"), dated
as of _____________, among __________________ (the "GUARANTEEING SUBSIDIARY"), a
subsidiary of Ames True Temper, Inc., a Delaware corporation (or its permitted
successor) (the "COMPANY"), and The Bank of New York, a New York banking
corporation (or its permitted successor), as trustee under the Indenture
referred to below (the "TRUSTEE").
W I T N E S S E T H
WHEREAS, the Company and ATT Holding Co. have heretofore
executed and delivered to the Trustee an indenture (the "INDENTURE"), dated as
of June 28, 2004 providing for the issuance of the Company's 10% Senior
Subordinated Notes due 2012 (the "NOTES");
WHEREAS, the Indenture provides that under certain
circumstances the Guaranteeing Subsidiary shall execute and deliver to the
Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary
shall, subject to Article Ten of the Indenture, unconditionally guarantee the
Notes on the terms and conditions set forth therein (the "NOTE GUARANTEE"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the
Trustee is authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the Guaranteeing Subsidiary and the Trustee agree as follows for the equal and
ratable benefit of the Holders of the Notes:
1. Capitalized Terms. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
2. Agreement to Guarantee.
(a) Subject to Article Ten of the Indenture, the Guaranteeing
Subsidiary, jointly and severally with all other Guarantors, fully and
unconditionally guarantees to each Holder of a Note authenticated and delivered
by the Trustee and to the Trustee and its successors and assigns, irrespective
of the validity and enforceability of the Indenture, the Notes or the
obligations of the Company hereunder or thereunder, that:
(i) the principal of, premium, if any, and accrued and unpaid
interest and Liquidated Damages, if any, on the Notes will be promptly
paid in full when due, whether at maturity, by acceleration, redemption
or otherwise, and interest on the overdue principal of, premium, if
any, and interest and Liquidated Damages, if any, on the Notes
(pursuant to Section 2.13 of the Indenture), if lawful (subject in all
cases to any applicable grace periods provided in the Indenture and the
Notes) when due, and all other
F-1
obligations of the Company to the Holders or the Trustee hereunder or
thereunder will be promptly paid in full, 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 any of such other obligations, the same will be promptly
paid in full when due in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise.
Failing payment when due of any amount so guaranteed for whatever
reason, the Guarantors shall be jointly and severally obligated to pay
the same immediately. The Guaranteeing Subsidiary agrees that this is a
guarantee of payment and not a guarantee of collection.
(b) The Guaranteeing Subsidiary hereby agrees that, to the
maximum extent permitted under applicable law, its obligations hereunder shall
be unconditional, irrespective of the validity, regularity or enforceability of
the Notes or the 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.
(c) The Guaranteeing Subsidiary, subject to Section 6.06 of
the Indenture, hereby waives diligence, presentment, demand of payment, filing
of claims with a court in the event of insolvency or bankruptcy of the Company,
any right to require a proceeding first against the Company, protest, notice and
all demands whatsoever and covenants that this Note Guarantee shall not be
discharged except by complete performance of the obligations contained in the
Notes and the Indenture.
(d) If any Holder or the Trustee is required by any court or
otherwise to return to the Company, the Guarantors, or any custodian, trustee,
liquidator or other similar official acting in relation to any of the Company or
the Guarantors, any amount paid by any of them to the Trustee or such Holder,
this Note Guarantee, to the extent theretofore discharged, shall be reinstated
in full force and effect.
(e) The Guaranteeing Subsidiary agrees that it shall not be
entitled to any right of subrogation in relation to the Holders in respect of
any obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby.
(f) The Guaranteeing Subsidiary agrees that, as between the
Guarantors, 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 Six of the Indenture for the purposes of the Note 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 declaration of acceleration of such obligations as provided in
Article Six of the Indenture, such obligations (whether or not due and payable)
shall forthwith become due and payable by the Guarantors for the purpose of the
Note Guarantee.
F-2
(g) The Guaranteeing Subsidiary shall have the right to seek
contribution from any non-paying Guarantor so long as the exercise of such right
does not impair the rights of the Holders under the Note Guarantee.
(h) The Guaranteeing Subsidiary confirms, pursuant to Section
10.02 of the Indenture, that it is the intention of such Guaranteeing Subsidiary
that the Note Guarantee not constitute (i) a fraudulent transfer or conveyance
for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar federal or state law to the
extent applicable to the Note Guarantee or (ii) an unlawful distribution under
any applicable state law prohibiting shareholder distributions by an insolvent
subsidiary to the extent applicable to the Note Guarantee. To effectuate the
foregoing intention, the Guaranteeing Subsidiary and the Trustee hereby
irrevocably agree that the obligations of the Guaranteeing Subsidiary will be
limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Guaranteeing Subsidiary that are
relevant under such laws, and after giving effect to any collections from,
rights to receive contribution from or payments made by or on behalf of any
other Guarantor in respect of the obligations of such other Guarantor under
Article Ten of the Indenture, result in the obligations of the Guaranteeing
Subsidiary under the Note Guarantee not constituting a fraudulent transfer or
conveyance or such an unlawful shareholder distribution.
3. Execution and Delivery. The Guaranteeing Subsidiary agrees
that the Note Guarantee shall remain in full force and effect notwithstanding
any failure to endorse on each Note a notation of the Note Guarantee.
4. Guaranteeing Subsidiary May Consolidate, Etc., on Certain
Terms.
(a) The Guaranteeing Subsidiary may not sell or otherwise
dispose of all or substantially all of its assets to, or consolidate with or
merge with or into (whether or not the Guaranteeing Subsidiary is the surviving
Person), another Person, other than the Company or another Guarantor, unless:
(i) immediately after giving effect to that transaction, no
Default or Event of Default exists; and
(ii) either:
(A) the Person acquiring the property in any such sale
or disposition or the Person formed by or surviving any such
consolidation or merger (if other than the Guarantor) and
assumes all the obligations of that Guarantor under this
Indenture, its Note Guarantee, and, if applicable, the
Registration Rights Agreement pursuant to a supplemental
indenture reasonably satisfactory to the Trustee; or
(B) such sale or other disposition or consolidation or
merger complies with Section 4.10 of the Indenture.
(b) In case of any such consolidation, merger, sale or
conveyance and upon the assumption by the successor Person, by supplemental
indenture, executed and delivered to
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the Trustee and satisfactory in form to the Trustee, of the Note Guarantee
endorsed upon the Notes and the due and punctual performance of all of the
covenants and conditions of the Indenture to be performed by the Guaranteeing
Subsidiary, such successor Person shall succeed to and be substituted for the
Guaranteeing Subsidiary with the same effect as if it had been named herein as a
Guaranteeing Subsidiary. Such successor Person thereupon may cause to be signed
any or all of the Note Guarantees to be endorsed upon all of the Notes issuable
under the Indenture which theretofore shall not have been signed by the Company
and delivered to the Trustee. All the Note Guarantees so issued shall in all
respects have the same legal rank and benefit under the Indenture as the Note
Guarantees theretofore and thereafter issued in accordance with the terms of the
Indenture as though all of such Note Guarantees had been issued at the date of
the execution of the Indenture.
(c) Except as set forth in Article Five of the Indenture, and
notwithstanding clauses (i) and (ii) of Section 4(a) above and clauses (i) and
(ii) of Section 10.04(a) of the Indenture, nothing contained in the Indenture or
in any of the Notes shall prevent any consolidation or merger of a Guaranteeing
Subsidiary with or into the Company or another Guarantor, or shall prevent any
sale or conveyance of the property of a Guaranteeing Subsidiary as an entirety
or substantially as an entirety to the Company or another Guarantor.
5. Release.
(a) The Guaranteeing Subsidiary shall be released and relieved
of any obligations under its Note Guarantee, (i) in connection with any sale or
other disposition of Capital Stock of such Guaranteeing Subsidiary to a Person
that is not (either before or after giving effect to such transaction) a
Restricted Subsidiary of the Company where, after giving effect to such sale or
other disposition, such Guaranteeing Subsidiary would no longer constitute a
Subsidiary of the Company, if such sale of Capital Stock of that Guaranteeing
Subsidiary complies with Section 4.10; (ii) if the Company properly designates
the Guaranteeing Subsidiary as an Unrestricted Subsidiary under the Indenture;
or (iii) solely in the case of a Note Guarantee created pursuant to Section
4.18(b), upon the release or discharge of the Guarantee which resulted in the
creation of such Note Guarantee pursuant to Section 4.18(b), except a discharge
or release by or as a result of payment under such Guarantee. Upon delivery by
the Company to the Trustee of an Officers' Certificate to the effect that one of
the foregoing requirements has been satisfied and the conditions to the release
of the Guaranteeing Subsidiary under Section 10.05 of the Indenture have been
met, the Trustee shall execute any documents reasonably required in order to
evidence the release of the Guaranteeing Subsidiary from its obligations under
its Note Guarantee, subject to the right of the Trustee, in its discretion, to
request an Opinion of Counsel pursuant to Section 7.02(b) of the Indenture.
(b) Any Guarantor not released from its obligations under its
Note Guarantee shall remain liable for the full amount of principal of and
accrued and unpaid interest and Liquidated Damages, if any, on the Notes and for
the other obligations of any Guarantor under this Indenture as provided in this
Article Ten.
6. No Recourse Against Others. Pursuant to Section 13.07 of
the Indenture, no past, present or future director, officer, employee, manager,
incorporator, stockholder, agent or member (or Person forming any limited
liability company) of the Company or any Guarantor,
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as such, shall have any liability for any obligations of the Company or any
Guarantor under the Notes, the Indenture, any Note Guarantee or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder of Notes by accepting a Note and a Note Guarantee waives and
releases all such liability. This waiver and release are part of the
consideration for issuance of the Notes and the Note Guarantees. The waiver may
not be effective to waive liabilities under the federal securities laws.
7. Subordination of Note Guarantee. Payments under the Note
Guarantees pursuant to this Supplemental Indenture shall be subordinated to the
prior payment in full of all Senior Debt of the Guaranteeing Subsidiary,
including Senior Debt incurred after the date of this Supplemental Indenture, on
the same basis as the payments by the Company on the Notes are subordinated to
the prior payment in full of Senior Debt of the Company. For the purposes of the
foregoing sentence, the Trustee and the Holders shall have the right to receive
and/or retain payments by the Guaranteeing Subsidiary only at such times as they
may receive and/or retain payments in respect of the Notes pursuant to the
Indenture, including Article Twelve thereof.
8. NEW YORK LAW TO GOVERN. THE LAWS OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE AND
THE NOTE GUARANTEE.
9. Counterparts. The parties may sign any number of copies of
this Supplemental Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
10. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
11. Trustee. The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Guaranteeing Subsidiary and the
Company.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed and attested, all as of the date
first above written.
THE BANK OF NEW YORK,
as Trustee
By:
------------------------------
Name:
Title:
ATT Holding Co., a Delaware Corporation
By:
------------------------------
Name:
Title:
AMES TRUE TEMPER, INC., a Delaware
corporation
By:
------------------------------
Name:
Title:
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NOTATION OF GUARANTEE
For value received, each Guarantor (which term includes any
successor Person under the Indenture) has, jointly and severally,
unconditionally guaranteed, to the extent set forth in and subject to the
provisions in the Indenture dated as of June 28, 2004 (the "INDENTURE") among
Ames True Temper, Inc., a Delaware corporation, ATT Holding Co., a Delaware
corporation and The Bank of New York, a New York banking corporation, as trustee
(the "TRUSTEE"), (a) prompt payment of the principal of, premium, if any, and
accrued and unpaid interest and Liquidated Damages, if any, on the Notes (as
defined in the Indenture) when due, whether at maturity, by acceleration,
redemption or otherwise, and the prompt payment of interest on overdue
principal, premium, if any, and interest and Liquidated Damages, if any, on the
Notes (pursuant to Section 2.13 of the Indenture), if lawful (subject in all
cases to any applicable grace periods provided in the Indenture and the Notes)
when due, and all other obligations of the Company to the Holders or the Trustee
under the Indenture and the Notes will be promptly paid in full, all in
accordance with the terms of the Indenture and the Notes and (b) in case of any
extension of time of payment or renewal of any Notes or any of such other
obligations, the same will be promptly paid in full when due in accordance with
the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise. The obligations of the Guarantors to the Holders of
Notes and to the Trustee pursuant to the Note Guarantee and the Indenture are
expressly set forth in Article Ten of the Indenture and reference is hereby made
to the Indenture for the precise terms of the Note Guarantee. Each Holder of a
Note, by accepting the same, agrees to and shall be bound by such provisions.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS HEREOF, the Parent Guarantor has caused this
Notation of Guarantee to be signed manually or by facsimile by its duly
authorized officer.
ATT HOLDING CO., a Delaware corporation
By:
--------------------------------
Name:
Title:
