Exhibit 4.2
EXECUTION VERSION
SENIOR TOGGLE NOTES INDENTURE
Dated as of May 29, 2007
Between
BAUBLE ACQUISITION SUB, INC.
and
THE BANK OF NEW YORK
as Trustee
9.625%/10.375% SENIOR TOGGLE NOTES DUE 2015
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions................................................... 1
Section 1.02 Other Definitions............................................. 47
Section 1.03 Incorporation by Reference of Trust Indenture Act............. 48
Section 1.04 Rules of Construction......................................... 49
Section 1.05 Acts of Holders............................................... 49
ARTICLE II
THE NOTES
Section 2.01 Form and Dating; Terms........................................ 51
Section 2.02 Execution and Authentication.................................. 52
Section 2.03 Registrar and Paying Agent.................................... 53
Section 2.04 Paying Agent to Hold Money in Trust........................... 54
Section 2.05 Holder Lists.................................................. 54
Section 2.06 Transfer and Exchange......................................... 54
Section 2.07 Replacement Notes............................................. 68
Section 2.08 Outstanding Notes............................................. 69
Section 2.09 Treasury Notes................................................ 69
Section 2.10 Temporary Notes............................................... 70
Section 2.11 Cancellation.................................................. 70
Section 2.12 Defaulted Interest............................................ 70
Section 2.13 CUSIP/ISIN Numbers............................................ 71
Section 2.14 Calculation of Principal Amount of Securities................. 71
ARTICLE III
REDEMPTION
Section 3.01 Notices to Trustee............................................ 71
Section 3.02 Selection of Notes to Be Redeemed............................. 71
Section 3.03 Notice of Redemption.......................................... 72
Section 3.04 Effect of Notice of Redemption................................ 73
Section 3.05 Deposit of Redemption Price................................... 73
Section 3.06 Notes Redeemed in Part........................................ 74
Section 3.07 Optional Redemption........................................... 74
Section 3.08 Mandatory Redemption.......................................... 75
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Section 3.09 Offers to Repurchase by Application of Excess Proceeds........ 75
ARTICLE IV
COVENANTS
Section 4.01 Payment of Notes.............................................. 77
Section 4.02 Maintenance of Office or Agency............................... 78
Section 4.03 Reports and Other Information................................. 78
Section 4.04 Compliance Certificate........................................ 80
Section 4.05 Taxes......................................................... 81
Section 4.06 Stay, Extension and Usury Laws................................ 83
Section 4.07 Limitation on Restricted Payments............................. 84
Section 4.08 Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries..................................... 90
Section 4.09 Limitation on Incurrence of Indebtedness and Issuance
of Disqualified Stock and Preferred Stock................... 93
Section 4.10 Asset Sales................................................... 99
Section 4.11 Transactions with Affiliates................................. 102
Section 4.12 Liens........................................................ 105
Section 4.13 Offer to Repurchase Upon Change of Control................... 105
Section 4.14 Future Guarantors............................................ 108
Section 4.15 Company Existence............................................ 109
Section 4.16 Suspension of Covenants...................................... 109
ARTICLE V
SUCCESSORS
Section 5.01 Merger, Amalgamation, Consolidation or Sale of All
or Substantially All Assets................................ 110
Section 5.02 Successor Corporation Substituted............................ 112
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.01 Events of Default............................................ 113
Section 6.02 Acceleration................................................. 114
Section 6.03 Other Remedies............................................... 115
Section 6.04 Waiver of Past Defaults...................................... 115
Section 6.05 Control by Majority.......................................... 116
Section 6.06 Limitation on Suits.......................................... 116
Section 6.07 Rights of Holders of Notes to Receive Payment................ 116
Section 6.08 Collection Suit by Trustee................................... 117
Section 6.09 Restoration of Rights and Remedies........................... 117
Section 6.10 Rights and Remedies Cumulative............................... 117
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Section 6.11 Delay or Omission Not Waiver................................. 117
Section 6.12 Trustee May File Proofs of Claim............................. 117
Section 6.13 Priorities................................................... 118
Section 6.14 Undertaking for Costs........................................ 118
ARTICLE VII
TRUSTEE
Section 7.01 Duties of Trustee............................................ 119
Section 7.02 Rights of Trustee............................................ 120
Section 7.03 Individual Rights of Trustee................................. 121
Section 7.04 Trustee's Disclaimer......................................... 121
Section 7.05 Notice of Defaults........................................... 121
Section 7.06 Reports by Trustee to Holders of the Notes................... 122
Section 7.07 Compensation and Indemnity................................... 122
Section 7.08 Replacement of Trustee....................................... 123
Section 7.09 Successor Trustee by Merger, etc............................. 124
Section 7.10 Eligibility; Disqualification................................ 124
Section 7.11 Preferential Collection of Claims Against Issuer............. 124
ARTICLE VIII
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance..... 125
Section 8.02 Legal Defeasance and Discharge............................... 125
Section 8.03 Covenant Defeasance.......................................... 125
Section 8.04 Conditions to Legal or Covenant Defeasance................... 126
Section 8.05 Deposited Money and Government Securities to Be Held
in Trust; Other Miscellaneous Provisions................... 128
Section 8.06 Repayment to Issuer.......................................... 128
Section 8.07 Reinstatement................................................ 128
ARTICLE IX
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes.......................... 129
Section 9.02 With Consent of Holders of Notes............................. 130
Section 9.03 Compliance with Trust Indenture Act.......................... 131
Section 9.04 Revocation and Effect of Consents............................ 131
Section 9.05 Notation on or Exchange of Notes............................. 132
Section 9.06 Trustee to Sign Amendments, Etc.............................. 132
Section 9.07 Payment for Consent.......................................... 133
Section 9.08 Additional Voting Terms; Calculation of Principal Amount..... 133
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ARTICLE X
GUARANTEES
Section 10.01 Guarantee.................................................... 133
Section 10.02 Limitation on Guarantor Liability............................ 135
Section 10.03 Execution and Delivery....................................... 135
Section 10.04 Subrogation.................................................. 136
Section 10.05 Benefits Acknowledged........................................ 136
Section 10.06 Release of Guarantees........................................ 136
ARTICLE XI
SATISFACTION AND DISCHARGE
Section 11.01 Satisfaction and Discharge................................... 137
Section 11.02 Application of Trust Money................................... 137
ARTICLE XII
MISCELLANEOUS
Section 12.01 Trust Indenture Act Controls................................. 138
Section 12.02 Notices...................................................... 138
Section 12.03 Communication by Holders of Notes with
Other Holders of Notes..................................... 139
Section 12.04 Certificate and Opinion as to Conditions Precedent........... 139
Section 12.05 Statements Required in Certificate or Opinion................ 140
Section 12.06 Rules by Trustee and Agents.................................. 140
Section 12.07 No Personal Liability of Directors, Officers,
Employees and Stockholders................................. 140
Section 12.08 Governing Law................................................ 141
Section 12.09 Waiver of Jury Trial......................................... 141
Section 12.10 Force Majeure................................................ 141
Section 12.11 No Adverse Interpretation of Other Agreements................ 141
Section 12.12 Successors................................................... 141
Section 12.13 Severability................................................. 141
Section 12.14 Counterpart Originals........................................ 141
Section 12.15 Table of Contents, Headings, etc............................. 141
Section 12.16 Qualification of Indenture................................... 141
Section 12.17 Currency of Account; Conversion of Currency;
Foreign Exchange Restrictions.............................. 142
Section 12.18 Consent to Jurisdiction and Service.......................... 144
EXHIBITS
Exhibit A Form of Note
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Exhibit B Form of Certificate of Transfer
Exhibit C Form of Certificate of Exchange
Exhibit D Form of Supplemental Indenture to Be Delivered by Subsequent
Guarantors
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INDENTURE, dated as of May 29, 2007, between Bauble Acquisition Sub, Inc.,
a Florida corporation (the "Issuer"), and The Bank of New York, a New York
banking corporation, as Trustee (the "Trustee").
Each party agrees as follows for the benefit of each other and for the
equal and ratable benefit of the Holders of the 9.625%/10.375% Senior Toggle
Notes due 2015 (the "Notes").
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions.
"144A Global Note" means a Global Note substantially in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of Notes sold in reliance on Rule 144A.
"Acquired Indebtedness" means, with respect to any specified Person,
(1) Indebtedness of any other Person existing at the time such other Person is
merged, consolidated or amalgamated with or into or became a Restricted
Subsidiary of such specified Person and (2) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Acquisition" means the acquisition by Affiliates of the Sponsors of
substantially all of the outstanding shares of capital stock of the Issuer,
pursuant to the Merger Agreement.
"Acquisition Documents" means the Merger Agreement and any other
document entered into in connection therewith, in each case as amended,
supplemented or modified from time to time prior to the Issue Date or
thereafter.
"Additional Interest" means all additional interest then owing
pursuant to the Registration Rights Agreement.
"Additional Notes" means additional Notes (other than the Initial
Notes, the Exchange Notes and any PIK Notes issued (and any increase in the
aggregate
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principal amount of Notes) as a result of the payment of PIK interest) issued
from time to time under this Indenture in accordance with Sections 2.01 and 4.09
hereof.
"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"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, means 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.
"Agent" means any Registrar or Paying Agent.
"Applicable Currency Equivalent" means, with respect to any monetary
amount in a currency other than U.S. dollars, at any time for the determination
thereof, the amount of U.S. dollars obtained by converting such foreign currency
involved in such computation into U.S. dollars, at the spot rate for the
purchase of U.S. dollars, with the applicable foreign currency as quoted by
Reuters at approximately 10:00 A.M. (New York City time) on the date that is two
Business Days prior to such determination.
"Applicable Premium" means, on any applicable Redemption Date, the
greater of:
(1) 1.0% of the then outstanding principal amount of the Notes;
and
(2) the excess of:
(a) the present value at such Redemption Date of (i) the
redemption price of the Notes at June 1, 2011 (such redemption price
being set forth in the table in Section 3.07(a)) plus (ii) all
required interest payments due on the Notes through June 1, 2011 )
(calculated based on the Cash Interest rate) (excluding accrued but
unpaid interest), computed using a discount rate equal to the
Treasury Rate as of such Redemption Date plus 50 basis points; over
(b) the then outstanding principal amount of the Notes.
"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 that apply to such transfer or exchange.
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"Asset Sale" means:
(1) the sale, conveyance, transfer or other disposition (whether in
a single transaction or a series of related transactions) of property or assets
(including by way of a Sale/Leaseback Transaction) outside the ordinary course
of business of the Issuer or any Restricted Subsidiary of the Issuer (each
referred to in this definition as a "disposition"); or
(2) the issuance or sale of Equity Interests (other than directors'
qualifying shares and shares issued to foreign nationals or other third parties
to the extent required by applicable law) of any Restricted Subsidiary (other
than to the Issuer or another Restricted Subsidiary of the Issuer) (whether in a
single transaction or a series of related transactions);
in each case other than:
(a) a disposition of Cash Equivalents or Investment Grade
Securities or obsolete, damaged or worn out property or equipment in
the ordinary course of business;
(b) the disposition of all or substantially all of the assets
of the Issuer in a manner permitted pursuant to the provisions
described under Section 5.01 hereof or any disposition that
constitutes a Change of Control;
(c) any Restricted Payment or Permitted Investment that is
permitted to be made, and is made, under Section 4.07 hereof;
(d) any disposition of assets of the Issuer or any Restricted
Subsidiary or issuance or sale of Equity Interests of any Restricted
Subsidiary, which assets or Equity Interests so disposed or issued
have an aggregate Fair Market Value (as determined in good faith by
the Issuer) of less than $15 million;
(e) any disposition of property or assets, or the issuance of
securities, by a Restricted Subsidiary of the Issuer to the Issuer
or by the Issuer or a Restricted Subsidiary of the Issuer to a
Restricted Subsidiary of the Issuer;
(f) any exchange of assets (including a combination of assets
and Cash Equivalents) for assets related to a Similar Business of
comparable or greater market value or usefulness to the business of
the Issuer and its Restricted Subsidiaries as a whole, as determined
in good faith by the Issuer;
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(g) foreclosure on assets of the Issuer or any of its
Restricted Subsidiaries;
(h) any sale of Equity Interests in, or Indebtedness or other
securities of, an Unrestricted Subsidiary;
(i) the lease, assignment or sublease of any real or personal
property in the ordinary course of business;
(j) any sale of inventory or other assets in the ordinary
course of business;
(k) any grant in the ordinary course of business of any
license of patents, trademarks, know-how or any other intellectual
property;
(l) in the ordinary course of business, any swap of assets, or
lease, assignment or sublease of any real or personal property, in
exchange for services (including in connection with any outsourcing
arrangements) of comparable or greater value or usefulness to the
business of the Issuer and its Restricted Subsidiaries as a whole,
as determined in good faith by the Issuer;
(m) a transfer of accounts receivable and related assets of
the type specified in the definition of "Receivables Financing" (or
a fractional undivided interest therein) by a Receivables Subsidiary
in a Qualified Receivables Financing;
(n) any financing transaction with respect to property built
or acquired by the Issuer or any Restricted Subsidiary after the
Issue Date, including any Sale/Leaseback Transaction or asset
securitization permitted by this Indenture;
(o) dispositions in connection with Permitted Liens;
(p) any disposition of Capital Stock of a Restricted
Subsidiary pursuant to an agreement or other obligation with or to a
Person (other than the Issuer or a Restricted Subsidiary) from whom
such Restricted Subsidiary was acquired or from whom such Restricted
Subsidiary acquired its business and assets (having been newly
formed in connection with such acquisition), made as part of such
acquisition and in each case comprising all or a portion of the
consideration in respect of such sale or acquisition; and
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(q) any surrender or waiver of contract rights or the settlement,
release, recovery on or surrender of contract, tort or other claims of any
kind.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Bank Indebtedness" means any and all amounts payable under or in
respect of the Credit Agreement and the other Credit Agreement Documents as
amended, restated, supplemented, waived, replaced, restructured, repaid,
refunded, refinanced or otherwise modified from time to time (including after
termination of the Credit Agreement), including principal, premium (if any),
interest (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Issuer whether or not a claim
for post-filing interest is allowed in such proceedings), fees, charges,
expenses, reimbursement obligations, guarantees and all other amounts payable
thereunder or in respect thereof.
"Board of Directors" means, as to any Person, the board of directors
or managers, as applicable, of such Person (or, if such Person is a partnership,
the board of directors or other governing body of the general partner of such
Person) or any duly authorized committee thereof.
"broker-dealer" has the meaning set forth in the Registration Rights
Agreement.
"Business Day" means a day other than a Saturday, Sunday or other
day on which banking institutions are authorized or required by law to close in
New York City.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock or shares;
(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
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(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.
"Capitalized 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 such time be required to be capitalized and reflected as a
liability on a balance sheet (excluding the footnotes thereto) in accordance
with GAAP.
"Capitalized Software Expenditures" shall mean, for any period, the
aggregate of all expenditures (whether paid in cash or accrued as liabilities)
by a Person and its Restricted Subsidiaries during such period in respect of
purchased software or internally developed software and software enhancements
that, in conformity with GAAP, are or are required to be reflected as
capitalized costs on the consolidated balance sheet of such Person and such
Restricted Subsidiaries.
"Cash Equivalents" means:
(1) U.S. dollars, pounds sterling, euros, the national currency of
any member state in the European Union or, in the case of any Foreign Subsidiary
that is a Restricted Subsidiary, such local currencies held by it from time to
time in the ordinary course of business;
(2) securities issued or directly and fully guaranteed or insured by
the U.S. government or any country that is a member of the European Union or any
agency or instrumentality thereof in each case maturing not more than two years
from the date of acquisition;
(3) certificates of deposit, time deposits and eurodollar time
deposits with maturities of one year or less from the date of acquisition,
bankers' acceptances, in each case with maturities not exceeding one year and
overnight bank deposits, in each case with any commercial bank having capital
and surplus in excess of $250.0 million and whose long-term debt is rated "A" or
the equivalent thereof by Moody's or S&P (or reasonably equivalent ratings of
another internationally recognized ratings agency);
(4) repurchase obligations for underlying securities of the types
described in clauses (2) and (3) above entered into with any financial
institution meeting the qualifications specified in clause (3) above;
(5) commercial paper issued by a corporation (other than an
Affiliate of the Issuer) rated at least "A-1" or the equivalent thereof by
Moody's or S&P (or
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reasonably equivalent ratings of another internationally recognized ratings
agency) and in each case maturing within one year after the date of acquisition;
(6) readily marketable direct obligations issued by any state of the
United States of America or any political subdivision thereof having one of the
two highest rating categories obtainable from either Moody's or S&P (or
reasonably equivalent ratings of another internationally recognized ratings
agency) in each case with maturities not exceeding two years from the date of
acquisition;
(7) Indebtedness issued by Persons (other than the Sponsors or any
of their Affiliates) with a rating of "A" or higher from S&P or "A-2" or higher
from Moody's (or reasonably equivalent ratings of another internationally
recognized ratings agency) in each case with maturities not exceeding two years
from the date of acquisition; and
(8) investment funds investing at least 95% of their assets in
securities of the types described in clauses (1) through (7) above.
"Cash Interest" means interest paid in the form of cash.
"Change of Control" means the occurrence of either of the following:
(1) the sale, lease or transfer, in one or a series of related
transactions, of all or substantially all the assets of the Issuer and its
Subsidiaries, taken as a whole, to a Person other than any of the Permitted
Holders; or
(2) the Issuer becomes aware (by way of a report or any other filing
pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or
otherwise) of the acquisition by any Person or group (within the meaning of
Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor
provision), including any group acting for the purpose of acquiring, holding or
disposing of securities (within the meaning of Rule 13d-5(b)(1) under the
Exchange Act), other than any of the Permitted Holders, in a single transaction
or in a related series of transactions, by way of merger, consolidation,
amalgamation or other business combination or purchase of beneficial ownership
(within the meaning of Rule 13d-3 under the Exchange Act, or any successor
provision), of more than 50% of the total voting power of the Voting Stock of
the Issuer. For purposes of calculating the total voting power of the Voting
Stock held by a group, the voting power beneficially owned by a Permitted Holder
shall be excluded to the extent such Permitted Holder retains the sole economic
rights with respect to the subject Voting Stock.
"Clearstream" means Clearstream Banking, Societe Anonyme.
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"Code" means the Internal Revenue Code of 1986, as amended.
"Consolidated Depreciation and Amortization Expense" means, with
respect to any Person for any period, the total amount of depreciation and
amortization expense, including the amortization of key money and other
intangible assets, deferred financing fees and Capitalized Software Expenditures
and amortization of unrecognized prior service costs and actuarial gains and
losses related to pensions and other post-employment benefits, of such Person
and its Restricted Subsidiaries for such period on a consolidated basis and
otherwise determined in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to any Person
for any period, the sum, without duplication, of:
(1) consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, to the extent such expense was deducted in
computing Consolidated Net Income (including amortization of original issue
discount, the interest component of Capitalized Lease Obligations, and net
payments and receipts (if any) pursuant to interest rate Hedging Obligations and
excluding Additional Interest in respect of the Notes, "additional interest"
under any registration rights agreement, amortization of deferred financing
fees, debt issuance costs, commissions, fees and expenses and expensing of any
bridge, commitment or other financing fees); plus
(2) consolidated capitalized interest of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued; plus
(3) commissions, discounts, yield and other fees and charges
Incurred in connection with any Receivables Financing which are payable to
Persons other than the Issuer and its Restricted Subsidiaries; minus
(4) interest income for such period.
For purposes of this definition, interest on a Capitalized Lease
Obligation shall be deemed to accrue at an interest rate reasonably determined
by the Issuer to be the rate of interest implicit in such Capitalized Lease
Obligation in accordance with GAAP.
"Consolidated Leverage Ratio" means, as at any date of
determination, the ratio of (1) the Consolidated Total Indebtedness of the
Issuer and its Restricted Subsidiaries as of the end of the most recent fiscal
quarter for which internal financial statements are available immediately
preceding the date on which such event for which such calculation is being made
shall occur to (2) the Issuer's EBITDA for the most recently ended four full
fiscal quarters for which internal financial statements are
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available immediately preceding the date on which such event for which such
calculation is being made shall occur, in each case with such pro forma
adjustments to Consolidated Total Indebtedness and EBITDA as are appropriate and
consistent with the pro forma adjustment provisions set forth in the definition
of Fixed Charge Coverage Ratio.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis; provided, however, that:
(1) any net after-tax extraordinary, nonrecurring or unusual gains
or losses (less all fees and expenses relating thereto) or expenses or charges,
any severance or relocation costs or expenses, curtailments or modifications to
pension and post-retirement employee benefit plans, any expenses related to any
reconstruction, decommissioning, recommissioning or reconfiguration of fixed
assets for alternate uses and fees, expenses or charges relating to new product
lines, plant shutdown costs, acquisition integration costs, expenses, excess
pension charges, acquisition integration charges, facilities opening costs and
expenses or charges related to any issuance of Equity Interests, any Investment,
acquisition, disposition, recapitalization or issuance, repayment, refinancing,
amendment or modification of Indebtedness (in each case, whether or not
successful), and any fees, expenses, charges or change of control payments,
including retention payments, made under the Acquisition Documents or otherwise
related to the Transactions, in each case, shall be excluded;
(2) effects of purchase accounting adjustments (including the
effects of such adjustments pushed down to such person and its subsidiaries) in
component amounts required or permitted by GAAP, resulting from the application
of purchase accounting in relation to the Transactions or any acquisition
consummated after the Issue Date or the amortization or write-off of any amounts
thereof, net of taxes, shall be excluded;
(3) the Net Income for such period shall not include the cumulative
effect of a change in accounting principles during such period;
(4) any net after-tax income or loss from disposed, abandoned,
transferred, closed or discontinued operations or store closures and any net
after-tax gain or loss on disposal of disposed, abandoned, transferred, closed
or discontinued operations or store closures shall be excluded;
(5) any net after-tax gains or losses (less all fees and expenses or
charges relating thereto) attributable to business dispositions or asset
dispositions other than in the ordinary course of business (as determined in
good faith by the Issuer) shall be excluded;
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(6)(a) any net after-tax gains or losses (less all fees and expenses
or charges relating thereto) attributable to the early extinguishment of
indebtedness, Hedging Obligations or other derivative instruments and (b) any
non-cash gains, losses, income and expenses resulting from fair value accounting
required by the applicable standards under GAAP and related interpretations
shall be excluded;
(7) the equity interest in the Net Income for such period of any
Person that is not a Subsidiary of such Person, or is an Unrestricted
Subsidiary, 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 or
other payments paid in cash (or to the extent converted into cash) to the
referent Person or a Restricted Subsidiary thereof in respect of such period;
(8) solely for the purpose of determining the amount available for
Restricted Payments under clause (A) of the definition of Cumulative Credit, the
Net Income for such period of any Restricted Subsidiary (other than any
Guarantor) shall be excluded to the extent that the declaration or payment of
dividends or similar distributions by such Restricted Subsidiary of its Net
Income is not at the date of determination permitted without any prior
governmental approval (which has not been obtained) or, directly or indirectly,
by the 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, unless such restrictions with
respect to the payment of dividends or similar distributions have been legally
waived; provided that the Consolidated Net Income of such Person shall be
increased by the amount of dividends or other distributions or other payments
actually paid in cash (or converted into cash) by any such Restricted Subsidiary
to such Person, to the extent not already included therein;
(9) an amount equal to the amount of Tax Distributions actually made
to any parent or equity holder of such Person in respect of such period in
accordance with Section 4.07(b)(xii) shall be included as though such amounts
had been paid as income taxes directly by such Person for such period;
(10) any non-cash impairment charges or asset write-offs, in each
case pursuant to GAAP, and the amortization of intangibles, including key money
amortization, arising pursuant to GAAP shall be excluded;
(11) any non-cash expense realized or resulting from stock option
plans, employee benefit plans or post-employment benefit plans, or grants or
sales of stock, stock appreciation or similar rights, stock options, restricted
stock, preferred stock or other rights shall be excluded;
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(12) any (a) one-time non-cash compensation charges, (b) costs and
expenses after the Issue Date related to employment of terminated employees
(including but not limited to change of control payments, "gross up" payments
under Code Sections 280G and 4999 and the acceleration of options) or (c) costs
or expenses realized in connection with or resulting from stock appreciation or
similar rights, stock options or other rights existing on the Issue Date of
officers, directors and employees, in each case of such Person or any of its
Restricted Subsidiaries, shall be excluded;
(13) expenses associated with additional accruals and reserves that
are established or adjusted within 12 months after the Issue Date and that are
so required to be established or adjusted in accordance with GAAP or as a result
of adoption or modification of accounting policies shall be excluded;
(14) solely for purposes of calculating EBITDA, (a) the Net Income
of any Person and its Restricted Subsidiaries shall be calculated without
deducting the income attributable to, or adding the losses attributable to, the
minority equity interests of third parties in any non-Wholly-owned Restricted
Subsidiary except to the extent of dividends declared or paid in respect of such
period or any prior period on the shares of Capital Stock of such Restricted
Subsidiary held by such third parties and (b) any ordinary course dividend,
distribution or other payment paid in cash and received from any Person in
excess of amounts included in clause (7) above shall be included;
(15) (a) the non-cash portion of "straight-line" rent expense shall
be excluded and (b) the cash portion of "straight-line" rent expense which
exceeds the amount expensed in respect of such rent expense shall be included,
(c) the non-cash amortization of tenant allowances shall be excluded and (d)
cash received from landlords for tenant allowances and shall be included;
(16) to the extent otherwise included in Consolidated Net Income any
currency translation gains and losses related to currency remeasurements of
Indebtedness, and any net loss or gain resulting from Hedging Obligations for
currency exchange risk, shall be excluded; and
(17) solely for the purpose of determining the amount available for
Restricted Payments under clause (A) of the definition of Cumulative Credit, the
difference, if positive, of the Consolidated Taxes of the Issuer calculated in
accordance with GAAP and the actual Consolidated Taxes paid in cash by the
Issuer during any Reference Period shall be included.
Notwithstanding the foregoing, for the purpose of Section 4.07
hereof only, there shall be excluded from Consolidated Net Income any dividends,
repayments of loans or advances or other transfers of assets from Unrestricted
Subsidiaries of the Issuer
11
or a Restricted Subsidiary of the Issuer to the extent such dividends,
repayments or transfers increase the amount of Restricted Payments permitted
pursuant to clauses (D) and (E) of the definition of Cumulative Credit.
"Consolidated Non-cash Charges" means, with respect to any Person
for any period, the non-cash expenses (other than Consolidated Depreciation and
Amortization Expense) of such Person and its Restricted Subsidiaries reducing
Consolidated Net Income of such Person for such period on a consolidated basis
and otherwise determined in accordance with GAAP, provided that if any such
non-cash expenses represent an accrual or reserve for potential cash items in
any future period, the cash payment in respect thereof in such future period
shall be subtracted from EBITDA in such future period to the extent paid, but
excluding from this proviso, for the avoidance of doubt, amortization of a
prepaid cash item that was paid in a prior period.
"Consolidated Taxes" means, with respect to any Person for any
period, the provision for taxes based on income, profits or capital, including,
without limitation, state, franchise, property and similar taxes, foreign
withholding taxes, levies, imposts, duties (including stamp duties), deductions,
withholdings or similar charges (including ad valorem charges) imposed by any
governmental authority and any and all interest and penalties related thereto
and any Tax Distributions taken into account in calculating Consolidated Net
Income.
"Consolidated Total Indebtedness" means, as at any date of
determination, an amount equal to (x) the sum of (1) the aggregate amount of all
outstanding Indebtedness of the Issuer and its Restricted Subsidiaries on a
consolidated basis consisting of Indebtedness for borrowed money, Obligations in
respect of Capitalized Lease Obligations and debt obligations evidenced by
promissory notes and similar instruments (and excluding, for the avoidance of
doubt, all obligations relating to Receivables Facilities) and (2) the aggregate
amount of all outstanding Disqualified Stock of the Issuer and all Preferred
Stock of its Restricted Subsidiaries on a consolidated basis, with the amount of
such Disqualified Stock and Preferred Stock equal to the greater of their
respective voluntary or involuntary liquidation preferences and maximum fixed
repurchase prices, in each case determined on a consolidated basis in accordance
with GAAP, less (y) the aggregate amount of unrestricted cash and Cash
Equivalents included on the consolidated balance sheet of the Issuer and any
Restricted Subsidiaries as of such date; provided that Indebtedness of the
Issuer and its Restricted Subsidiaries under any revolving credit facility as at
any date of determination shall be determined using the Average Monthly Balance
of such Indebtedness for the most recently ended four fiscal quarters for which
internal financial statements are available as of such date of determination
(the "Reference Period"). For purposes of this definition, (a) the "maximum
fixed repurchase price" of any Disqualified Stock or Preferred Stock that does
not have a fixed repurchase price shall be calculated in accordance with the
terms of such Disqualified Stock or Preferred Stock as if such Disqualified
Stock or Preferred Stock were purchased on any date on which Consolidated Total
Indebtedness shall be
12
required to be determined pursuant to this Indenture, and if such price is based
upon, or measured by, the fair market value of such Disqualified Stock or
Preferred Stock, such fair market value shall be determined reasonably and in
good faith by the Issuer, (b) "Average Monthly Balance" means, with respect to
any Indebtedness incurred by the Issuer or its Restricted Subsidiaries under a
revolving credit facility, the quotient of (x) the sum of each Individual
Monthly Balance for each fiscal month ended on or prior to such date of
determination and included in the Reference Period divided by (y) 12, and (c)
"Individual Monthly Balance" means, with respect to any Indebtedness incurred by
the Issuer or its Restricted Subsidiaries under a revolving credit facility
during any fiscal month of the Issuer, the quotient of (x) the sum of the
aggregate outstanding principal amount of all such Indebtedness at the end of
each day of such fiscal month divided by (y) the number of days in such fiscal
month.
"Contingent Obligations" means, with respect to any Person, any
obligation of such Person guaranteeing any leases, dividends or other
obligations that do not constitute Indebtedness ("primary obligations") of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent:
(1) to purchase any such primary obligation or any property
constituting direct or indirect security therefor;
(2) to advance or supply funds (a) for the purchase or payment of
any such primary obligation or (b) to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor; or
(3) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation against loss in
respect thereof.
"Corporate Trust Office of the Trustee" shall be at the address of
the Trustee specified in Section 12.02 hereof or such other address as to which
the Trustee may give notice to the Holders and the Issuer.
"Credit Agreement" means (i) the credit agreement entered into in
connection with, and on or prior to, the consummation of the Acquisition, among
the Issuer, the guarantors named therein, the financial institutions named
therein, and Credit Suisse, as Administrative Agent, as amended, restated,
supplemented, waived, replaced (whether or not upon termination, and whether
with the original lenders or otherwise), restructured, repaid, refunded,
refinanced or otherwise modified from time to time, including any agreement or
indenture extending the maturity thereof, refinancing,
13
replacing or otherwise restructuring all or any portion of the Indebtedness
under such agreement or agreements or indenture or indentures or any successor
or replacement agreement or agreements or indenture or indentures or increasing
the amount loaned or issued thereunder or altering the maturity thereof and (ii)
whether or not the credit agreement referred to in clause (i) remains
outstanding, if designated by the Issuer to be included in the definition of
"Credit Agreement," one or more (A) debt facilities or commercial paper
facilities, providing for revolving credit loans, term loans, receivables
financing (including through the sale of receivables to lenders or to special
purpose entities formed to borrow from lenders against such receivables) or
letters of credit, (B) debt securities, indentures or other forms of debt
financing (including convertible or exchangeable debt instruments or bank
guarantees or bankers' acceptances), or (C) instruments or agreements evidencing
any other Indebtedness, in each case, with the same or different borrowers or
issuers and, in each case, as amended, supplemented, modified, extended,
restructured, renewed, refinanced, restated, replaced or refunded in whole or in
part from time to time; provided that for purposes of Section 4.09(b)(i) only,
the aggregate principal amount of Indebtedness Incurred under clause (i) and
(ii) above (with letters of credit and bankers' acceptances being deemed to have
a principal amount equal to the face amount thereof) at any one time outstanding
shall not exceed the Initial Commitment Amount plus an aggregate additional
principal amount of secured Indebtedness that does not cause the Secured
Indebtedness Leverage Ratio of the Issuer to exceed 4.75 to 1.00, determined on
a pro forma basis (including a pro forma application of the net proceeds
therefrom).
"Credit Agreement Documents" means the collective reference to any
Credit Agreement, any notes issued pursuant thereto and the guarantees thereof,
and the collateral documents relating thereto, as amended, supplemented,
restated, renewed, refunded, replaced, restructured, repaid, refinanced or
otherwise modified, in whole or in part, from time to time.
"Cumulative Credit" means the sum of (without duplication):
(A) 50% of the Consolidated Net Income of the Issuer for the
period (taken as one accounting period, the "Reference Period") from
May 6, 2007 to the end of the Issuer's most recently ended fiscal
quarter for which internal financial statements are available at the
time of such Restricted Payment (or, in the case such Consolidated
Net Income for such period is a deficit, minus 100% of such
deficit), plus
(B) 100% of the aggregate net proceeds, including cash and the
Fair Market Value (as determined in good faith by the Issuer) of
property other than cash, received by the Issuer after the Issue
Date (other than net proceeds to the extent such net proceeds have
been used to incur Indebtedness, Disqualified Stock, or Preferred
Stock pursuant to clause (xiii) of Section 4.09(b) hereof) from the
issue or sale of Equity Interests of the Issuer (excluding Refunding
Capital Stock (as defined below), Designated Preferred Stock,
14
Excluded Contributions, and Disqualified Stock), including Equity
Interests issued upon exercise of warrants or options (other than an
issuance or sale to a Restricted Subsidiary of the Issuer), plus
(C) 100% of the aggregate amount of contributions to the
capital of the Issuer received in cash and the Fair Market Value (as
determined in good faith by the Issuer) of property other than cash
after the Issue Date (other than Excluded Contributions, Refunding
Capital Stock, Designated Preferred Stock, and Disqualified Stock
and other than contributions to the extent such contributions have
been used to incur Indebtedness, Disqualified Stock, or Preferred
Stock pursuant to clause (xiii) of Section 4.09(b) hereof), plus
(D) 100% of the principal amount of any Indebtedness, or the
liquidation preference or maximum fixed repurchase price, as the
case may be, of any Disqualified Stock of the Issuer or any
Restricted Subsidiary thereof issued after the Issue Date (other
than Indebtedness or Disqualified Stock issued to a Restricted
Subsidiary) which has been converted into or exchanged for Equity
Interests in the Issuer (other than Disqualified Stock) or any
direct or indirect parent of the Issuer (provided in the case of any
parent, such Indebtedness or Disqualified Stock is retired or
extinguished), plus
(E) 100% of the aggregate amount received by the Issuer or any
Restricted Subsidiary in cash and the Fair Market Value (as
determined in good faith by the Issuer) of property other than cash
received by the Issuer or any Restricted Subsidiary from:
(1) the sale or other disposition (other than to the
Issuer or a Restricted Subsidiary of the Issuer) of Restricted
Investments made by the Issuer and its Restricted Subsidiaries
and from repurchases and redemptions of such Restricted
Investments from the Issuer and its Restricted Subsidiaries by
any Person (other than the Issuer or any of its Restricted
Subsidiaries) and from repayments of loans or advances, and
releases of guarantees, which constituted Restricted
Investments (other than in each case to the extent that the
Restricted Investment was made pursuant to clause (vii) of
Section 4.07(b) hereof),
(2) the sale (other than to the Issuer or a Restricted
Subsidiary of the Issuer) of the Capital Stock of an
Unrestricted Subsidiary, or
(3) a distribution or dividend from an Unrestricted
Subsidiary, plus
(F) in the event any Unrestricted Subsidiary of the Issuer has
been redesignated as a Restricted Subsidiary or has been merged,
consolidated or amalgamated with or into, or transfers or conveys
its assets to, or is liquidated into, the Issuer or a Restricted
Subsidiary, the Fair Market Value (as
15
determined in good faith by the Issuer) of the Investment of the
Issuer in such Unrestricted Subsidiary at the time of such
redesignation, combination or transfer (or of the assets transferred
or conveyed, as applicable) (other than in each case to the extent
that the designation of such Subsidiary as an Unrestricted
Subsidiary was made pursuant to clause (vii) of Section 4.07(b)
hereof to the extent such Investment constituted a Permitted
Investment).
"Custodian" means the Trustee, as custodian with respect to the
Notes, each in global form, or any successor entity.
"Default" means any event which is, or after notice or passage of
time 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 2.06(c) hereof,
substantially in the form of Exhibit A hereto 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 Notes issuable or issued in
whole or in part in global form, any Person specified in Section 2.03 hereof as
the Depositary with respect to the Notes, and any and all successors thereto
appointed as Depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Designated Non-cash Consideration" means the Fair Market Value (as
determined in good faith by the Issuer) of non-cash consideration received by
the Issuer or one of its Restricted Subsidiaries in connection with an Asset
Sale that is so designated as Designated Non-cash Consideration pursuant to an
Officer's Certificate, setting forth the basis of such valuation, less the
amount of Cash Equivalents received in connection with a subsequent sale of such
Designated Non-cash Consideration.
"Designated Preferred Stock" means Preferred Stock of the Issuer or
any direct or indirect parent of the Issuer (other than Disqualified Stock),
that is issued for cash (other than to the Issuer or any of its Subsidiaries or
an employee stock ownership plan or trust established by the Issuer or any of
its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant
to an Officer's Certificate, on the issuance date thereof.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock of such Person which, by its terms (or by the terms of any security into
which it is
16
convertible or for which it is redeemable or exchangeable), or upon the
happening of any event:
(1) matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise (other than as a result of a change of control or asset
sale),
(2) is convertible or exchangeable for Indebtedness or Disqualified
Stock of such Person, or
(3) is redeemable at the option of the holder thereof, in whole or
in part (other than solely as a result of a change of control or asset sale),
in each case prior to 91 days after the earlier of the maturity date of the
Notes or the date the Notes are no longer outstanding; provided, however, that
only the portion of Capital Stock which so matures or is mandatorily redeemable,
is so convertible or exchangeable or is so redeemable at the option of the
holder thereof prior to such date shall be deemed to be Disqualified Stock;
provided, further, however, that if such Capital Stock is issued to any employee
or to any plan for the benefit of employees of the Issuer or 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
Issuer in order to satisfy applicable statutory or regulatory obligations or as
a result of such employee's termination, death or disability; provided, further,
that any class of Capital Stock of such Person that by its terms authorizes such
Person to satisfy its obligations thereunder by delivery of Capital Stock that
is not Disqualified Stock shall not be deemed to be Disqualified Stock.
"Domestic Subsidiary" means a Restricted Subsidiary that is not a
Foreign Subsidiary.
"EBITDA" means, with respect to any Person for any period, the
Consolidated Net Income of such Person for such period plus, without
duplication, to the extent the same was deducted in calculating Consolidated Net
Income:
(1) Consolidated Taxes; plus
(2) Fixed Charges; plus
(3) Consolidated Depreciation and Amortization Expense; plus
17
(4) Consolidated Non-cash Charges; plus
(5) the amount of any restructuring charges or reserves in such
period; plus
(6) the amount of management, monitoring, consulting, transaction
and advisory fees and related expenses paid to the Sponsors (or any accruals
relating to such fees and related expenses) during such period to the extent
otherwise permitted under Section 4.11 hereof; plus
(7) any costs or expense incurred pursuant to any management equity
plan or stock option plan or any other management or employee benefit plan or
agreement or any stock subscription or shareholder agreement, to the extent that
such cost or expenses are funded with cash proceeds contributed to the capital
of the Issuer or a Guarantor or net cash proceeds of an issuance of Equity
Interests of the Issuer (other than Disqualified Stock) solely to the extent
that such net cash proceeds are excluded from the calculation of the Cumulative
Credit; plus
(8) to the extent covered by insurance and actually reimbursed, or,
so long as such Person has made a determination that there exists reasonable
evidence that such amount will in fact be reimbursed by the insurer and only to
the extent that such amount is (a) not denied by the applicable carrier in
writing within 180 days and (b) in fact reimbursed within 365 days of the date
of such evidence (with a deduction for any amount so added back to the extent
not so reimbursed within 365 days), expenses with respect to liability or
casualty events or business interruption shall be excluded; provided that any
proceeds of such reimbursement when received shall be excluded from the
calculation of EBITDA to the extent the expense reimbursed was previously
excluded pursuant to this clause (8);
less, without duplication,
(9) non-cash items increasing Consolidated Net Income for such
period (excluding the recognition of deferred revenue or any items which
represent the reversal of any accrual of, or cash reserve for, anticipated cash
charges that reduced EBITDA in any prior period and any items for which cash was
received in a prior period).
"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).
18
"Equity Offering" means any public or private sale after the Issue
Date of common stock or Preferred Stock of the Issuer or any direct or indirect
parent of the Issuer, as applicable (other than Disqualified Stock), other than:
(1) public offerings with respect to the Issuer's or such direct or indirect
parent's common stock registered on Form S-8; and (2) any such public or private
sale that constitutes an Excluded Contribution.
"Euroclear" means Euroclear S.A./N.V., as operator of the Euroclear
System.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated thereunder.
"Exchange Notes" means the Notes issued in the Exchange Offer
pursuant to Section 2.06(f) hereof.
"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.
"Excluded Contributions" means the Cash Equivalents or other assets
(valued at their Fair Market Value as determined in good faith by senior
management or the Board of Directors of the Issuer) received by the Issuer after
the Issue Date from: (1) contributions to its common equity capital, and (2) the
sale (other than to a Subsidiary of the Issuer or to any Subsidiary management
equity plan or stock option plan or any other management or employee benefit
plan or agreement) of Capital Stock (other than Disqualified Stock and
Designated Preferred Stock) of the Issuer, in each case designated as Excluded
Contributions pursuant to an Officer's Certificate executed by an Officer of the
Issuer on or promptly after the date such capital contributions are made or the
date such Capital Stock is sold, as the case may be.
"Fair Market Value" means, with respect to any asset or property,
the price which could be negotiated in an arm's-length transaction, for cash,
between a willing seller and a willing and able buyer, neither of whom is under
undue pressure or compulsion to complete the transaction.
"Fixed Charge Coverage Ratio" means, with respect to any Person for
any period, the ratio of EBITDA of such Person for such period to the Fixed
Charges of such Person for such period. In the event that the Issuer or any of
its Restricted
19
Subsidiaries Incurs, repays, repurchases or redeems any Indebtedness (other than
in the case of revolving credit borrowings or revolving advances under any
Qualified Receivables Financing, in which case interest expense shall be
computed based upon the average daily balance of such Indebtedness during the
applicable period) 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 but prior to 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, repayment, repurchase or redemption of Indebtedness, or such
issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, as
if the same had occurred at the beginning of the applicable four-quarter period.
For purposes of making the computation referred to above,
Investments, acquisitions, dispositions, mergers, amalgamations, consolidations
(including the Transactions) and discontinued operations (as determined in
accordance with GAAP), in each case with respect to an operating unit of a
business, 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 assuming that all such Investments,
acquisitions, dispositions, mergers, amalgamations, consolidations (including
the Transactions) and discontinued operations (and the change of any associated
fixed charge obligations and the change in EBITDA 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 or was merged with or into the Issuer or any Restricted Subsidiary
since the beginning of such period shall have made any Investment, acquisition,
disposition, merger, consolidation, amalgamation or discontinued operation, in
each case with respect to an operating unit of a business, 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 Investment, acquisition, disposition, discontinued operation, merger,
amalgamation or consolidation had occurred at the beginning of the applicable
four-quarter period.
For purposes of this definition, whenever pro forma effect is to be
given to any event, the pro forma calculations shall be made in good faith by a
responsible financial or accounting officer of the Issuer. Any such pro forma
calculation may include adjustments appropriate, in the reasonable good faith
determination of the Issuer as set forth in an Officer's Certificate, to reflect
(1) operating expense reductions and other operating improvements or synergies
reasonably expected to result from the applicable event (including, to the
extent applicable, from the Transactions), and (2) all adjustments of the nature
used in connection with the calculation of "Adjusted EBITDA" as set forth in
footnote 2 to the "Summary Historical and Unaudited Pro Forma Financial Data"
under "Offering Memorandum Summary" in the Offering Memorandum to the extent
such adjustments, without duplication, continue to be applicable to such
four-quarter period.
20
If any Indebtedness bears a floating rate of interest and is being
given pro forma effect, the interest on such Indebtedness shall be calculated as
if the rate in effect on the Calculation Date had been the applicable rate for
the entire period (taking into account any Hedging Obligations applicable to
such Indebtedness if such Hedging Obligation has a remaining term in excess of
12 months). Interest on a Capitalized Lease Obligation shall be deemed to accrue
at an interest rate reasonably determined by a responsible financial or
accounting officer of the Issuer to be the rate of interest implicit in such
Capitalized Lease Obligation in accordance with GAAP. For purposes of making the
computation referred to above, interest on any Indebtedness under a revolving
credit facility computed on a pro forma basis shall be computed based upon the
average daily balance of such Indebtedness during the applicable period.
Interest on Indebtedness that 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 rate, shall be deemed to have been based upon the rate actually
chosen, or, if none, then based upon such optional rate chosen as the Issuer may
designate.
For purposes of this definition, any amount in a currency than U.S.
dollars will be converted to U.S. dollars based on the average exchange rate for
such currency for the most recent twelve month period immediately prior to the
date of determination in a manner consistent with that used in calculating
EBITDA for the applicable period.
"Fixed Charges" means, with respect to any Person for any period,
the sum, without duplication, of (1) Consolidated Interest Expense of such
Person for such period and (2) all cash dividend payments (excluding items
eliminated in consolidation) on any series of Preferred Stock or Disqualified
Stock of such Person and its Restricted Subsidiaries.
"Foreign Subsidiary" means a Restricted Subsidiary not organized or
existing under the laws of the United States of America or any state thereof or
the District of Columbia and any direct or indirect subsidiary of such
Restricted Subsidiary.
"GAAP" means generally accepted accounting principles in the United
States 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 Issue Date. For the
purposes of this Indenture, the term "consolidated" with respect to any Person
shall mean such Person consolidated with its Restricted Subsidiaries, and shall
not include any Unrestricted Subsidiary, but the interest of such Person in an
Unrestricted Subsidiary will be accounted for as an Investment.
21
"Global Note Legend" means the legend set forth in Section
2.06(g)(ii) hereof, which is required to be placed on all Global Notes issued
under this Indenture.
"Global Notes" means, individually and collectively, the Restricted
Global Notes and the Unrestricted Global Notes, substantially in the form of
Exhibit A hereto.
"Government Securities" means securities that are:
(1) direct obligations of the United States of America for the
timely payment of which its full faith and credit is pledged; or
(2) obligations of a Person controlled or supervised by and
acting as an agency or instrumentality of the United States of
America the timely payment of which is unconditionally guaranteed as
a full faith and credit obligation by the United States of America,
which, in either case, are not callable or redeemable at the option
of the issuers thereof, and shall also include a depository receipt issued by a
bank (as defined in Section 3(a)(2) of the Securities Act), as custodian with
respect to any such Government Securities or a specific payment of principal of
or interest on any such Government Securities held by such custodian for the
account of the holder of such depository receipt; provided that (except as
required by law) such custodian is not authorized to make any deduction from the
amount payable to the holder of such depository receipt from any amount received
by the custodian in respect of the Government Securities or the specific payment
of principal of or interest on the Government Securities evidenced by such
depository receipt.
"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, letters of
credit and reimbursement agreements in respect thereof), of all or any part of
any Indebtedness or other obligations.
"Guarantee" means any guarantee of the obligations of the Issuer
under this Indenture and the Notes by any Person in accordance with the
provisions herein.
"Guarantor" means any Person that Incurs a Guarantee; provided that
upon the release or discharge of such Person from its Guarantee in accordance
with this Indenture such Person ceases to be a Guarantor.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under:
22
(1) currency exchange, interest rate or commodity swap agreements,
currency exchange, interest rate or commodity cap agreements and currency
exchange, interest rate or commodity collar agreements; and
(2) other agreements or arrangements designed to protect such Person
against fluctuations in currency exchange, interest rates or commodity prices.
"Holder" means the Person in whose name a Note is registered on the
Registrar's books.
"Incur" means issue, assume, guarantee, incur or otherwise become
liable for; provided, however, that any Indebtedness or Capital Stock of a
Person existing at the time such person becomes a Subsidiary (whether by merger,
amalgamation, consolidation, acquisition or otherwise) shall be deemed to be
Incurred by such Person at the time it becomes a Subsidiary.
"Indebtedness" means, with respect to any Person:
(1) the principal and premium (if any) of any indebtedness of such
Person, whether or not contingent, (a) in respect of borrowed money, (b)
evidenced by bonds, notes, debentures or similar instruments or letters of
credit or bankers' acceptances (or, without duplication, reimbursement
agreements in respect thereof), (c) representing the deferred and unpaid
purchase price of any property (except any such balance that (i) constitutes a
trade payable or similar obligation to a trade creditor Incurred in the ordinary
course of business, (ii) any earn-out obligations until such obligation becomes
a liability on the balance sheet of such Person in accordance with GAAP and
(iii) liabilities accrued in the ordinary course of business), which purchase
price is due more than six months after the date of placing the property in
service or taking delivery and title thereto, (d) in respect of Capitalized
Lease Obligations, or (e) representing any Hedging Obligations, if and to the
extent that any of the foregoing indebtedness (other than letters of credit and
Hedging Obligations) would appear as a liability on a balance sheet (excluding
the footnotes thereto) of such Person prepared in accordance with GAAP;
(2) to the extent not otherwise included, any obligation of such
Person to be liable for, or to pay, as obligor, guarantor or otherwise, the
obligations referred to in clause (1) of another Person (other than by
endorsement of negotiable instruments for collection in the ordinary course of
business); and
(3) to the extent not otherwise included, Indebtedness of another
Person secured by a Lien on any asset owned by such Person (whether or not such
23
Indebtedness is assumed by such Person); provided, however, that the amount of
such Indebtedness will be the lesser of: (a) the Fair Market Value (as
determined in good faith by the Issuer) of such asset at such date of
determination, and (b) the amount of such Indebtedness of such other Person;
provided, however, that notwithstanding the foregoing, Indebtedness shall be
deemed not to include (1) Contingent Obligations incurred in the ordinary course
of business and not in respect of borrowed money; (2) deferred or prepaid
revenues; (3) purchase price holdbacks in respect of a portion of the purchase
price of an asset to satisfy warranty or other unperformed obligations of the
respective seller; (4) Obligations under or in respect of Qualified Receivables
Financing or (5) obligations under the Acquisition Documents.
Notwithstanding anything in this Indenture to the contrary,
Indebtedness shall not include, and shall be calculated without giving effect
to, the effects of Statement of Financial Accounting Standards No. 133 and
related interpretations to the extent such effects would otherwise increase or
decrease an amount of Indebtedness for any purpose under this Indenture as a
result of accounting for any embedded derivatives created by the terms of such
Indebtedness; and any such amounts that would have constituted Indebtedness
under this Indenture but for the application of this sentence shall not be
deemed an Incurrence of Indebtedness under this Indenture.
"Indenture" means this Indenture, as amended or supplemented from
time to time.
"Independent Financial Advisor" means an accounting, appraisal or
investment banking firm or consultant, in each case of nationally recognized
standing, that is, in the good faith determination of the Issuer, qualified to
perform the task for which it has been engaged.
"Indirect Participant" means a Person who holds a beneficial
interest in a Global Note through a Participant.
"Initial Commitment Amount" means the sum of (i) the aggregate
principal amount of term loans outstanding under the Credit Agreement as of the
Issue Date, (ii) the aggregate principal amount of the revolving credit facility
(whether drawn, in whole or in part, or undrawn) under the Credit Agreement as
of the Issue Date, and (iii) the aggregate principal amount of delayed draw term
loans or incremental term loan or revolving credit facilities contemplated by
the Credit Agreement (as in effect on the Issue Date) up to a maximum of $250
million pursuant to this clause (iii).
24
"Initial Notes" means the Notes issued on the Issue Date and any
Notes issued in replacement thereof, but not including any Exchange Notes issued
in exchange therefore.
"Initial Purchasers" means Bear, Stearns and Co. Inc., Credit Suisse
Securities (USA) LLC, Lehman Brothers Inc., ABN AMRO Incorporated, Mizuho
Securities USA Inc. and Natexis Bleichroeder Inc.
"Interest Payment Date" means June 1 and December 1 of each year to
Stated Maturity.
"Interest Period" means the period commencing on and including an
Interest Payment Date and ending on and including the day immediately preceding
the next succeeding Interest Payment Date, with the exception that the first
Interest Period shall commence on and include the Issue Date and end on and
include November 30, 2007.
"Investment Grade Rating" means a rating equal to or higher than
Baa3 (or the equivalent) by Moody's and BBB- (or the equivalent) by S&P, or an
equivalent rating by any other Rating Agency.
"Investment Grade Securities" means:
(1) securities issued or directly and fully guaranteed or insured by
the U.S. government or any agency or instrumentality thereof (other than Cash
Equivalents);
(2) securities that have a rating equal to or higher than Baa3 (or
equivalent) by Moody's or BBB- (or equivalent) by S&P, or an equivalent rating
by any other Rating Agency, but excluding any debt securities or loans or
advances between and among the Issuer and its Subsidiaries;
(3) investments in any fund that invests exclusively in investments
of the type described in clauses (1) and (2) above which fund may also hold
immaterial amounts of cash pending investment and/or distribution; and
(4) corresponding instruments in countries other than the United
States customarily utilized for high quality investments and in each case with
maturities not exceeding two years from the date of acquisition.
25
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the form of loans
(including guarantees), advances or capital contributions (excluding accounts
receivable, trade credit and advances to customers and commission, travel and
similar advances to officers, employees and consultants made in the ordinary
course of business), purchases or other acquisitions for consideration of
Indebtedness, Equity Interests or other securities issued by any other Person
and investments that are required by GAAP to be classified on the balance sheet
of the Issuer in the same manner as the other investments included in this
definition to the extent such transactions involve the transfer of cash or other
property. For purposes of the definition of "Unrestricted Subsidiary" and
Section 4.07 hereof:
(1) "Investments" shall include the portion (proportionate to the
Issuer's equity interest in such Subsidiary) of the Fair Market Value (as
determined in good faith by the Issuer) of the net assets of a Subsidiary of the
Issuer at the time that such Subsidiary is designated an Unrestricted
Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a
Restricted Subsidiary, the Issuer shall be deemed to continue to have a
permanent "Investment" in an Unrestricted Subsidiary equal to an amount (if
positive) equal to:
(a) the Issuer's "Investment" in such Subsidiary at the time
of such redesignation, less
(b) the portion (proportionate to the Issuer's Equity Interest
in such Subsidiary) of the Fair Market Value (as determined in good
faith by the Issuer) of the net assets of such Subsidiary at the
time of such redesignation; and
(2) any property transferred to or from an Unrestricted Subsidiary
shall be valued at its Fair Market Value (as determined in good faith by the
Issuer) at the time of such transfer, in each case as determined in good faith
by the Board of Directors of the Issuer.
"Issue Date" means the date on which the Notes are originally
issued.
"Issuer" means Bauble Acquisition Sub, Inc., a Florida corporation
(and not any of its Subsidiaries), and its successors.
"Issuer Order" means a written request or order signed on behalf of
the Issuer by an Officer of the Issuer, who must be the principal executive
officer, the principal financial officer, the treasurer or the principal
accounting officer of the Issuer, and delivered to the Trustee.
26
"Letter of Transmittal" means the letter of transmittal to be
prepared by the Issuer 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 similar encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law (including any conditional sale or other title retention agreement, any
lease in the nature thereof, any option or other agreement to sell or give a
security interest in and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction); provided that in no event shall an operating lease be deemed to
constitute a Lien.
"Management Group" means the group consisting of the directors,
executive officers and other management personnel of the Issuer or any direct or
indirect parent of the Issuer, as the case may be, on the Issue Date together
with (1) any new directors whose election by such boards of directors or whose
nomination for election by the shareholders of the Issuer or any direct or
indirect parent of the Issuer, as applicable, was approved by a vote of a
majority of the directors of the Issuer or any direct or indirect parent of the
Issuer, as applicable, then still in office who were either directors on the
Issue Date or whose election or nomination was previously so approved and (2)
executive officers and other management personnel of the Issuer or any direct or
indirect parent of the Issuer, as applicable, hired at a time when the directors
on the Issue Date together with the directors so approved constituted a majority
of the directors of the Issuer or any direct or indirect parent of the Issuer,
as applicable.
"Merger Agreement" means the Agreement and Plan of Merger, dated as
of March 20, 2007, among Claire's Stores, Inc., Bauble Holdings Corp. and Bauble
Acquisition Sub, Inc., as amended, supplemented or modified from time to time
prior to the Issue Date or thereafter.
"Moody's" means Moody's Investors Service, Inc. or any successor to
the rating agency business thereof.
"Net Income" means, with respect to any Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of Preferred Stock dividends.
"Net Proceeds" means the aggregate cash proceeds received by the
Issuer or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received in respect of or upon the sale
or other disposition of any Designated Non-cash Consideration received in any
Asset Sale and any cash payments
27
received by way of deferred payment of principal pursuant to a note or
installment receivable or otherwise, but only as and when received, but
excluding the assumption by the acquiring person of Indebtedness relating to the
disposed assets or other consideration received in any other non-cash form), net
of the direct costs relating to such Asset Sale and the sale or disposition of
such Designated Non-cash Consideration (including, without limitation, legal,
accounting and investment banking fees, and brokerage and sales commissions),
and any relocation expenses Incurred as a result thereof, taxes paid or payable
as a result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements related thereto), amounts required
to be applied to the repayment of principal, premium (if any) and interest on
Indebtedness required (other than pursuant to Section 4.10(b) hereof) to be paid
as a result of such transaction, and any deduction of appropriate amounts to be
provided by the Issuer as a reserve in accordance with GAAP against any
liabilities associated with the asset disposed of in such transaction and
retained by the Issuer after such sale or other disposition thereof, including,
without limitation, pension and other post-employment benefit liabilities and
liabilities related to environmental matters or against any indemnification
obligations associated with such transaction.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Notes" means the Initial Notes, the Exchange Notes issued in
exchange therefore, any Additional Notes and any PIK Notes issued in respect of
any Notes. For purposes of this Indenture, all references to "principal amount"
of the Notes shall include any PIK Notes issued in respect thereof (and any
increase in the principal amount thereof) as a result of the payment of PIK
Interest.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements (including, without limitation, reimbursement
obligations with respect to letters of credit and bankers' acceptances), damages
and other liabilities payable under the documentation governing any
Indebtedness; provided that Obligations with respect to the Notes shall not
include fees or indemnifications in favor of the Trustee and other third parties
other than the Holders of the Notes.
"Offering Memorandum" means the confidential Offering Memorandum,
dated May 22, 2007, relating to the sale of the Initial Notes.
"Officer" means the Chairman of the Board, Chief Executive Officer,
Chief Financial Officer, President, any Executive Vice President, Senior Vice
President or Vice President, the Treasurer or the Secretary of the Issuer.
"Officer's Certificate" means a certificate signed on behalf of the
Issuer by an Officer of the Issuer, who must be the principal executive officer,
the principal
28
financial officer, the treasurer or the principal accounting officer of the
Issuer, which meets the requirements set forth in this Indenture.
"Opinion of Counsel" means a written opinion from legal counsel who
is acceptable to the Trustee. The counsel may be an employee of or counsel to
the Issuer.
"Pari Passu Indebtedness" means:
(1) with respect to the Issuer, the Notes and any Indebtedness which
ranks pari passu in right of payment to the Notes; and
(2) with respect to any Guarantor, its Guarantee and any
Indebtedness which ranks pari passu in right of payment to such Guarantor's
Guarantee.
"Participant" means, with respect to the Depositary a Person who has
an account with the Depositary (and, with respect to DTC, shall include
Euroclear and Clearstream).
"Permitted Amount" means (a) an aggregate additional principal
amount that does not cause the Secured Indebtedness Leverage Ratio of the Issuer
to exceed 5.0 to 1.00, determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), or (b) an aggregate principal
amount, which when aggregated with the principal amount of all other
Indebtedness (including Capitalized Lease Obligations), together with any
refinancings or replacements thereof, then outstanding and Incurred under this
clause (b), does not exceed the greater of $75 million and 2.25% of Total Assets
at the time of Incurrence.
"Permitted Holders" means, at any time, each of (i) the Sponsors and
(ii) the Management Group. Any Person or group whose acquisition of beneficial
ownership constitutes a Change of Control in respect of which a Change of
Control Offer is made in accordance with the requirements of this Indenture will
thereafter, together with its Affiliates, constitute an additional Permitted
Holder.
"Permitted Investments" means:
(1) any Investment in the Issuer or any Restricted Subsidiary;
(2) any Investment in Cash Equivalents or Investment Grade
Securities;
29
(3) any Investment by the Issuer or any Restricted Subsidiary of the
Issuer in a Person if as a result of such Investment (a) such Person becomes a
Restricted Subsidiary of the Issuer, or (b) such Person, in one transaction or a
series of related transactions, is merged, consolidated or amalgamated with or
into, or transfers or conveys all or substantially all of its assets to, or is
liquidated into, the Issuer or a Restricted Subsidiary of the Issuer;
(4) any Investment in securities or other assets not constituting
Cash Equivalents and received in connection with an Asset Sale made pursuant to
Section 4.10 hereof or any other disposition of assets not constituting an Asset
Sale;
(5) any Investment existing on, or made pursuant to binding
commitments existing on, the Issue Date or an Investment consisting of any
extension, modification or renewal of any Investment existing on the Issue Date;
provided that the amount of any such Investment may be increased (x) as required
by the terms of such Investment as in existence on the Issuer Date or (y) as
otherwise permitted under this Indenture;
(6) advances to employees, taken together with all other advances
made pursuant to this clause (6), not to exceed the greater of (x) $5 million
and (y) 0.25% of Total Assets at any one time outstanding;
(7) any Investment acquired by the Issuer or any of its Restricted
Subsidiaries (a) in exchange for any other Investment or accounts receivable
held by the Issuer or any such Restricted Subsidiary in connection with or as a
result of a bankruptcy, workout, reorganization or recapitalization of the
issuer of such other Investment or accounts receivable, or (b) as a result of a
foreclosure by the Issuer 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;
(8) Hedging Obligations permitted under Section 4.09(b)(x) hereof;
(9) any Investment by the Issuer or any of its Restricted
Subsidiaries in a Similar Business having an aggregate Fair Market Value (as
determined in good faith by the Issuer), taken together with all other
Investments made pursuant to this clause (9) that are at that time outstanding,
not to exceed the greater of (x) $50 million and (y) 1.5% of Total Assets at the
time of such Investment (with the Fair Market Value of each Investment being
measured at the time made and without giving effect to subsequent changes in
value); provided, however, that if any Investment pursuant to this clause (9) is
made in any Person that is not a Restricted Subsidiary of the Issuer at the date
of the making of such Investment and such Person becomes a Restricted Subsidiary
of the Issuer after such date, such Investment shall thereafter be deemed to
have been made
30
pursuant to clause (1) above and shall cease to have been made pursuant to this
clause (9) for so long as such Person continues to be a Restricted Subsidiary;
(10) additional Investments by the Issuer or any of its Restricted
Subsidiaries having an aggregate Fair Market Value (as determined in good faith
by the Issuer), taken together with all other Investments made pursuant to this
clause (10) that are at that time outstanding, not to exceed the greater of (x)
$100 million and (y) 3.0% of Total Assets at the time of such Investment (with
the Fair Market Value of each Investment being measured at the time made and
without giving effect to subsequent changes in value); provided, however, that
if any Investment pursuant to this clause (10) is made in any Person that is not
a Restricted Subsidiary of the Issuer at the date of the making of such
Investment and such Person becomes a Restricted Subsidiary of the Issuer after
such date, such Investment shall thereafter be deemed to have been made pursuant
to clause (1) above and shall cease to have been made pursuant to this clause
(10) for so long as such Person continues to be a Restricted Subsidiary;
(11) loans and advances to officers, directors or employees for
business-related travel expenses, moving expenses and other similar expenses, in
each case Incurred in the ordinary course of business or consistent with past
practice or to fund such person's purchase of Equity Interests of the Issuer or
any direct or indirect parent of the Issuer;
(12) Investments the payment for which consists of Equity Interests
of the Issuer (other than Disqualified Stock) or any direct or indirect parent
of the Issuer, as applicable; provided, however, that such Equity Interests will
not increase the amount available for Restricted Payments under clause (C) of
the definition of Cumulative Credit;
(13) any transaction to the extent it constitutes an Investment that
is permitted by and made in accordance with Section 4.11(b) hereof (except
transactions described in clauses (ii), (vi), (vii) and (xi)(b) thereof);
(14) Investments consisting of the licensing or contribution of
intellectual property pursuant to joint marketing arrangements with other
Persons;
(15) guarantees issued in accordance with Section 4.09 and Section
4.14;
(16) Investments consisting of or to finance purchases and
acquisitions of inventory, supplies, materials, services or equipment or
purchases of contract rights or licenses or leases of intellectual property;
31
(17) any Investment in a Receivables Subsidiary or any Investment by
a Receivables Subsidiary in any other Person in connection with a Qualified
Receivables Financing, including Investments of funds held in accounts permitted
or required by the arrangements governing such Qualified Receivables Financing
or any related Indebtedness;
(18) additional Investments in joint ventures not to exceed at any
one time in the aggregate outstanding under this clause (18), the greater of (x)
$65 million and (y) 2.0% of Total Assets; provided, however, that if any
Investment pursuant to this clause (18) is made in any Person that is not a
Restricted Subsidiary of the Issuer at the date of the making of such Investment
and such Person becomes a Restricted Subsidiary of the Issuer after such date,
such Investment shall thereafter be deemed to have been made pursuant to clause
(1) above and shall cease to have been made pursuant to this clause (18) for so
long as such Person continues to be a Restricted Subsidiary; and
(19) Investments of a Restricted Subsidiary of the Issuer acquired
after the Issue Date or of an entity merged into, amalgamated with, or
consolidated with the Issuer or a Restricted Subsidiary of the Issuer in a
transaction that is not prohibited by Section 5.01 after the Issue Date to the
extent that such Investments were not made in contemplation of such acquisition,
merger, amalgamation or consolidation and were in existence on the date of such
acquisition, merger, amalgamation or consolidation.
"Permitted Liens" means, with respect to any Person:
(1) pledges or deposits by such Person under workmen's compensation
laws, unemployment insurance laws or similar legislation, or good faith deposits
in connection with bids, tenders, contracts (other than for the payment of
Indebtedness) or leases to which such Person is a party, or deposits to secure
public or statutory obligations of such Person or deposits of cash or U.S.
government bonds to secure surety or appeal bonds to which such Person is a
party, or deposits as security for contested taxes or import duties or for the
payment of rent, in each case Incurred in the ordinary course of business;
(2) Liens imposed by law, such as carriers', warehousemen's and
mechanics' Liens, in each case for sums not yet due or being contested in good
faith by appropriate proceedings or other Liens arising out of judgments or
awards against such Person with respect to which such Person shall then be
proceeding with an appeal or other proceedings for review;
(3) Liens for taxes, assessments or other governmental charges not
yet due or payable or subject to penalties for nonpayment or which are being
contested in good faith by appropriate proceedings;
32
(4) Liens in favor of issuers of performance and surety bonds or bid
bonds or with respect to other regulatory requirements or letters of credit
issued pursuant to the request of and for the account of such Person in the
ordinary course of its business;
(5) minor survey exceptions, minor encumbrances, easements or
reservations of, or rights of others for, licenses, rights-of-way, sewers,
electric lines, telegraph and telephone lines and other similar purposes, or
zoning or other restrictions as to the use of real properties or Liens
incidental to the conduct of the business of such Person or to the ownership of
its properties which were not Incurred in connection with Indebtedness and which
do not in the aggregate materially adversely affect the value of said properties
or materially impair their use in the operation of the business of such Person;
(6) (A) Liens on assets of a Restricted Subsidiary that is not a
Guarantor securing Indebtedness of such Restricted Subsidiary permitted to be
Incurred pursuant to Section 4.09 hereof, (B) Liens securing Indebtedness
permitted to be incurred under the Credit Agreement, including any letter of
credit facility relating thereto, that was permitted to be incurred pursuant to
clause (i) of Section 4.09(b) hereof, (C) Liens securing obligations in respect
of any Indebtedness permitted to be incurred pursuant to clauses (xii) and
(xxii) of Section 4.09(b) hereof, provided that, with respect to Liens securing
obligations permitted under this clause (C), at the time of incurrence and after
giving pro forma effect thereto, the Secured Indebtedness Leverage Ratio of the
Issuer would not exceed 4.75 to 1.00, and (D) Liens securing Indebtedness
permitted to be Incurred pursuant to clause (iv) of Section 4.09(b), provided
that such Liens do not extend to any property or assets that are not being
purchased, leased, constructed or improved with the proceeds of such
Indebtedness being Incurred pursuant to clause (iv);
(7) Liens existing on the Issue Date;
(8) Liens on assets, property or shares of stock of a Person at the
time such Person becomes a Subsidiary; provided, however, that such Liens are
not created or Incurred in connection with, or in contemplation of, such other
Person becoming such a Subsidiary; provided, further, however, that such Liens
may not extend to any other property owned by the Issuer or any Restricted
Subsidiary of the Issuer;
(9) Liens on assets or property at the time the Issuer or a
Restricted Subsidiary of the Issuer acquired the assets or property, including
any acquisition by means of a merger, amalgamation or consolidation with or into
the Issuer or any Restricted Subsidiary of the Issuer; provided, however, that
such Liens are not created or Incurred in connection with, or in contemplation
of, such acquisition; provided, further, however, that the Liens may not extend
to any other property owned by the Issuer or any Restricted Subsidiary of the
Issuer;
33
(10) Liens securing Indebtedness or other obligations of a
Restricted Subsidiary owing to the Issuer or another Restricted Subsidiary of
the Issuer permitted to be Incurred in accordance with Section 4.09;
(11) Liens securing Hedging Obligations not incurred in violation of
this Indenture; provided that with respect to Hedging Obligations relating to
Indebtedness, such Lien extends only to the property securing such Indebtedness;
(12) Liens on specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of bankers'
acceptances issued or created for the account of such Person to facilitate the
purchase, shipment or storage of such inventory or other goods;
(13) leases and subleases of real property which do not materially
interfere with the ordinary conduct of the business of the Issuer or any of its
Restricted Subsidiaries;
(14) Liens arising from Uniform Commercial Code financing statement
filings regarding operating leases entered into by the Issuer and its Restricted
Subsidiaries in the ordinary course of business;
(15) Liens in favor of the Issuer or any Guarantor;
(16) Liens on accounts receivable and related assets of the type
specified in the definition of "Receivables Financing" Incurred in connection
with a Qualified Receivables Financing;
(17) deposits made in the ordinary course of business to secure
liability to insurance carriers;
(18) Liens on the Equity Interests of Unrestricted Subsidiaries;
(19) grants of software and other technology licenses in the
ordinary course of business;
(20) Liens to secure any refinancing, refunding, extension, renewal
or replacement (or successive refinancings, refundings, extensions, renewals or
replacements) as a whole, or in part, of any Indebtedness secured by any Lien
referred to in the foregoing clauses (6), (7), (8), (9), (10), (11) and (15);
provided, however, that (x)
34
such new Lien shall be limited to all or part of the same property that secured
the original Lien (plus improvements on such property), and (y) the Indebtedness
secured by such Lien at such time is not increased to any amount greater than
the sum of (A) the outstanding principal amount or, if greater, committed amount
of the Indebtedness described under clauses (6), (7), (8), (9), (10), (11) and
(15) at the time the original Lien became a Permitted Lien under this Indenture,
and (B) an amount necessary to pay any fees and expenses, including premiums,
related to such refinancing, refunding, extension, renewal or replacement;
provided further, however, that in the case of any Liens to secure any
refinancing, refunding, extension or renewal of Indebtedness secured by a Lien
referred to in clause (6)(B) above, the principal amount of any Indebtedness
Incurred for such refinancing, refunding, extension or renewal shall be deemed
secured by a Lien under clause (6)(B) above and not this clause (20) for
purposes of determining the principal amount of Indebtedness outstanding under
clause (6)(B) above;
(21) Liens on equipment of the Issuer or any Restricted Subsidiary
granted in the ordinary course of business to the Issuer's or such Restricted
Subsidiary's client at which such equipment is located;
(22) judgment and attachment Liens not giving rise to an Event of
Default and notices of lis pendens and associated rights related to litigation
being contested in good faith by appropriate proceedings and for which adequate
reserves have been made;
(23) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into in the
ordinary course of business;
(24) Liens incurred to secure cash management services in the
ordinary course of business;
(25) other Liens securing obligations incurred in the ordinary
course of business which obligations do not exceed $30 million at any one time
outstanding; and
(26) liens arising by virtue of any statutory or common law
provisions relating to banker's liens, rights of set-off or similar rights and
remedies as to deposit accounts or other funds maintained with a depository or
financial institution.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
35
"PIK Interest" means interest paid with respect to the Notes in the
form of increasing the outstanding principal amount of the Notes or issuing PIK
Notes.
"PIK Notes" means additional Notes issued under this Indenture on
the same terms and conditions as the Notes issued on the Issue Date in
connection with the payment of PIK Interest. For purposes of this Indenture, all
references to "PIK Notes" shall include the Related PIK Notes.
"Preferred Stock" means any Equity Interest with preferential right
of payment of dividends or upon liquidation, dissolution, or winding up.
"Private Placement Legend" means the legend set forth in Section
2.06(g)(i) hereof to be placed on all Notes issued under this Indenture, except
where otherwise permitted by the provisions of this Indenture.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Qualified Receivables Financing" means any Receivables Financing of
a Receivables Subsidiary that meets the following conditions:
(1) the Board of Directors of the Issuer shall have determined in
good faith that such Qualified Receivables Financing (including financing terms,
covenants, termination events and other provisions) is in the aggregate
economically fair and reasonable to the Issuer and the Receivables Subsidiary;
(2) all sales of accounts receivable and related assets to the
Receivables Subsidiary are made at Fair Market Value (as determined in good
faith by the Issuer); and
(3) the financing terms, covenants, termination events and other
provisions thereof shall be market terms (as determined in good faith by the
Issuer) and may include Standard Securitization Undertakings.
The grant of a security interest in any accounts receivable of the
Issuer or any of its Restricted Subsidiaries (other than a Receivables
Subsidiary) to secure Bank Indebtedness shall not be deemed a Qualified
Receivables Financing.
"Rating Agency" means (1) each of Moody's and S&P and (2) if Moody's
or S&P ceases to rate the Notes for reasons outside of the Issuer's control, a
36
"nationally recognized statistical rating organization" within the meaning of
Rule 15cs-1(c)(2)(vi)(F) under the Exchange Act selected by the Issuer or any
direct or indirect parent of the Issuer as a replacement agency for Moody's or
S&P, as the case may be.
"Receivables Fees" means distributions or payments made directly or
by means of discounts with respect to any participation interests issued or sold
in connection with, and all other fees paid to a Person that is not a Restricted
Subsidiary in connection with, any Receivables Financing.
"Receivables Financing" means any transaction or series of
transactions that may be entered into by the Issuer or any of its Subsidiaries
pursuant to which the Issuer or any of its Subsidiaries may sell, convey or
otherwise transfer to (a) a Receivables Subsidiary (in the case of a transfer by
the Issuer or any of its Subsidiaries); and (b) any other Person (in the case of
a transfer by a Receivables Subsidiary), or may grant a security interest in,
any accounts receivable (whether now existing or arising in the future) of the
Issuer or any of its Subsidiaries, and any assets related thereto including,
without limitation, all collateral securing such accounts receivable, all
contracts and all guarantees or other obligations in respect of such accounts
receivable, proceeds of such accounts receivable and other assets which are
customarily transferred or in respect of which security interests are
customarily granted in connection with asset securitization transactions
involving accounts receivable and any Hedging Obligations entered into by the
Issuer or any such Subsidiary in connection with such accounts receivable.
"Receivables Repurchase Obligation" means any obligation of a seller
of receivables in a Qualified Receivables Financing to repurchase receivables
arising as a result of a breach of a representation, warranty or covenant or
otherwise, including as a result of a receivable or portion thereof becoming
subject to any asserted defense, dispute, off-set or counterclaim of any kind as
a result of any action taken by, any failure to take action by or any other
event relating to the seller.
"Receivables Subsidiary" means a Wholly-owned Restricted Subsidiary
of the Issuer (or another Person formed for the purposes of engaging in
Qualified Receivables Financing with the Issuer in which the Issuer or any
Subsidiary of the Issuer makes an Investment and to which the Issuer or any
Subsidiary of the Issuer transfers accounts receivable and related assets) which
engages in no activities other than in connection with the financing of accounts
receivable of the Issuer and its Subsidiaries, all proceeds thereof and all
rights (contractual or other), collateral and other assets relating thereto, and
any business or activities incidental or related to such business, and which is
designated by the Board of Directors of the Issuer (as provided below) as a
Receivables Subsidiary and:
(a) no portion of the Indebtedness or any other obligations
(contingent or otherwise) of which (i) is guaranteed by the Issuer
or any other
37
Subsidiary of the Issuer (excluding guarantees of obligations (other
than the principal of and interest on, Indebtedness) pursuant to
Standard Securitization Undertakings), (ii) is recourse to or
obligates the Issuer or any other Subsidiary of the Issuer in any
way other than pursuant to Standard Securitization Undertakings, or
(iii) subjects any property or asset of the Issuer or any other
Subsidiary of the Issuer, directly or indirectly, contingently or
otherwise, to the satisfaction thereof, other than pursuant to
Standard Securitization Undertakings;
(b) with which neither the Issuer nor any other Subsidiary of
the Issuer has any material contract, agreement, arrangement or
understanding other than on terms which the Issuer reasonably
believes to be no less favorable to the Issuer or such Subsidiary
than those that might be obtained at the time from Persons that are
not Affiliates of the Issuer; and
(c) to which neither the Issuer nor any other Subsidiary of
the Issuer has any obligation to maintain or preserve such entity's
financial condition or cause such entity to achieve certain levels
of operating results.
Any such designation by the Board of Directors of the Issuer shall
be evidenced to the Trustee by filing with the Trustee a certified copy of the
resolution of the Board of Directors of the Issuer giving effect to such
designation and an Officer's Certificate certifying that such designation
complied with the foregoing conditions.
"Record Date" for the interest payable on any applicable Interest
Payment Date means the May 15 and November 15 (whether or not a Business Day)
immediately preceding such Interest Payment Date.
"Registration Rights Agreement" means the Registration Rights
Agreement with respect to the Notes dated as of the Issue Date, among Claire's
Stores, Inc., the Guarantors and the Initial Purchasers, 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 Issuer
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 Issuer 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 Regulation S Temporary Global
Note or Regulation S Permanent Global Note, as applicable.
38
"Regulation S Permanent Global Note" means a permanent Global Note
in the form of Exhibit A bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of and registered in the name
of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Regulation S Temporary Global Note of the
applicable series upon expiration of the Restricted Period.
"Regulation S Temporary Global Note" means a temporary Global Note
in the form of Exhibit A bearing the Global Note Legend, the Private Placement
Legend and the Regulation S Temporary Global Note Legend and deposited with or
on behalf of and registered in the name of the Depositary or its nominee, issued
in a denomination equal to the outstanding principal amount of the Notes of the
applicable series initially sold in reliance on Rule 903.
"Regulation S Temporary Global Note Legend" means the legend set
forth in Section 2.06(g)(iii) hereof.
"Representative" means the trustee, agent or representative (if any)
for an issue of Indebtedness; provided that if, and for so long as, such
Indebtedness lacks such a Representative, then the Representative for such
Indebtedness shall at all times constitute the holder or holders of a majority
in outstanding principal amount of obligations under such Indebtedness.
"Responsible Officer" means, when used with respect to the Trustee,
any officer within the corporate trust department of the Trustee, including any
vice president, assistant vice president, assistant secretary, assistant
treasurer, trust officer or any other officer of the Trustee who customarily
performs functions similar to those performed by the Persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred because of such Person's 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, or
that is required to bear, the Private Placement Legend.
"Restricted Global Note" means a Global Note bearing, or that is
required to bear, the Private Placement Legend.
"Restricted Cash" means cash and Cash Equivalents held by Restricted
Subsidiaries that is contractually restricted from being distributed to the
Issuer, except for
39
such restrictions that are contained in agreements governing Indebtedness
permitted under this Indenture and that is secured by such cash or Cash
Equivalents.
"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" means, with respect to any Person, any
Subsidiary of such Person other than an Unrestricted Subsidiary of such Person.
Unless otherwise indicated in this Indenture, all references to Restricted
Subsidiaries shall mean Restricted Subsidiaries of the Issuer.
"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/Leaseback Transaction" means an arrangement relating to
property now owned or hereafter acquired by the Issuer or a Restricted
Subsidiary whereby the Issuer or a Restricted Subsidiary transfers such property
to a Person and the Issuer or such Restricted Subsidiary leases it from such
Person, other than leases between the Issuer and a Restricted Subsidiary of the
Issuer or between Restricted Subsidiaries of the Issuer.
"S&P" means Standard & Poor's Ratings Group or any successor to the
rating agency business thereof.
"SEC" means the Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness secured by a Lien.
"Secured Indebtedness Leverage Ratio" means, with respect to any
Person, at any date the ratio of (i) Secured Indebtedness of such Person and its
Restricted
40
Subsidiaries as of such date of calculation (determined on a consolidated basis
in accordance with GAAP) less the amount of cash and cash Equivalents in excess
of any Restricted Cash that would be stated on the balance sheet of such Person
and its Restricted Subsidiaries and held by such Person and its Restricted
Subsidiaries as of such date of determination to (ii) EBITDA of such Person for
the four full fiscal quarters for which internal financial statements are
available immediately preceding such date on which such additional Indebtedness
is Incurred. In the event that the Issuer or any of its Restricted Subsidiaries
Incurs, repays, repurchases or redeems any Indebtedness subsequent to the
commencement of the period for which the Secured Indebtedness Leverage Ratio is
being calculated but prior to the event for which the calculation of the Secured
Indebtedness Leverage Ratio is made (the "Secured Leverage Calculation Date"),
then the Secured Indebtedness Leverage Ratio shall be calculated giving pro
forma effect to such Incurrence, repayment, repurchase or redemption of
Indebtedness as if the same had occurred at the beginning of the applicable
four-quarter period; provided that the Issuer may elect pursuant to an Officer's
Certificate delivered to the Trustee to treat all or any portion of the
commitment under any Indebtedness as being Incurred at such time, in which case
any subsequent Incurrence of Indebtedness under such commitment shall not be
deemed, for purposes of this calculation, to be an Incurrence at such subsequent
time.
For purposes of making the computation referred to above,
Investments, acquisitions, dispositions, mergers, amalgamations, consolidations
(including the Transactions) and discontinued operations (as determined in
accordance with GAAP), in each case with respect to an operating unit of a
business, during the four-quarter reference period or subsequent to such
reference period and on or prior to or simultaneously with the Secured Leverage
Calculation Date (each, for purposes of this calculation, a pro forma event)
shall be calculated on a pro forma basis assuming that all such Investments,
acquisitions, dispositions, mergers, amalgamations, consolidations (including
the Transactions) and discontinued operations (and the change of any associated
Indebtedness and the change in EBITDA 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 or was merged
with or into the Issuer or any Restricted Subsidiary since the beginning of such
period shall have made any Investment, acquisition, disposition, merger,
consolidation, amalgamation or discontinued operation, in each case with respect
to an operating unit of a business, that would have required adjustment pursuant
to this definition, then the Secured Indebtedness Leverage Ratio shall be
calculated giving pro forma effect thereto for such period as if such
Investment, acquisition, disposition, discontinued operation, merger,
amalgamation or consolidation had occurred at the beginning of the applicable
four-quarter period.
For purposes of this definition, whenever pro forma effect is to be
given to any pro forma event, the pro forma calculations shall be made in good
faith by a responsible financial or accounting officer of the Issuer. Any such
pro forma calculation may include adjustments appropriate, in the reasonable
good faith determination of the
41
Issuer as set forth in an Officer's Certificate, to reflect (1) operating
expense reductions and other operating improvements or synergies reasonably
expected to result from the applicable event (including, to the extent
applicable, from the Transactions) and (2) all adjustments of the nature used in
connection with the calculation of "Adjusted EBITDA" as set forth in footnote 2
to the "Summary Historical and Unaudited Pro Forma Financial Data" under
"Offering Memorandum Summary" in the Offering Memorandum to the extent such
adjustments, without duplication, continue to be applicable to such four-quarter
period.
For purposes of this definition, any amount in a currency than U.S.
dollars will be converted to U.S. dollars based on the average exchange rate for
such currency for the most recent twelve month period immediately prior to the
date of determination in a manner consistent with that used in calculating
EBITDA for the applicable period.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations of the SEC promulgated thereunder.
"Senior Notes" means the 9.25% Senior Notes due 2015 of the Issuer
to be issued on the Issue Date.
"Senior Notes Indenture" means the Indenture governing the Senior
Notes to be dated the Issue Date between the Issuer and the Trustee, as amended
or supplemented from time to time.
"Senior Subordinated Notes" means the 10.50% Senior Subordinated
Notes due 2017 of the Issuer to be issued on the Issue Date.
"Senior Subordinated Notes Indenture" means the Indenture governing
the Senior Subordinated Notes to be dated the Issue Date between the Issuer and
the Trustee, as may be amended or supplemented from time to time.
"Shelf Registration Statement" means the Shelf Registration
Statement as defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Restricted Subsidiary that would
be a "Significant Subsidiary" of the Issuer within the meaning of Rule 1-02
under Regulation S-X promulgated by the SEC (or any successor provision).
"Similar Business" means a business, the majority of whose revenues
are derived from the activities of the Issuer and its Subsidiaries as of the
Issue Date or any
42
business or activity that is reasonably similar or complementary thereto or a
reasonable extension, development or expansion thereof or ancillary thereto.
"Sponsors" means (i) one or more funds controlled by Apollo
Management, L.P., any of their respective Affiliates and other affiliated
co-investment partnerships (collectively, the "Apollo Sponsors") and (ii) any
Person that forms a group (within the meaning of Section 13(d)(3) or Section
14(d)(2) of the Exchange Act, or any successor provision) with any Apollo
Sponsors; provided that any Apollo Sponsor (x) owns a majority of the voting
power and (y) controls a majority of the Board of Directors of the Issuer.
"Standard Securitization Undertakings" means representations,
warranties, covenants, indemnities and guarantees of performance entered into by
the Issuer or any Subsidiary of the Issuer which the Issuer has determined in
good faith to be customary in a Receivables Financing including, without
limitation, those relating to the servicing of the assets of a Receivables
Subsidiary, it being understood that any Receivables Repurchase Obligation shall
be deemed to be a Standard Securitization Undertaking.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency beyond the control of the issuer unless such
contingency has occurred).
"Subordinated Indebtedness" means (a) with respect to the Issuer,
any Indebtedness of the Issuer which is by its terms subordinated in right of
payment to the Notes, and (b) with respect to any Guarantor, any Indebtedness of
such Guarantor which is by its terms subordinated in right of payment to its
Guarantee.
"Subsidiary" means, with respect to any Person, (1) any corporation,
association or other business entity (other than a partnership, joint venture or
limited liability company) 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 of determination 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, joint venture or limited liability
company of which (x) more than 50% of the capital accounts, distribution rights,
total equity and voting interests or general and limited partnership interests,
as applicable, are owned or controlled, directly or indirectly, by such Person
or one or more of the other Subsidiaries of that Person or a combination
thereof, whether in the form of membership, general, special or limited
partnership interests or otherwise,
43
and (y) such Person or any Subsidiary of such Person is a controlling general
partner or otherwise controls such entity.
"Synthetic Lease Obligations" means obligations of a Loan Party, as
defined in the Credit Agreement, as lessee/borrower under any transaction which
is classified as an operating lease under GAAP but as a financing for tax
purposes either currently or when such leases were originally written.
"Tax Distributions" means any distributions described in clause
(xii) of Section 4.07(b).
"Total Assets" means the total consolidated assets of the Issuer and
its Restricted Subsidiaries, as shown on the most recent balance sheet of the
Issuer, without giving effect to any amortization of the amount of intangible
assets since the Issue Date.
"Transactions" has the meaning set forth under "Offering Memorandum
Summary - The Transactions" in the Offering Memorandum.
"Treasury Rate" means, as of the applicable Redemption Date, the
yield to maturity as of such Redemption Date of United States Treasury
securities with a constant maturity (as compiled and published in the most
recent Federal Reserve Statistical Release H.15 (519) that has become publicly
available at least two business days prior to such Redemption Date (or, if such
Statistical Release is no longer published, any publicly available source of
similar market data)) most nearly equal to the period from such Redemption Date
to June 1, 2011; provided, however, that if the period from such Redemption Date
to June 1, 2011 is less than one year, the weekly average yield on actually
traded United States Treasury securities adjusted to a constant maturity of one
year will be used.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended (15 U.S.C. ss.ss. 77aaa-777bbbb).
"Trustee" means The Bank of New York, as trustee, until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"Unapplied Proceeds" means net cash proceeds received by the Issuer
and its Restricted Subsidiaries since immediately after the Issue Date from the
issue or sale of Equity Interests of the Issuer or any direct or indirect parent
entity of the Issuer (which proceeds are contributed to the Issuer or its
Restricted Subsidiary) or cash contributed to the capital of the Issuer (in each
case other than proceeds of Disqualified
44
Stock or sales of Equity Interests to, or contributions received from, the
Issuer or any of its Subsidiaries) as determined in accordance with clauses (B)
and (C) of the definition of Cumulative Credit to the extent such net cash
proceeds or cash have not been applied pursuant to such clauses to make
Restricted Payments or to make other Investments, payments or exchanges pursuant
to Section 4.07(b) hereof or to make Permitted Investments (other than Permitted
Investments specified in clauses (1) and (3) of the definition thereof).
"Uniform Commercial Code" means the New York Uniform Commercial Code
as in effect from time to time.
"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 Global Note,
substantially in the form of Exhibit A that bears the Global Note Legend and
that has the "Schedule of Exchanges of Interests in the Global Note" attached
thereto, and that is deposited with or on behalf of and registered in the name
of the Depositary, representing Notes that do not bear the Private Placement
Legend.
"Unrestricted Subsidiary" means:
(1) any Subsidiary of the Issuer that at the time of determination
shall be designated an Unrestricted Subsidiary by the Board of Directors of such
Person in the manner provided below; and
(2) any Subsidiary of an Unrestricted Subsidiary.
The Issuer may designate any Subsidiary of the Issuer (including any
newly acquired or newly formed Subsidiary of the Issuer) to be an Unrestricted
Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Equity
Interests or Indebtedness of, or owns or holds any Lien on any property of, the
Issuer or any other Subsidiary of the Issuer that is not a Subsidiary of the
Subsidiary to be so designated; provided, however, that the Subsidiary to be so
designated and its Subsidiaries do not at the time of designation have and do
not thereafter Incur any Indebtedness pursuant to which the lender has recourse
to any of the assets of the Issuer or any of its Restricted Subsidiaries;
provided, further, however, that either:
(a) the Subsidiary to be so designated has total consolidated
assets of $1,000 or less; or
45
(b) if such Subsidiary has consolidated assets greater than
$1,000, then such designation would be permitted under the covenant
described under Section 4.07.
The Issuer may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided, however, that immediately after giving effect
to such designation:
(x) (1) the Issuer could Incur $1.00 of additional Indebtedness
pursuant to Section 4.09(a) or (2) the Fixed Charge Coverage Ratio for the
Issuer and its Restricted Subsidiaries would be equal to or greater than such
ratio for the Issuer and its Restricted Subsidiaries immediately prior to such
designation, in each case on a pro forma basis taking into account such
designation, and
(y) no Event of Default shall have occurred and be continuing.
Any such designation by Issuer shall be evidenced to the Trustee by
promptly filing with the Trustee a copy of the resolution of the Board of
Directors or any committee thereof of the Issuer giving effect to such
designation and an Officer's Certificate certifying that such designation
complied with the foregoing provisions.
"U.S. Dollar Equivalent" means, with respect to any monetary amount
in a currency other than U.S. dollars, at any time for the determination
thereof, the amount of U.S. dollars obtained by converting such foreign currency
involved in such computation into U.S. dollars at the spot rate for the purchase
of U.S. dollars with the applicable foreign currency as quoted by Reuters at
approximately 10:00 A.M. (New York City time) on such date of determination (or
if no such quote is available on such date, on the immediately preceding
Business Day for which such a quote is available).
"U.S. Government Obligations" means securities that are:
(1) direct obligations of the United States of America for the
timely payment of which its full faith and credit is pledged, or
(2) obligations of a Person controlled or supervised by and acting
as an agency or instrumentality of the United States of America, the timely
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America,
which, in each case, are not callable or redeemable at the option of
the issuer thereof, and shall also include a depository receipt issued by a bank
(as defined in
46
Section 3(a)(2) of the Securities Act) as custodian with respect to any such
U.S. Government Obligations or a specific payment of principal of or interest on
any such U.S. Government Obligations held by such custodian for the account of
the holder of such depository receipt; provided that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligations or the specific payment
of principal of or interest on the U.S. Government Obligations evidenced by such
depository receipt.
"U.S. Person" means a U.S. person as defined in Rule 902(k) 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 or Preferred Stock, as the case may be, at
any date, the quotient obtained by dividing; (1) the sum of the products of the
number of years from the date of determination to the date of each successive
scheduled principal payment of such Indebtedness or redemption or similar
payment with respect to such Disqualified Stock or Preferred Stock multiplied by
the amount of such payment, by (2) the sum of all such payments.
"Wholly-owned Restricted Subsidiary" is any Wholly-owned Subsidiary
that is a Restricted Subsidiary.
"Wholly-owned Subsidiary" of any Person means a Subsidiary of such
Person 100% of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares or shares required to be held by
Foreign Subsidiaries) shall at the time be owned by such Person or by one or
more Wholly-owned Subsidiaries of such Person.
Section 1.02 Other Definitions.
Term Defined in Section
---- ------------------
"Additional Amounts" ................................. 4.05
"Affiliate Transaction" .............................. 4.11
"Asset Sale Offer" ................................... 4.10
"Authentication Order" ............................... 2.02
"Base Currency" ...................................... 4.13
"Change of Control Offer" ............................ 4.13
47
"Change of Control Payment" .......................... 4.13
"Change of Control Payment Date" ..................... 4.13
"Covenant Defeasance" ................................ 8.03
"Covenant Suspension Event" .......................... 4.14
"DTC" ................................................ 2.03
"Event of Default" ................................... 6.01
"Excess Proceeds" .................................... 4.10
"Foreign Payor" ...................................... 4.05
"Judgment Currency" .................................. 4.13
"Legal Defeasance" ................................... 8.02
"Note Register" ...................................... 2.03
"Offer Amount" ....................................... 3.09
"Offer Period" ....................................... 3.09
"Paying Agent" ....................................... 2.03
"Purchase Date" ...................................... 3.09
"Redemption Date" .................................... 3.07
"Refinancing Indebtedness" ........................... 4.09
"Refunding Capital Stock" ............................ 4.07
"Registrar" .......................................... 2.03
"Relevant Taxing Jurisdiction" ....................... 4.05
"Restricted Payments" ................................ 4.07
"Retired Capital Stock" .............................. 4.07
"Reversion Date" ..................................... 4.14
"Second Commitment" .................................. 4.10
"Successor Company" .................................. 5.01
"Successor Guarantor" ................................ 5.01
"Suspended Covenants" ................................ 4.14
"Taxes" .............................................. 4.05
Section 1.03 Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the Trust Indenture Act, the provision
is incorporated by reference in and made a part of this Indenture.
The following Trust Indenture Act terms used in this Indenture have
the following meanings:
"indenture securities" means the Notes and the Guarantees;
"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
48
"obligor" on the Notes and the Guarantees means the Issuer and the
Guarantors, respectively, and any successor obligor upon the Notes and the
Guarantees, respectively.
All other terms used in this Indenture that are defined by the Trust
Indenture Act, defined by Trust Indenture Act reference to another statute or
defined by SEC rule under the Trust Indenture Act 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) "including" means including without limitation;
(e) words in the singular include the plural, and in the plural
include the singular;
(f) "will" shall be interpreted to express a command;
(g) provisions apply to successive events and transactions;
(h) references to sections of, or rules under, the Securities Act
shall be deemed to include substitute, replacement or successor sections or
rules adopted by the SEC from time to time;
(i) unless the context otherwise requires, any reference to an
"Article," "Section" or "clause" refers to an Article, Section or clause, as the
case may be, of this Indenture;
(j) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not any particular
Article, Section, clause or other subdivision; and
(k) all references to any interest or other amount payable on or
with respect to the Notes shall be deemed to include any Additional Interest
payable pursuant to the Registration Rights Agreement.
Section 1.05 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
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing. Except as
49
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments or record or both are delivered to the Trustee
and, where it is hereby expressly required, to the Issuer. Proof of execution of
any such instrument or of a writing appointing any such agent, or the holding by
any Person of a Note, shall be sufficient for any purpose of this Indenture and
(subject to Section 7.01) conclusive in favor of the Trustee and the Issuer, if
made in the manner provided in this Section 1.05.
(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 the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by or on behalf of any legal entity other than an individual, such
certificate or affidavit shall also constitute proof of the authority of the
Person executing the same. 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 that the Trustee deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Note shall bind every future Holder
of the same Note and the Holder of every Note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof, in respect of any
action taken, suffered or omitted by the Trustee or the Issuer in reliance
thereon, whether or not notation of such action is made upon such Note.
(e) The Issuer may, in the circumstances permitted by the Trust
Indenture Act, set a record date for purposes of determining the identity of
Holders entitled to give any request, demand, authorization, direction, notice,
consent, waiver or take any other act, or to vote or consent to any action by
vote or consent authorized or permitted to be given or taken by Holders.
(f) Without limiting the foregoing, a Holder entitled to take any
action hereunder with regard to any particular Note may do so 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. Any notice given or action
taken by a Holder or its agents with regard to different parts of such principal
amount pursuant to this paragraph shall have the same effect as if given or
taken by separate Holders of each such different part.
(g) Without limiting the generality of the foregoing, a Holder,
including DTC, may make, give or take, by a proxy or proxies duly appointed in
writing, any request, demand, authorization, direction, notice, consent, waiver
or other action provided in this Indenture to be made, given or taken by
Holders, and DTC may provide its proxy to the beneficial owners of interests in
any such Global Note through such depositary's standing instructions and
customary practices.
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(h) The Issuer may fix a record date for the purpose of determining
the Persons who are beneficial owners of interests in any Global Note held by
DTC entitled under the procedures of such depositary to make, give or take, by a
proxy or proxies duly appointed in writing, any request, demand, authorization,
direction, notice, consent, waiver or other action provided in this Indenture to
be made, given or taken by Holders. If such a record date is fixed, the Holders
on such record date or their duly appointed proxy or proxies, and only such
Persons, shall be entitled to make, give or take such request, demand,
authorization, direction, notice, consent, waiver or other action, whether or
not such Holders remain Holders after such record date. No such request, demand,
authorization, direction, notice, consent, waiver or other action shall be valid
or effective if made, given or taken more than 90 days after such record date.
ARTICLE II
THE NOTES
Section 2.01 Form and Dating; Terms.
(a) General. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto. The Notes
may have notations, legends or endorsements required by law, stock exchange
rules or usage. Each Note shall be dated the date of its authentication. The
Notes shall be in minimum denominations of $2,000 and integral multiples of
$1,000 in excess thereof; provided that PIK Notes in definitive form shall be in
minimum denominations of $1.00 and integral multiples thereof.
(b) Global Notes. Notes issued in global form shall be substantially
in the form of Exhibit A hereto (including 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
hereto (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 in the
"Schedule of Exchanges of Interests in the Global Note" attached thereto and
each shall provide that it shall represent up to the aggregate principal amount
of 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 applicable, 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 the Custodian, at the direction of the Trustee, in
accordance with Section 2.06 hereof.
(i) Temporary Global Notes. Notes offered and sold in reliance
on Regulation S shall be issued initially in the form of the
Regulation S Temporary Global Note, which shall be deposited on
behalf of the purchasers of the Notes represented thereby with the
Custodian and registered in the name of the Depositary or the
nominee of the Depositary for the accounts of designated
51
agents holding on behalf of Euroclear or Clearstream, duly executed
by the Issuer and authenticated by the Trustee as hereinafter
provided. The Restricted Period shall be terminated upon the receipt
by the Trustee of an Officer's Certificate from the Issuer.
Following the termination of the Restricted Period, beneficial interests in each
Regulation S Temporary Global Note shall be exchanged for beneficial interests
in a Regulation S Permanent Global Note of the same series pursuant to the
Applicable Procedures. Simultaneously with the authentication of the
corresponding Regulation S Permanent Global Note, the Trustee shall cancel the
corresponding Regulation S Temporary Global Note. The aggregate principal amount
of a Regulation S Temporary Global Note and a Regulation S Permanent Global Note
may from time to time be increased or decreased by adjustments 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.
(c) Terms. The aggregate principal amount of Notes that may be
authenticated and delivered under this Indenture is unlimited.
The terms and provisions contained in the Notes shall constitute,
and are hereby expressly made, a part of this Indenture and the Issuer, the
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. 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.
The Notes shall be subject to repurchase by the Issuer pursuant to
an Asset Sale Offer as provided in Section 4.10 hereof or a Change of Control
Offer as provided in Section 4.13 hereof. The Notes shall not be redeemable,
other than as provided in Article 3 hereof.
Additional Notes ranking pari passu with the Initial Notes may be
created and issued from time to time by the Issuer without notice to or consent
of the Holders and shall be consolidated with and form a single class with the
Initial Notes and shall have the same terms as to status, redemption or
otherwise as the Initial Notes; provided that the Issuer's ability to issue
Additional Notes shall be subject to the Issuer's compliance with Section 4.09
hereof; provided, that in connection with the payment of PIK Interest, the
Issuer is entitled to, without the consent of the Holders (and without regard to
any restrictions or limitations set forth in Section 4.09 hereof), increase the
outstanding principal amount of the Notes or issue PIK Notes. Any Additional
Notes shall be issued with the benefit of an indenture supplemental to this
Indenture.
Section 2.02 Execution and Authentication. At least one Officer of the
Issuer shall execute the Notes on behalf of the Issuer by manual or facsimile
signature.
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If an Officer of the Issuer whose signature is on a Note no longer
holds that office at the time the Trustee authenticates the Note, the Note shall
nevertheless be valid.
A Note shall not be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose until authenticated substantially in the
form of Exhibit A by the manual or facsimile signature of the Trustee. The
signature shall be conclusive evidence that the Note has been duly authenticated
and delivered under this Indenture.
On the Issue Date, the Trustee shall, upon receipt of an Issuer
Order (an "Authentication Order"), authenticate and deliver the Initial Notes.
In addition, at any time, from time to time, the Trustee shall upon an
Authentication Order authenticate and deliver any Additional Notes, Exchange
Notes or PIK Notes (or increases in the principal amount of any Notes) as a
result of the payment of PIK Interest for an aggregate principal amount
specified in such Authentication Order for such Additional Notes, Exchange Notes
or PIK Notes (or increases in the principal amount of any Notes) issued or
increased hereunder.
The Trustee may appoint an authenticating agent acceptable to the
Issuer to authenticate Notes. 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 Issuer.
Section 2.03 Registrar and Paying Agent. The Issuer shall maintain (i) an
office or agency where Notes may be presented for registration of transfer or
for exchange ("Registrar") and (ii) an office or agency in the Borough of
Manhattan, the City of New York, the State of New York where Notes may be
presented for payment ("Paying Agent"). The Registrar shall keep a register of
the Notes ("Note Register") and of their transfer and exchange. The Issuer 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 agents. The Issuer initially appoints the Trustee as
Paying Agent. The Issuer may change any Paying Agent or Registrar without prior
notice to any Holder. The Issuer shall notify the Trustee in writing of the name
and address of any Agent not a party to this Indenture. If the Issuer fails to
appoint or maintain another entity as Registrar or Paying Agent, the Trustee
shall, to the extent that it is capable, act as such. The Issuer or any of its
domestic Subsidiaries may act as Paying Agent or Registrar.
The Issuer initially appoints The Depository Trust Company ("DTC")
to act as Depositary with respect to the Global Notes representing the Notes.
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The Issuer initially appoints the Trustee to act as the Registrar
for the Notes.
Section 2.04 Paying Agent to Hold Money in Trust. The Issuer 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, if any, or Cash
Interest on the Notes, and will notify the Trustee of any default by the Issuer
in making any such payment. While any such default continues, the Trustee may
require a Paying Agent to pay all money held by it to the Trustee. The Issuer 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 (if other than the Issuer or
a Subsidiary) shall have no further liability for the money. If the Issuer or a
Subsidiary 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 Issuer, the Trustee
shall serve as Paying Agent for the Notes.
Section 2.05 Holder Lists. The Trustee shall preserve in as current a form
as is reasonably practicable the most recent list available to it of the names
and addresses of all Holders and shall otherwise comply with Trust Indenture Act
Section 312(a). If the Trustee is not the Registrar, the Issuer shall furnish to
the Trustee at least five Business Days before each Interest Payment Date and at
such other times as the Trustee may request in writing, a list in such form and
as of such date as the Trustee may reasonably require of the names and addresses
of the Holders of Notes and the Issuer shall otherwise comply with Trust
Indenture Act Section 312(a).
Section 2.06 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. Except as otherwise set
forth in this Section 2.06, a Global Note may be transferred, in whole and not
in part, only to another nominee of the Depositary or to a successor thereto or
a nominee of such successor thereto. A beneficial interest in a Global Note may
not be exchanged for a Definitive Note of the same series unless (A) the
Depositary (x) notifies the Issuer that it is unwilling or unable to continue as
Depositary for such Global Note or (y) has ceased to be a clearing agency
registered under the Exchange Act, and, in either case, a successor Depositary
is not appointed by the Issuer within 120 days or (B) there shall have occurred
and be continuing a Default with respect to the Notes. Upon the occurrence of
any of the preceding events in (A) above, Definitive Notes delivered in exchange
for any Global Note of the same series or beneficial interests therein will be
registered in the names, and issued in any approved denominations, requested by
or on behalf of the Depositary (in accordance with its customary procedures).
Global Notes also may be exchanged or replaced, in whole or in part, as provided
in Sections 2.07 and 2.10 hereof. Every Note authenticated and delivered in
exchange for, or in lieu of, a Global Note of the same series or any portion
thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be
authenticated and delivered in the form of, and shall be, a Global Note, except
for Definitive Notes issued subsequent to any of the preceding events in (A) or
(B) above and pursuant to Section 2.06(c) hereof. A Global Note may not be
exchanged for another
54
Note other than as provided in this Section 2.06(a); provided, however,
beneficial interests in a Global Note may be transferred and exchanged as
provided in Section 2.06(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.
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:
(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, that prior to the expiration of the Restricted
Period, transfers of beneficial interests in the Regulation S
Temporary Global Note may not be made to a U.S. Person or for the
account or benefit of a U.S. Person other than pursuant to Rule
144A. 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
2.06(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 2.06(b)(i)
hereof, 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 of
the same series 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 a Regulation S Temporary
Global Note prior to (A) the expiration of the Restricted Period and
(B) the receipt by the Registrar of any certificates required
pursuant to Rule 903. Upon consummation of an Exchange Offer by the
Issuer in accordance with Section 2.06(f) hereof, the
55
requirements of this Section 2.06(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 of the relevant Global
Note(s) pursuant to Section 2.06(h) hereof.
(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 2.06(b)(ii)
hereof and the Registrar receives the following:
(A) if the transferee will take delivery in the form of
a beneficial interest in a 144A Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (1) thereof; or
(B) if the transferee will take delivery in the form of
a beneficial interest in a Regulation S Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, 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 2.06(b)(ii) hereof 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 that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3)
a Person who is an affiliate (as defined in Rule 144) of the
Issuer;
(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
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(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 of the same series, a
certificate from such Holder substantially in the form
of Exhibit C hereto, 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 of the same series, a
certificate from such holder in the form of Exhibit B
hereto, including the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar 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
Issuer 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 the occurrence of
any of the events in subsection (A) of Section 2.06(a) hereof and
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
57
Restricted Definitive Note, a certificate from such holder
substantially in the form of Exhibit C hereto, including the
certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to
a QIB in accordance with Rule 144A, a certificate
substantially in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to
a Non-U.S. Person in an offshore transaction in accordance
with Rule 903 or Rule 904, a certificate substantially in the
form of Exhibit B hereto, including the certifications in item
(2) thereof;
(D) if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of
the Securities Act in accordance with Rule 144, a certificate
substantially in the form of Exhibit B hereto, including the
certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to
the Issuer or any of its Restricted Subsidiaries, a
certificate substantially in the form of Exhibit B hereto,
including the certifications in item (3)(b) thereof; or
(F) if such beneficial interest is being transferred
pursuant to an effective registration statement under the
Securities Act, a certificate substantially in the form of
Exhibit B hereto, including the certifications in item (3)(c)
thereof,
the Trustee shall cause the aggregate principal amount of the
applicable Global Note to be reduced accordingly pursuant to Section
2.06(h) hereof, and the Issuer shall execute and the Trustee shall
authenticate and mail to the Person designated in the instructions a
Definitive Note in the applicable principal amount. Any Definitive
Note issued in exchange for a beneficial interest in a Restricted
Global Note pursuant to this Section 2.06(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 mail 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
2.06(c)(i) shall bear the Private Placement Legend and shall be
subject to all restrictions on transfer contained therein.
(ii) Beneficial Interests in Regulation S Temporary Global
Note to Definitive Notes. Notwithstanding Sections 2.06(c)(i)(A) and
(C) hereof, a beneficial interest in the Regulation S Temporary
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 (A) the expiration of the Restricted Period
and (B) the receipt by the Registrar of any certificates required
pursuant to Rule 903(b)(3)(ii)(B) of the Securities Act, except in
the case of a
58
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 upon the occurrence of any of the
events in subsection (A) of Section 2.06(a) hereof and 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 it is not (1) a broker-dealer, (2) a Person participating
in the distribution of the Exchange Notes or (3) a Person who
is an affiliate (as defined in Rule 144) of the Issuer;
(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 an Unrestricted Definitive Note,
a certificate from such holder substantially in the form
of Exhibit C hereto, 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 an Unrestricted Definitive Note,
a certificate from such holder substantially in the form
of Exhibit B hereto, including the certifications in
item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar 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
59
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 the occurrence of any of the events in
subsection (A) of Section 2.06(a) hereof and satisfaction of the
conditions set forth in Section 2.06(b)(ii) hereof, the Trustee
shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(h) hereof,
and the Issuer shall execute and the Trustee shall authenticate and
mail to the Person designated in the instructions a Definitive Note
in the applicable principal amount. Any Definitive Note issued in
exchange for a beneficial interest pursuant to this Section
2.06(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 or through the Depositary and the Participant or
Indirect Participant. The Trustee shall mail 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 2.06(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
Note 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:
(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
substantially in the form of Exhibit C hereto, 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 substantially in the form of Exhibit B hereto,
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
substantially in the form of Exhibit B hereto, including the
certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being
transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule
144, a certificate substantially in the form of Exhibit B
hereto, including the certifications in item (3)(a) thereof;
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(E) if such Restricted Definitive Note is being transferred to
the Issuer or any of its Restricted Subsidiaries, a certificate
substantially in the form of Exhibit B hereto, including the
certifications in item (3)(b) thereof; or
(F) if such Restricted Definitive Note is being transferred
pursuant to an effective registration statement under the Securities
Act, a certificate substantially in the form of Exhibit B hereto,
including the certifications in item (3)(c) thereof,
the Trustee shall cancel the Restricted Definitive Note, increase or cause to be
increased the aggregate principal amount of, in the case of clause (A) above,
the applicable Restricted Global Note, in the case of clause (B) above, the
applicable 144A Global Note, and in the case of clause (C) above, the applicable
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 that it is not (1) a
broker-dealer, (2) a Person participating in the distribution
of the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Issuer;
(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 Definitive Notes
proposes to exchange such Notes for a beneficial
interest in the Unrestricted Global Note, a certificate
from such Holder substantially in the form of Exhibit C
hereto, including the certifications in item (1)(c)
thereof; or
(2) if the Holder of such Definitive Notes
proposes to transfer such Notes to a Person who shall
take delivery thereof in the form of a beneficial
interest in the Unrestricted Global Note, a
61
certificate from such Holder substantially in the form
of Exhibit B hereto, including the certifications in
item (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable
to the Registrar 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 2.06(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 Definitive Notes 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 subparagraph (ii)(B), (ii)(D) or
(iii) above at a time when an Unrestricted Global Note has not yet been issued,
the Issuer 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 2.06(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 certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(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:
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(A) if the transfer will be made pursuant to a QIB in
accordance with Rule 144A, then the transferor must deliver a
certificate substantially in the form of Exhibit B hereto,
including the certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or
Rule 904 then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in item
(2) thereof; or
(C) if the transfer will 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 hereto, including the certifications
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 it is not (1) a
broker-dealer, (2) a Person participating in the distribution
of the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Issuer;
(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
Notes proposes to exchange such Notes for an
Unrestricted Definitive Note, a certificate from such
Holder substantially in the form of Exhibit C hereto,
including the certifications in item (1)(d) thereof; or
(2) if the Holder of such Restricted Definitive
Notes proposes to transfer such Notes to a Person who
shall take delivery thereof in the form of an
Unrestricted Definitive Note, a certificate from such
Holder substantially in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
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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 Registrar 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 Issuer shall issue and,
upon receipt of an Authentication Order in accordance with Section 2.02 hereof,
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 of the same series tendered for
acceptance by Persons that certify in the applicable Letters of Transmittal that
(x) they are not broker-dealers, (y) they are not participating in a
distribution of the Exchange Notes and (z) they are not affiliates (as defined
in Rule 144) of the Issuer, and accepted for exchange in the Exchange Offer and
(ii) Unrestricted Definitive Notes in an aggregate principal amount equal to the
principal amount of the Restricted Definitive Notes of the same series tendered
for acceptance by Persons that certify in the applicable Letters of Transmittal
that (x) they are not broker-dealers, (y) they are not participating in a
distribution of the Exchange Notes and (z) they are not affiliates (as defined
in Rule 144) of the Issuer, and 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 Issuer shall execute and the Trustee shall
authenticate and mail to the Persons designated by the Holders of Definitive
Notes so accepted Unrestricted Definitive Notes in the applicable principal
amount. Any Notes that remain outstanding after the consummation of the Exchange
Offer, and Exchange Notes issued in connection with the Exchange Offer, shall be
treated as a single class of securities under this Indenture.
(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.
(A) Except as permitted by subparagraph (B) 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:
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"THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE
SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT. THE HOLDER OF THIS
NOTE AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) THIS NOTE MAY BE
OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) (a) IN
THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A UNDER THE SECURITIES ACT, (b) OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (c) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144 UNDER THE SECURITIES ACT, (d) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501 (a) (1), (2), (3) OR
(7) UNDER THE SECURITIES ACT (AN "INSTITUTIONAL ACCREDITED
INVESTOR")) THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS (THE
FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH
TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES
LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER
THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT OR (e)
IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL IF THE ISSUER SO REQUESTS), (2) TO THE ISSUER OR (3)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE,
IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS SET FORTH
IN (A) ABOVE."
(B) 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) of this Section
2.06 (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 (with appropriate changes in the
last sentence if DTC is not the Depositary):
"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
2.06(h) OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN
WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS
GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE
PRIOR WRITTEN CONSENT OF THE ISSUER. UNLESS AND UNTIL IT IS
EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS
NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE
DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY
OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER
STREET, NEW YORK, NEW YORK) ("DTC") TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN."
(iii) Regulation S Temporary Global Note Legend. The
Regulation S Temporary Global Note shall bear a legend in
substantially the following form:
"THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY
NOT BE TRANSFERRED IN THE UNITED STATES OR
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TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT
PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE
SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN
REGULATION S UNDER THE SECURITIES ACT."
(h) 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 2.11 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 will 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 will 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.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Issuer shall execute and the Trustee shall authenticate Global Notes
and Definitive Notes upon receipt of an Authentication Order in
accordance with Section 2.02 hereof or at the Registrar's request.
(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 Issuer
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 2.07, 2.10, 3.06,
3.09, 4.10, 4.14 and 9.05 hereof).
(iii) Neither the Registrar nor the Issuer shall 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 obligations of the Issuer, 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.
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(v) The Issuer 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 hereof 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 or (C) to register the transfer of or to exchange a
Note between a Record Date with respect to such Note and the next
succeeding Interest Payment Date with respect to such Note.
(vi) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Issuer 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 payment of
principal of (and premium, if any) and interest on such Notes and
for all other purposes, and none of the Trustee, any Agent or the
Issuer shall be affected by notice to the contrary.
(vii) Upon surrender for registration of transfer of any Note
at the office or agency of the Issuer designated pursuant to Section
4.02 hereof, the Issuer shall execute, and the Trustee shall
authenticate and mail, in the name of the designated transferee or
transferees, one or more replacement Notes of any authorized
denomination or denominations of a like aggregate principal amount.
(viii) At the option of the Holder, Notes may be exchanged for
other Notes of any authorized denomination or denominations of a
like aggregate principal amount upon surrender of the Notes to be
exchanged at such office or agency. Whenever any Global Notes or
Definitive Notes are so surrendered for exchange, the Issuer shall
execute, and the Trustee shall authenticate and mail, the
replacement Global Notes and Definitive Notes which the Holder
making the exchange is entitled to in accordance with the provisions
of Section 2.02 hereof.
(ix) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section
2.06 to effect a registration of transfer or exchange may be
submitted by facsimile.
(x) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on
transfer imposed under this Indenture or under applicable law with
respect to any transfer of any interest in any Security (including
any transfers between or among Depositary participants or beneficial
owners of interests in any registered Global Security) other than to
require delivery of such certificates and other documentation or
evidence as are expressly required by, and to do so if and when
expressly required by the terms of, this Indenture, and to examine
the same to determine substantial compliance as to form with the
express requirements hereof.
Section 2.07 Replacement Notes. If any mutilated Note is surrendered to
the Trustee, the Registrar or the Issuer and the Trustee receives evidence to
its satisfaction of
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the ownership and destruction, loss or theft of any Note, the Issuer shall issue
and the Trustee, upon receipt of an Authentication Order, shall authenticate a
replacement Note if the Trustee's requirements are met. If required by the
Trustee or the Issuer, an indemnity bond must be supplied by the Holder that is
sufficient in the judgment of the Trustee and the Issuer to protect the Issuer,
the Trustee, any Agent and any authenticating agent from any loss that any of
them may suffer if a Note is replaced. The Issuer and the Trustee may charge the
Holder for their expenses in replacing a Note.
Every replacement Note is a contractual obligation of the Issuer and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
Section 2.08 Outstanding Notes. 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 2.08 as not outstanding. Except as set forth in
Section 2.09 hereof, a Note does not cease to be outstanding because the Issuer,
a Guarantor or an Affiliate of the Issuer or a Guarantor holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to
be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a protected purchaser (as defined in Section 8-303 of
the Uniform Commercial Code).
If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Issuer, a Guarantor or an
Affiliate of the Issuer or a Guarantor) holds, on a Redemption Date or maturity
date, money sufficient to pay Notes (or portions thereof) payable on that date,
then on and after that date such Notes (or portions thereof) shall be deemed to
be no longer outstanding and shall cease to accrue interest.
Section 2.09 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 Issuer, a Guarantor or by any Affiliate of the
Issuer or a Guarantor, 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 a Responsible
Officer of the Trustee knows are so owned shall be so disregarded. Notes so
owned which have been pledged in good faith shall not be disregarded if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right to
deliver any such direction, waiver or consent with respect to the Notes and that
the
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pledgee is not the Issuer, a Guarantor or any obligor upon the Notes or any
Affiliate of the Issuer, a Guarantor or of such other obligor.
Section 2.10 Temporary Notes. Until certificates representing Notes are
ready for delivery, the Issuer may prepare and the Trustee, upon receipt of an
Authentication Order, shall authenticate temporary Notes. Temporary Notes shall
be substantially in the form of certificated Notes but may have variations that
the Issuer considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Issuer shall prepare
and the Trustee shall authenticate definitive Notes in exchange for temporary
Notes.
Holders and beneficial holders, as the case may be, of temporary
Notes shall be entitled to all of the benefits accorded to Holders, or
beneficial holders, respectively, of Notes under this Indenture.
Section 2.11 Cancellation. The Issuer 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 destroy
cancelled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all cancelled Notes shall be delivered
to the Issuer. The Issuer may not issue new Notes to replace Notes that it has
paid or that have been delivered to the Trustee for cancellation.
Section 2.12 Defaulted Interest. If the Issuer 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, in each
case at the rate provided in the Notes and in Section 4.01 hereof. The Issuer
may pay the defaulted interest to the Persons who are Holders on a subsequent
special record date. The Issuer 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, and at the same time the Issuer shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid in
respect of such defaulted interest or shall make arrangements satisfactory to
the Trustee for such deposit prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons entitled
to such defaulted interest as provided in this Section 2.12. The Trustee shall
fix or cause to be fixed any 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. The Trustee shall promptly notify the
Issuer of any such special record date. At least 15 days before any such special
record date, the Issuer (or, upon the written request of the Issuer, the Trustee
in the name and at the expense of the Issuer) shall mail or cause to be mailed,
first-class postage prepaid, to each Holder, with a copy to the Trustee, a
notice at his or her address as it appears in the Note Register that states the
special record date, the related payment date and the amount of such interest to
be paid.
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Subject to the foregoing provisions of this Section 2.12 and for
greater certainty, each Note delivered under this Indenture upon registration of
transfer of or in exchange for or in lieu of any other Note shall carry the
rights to interest accrued and unpaid, and to accrue, which were carried by such
other Note.
Section 2.13 CUSIP/ISIN Numbers. The Issuer in issuing the Notes may use
CUSIP and ISIN numbers (in each case, if then generally in use) and, if so, the
Trustee shall use CUSIP and ISIN numbers in notices of redemption as a
convenience to Holders; provided, that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Notes or as contained in any notice of 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 Issuer will as promptly as practicable notify the Trustee in
writing of any change in the CUSIP and ISIN numbers.
Section 2.14 Calculation of Principal Amount of Securities. The aggregate
principal amount of the Notes, at any date of determination, shall be the
principal amount of the Notes (including any PIK Notes issued in respect
thereof, and any increase in principal amount thereof, as a result of the
payment of PIK Interest) at such date of determination. With respect to any
matter requiring consent, waiver, approval or other action of the Holders of a
specified percentage of the principal amount of all the Notes, such percentage
shall be calculated, on the relevant date of determination, by dividing (a) the
principal amount, as of such date of determination, of Notes, the Holders of
which have so consented by (b) the aggregate principal amount, as of such date
of determination, of the Notes then outstanding, in each case, as determined in
accordance with the preceding sentence, Section 2.08 and Section 2.09 of this
Indenture. Any such calculation made pursuant to this Section 2.14 shall be made
by the Issuer and delivered to the Trustee pursuant to an Officer's Certificate.
ARTICLE III
REDEMPTION
Section 3.01 Notices to Trustee. If the Issuer elects to redeem the Notes
pursuant to Section 3.07 hereof, it shall furnish to the Trustee, at least 15
days (unless a shorter period is agreed upon by the Trustee) before notice of
redemption is required to be mailed or caused to be mailed to Holders pursuant
to Section 3.03 hereof but not more than 60 days before a Redemption Date, an
Officer's Certificate of the Issuer setting forth (i) the paragraph or
subparagraph of such Note and/or Section 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. If less than all of the
Notes are to be redeemed at any time, the Trustee shall select the Notes to be
redeemed (a) if the Notes are listed on any national securities exchange, in
compliance with the requirements of the principal national securities exchange
on which the Notes are listed
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or (b) on a pro rata basis to the extent practicable, or, if the pro rata basis
is not practicable for any reason, by lot or by such other method the Trustee
shall deem fair and appropriate. 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.
The Trustee shall promptly notify the Issuer in writing of the Notes
selected for redemption and, in the case of any Notes selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $2,000 or whole multiples of $1,000 in
excess thereof; no Notes of less than $2,000 can be redeemed in part; provided
that PIK Notes in definitive form selected shall be in amounts of $1.00 or whole
multiples of $1.00 in excess thereof. 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. Subject to Section 3.09 hereof, the
Issuer shall mail or cause to be mailed by first-class mail notices of
redemption at least 30 days but not more than 60 days before the Redemption Date
to each Holder of Notes to be redeemed at such Holder's registered address or
otherwise in accordance with Applicable Procedures.
The notice shall identify the Notes to be redeemed and shall state:
(a) the Redemption Date;
(b) the redemption price;
(c) if any Note is to be redeemed in part only, the portion of the
principal amount of that Note that is 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 representing the
same indebtedness to the extent not redeemed will be issued in the name of the
Holder of the Notes upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(f) that, unless the Issuer defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and after
the Redemption Date;
(g) the paragraph or subparagraph of the Notes and/or Section of
this Indenture pursuant to which the Notes called for redemption are being
redeemed;
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(h) the CUSIP and ISIN number, if any, printed on the Notes being
redeemed and that no representation is made as to the correctness or accuracy of
any such CUSIP and ISIN number that is listed in such notice or printed on the
Notes; and
(i) if in connection with a redemption pursuant to Section 3.07(c)
hereof, any condition to such redemption.
At the Issuer's request, the Trustee shall give the notice of
redemption in the Issuer's name and at its expense; provided that the Issuer
shall have delivered to the Trustee, at least 15 days (unless a shorter period
is agreed upon by the Trustee) before notice of redemption is required to be
mailed or caused to be mailed to Holders pursuant to this Section 3.03 (unless a
shorter notice shall be agreed to by the Trustee), an Officer's Certificate of
the Issuer requesting that the Trustee give such notice and setting forth the
information to be stated in such notice as provided in the preceding paragraph.
Section 3.04 Effect of Notice of Redemption. Subject to Section 3.07(c)
hereof, 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. The notice, if mailed in a manner
herein provided, shall be conclusively presumed to have been given, whether or
not the Holder receives such notice. In any case, failure to give such notice by
mail or any defect in the notice to the Holder of any Note designated for
redemption in whole or in part shall not affect the validity of the proceedings
for the redemption of any other Note. Subject to Section 3.05 hereof, on and
after the Redemption Date, interest ceases to accrue on Notes or portions of
Notes called for redemption.
Section 3.05 Deposit of Redemption Price.
(a) Prior to 11:00 a.m. (New York City time) on the Redemption Date,
the Issuer shall deposit with the Trustee or with the Paying Agent money
sufficient to pay the redemption price of, and accrued and unpaid interest and
Additional Interest, if any, to the Redemption Date on, all Notes to be
redeemed. The Trustee or the Paying Agent shall promptly return to the Issuer
any money deposited with the Trustee or the Paying Agent by the Issuer in excess
of the amounts necessary to pay the redemption price of, and accrued and unpaid
interest and Additional Interest, if any, to the Redemption Date on, all Notes
to be redeemed.
(b) If the Issuer complies with the provisions of the preceding
paragraph (a), on and after the Redemption Date, interest shall cease to accrue
on the Notes or the portions of Notes called for redemption. If a Note is
redeemed on or after a Record Date but on or prior to the related Interest
Payment Date, then any accrued and unpaid interest to the Redemption Date 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 Issuer 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
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on any interest and Additional Interest, if any, accrued to the Redemption Date
not paid on such unpaid principal, in each case at the rate provided in the
Notes and in Section 4.01 hereof.
Section 3.06 Notes Redeemed in Part. Upon surrender of a Note that is
redeemed in part, the Issuer shall issue and the Trustee shall authenticate for
the Holder at the expense of the Issuer a new Note equal in principal amount to
the unredeemed portion of the Note surrendered representing the same
indebtedness to the extent not redeemed; provided that each new Note will be in
minimum denominations of $2,000 and integral multiples of $1,000 in excess
thereof; provided, further, that PIK Notes in definitive form will be in minimum
denominations of $1.00 and integral multiples of $1.00 in excess thereof.
Section 3.07 Optional Redemption. (a) On or after June 1, 2011, the Issuer
may redeem the Notes at its option, in whole at any time or in part from time to
time, at the following redemption prices (expressed as a percentage of principal
amount), plus accrued and unpaid interest and Additional Interest, if any, to
the date of redemption (the "Redemption Date"), if redeemed during the 12-month
period commencing on June 1 of the years set forth below:
Period Redemption Price
2011 ................................................ 104.813%
2012 ................................................ 102.406%
2013 and thereafter ................................. 100.000%
(b) Prior to June 1, 2011, the Issuer may redeem the Notes at its
option, in whole at any time or in part from time to time, at a redemption price
equal to 100% of the principal amount of the Notes redeemed plus the Applicable
Premium as of, and accrued and unpaid interest and Additional Interest, if any,
to, the Redemption Date (subject to the right of Holders of record on the Record
Date to receive interest due on the Interest Payment Date).
(c) At any time and from time to time on or prior to June 1, 2010,
the Issuer may redeem in the aggregate up to 35% of the original aggregate
principal amount of the Notes (calculated after giving effect to any issuance of
Additional Notes, including PIK Notes) with the net cash proceeds of one or more
Equity Offerings (1) by the Issuer or (2) by any direct or indirect parent of
the Issuer, in each case to the extent the net cash proceeds thereof are
contributed to the common equity capital of the Issuer or used to purchase
Capital Stock (other than Disqualified Stock) of the Issuer from it, at a
redemption price (expressed as a percentage of principal amount thereof) of
109.625%, plus accrued and unpaid interest and Additional Interest, if any, to
the Redemption Date; provided, however, that at least 65% of the original
aggregate principal amount of the Notes (calculated after giving effect to any
issuance of Additional Notes, including PIK Notes) must remain outstanding after
each such redemption; provided, further, that such redemption shall occur within
90 days after the date on which any such Equity Offering is consummated.
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Notice of any redemption upon any Equity Offering may be given
prior to the completion thereof, and any such redemption or notice may, at the
Issuer's discretion, be subject to one or more conditions precedent, including,
but not limited to, completion of the related Equity Offering.
Section 3.08 Mandatory Redemption. The Issuer shall not be required to
make any mandatory redemption or sinking fund payments with respect to the
Notes.
Section 3.09 Offers to Repurchase by Application of Excess Proceeds.
(a) In the event that, pursuant to Section 4.10 hereof, the Issuer
shall be required to commence an Asset Sale Offer, it shall follow the
procedures specified below.
(b) The Asset Sale Offer shall remain open for a period of twenty
Business Days following its commencement and no longer, except to the extent
that a longer period is required by applicable law (the "Offer Period"). No
later than five Business Days after the termination of the Offer Period (the
"Purchase Date"), the Issuer shall apply all Excess Proceeds (the "Offer
Amount") to the purchase of Notes and, if required, Pari Passu Indebtedness (on
a pro rata basis, if applicable), or, if less than the Offer Amount has been
tendered, all Notes and Pari Passu Indebtedness tendered in response to the
Asset Sale Offer. Payment for any Notes so purchased shall be made in the same
manner as interest payments are made.
(c) If the Purchase Date is on or after a Record Date and on or
before the related Interest Payment Date, any accrued and unpaid interest, up to
but excluding the Purchase Date, shall be paid to the Person in whose name a
Note is registered at the close of business on such Record Date, and no
additional interest shall be payable to Holders who tender Notes pursuant to the
Asset Sale Offer.
(d) Upon the commencement of an Asset Sale Offer, the Issuer shall
send, by first-class mail, postage prepaid, at least 30 but not more than 60
days before the Purchase Date, a notice to 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 Asset Sale Offer. The
Asset Sale Offer shall be made to all Holders and holders of Pari Passu
Indebtedness. The notice, which shall govern the terms of the Asset Sale Offer,
shall state:
(i) that the Asset Sale Offer is being made pursuant to this
Section 3.09 and Section 4.10 hereof and the length of time the
Asset Sale 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;
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(iv) that, unless the Issuer defaults in making such payment,
any Note accepted for payment pursuant to the Asset Sale Offer shall
cease to accrue interest after the Purchase Date;
(v) that any Holder electing to have less than all of the
aggregate principal amount of its Notes purchased pursuant to an
Asset Sale Offer may elect to have Notes purchased in minimum
denominations of $2,000 or whole multiples of $1,000 in excess
thereof; provided that PIK Notes in definitive form will be in
minimum denominations of $1.00 and integral multiples of $1.00 in
excess thereof;
(vi) that Holders electing to have a Note purchased pursuant
to any Asset Sale Offer shall be required to surrender the Note,
with the form entitled "Option of Holder to Elect Purchase" attached
to the Note completed, or transfer by book-entry transfer, to the
Issuer, the Depositary, if appointed by the Issuer, or a Paying
Agent at the address specified in the notice at least two Business
Days before the Purchase Date;
(vii) that Holders shall be entitled to withdraw their
election if the Issuer, the Depositary or the Paying Agent, as the
case may be, receives, not later than the expiration of the Offer
Period, a 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 principal amount of Notes and
Pari Passu Indebtedness surrendered by the holders thereof exceeds
the Offer Amount, the Trustee shall select the Notes and the Company
or its applicable agent shall select such Pari Passu Indebtedness to
be purchased on a pro rata basis based on the accreted value or
principal amount of the Notes or such Pari Passu Indebtedness
tendered (with such adjustments as may be deemed appropriate by the
Trustee so that only Notes in minimum denominations of $2,000 or
whole multiples of $1,000 in excess thereof are purchased;
provided,that PIK Notes in definitive form will be in minimum
denominations of $1.00 and integral multiples of $1.00 in excess
thereof); and
(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) representing the same indebtedness to the
extent not repurchased.
(e) On or before the Purchase Date, the Issuer shall, to the extent
lawful, (1) accept for payment, on a pro rata basis as described in clause
(d)(viii) of this Section 3.09, the Offer Amount of Notes or portions thereof
validly tendered pursuant to the Asset Sale Offer, or if less than the Offer
Amount has been tendered, all Notes tendered and (2) deliver or cause to be
delivered to the Trustee the Notes properly
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accepted together with an Officer's Certificate stating the aggregate principal
amount of Notes or portions thereof so tendered.
(f) The Issuer, 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 the Notes properly tendered by such Holder and accepted by
the Issuer for purchase, and the Issuer shall promptly issue a new Note, and the
Trustee, upon receipt of an Authentication Order, shall authenticate and mail or
deliver (or cause to be transferred by book-entry) such new Note to such Holder
(it being understood that, notwithstanding anything in this Indenture to the
contrary, no Opinion of Counsel or Officer's Certificate of the Issuer is
required for the Trustee to authenticate and mail or deliver such new Note) in a
principal amount equal to any unpurchased portion of the Note surrendered
representing the same indebtedness to the extent not repurchased. Any Note not
so accepted shall be promptly mailed or delivered by the Issuer to the Holder
thereof. The Issuer shall publicly announce the results of the Asset Sale Offer
on or as soon as practicable after the Purchase Date.
(g) Prior to 11:00 a.m. (New York City time) on the purchase date,
the Issuer shall deposit with the Trustee or with the Paying Agent money
sufficient to pay the purchase price of and accrued and unpaid interest on all
Notes to be purchased on that purchase date. The Trustee or the Paying Agent
shall promptly return to the Issuer any money deposited with the Trustee or the
Paying Agent by the Issuer in excess of the amounts necessary to pay the
purchase price of, and accrued and unpaid interest on, all Notes to be redeemed.
Other than as specifically provided in this Section 3.09 or Section
4.10 hereof, any purchase pursuant to this Section 3.09 shall be made pursuant
to the applicable provisions of Sections 3.01 through 3.06 hereof, and
references therein to "redeem," "redemption" and similar words shall be deemed
to refer to "purchase," "repurchase" and similar words, as applicable.
ARTICLE IV
COVENANTS
Section 4.01 Payment of Notes. The Issuer 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 Cash Interest
shall be considered paid on the date due if the Paying Agent, if other than the
Issuer, a Guarantor or an Affiliate of the Issuer or a Guarantor, holds as of
11:00 a.m. New York City time, on the due date money deposited by the Issuer in
immediately available funds and designated for and sufficient to pay all
principal, premium, if any, and Cash Interest then due. PIK Interest shall be
considered paid on the date due if the Trustee is directed on or prior to such
date to issue PIK Notes or increase the principal amount of the Notes, in each
case in an amount equal to the amount of applicable PIK Interest.
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The Issuer shall pay all Additional Interest, if any, in the same
manner on the dates and in the amounts set forth in the Registration Rights
Agreement. The Issuer shall pay all Additional Interest on the Notes, if any, in
the same form of payment elected by the Issuer for the payment of interest with
respect to the applicable Interest Period.
The Issuer shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal 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 (without regard to any
applicable grace period) at the same rate to the extent lawful.
Section 4.02 Maintenance of Office or Agency. The Issuer shall maintain
the offices or agencies (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-registrar) required under Section 2.03 where
Notes may be surrendered for registration of transfer or for exchange and where
notices and demands to or upon the Issuer in respect of the Notes and this
Indenture may be served. The Issuer 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 Issuer 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.
The Issuer 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
that no such designation or rescission shall in any manner relieve the Issuer of
its obligation to maintain such offices or agencies as required by Section 2.03
for such purposes. The Issuer shall give prompt written notice to the Trustee of
any such designation or rescission and of any change in the location of any such
other office or agency.
The Issuer hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Issuer in accordance with Section
2.03 hereof.
Section 4.03 Reports and Other Information.
(a) Notwithstanding that the Issuer may not be subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act or otherwise
report on an annual and quarterly basis on forms provided for such annual and
quarterly reporting pursuant to rules and regulations promulgated by the SEC,
after the consummation of the Exchange Offer, the Issuer shall file with the SEC
(and provide the Trustee and Holders with copies thereof, without cost to each
Holder, within 15 days after the Issuer files such reports with the SEC),
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(1) within the time period specified in the SEC's rules and
regulations for non-accelerated filers, annual reports on Form 10-K
(or any successor or comparable form) containing the information
required to be contained therein (or required in such successor or
comparable form),
(2) within the time period specified in the SEC's rules and
regulations for non-accelerated filers, reports on Form 10-Q (or any
successor or comparable form) containing the information required to
be contained therein (or required in such successor or comparable
form),
(3) promptly from time to time after the occurrence of an
event required to be therein reported (and in any event within the
time period specified in the SEC's rules and regulations), such
other reports on Form 8-K (or any successor or comparable form), and
(4) any other information, documents and other reports which
the Issuer would be required to file with the SEC if it were subject
to Section 13 or 15(d) of the Exchange Act;
provided, however, that the Issuer shall not be so obligated to file such
reports with the SEC if the SEC does not permit such filing, in which event the
Issuer shall make available such information to prospective purchasers of Notes,
in addition to providing such information to the Trustee and the Holders, in
each case within 15 days after the time the Issuer would be required to file
such information with the SEC, if it were subject to Sections 13 or 15(d) of the
Exchange Act. Delivery of such reports, information and documents to the Trustee
is for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein, including
compliance with any of the covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officer's Certificates). The availability of the
foregoing materials on the SEC's Electronic Data Gathering and Retrieval service
or on the Issuer's website shall be deemed to satisfy the Issuer's delivery
obligation.
(b) Notwithstanding the foregoing, the Issuer shall not be required
to furnish any information, certificates or reports required by Items 307 or 308
of Regulation S-K prior to the effectiveness of the exchange offer registration
statement or shelf registration statement.
(c) In the event that:
(i) the rules and regulations of the SEC permit the Issuer and
any direct or indirect parent of the Issuer to report at such parent
entity's level on a consolidated basis and such parent entity is not
engaged in any business in any material respect other than
incidental to its ownership, directly or indirectly, of the capital
stock of the Issuer, or
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(ii) any direct or indirect parent of the Issuer is or becomes
a Guarantor of the Notes,
consolidating reporting at the parent entity's level in a manner consistent with
that described in this Section 4.03 for the Issuer shall satisfy this Section
4.03, and the Issuer shall satisfy its obligations under this Section 4.03 with
respect to financial information relating to the Issuer by furnishing financial
information relating to such direct or indirect parent; provided that such
financial information is accompanied by consolidating information that explains
in reasonable detail the differences between the information relating to such
direct or indirect parent and any of its Subsidiaries other than the Issuer and
its Subsidiaries, on the one hand, and the information relating to the Issuer,
the Guarantors and the other Subsidiaries of the Issuer on a standalone basis,
on the other hand.
(d) The Issuer will make the reports and other information required
by this Section 4.03 available to prospective investors upon request. In
addition, the Issuer shall, for so long as any Notes are outstanding during any
period when the Issuer is not subject to Section 13 or 15(d) of the Exchange
Act, or otherwise permitted to furnish the SEC with certain information pursuant
to Rule 12g3-2(b) of the Exchange Act, the Issuer shall furnish to Holders and
to 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, the Issuer will be deemed to have
furnished such reports referred to above to the Trustee and the Holders if the
Issuer has filed such reports with the SEC via the EDGAR filing system and such
reports are publicly available. In addition, such requirements shall be deemed
satisfied prior to the commencement of the exchange offer contemplated by the
Registration Rights Agreement relating to the Notes or the effectiveness of the
shelf registration statement by the filing with the SEC of the exchange offer
registration statement and/or shelf registration statement in accordance with
the provisions of such Registration Rights Agreement, and any amendments
thereto, and such registration statement and/or amendments thereto are filed at
times that otherwise satisfy the time requirements set forth in Section 4.03(a).
Section 4.04 Compliance Certificate.
(a) The Issuer shall deliver to the Trustee, within 120 days after
the end of each fiscal year ending after the Issue Date, a certificate from the
principal executive officer, principal financial officer or principal accounting
officer stating that a review of the activities of the Issuer and its Restricted
Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officer with a view to determining whether the Issuer
and its Restricted Subsidiaries have kept, observed, performed and fulfilled
their obligations under this Indenture, and further stating, as to such Officer
signing such certificate, that to the best of his or her knowledge the Issuer
and its Restricted Subsidiaries have kept, observed, performed and fulfilled
each and every condition and covenant contained in this Indenture and is not in
default in the
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performance or observance of any of the terms, provisions, covenants and
conditions of this Indenture (or, if a Default shall have occurred, describing
all such Defaults of which he or she may have knowledge and what action the
Issuer is taking or proposes to take with respect thereto).
(b) When any Default has occurred and is continuing under this
Indenture, or if the Trustee or the holder of any other evidence of Indebtedness
of the Issuer or any Subsidiary gives any notice or takes any other action with
respect to a claimed Default, the Issuer shall promptly (which shall be no more
than 30 days after becoming aware of such Default) deliver to the Trustee by
registered or certified mail or by facsimile transmission an Officer's
Certificate specifying such event and what action the Issuer proposes to take
with respect thereto.
Section 4.05 Taxes.
(a) The Issuer shall pay, and shall cause each of its Restricted
Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and
governmental levies except such as are contested in good faith and by
appropriate negotiations or proceedings or where the failure to effect such
payment is not adverse in any material respect to the Holders of the Notes.
(b) All payments that any Guarantor that is not organized or
existing under the laws of the United States, any state thereof, the District of
Columbia, or any territory thereof (each a "Foreign Payor") makes under or with
respect to the Notes or any Guarantee, will be made free and clear of, and
without withholding or deduction for or on account of, any present or future
tax, duty, levy, impost, assessment or other governmental charges (including
penalties, interest and other similar liabilities related thereto) of whatever
nature (collectively, "Taxes") imposed or levied by or on behalf of any
jurisdiction in which any Foreign Payor is incorporated, organized or otherwise
resident for tax purposes or from or through which any of the foregoing makes
any payment on the Notes or by any taxing authority therein or political
subdivision thereof (each, as applicable, a "Relevant Taxing Jurisdiction"),
unless the applicable Foreign Payor is required to withhold or deduct Taxes by
law or by the interpretation or administration of law. If a Foreign Payor is
required to withhold or deduct any amount for, or on account of, Taxes of a
Relevant Taxing Jurisdiction from any payment made under or with respect to the
Notes or any Guarantee, such Foreign Payor will pay such additional amounts
("Additional Amounts") as may be necessary to ensure that the net amount
received by each Holder of the Notes after such withholding or deduction will be
not less than the amount such Holder would have received if such Taxes had not
been required to be withheld or deducted.
(c) Notwithstanding the foregoing, no Foreign Payor will be required
to pay Additional Amounts to a Holder of Notes in respect of or on account of:
(i) any Taxes that are imposed or levied by a Relevant Taxing
Jurisdiction by reason of such Holder's present or former connection
with such Relevant Taxing Jurisdiction, including such Holder being
or having been a
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citizen, national, or resident, being or having been engaged in a
trade or business, being, or having been, physically present in or
having or having had a permanent establishment in a Relevant Taxing
Jurisdiction (but not including, in each case, any connection
arising from the mere receipt or holding of Notes or the receipt of
payments thereunder or under a Guarantee or the exercise or
enforcement of rights under any Notes or the Indenture or a
Guarantee);
(ii) any Taxes that are imposed or levied by reason of the
failure of such Holder, following the written request of any Foreign
Payor (as the case may be) addressed to such Holder (and made at a
time that would enable such Holder acting reasonably to comply with
that request) made in accordance with the notice procedures set
forth in the Indenture, to comply with any certification,
identification, information or other reporting requirements, whether
required by statute, treaty, regulation or administrative practice
of a Relevant Taxing Jurisdiction, as a precondition to exemption
from, or reduction in the rate of withholding or deduction of, Taxes
imposed by the Relevant Taxing Jurisdiction (including a
certification that such Holder is not resident in the Relevant
Taxing Jurisdiction);
(iii) any estate, inheritance, gift, sales, transfer, personal
property or similar Taxes;
(iv) any Tax that is payable otherwise than by withholding or
deduction from payments made under or with respect to the Notes;
(v) any Tax that is imposed or levied by reason of the
presentation (where presentation is required in order to receive
payment) of the Notes for payment on a date more than 30 days after
the date on which such payment became due and payable or the date on
which payment thereof is duly provided for, whichever is later,
except to the extent that the beneficial owner or holder thereof
would have been entitled to Additional Amounts had the Notes been
presented for payment on any date during such 30 day period;
(vi) any Tax except to the extent it exceeds any Tax that
would have been required to be withheld from payments to the Holder
if such payments were made by the Issuer; or
(vii) any combination of items (i) through (vi) above.
(d) Additional Amounts will not be paid with respect to the Notes to
a Holder who is a fiduciary, a partnership, a limited liability company or other
than the sole beneficial owner of the payment under or with respect to the
Notes, to the extent that payment would be required by the laws of a Relevant
Taxing Jurisdiction to be included in the income, for tax purposes, of a
beneficiary or settlor with respect to the fiduciary, a member of that
partnership, an interest holder in that limited liability company or a
beneficial owner who would not have been entitled to the Additional Amounts had
it been the Holder of the Notes.
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(e) The relevant Foreign Payor shall (i) make such withholding or
deduction as is required by applicable law and (ii) remit the full amount
withheld or deducted to the relevant taxing authority in accordance with
applicable law.
At least 30 calendar days prior to each date on which any payment
under or with respect to the Notes is due and payable, if the relevant Foreign
Payor will be obligated to pay Additional Amounts with respect to such payment
(unless such obligation to pay Additional Amounts arises after the 30th day
prior to the date on which payment under or with respect to the Notes is due and
payable, in which case it will be promptly thereafter), the relevant Foreign
Payor will deliver to the Trustee an Officer's Certificate of such Foreign Payor
stating that such Additional Amounts will be payable and the amounts so payable
and will set forth such other information necessary to enable the Trustee to pay
such Additional Amounts to the applicable Holders on the payment date.
The relevant Foreign Payor shall promptly publish a notice in
accordance with the notice provisions set forth in this Indenture stating that
such Additional Amounts will be payable and describing the obligation to pay
such amounts.
(f) Upon written request, the relevant Foreign Payor shall furnish
to the Trustee or to a Holder of the Notes copies of tax receipts evidencing the
payment of any Taxes by such Foreign Payor in such form as provided in the
normal course by the taxing authority imposing such Taxes and as is reasonably
available to such Foreign Payor. If, notwithstanding the efforts of such Foreign
Payor to obtain such receipts, the same are not obtainable, such Foreign Payor
shall provide the Trustee or the applicable Holder with other evidence
reasonably satisfactory to the Trustee or such Holder.
(g) The Issuer and any Guarantor, as the case may be, will pay any
present or future stamp, issue, registration, court, documentation, excise or
property taxes or other similar taxes, charges and duties, including interest
and penalties with respect thereto, imposed by or in any Relevant Taxing
Jurisdiction in respect of the execution, issue, enforcement or delivery of the
Notes or any other document or instrument referred to thereunder (other than on
or in connection with a transfer of the Notes other than the initial resale by
the Initial Purchasers).
(h) Whenever this Indenture or the Notes refers to, in any context,
the payment of principal, premium, if any, interest or any other amount payable
under or with respect to any Note or with respect to any Guarantee, such
reference includes the payment of Additional Amounts, if applicable.
Section 4.06 Stay, Extension and Usury Laws. The Issuer and each of the
Guarantors covenant (to the extent that they may lawfully do so) that they 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 Issuer and each of the Guarantors (to the
extent that they may lawfully do so) hereby
83
expressly waive all benefit or advantage of any such law, and covenant that they
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.
Section 4.07 Limitation on Restricted Payments.
(a) The Issuer shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend or make any distribution on
account of the Issuer's or any of its Restricted Subsidiaries'
Equity Interests, including any payment made in connection with any
merger, amalgamation or consolidation involving the Issuer, other
than:
(A) dividends or distributions by the Issuer payable
solely in Equity Interests (other than Disqualified Stock) of
the Issuer; or
(B) dividends or distributions by a Restricted
Subsidiary so long as, in the case of any dividend or
distribution payable on or in respect of any class or series
of securities issued by a Restricted Subsidiary other than a
Wholly-owned Restricted Subsidiary, the Issuer or a Restricted
Subsidiary receives at least its pro rata share of such
dividend or distribution in accordance with its Equity
Interests in such class or series of securities;
(ii) purchase or otherwise acquire or retire for value any
Equity Interests of the Issuer or any direct or indirect parent of
the Issuer;
(iii) make any principal payment on, or redeem, repurchase,
defease or otherwise acquire or retire for value, in each case prior
to any scheduled repayment or scheduled maturity, any Subordinated
Indebtedness of the Issuer or any of its Restricted Subsidiaries,
other than the payment, redemption, repurchase, defeasance,
acquisition or retirement of:
(A) Subordinated 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 payment, redemption, repurchase, defeasance,
acquisition or retirement; and
(B) Indebtedness permitted under clauses (vii) and (ix)
of Section 4.09(b) hereof; or
(iv) make any Restricted Investment
(all such payments and other actions set forth in clauses (i)
through (iv) of this Section 4.07(a) being collectively referred to
as "Restricted Payments"), unless, at the time of such Restricted
Payment:
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(1) no Default shall have occurred and be continuing or would
occur as a consequence thereof;
(2) immediately after giving effect to such transaction on a
pro forma basis, the Issuer could Incur $1.00 of additional
Indebtedness pursuant to Section 4.09(a) hereof;
(3) immediately after giving effect to such transaction on a
pro forma basis, the Issuer's Consolidated Leverage Ratio would be
less than 6.0 to 1.0; and
(4) such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by the Issuer and its
Restricted Subsidiaries after the Issue Date (including Restricted
Payments permitted by clauses (i), (iv) (only to the extent of
one-half of the amounts paid pursuant to such clause), (vi) and
(viii) of Section 4.07(b) hereof, but excluding all other Restricted
Payments permitted by Section 4.07(b) hereof), is less than the
amount equal to the Cumulative Credit.
(b) Section 4.07(a) hereof will not prohibit:
(i) the payment of any dividend or distribution within 60 days
after the date of declaration thereof, if at the date of declaration
such payment would have complied with the provisions of this
Indenture;
(ii) (A) the redemption, repurchase, retirement or other
acquisition of any Equity Interests ("Retired Capital Stock") or
Subordinated Indebtedness of the Issuer, any direct or indirect
parent of the Issuer or any Guarantor in exchange for, or out of the
proceeds of, the substantially concurrent sale of, Equity Interests
of the Issuer or any direct or indirect parent of the Issuer or
contributions to the equity capital of the Issuer (other than any
Disqualified Stock or any Equity Interests sold to a Subsidiary of
the Issuer ) (collectively, including any such contributions,
"Refunding Capital Stock") (B) the declaration and payment of
dividends on the Retired Capital Stock out of the proceeds of the
substantially concurrent sale (other than to a Subsidiary of the
Issuer) of Refunding Capital Stock, and (C) if immediately prior to
the retirement of the Retired Capital Stock, the declaration and
payment of dividends thereon was permitted under clause (vi) of this
Section 4.07(b) and not made pursuant to clause (ii)(B) of this
paragraph, the declaration and payment of dividends on the Refunding
Capital Stock (other than Refunding Capital Stock the proceeds of
which were used to redeem, repurchase, retire or otherwise acquire
any Equity Interests of any direct or indirect parent of the Issuer)
in an aggregate amount per year no greater than the aggregate amount
of dividends per annum that were declarable and payable on such
Retired Capital Stock immediately prior to such retirement;
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(iii) the redemption, repurchase, defeasance, or other
acquisition or retirement of Subordinated Indebtedness of the Issuer
or any Guarantor made by exchange for, or out of the proceeds of the
substantially concurrent sale of, new Indebtedness of the Issuer or
a Guarantor which is Incurred in accordance with Section 4.09 hereof
so long as:
(A) the principal amount (or accreted value, if
applicable) of such new Indebtedness does not exceed the
principal amount (or accreted value, if applicable) plus any
accrued and unpaid interest, of the Subordinated Indebtedness
being so redeemed, repurchased, acquired or retired for value
(plus the amount of any premium required to be paid under the
terms of the instrument governing the Subordinated
Indebtedness being so redeemed, repurchased, acquired or
retired, any tender premiums, plus any defeasance costs, fees
and expenses incurred in connection therewith;
(B) such Indebtedness is subordinated to the Notes or
the related Guarantee, as the case may be, at least to the
same extent as such Subordinated Indebtedness so purchased,
exchanged, redeemed, repurchased, acquired or retired for
value;
(C) such Indebtedness has a final scheduled maturity
date equal to or later than the earlier of (x) the final
scheduled maturity date of the Subordinated Indebtedness being
so redeemed, repurchased, acquired or retired and (y) 91 days
following the maturity date of the Notes; and
(D) such Indebtedness has a Weighted Average Life to
Maturity at the time Incurred which is not less than the
shorter of (x) the remaining Weighted Average Life to Maturity
of the Subordinated Indebtedness being so redeemed,
repurchased, acquired or retired and (y) the Weighted Average
Life to Maturity that would result if all payments of
principal on the Subordinated Indebtedness being redeemed,
repurchased, acquired or retired that were due on or after the
date that is one year following the last maturity date of any
Notes then outstanding were instead due on such date one year
following the last date of maturity of the Notes;
(iv) the repurchase, retirement or other acquisition (or
dividends to any direct or indirect parent of the Issuer to finance
any such repurchase, retirement or other acquisition) for value of
Equity Interests of the Issuer or any direct or indirect parent of
the Issuer held by any future, present or former employee, director
or consultant of the Issuer or any direct or indirect parent of the
Issuer or any Subsidiary of the Issuer pursuant to any management
equity plan or stock option plan or any other management or employee
benefit plan or other agreement or arrangement; provided, however,
that the aggregate Restricted Payments made under this clause (iv)
do not exceed $30 million in any calendar year (with unused amounts
in any calendar year being permitted to be carried over to
succeeding calendar years); provided, further, however, that such
amount in any calendar year may be increased by an amount not to
exceed:
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(A) the cash proceeds received by the Issuer or any of
its Restricted Subsidiaries from the sale of Equity Interests
(other than Disqualified Stock) of the Issuer or any direct or
indirect parent of the Issuer (to the extent contributed to
the Issuer) to members of management, directors or consultants
of the Issuer and its Restricted Subsidiaries or any direct or
indirect parent of the Issuer that occurs after the Issue Date
(provided that the amount of such cash proceeds utilized for
any such repurchase, retirement, other acquisition or dividend
will not increase the amount available for Restricted Payments
under clause (iii) of Section 4.07(a) hereof; plus
(B) the cash proceeds of key man life insurance policies
received by the Issuer or any direct or indirect parent of the
Issuer (to the extent contributed to the Issuer) or the
Issuer's Restricted Subsidiaries after the Issue Date; plus
(C) the amount of any cash bonuses otherwise payable to
members of management, directors or consultants of the Issuer
and its Restricted Subsidiaries or any direct or indirect
parent of the Issuer in connection with the Transactions that
are foregone in return for the receipt of Equity Interests;
provided that the Issuer may elect to apply all or any portion of
the aggregate increase contemplated by clauses (A), (B) and (C) of
this Section 4.07(b)(iv) in any calendar year; and provided,
further, that cancellation of Indebtedness owing to the Issuer or
any Restricted Subsidiary from members of management of the Issuer,
any of its Restricted Subsidiaries or its direct or indirect parents
in connection with a repurchase of Equity Interests of the Issuer or
any of its direct or indirect parents will not be deemed to
constitute a Restricted Payment for purposes of this Section 4.07 or
any other provision of this Indenture;
(v) the declaration and payment of dividends or distributions
to holders of any class or series of Disqualified Stock of the
Issuer or any of its Restricted Subsidiaries issued or incurred in
accordance with Section 4.09 hereof;
(vi) (A) the declaration and payment of dividends or
distributions to holders of any class or series of Designated
Preferred Stock (other than Disqualified Stock) issued after the
Issue Date; provided that the aggregate amount of dividends declared
and paid pursuant to this clause (A) does not exceed the net cash
proceeds actually received by the Issuer from any such sale of
Designated Preferred Stock (other than Disqualified Stock) issued
after the Issue Date;
(B) a Restricted Payment to any direct or indirect
parent of the Issuer, the proceeds of which will be used to
fund the payment of dividends to Holders of any class or
series of Designated Preferred Stock (other than Disqualified
Stock) of any direct or indirect parent of the Issuer issued
after the Issue Date; provided that the aggregate amount of
dividends declared and paid
87
pursuant to this clause (B) does not exceed the net cash
proceeds actually received by the Issuer from any such sale of
Designated Preferred Stock (other than Disqualified Stock)
issued after the Issue Date; or
(C) the declaration and payment of dividends on
Refunding Capital Stock that is Preferred Stock in excess of
the dividends declarable and payable thereon pursuant to
clause (ii) of this Section 4.07(b);
provided, however, in the case of each of (A), (B) and (C) of this clause (vi),
that for the most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date of issuance of
such Designated Preferred Stock after giving effect to such issuance (and the
payment of dividends or distributions) on a pro forma basis, the Issuer would
have had a Fixed Charge Coverage Ratio of at least 2.00 to 1.00;
(vii) so long as immediately after giving effect to such
transaction on a pro forma basis, the Issuer's Consolidated Leverage
Ratio would be less than 6.0 to 1.0, Investments in Unrestricted
Subsidiaries having an aggregate Fair Market Value (as determined in
good faith by the Issuer), taken together with all other Investments
made pursuant to this clause (vii) that are at that time
outstanding, not to exceed the greater of $35 million and 1.0% of
Total Assets at the time of such Investment (with the Fair Market
Value of each Investment being measured at the time made and without
giving effect to subsequent changes in value);
(viii) the payment of dividends on the Issuer's common stock
(or a Restricted Payment to any direct or indirect parent of the
Issuer to fund the payment by such direct or indirect parent of the
Issuer of dividends on such entity's common stock) of up to 6.0% per
annum of the net proceeds received by the Issuer from any public
offering of common stock of the Issuer or any direct or indirect
parent of the Issuer;
(ix) Restricted Payments that are made with Excluded
Contributions;
(x) other Restricted Payments in an aggregate amount not to
exceed the greater of $50 million and 1.5% of Total Assets at the
time made;
(xi) the distribution, as a dividend or otherwise, of shares
of Capital Stock of, or Indebtedness owed to the Issuer or a
Restricted Subsidiary of the Issuer by, Unrestricted Subsidiaries;
(xii) the payment of dividends or other distributions to any
direct or indirect parent of the Issuer in amounts required for such
parent to pay foreign, federal, state or local income taxes (as the
case may be) imposed directly on such parent to the extent such
income taxes are attributable to the income of the Issuer and its
Restricted Subsidiaries (including, without limitation, by virtue
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of such parent being the common parent of a consolidated or combined
tax group of which the Issuer and/or its Restricted Subsidiaries are
members);
(xiii) the payment of dividends, other distributions or other
amounts or the making of loans or advances or any other Restricted
Payment, if applicable:
(A) in amounts required for any direct or indirect
parent of the Issuer, if applicable, to pay fees and expenses
(including franchise or similar taxes) required to maintain
its corporate existence, customary salary, bonus and other
benefits payable to, and indemnities provided on behalf of,
officers and employees of any direct or indirect parent of the
Issuer, if applicable, and general corporate operating and
overhead expenses of any direct or indirect parent of the
Issuer, if applicable, in each case to the extent such fees
and expenses are attributable to the ownership or operation of
the Issuer, if applicable, and its Subsidiaries;
(B) in amounts required for any direct or indirect
parent of the Issuer, if applicable, to pay interest and/or
principal on Indebtedness the proceeds of which have been
contributed to the Issuer or any of its Restricted
Subsidiaries and that has been guaranteed by, or is otherwise
considered Indebtedness of, the Issuer Incurred in accordance
with Section 4.09 hereof; and
(C) in amounts required for any direct or indirect
parent of the Issuer to pay fees and expenses, other than to
Affiliates of the Issuer, related to any unsuccessful equity
or debt offering of such parent;
(xiv) any Restricted Payment used to fund the Transactions and
the payment of fees and expenses incurred in connection with the
Transactions or owed by the Issuer or any direct or indirect parent
of the Issuer or Restricted Subsidiaries of the Issuer to
Affiliates, in each case to the extent permitted under Section 4.11
hereof;
(xv) repurchases of Equity Interests deemed to occur upon
exercise of stock options or warrants if such Equity Interests
represent a portion of the exercise price of such options or
warrants;
(xvi) purchases of receivables pursuant to a Receivables
Repurchase Obligation in connection with a Qualified Receivables
Financing and the payment or distribution of Receivables Fees;
(xvii) payments of cash, or dividends, distributions, advances
or other Restricted Payments by the Issuer or any Restricted
Subsidiary to allow the payment of cash in lieu of the issuance of
fractional shares upon the exercise of options or warrants or upon
the conversion or exchange of Capital Stock of any such Person;
89
(xviii) the repurchase, redemption or other acquisition or
retirement for value of any Subordinated Indebtedness pursuant to
the provisions similar to those described under Sections 4.10 and
4.13 hereof; provided that all Notes tendered by Holders in
connection with a Change of Control or Asset Sale Offer, as
applicable, have been repurchased, redeemed or acquired for value;
(xix) any payments made, including any such payments made to
any direct or indirect parent of the Issuer to enable it to make
payments, in connection with the consummation of the Transactions or
as contemplated by the Acquisition Documents, whether payable on the
Issue Date or thereafter (other than payments to any Permitted
Holder or any Affiliate thereof which are not permitted by Section
4.11 hereof); and
(xx) payments or distributions to dissenting stockholders
pursuant to applicable law, pursuant to or in connection with a
consolidation, amalgamation, merger or transfer of all or
substantially all of the assets of the Issuer and its Restricted
Subsidiaries, taken as a whole, that complies with Section 5.01;
provided that as a result of such consolidation, amalgamation,
merger or transfer of assets, the Issuer shall have made a Change of
Control Offer (if required by this Indenture) and that all Notes
tendered by Holders in connection with such Change of Control Offer
have been repurchased, redeemed or acquired for value;
provided, however, that at the time of, and after giving effect to, any
Restricted Payment permitted under clauses (x) and (xi) of this Section 4.07(b),
no Default shall have occurred and be continuing or would occur as a consequence
thereof.
(c) As of the Issue Date, all of the Issuer's Subsidiaries will be
Restricted Subsidiaries. The Issuer will not permit any Unrestricted Subsidiary
to become a Restricted Subsidiary except pursuant to the definition of
"Unrestricted Subsidiary." For purposes of designating any Restricted Subsidiary
as an Unrestricted Subsidiary, all outstanding Investments by the Issuer and its
Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so
designated will be deemed to be Restricted Payments in an amount determined as
set forth in the last sentence of the definition of "Investments." Such
designation will only be permitted if a Restricted Payment in such amount would
be permitted at such time and if such Subsidiary otherwise meets the definition
of an Unrestricted Subsidiary.
Section 4.08 Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries.
(a) The Issuer shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or consensual restriction
on the ability of any Restricted Subsidiary to:
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(i) (A) pay dividends or make any other distributions to the
Issuer or any of its Restricted Subsidiaries (1) on its Capital
Stock; or (2) with respect to any other interest or participation
in, or measured by, its profits; or (B) pay any Indebtedness owed to
the Issuer or any of its Restricted Subsidiaries;
(ii) make loans or advances to the Issuer or any of its
Restricted Subsidiaries; or
(iii) sell, lease or transfer any of its properties or assets
to the Issuer or any of its Restricted Subsidiaries.
(b) Section 4.08(a) hereof shall not apply to encumbrances or
restrictions existing under or by reason of:
(i) contractual encumbrances or restrictions in effect on the
Issue Date, including pursuant to the Credit Agreement and the other
Credit Agreement Documents; (ii) (A) this Indenture and the Notes
(and any Exchange Notes and guarantees thereof), (B) the Senior
Toggle Notes Indenture and the Senior Toggle Notes (and any
"exchange notes" and guarantees thereof), and (C) the Senior
Subordinated Notes Indenture and the Senior Subordinated Notes (and
any "exchange notes" and guarantees thereof);
(iii) applicable law or any applicable rule, regulation or
order;
(iv) any agreement or other instrument of a Person acquired by
the Issuer or any Restricted Subsidiary which was in existence at
the time of such acquisition(but not created in contemplation
thereof or to provide all or any portion of the funds or credit
support utilized to consummate such acquisition), which encumbrance
or restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Person and its Subsidiaries, or
the property or assets of the Person and its Subsidiaries, so
acquired;
(v) contracts or agreements for the sale of assets, including
any restriction with respect to a Restricted Subsidiary imposed
pursuant to an agreement entered into for the sale or disposition of
the Capital Stock or assets of such Restricted Subsidiary;
(vi) Secured Indebtedness otherwise permitted to be Incurred
pursuant to Sections 4.09 and 4.12 hereof that limit the right of
the debtor to dispose of the assets securing such Indebtedness;
(vii) restrictions on cash or other deposits or net worth
imposed by customers under contracts entered into in the ordinary
course of business;
91
(viii) customary provisions in joint venture agreements,
similar agreements relating solely to such joint venture and other
similar agreements entered into in the ordinary course of business;
(ix) purchase money obligations for property acquired and
Capitalized Lease Obligations in the ordinary course of business;
(x) customary provisions contained in leases, licenses and
other similar agreements, entered into in the ordinary course of
business;
(xi) any encumbrance or restriction of a Receivables
Subsidiary effected in connection with a Qualified Receivables
Financing; provided, however, that such restrictions apply only to
such Receivables Subsidiary;
(xii) other Indebtedness, Disqualified Stock or Preferred
Stock of (a) any Restricted Subsidiary of the Issuer that is a
Guarantor or a Foreign Subsidiary or (b) any Restricted Subsidiary
that is not a Guarantor or a Foreign Subsidiary so long as such
encumbrances and restrictions contained in any agreement or
instrument will not materially affect the Issuer's ability to make
anticipated principal or interest payments on the Notes (as
determined in good faith by the Issuer), in the case of each of
clauses (a) and (b) to the extent that such Indebtedness,
Disqualified Stock or Preferred Stock is permitted to be Incurred
subsequent to the Issue Date under Section 4.09 hereof;
(xiii) any Restricted Investment not prohibited by Section
4.07 and any Permitted Investment; or
(xiv) any encumbrances or restrictions of the type referred to
in Section 4.08(a) hereof imposed by any amendments, modifications,
restatements, renewals, increases, supplements, refundings,
replacements or refinancings of the contracts, instruments or
obligations referred to in clauses (i) through (xiii) of this
Section 4.08(b); provided that such amendments, modifications,
restatements, renewals, increases, supplements, refundings,
replacements or refinancings are, in the good faith judgment of the
Issuer, no more restrictive with respect to dividend and other
payment restrictions than those contained in the dividend or other
payment restrictions prior to such amendment, modification,
restatement, renewal, increase, supplement, refunding, replacement
or refinancing.
For purposes of determining compliance with this covenant, (1)
the priority of any Preferred Stock in receiving dividends or
liquidating distributions prior to dividends or liquidating
distributions being paid on common stock shall not be deemed a
restriction on the ability to make distributions on Capital Stock
and (2) the subordination of loans or advances made to the Issuer or
a Restricted Subsidiary of the Issuer to other Indebtedness Incurred
by the Issuer or any such Restricted Subsidiary shall not be deemed
a restriction on the ability to make loans or advances.
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Section 4.09 Limitation on Incurrence of Indebtedness and Issuance of
Disqualified Stock and Preferred Stock.
(a) (i) the Issuer will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness
(including Acquired Indebtedness) or issue any shares of Disqualified
Stock; and
(ii) the Issuer will not permit any of its Restricted
Subsidiaries (other than a Guarantor) to issue any shares of
Preferred Stock;
provided, however, that the Issuer and any Guarantor may Incur
Indebtedness (including Acquired Indebtedness) or issue shares of
Disqualified Stock, and any Restricted Subsidiary of the Issuer that is
not a Guarantor may Incur Indebtedness (including Acquired Indebtedness),
issue shares of Disqualified Stock or issue shares of Preferred Stock, in
each case if the Fixed Charge Coverage Ratio of the Issuer for the 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 1.00 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 the Disqualified Stock or Preferred Stock had been issued, as the case
may be, and the application of proceeds therefrom had occurred at the
beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) hereof shall not apply to:
(i) the Incurrence by the Issuer or its Restricted
Subsidiaries of Indebtedness under the Credit Agreement and the
issuance and creation of letters of credit and bankers' acceptances
thereunder;
(ii) the Incurrence by the Issuer and the Guarantors of
Indebtedness represented by (1) the Notes (not including any
Additional Notes) and the Guarantees (including Exchange Notes and
related guarantees thereof), (2) the Senior Notes (not including any
additional Senior Notes) and the related guarantees thereof
(including exchange Senior Notes and related guarantees thereof) and
(3) the Senior Subordinated Notes (not including any additional
Senior Subordinated Notes) and the related guarantees thereof
(including exchange Senior Subordinated Notes and related guarantees
thereof);
(iii) Indebtedness of the Issuer or any of its Restricted
Subsidiaries existing on the Issue Date (other than Indebtedness
described in clauses (i) and (ii) of this Section 4.09(b));
(iv) Indebtedness (including Capitalized Lease Obligations)
Incurred by the Issuer or any of its Restricted Subsidiaries,
Disqualified Stock issued by the Issuer or any of its Restricted
Subsidiaries and Preferred Stock issued by any Restricted
Subsidiaries of the Issuer to finance (whether prior to or
93
within 270 days after) the purchase, lease, construction or
improvement of property (real or personal) or equipment (whether
through the direct purchase of assets or the Capital Stock of any
Person owning such assets), and any refinancings or replacements
thereof, in an aggregate principal amount, which when aggregated
with the principal amount of all other Indebtedness (including
Capitalized Lease Obligations), together with any refinancings ore
replacements thereof, then outstanding and Incurred under this
clause (iv), does not exceed the Permitted Amount at the time of
Incurrence (it being understood that any Indebtedness Incurred under
this clause (iv) shall cease to be deemed Incurred or outstanding
for purposes of this clause (iv) but shall be deemed Incurred for
purposes of the first paragraph of this covenant from and after the
first date on which the Issuer, or the Restricted Subsidiary, as the
case may be, could have Incurred such Indebtedness under the first
paragraph of this covenant without reliance upon this clause (iv));
(v) Indebtedness Incurred by the Issuer or any of its
Restricted Subsidiaries constituting reimbursement obligations with
respect to letters of credit and bank guarantees issued in the
ordinary course of business, including without limitation letters of
credit in respect of workers' compensation claims, health,
disability or other benefits to employees or former employees or
their families or property, casualty or liability insurance or
self-insurance, and letters of credit in connection with the
maintenance of, or pursuant to the requirements of, environmental or
other permits or licenses from governmental authorities, or other
Indebtedness with respect to reimbursement type obligations
regarding workers' compensation claims;
(vi) Indebtedness arising from agreements of the Issuer or a
Restricted Subsidiary providing for indemnification, adjustment of
purchase price or similar obligations, in each case, Incurred in
connection with the Transactions or any other acquisition or
disposition of any business, assets or a Subsidiary of the Issuer in
accordance with the terms of this Indenture, other than guarantees
of Indebtedness Incurred by any Person acquiring all or any portion
of such business, assets or Subsidiary for the purpose of financing
such acquisition;
(vii) Indebtedness of the Issuer to a Restricted Subsidiary;
provided that any such Indebtedness owed to a Restricted Subsidiary
that is not a Guarantor is subordinated in right of payment to the
obligations of the Issuer under the Notes; provided, further, that
any subsequent issuance or transfer of any Capital Stock or any
other event which results in any such Restricted Subsidiary ceasing
to be a Restricted Subsidiary or any other subsequent transfer of
any such Indebtedness (except to the Issuer or another Restricted
Subsidiary or any pledge of such Indebtedness constituting a
Permitted Lien) shall be deemed, in each case, to be an Incurrence
of such Indebtedness not permitted by this clause (vii);
(viii) shares of Preferred Stock of a Restricted Subsidiary
issued to the Issuer or another Restricted Subsidiary; provided that
any subsequent issuance or transfer of any Capital Stock or any
other event which results in any
94
Restricted Subsidiary that holds such shares of Preferred Stock of
another Restricted Subsidiary ceasing to be a Restricted Subsidiary
or any other subsequent transfer of any such shares of Preferred
Stock (except to the Issuer or another Restricted Subsidiary) shall
be deemed, in each case, to be an issuance of shares of Preferred
Stock not permitted by this clause (viii);
(ix) Indebtedness of a Restricted Subsidiary to the Issuer or
another Restricted Subsidiary; provided that if a Guarantor incurs
such Indebtedness to a Restricted Subsidiary that is not a
Guarantor, such Indebtedness is subordinated in right of payment to
the Guarantee of such Guarantor; provided, further, that any
subsequent issuance or transfer of any Capital Stock or any other
event which results in any Restricted Subsidiary holding such
Indebtedness ceasing to be a Restricted Subsidiary or any other
subsequent transfer of any such Indebtedness (except to the Issuer
or another Restricted Subsidiary or any pledge of such Indebtedness
constituting a Permitted Lien) shall be deemed, in each case, to be
an Incurrence of such Indebtedness not permitted by this clause
(ix);
(x) Hedging Obligations that are not incurred for speculative
purposes and are either (1) for the purpose of fixing or hedging
interest rate risk with respect to any Indebtedness that is
permitted by the terms of this Indenture to be outstanding; (2) for
the purpose of fixing or hedging currency exchange rate risk with
respect to any currency exchanges; or (3) for the purpose of fixing
or hedging commodity price risk with respect to any commodity
purchases or sales;
(xi) obligations (including reimbursement obligations with
respect to letters of credit and bank guarantees) in respect of
performance, bid, appeal and surety bonds and completion guarantees
provided by the Issuer or any Restricted Subsidiary in the ordinary
course of business or consistent with past practice or industry
practice;
(xii) Indebtedness or Disqualified Stock of the Issuer or any
Restricted Subsidiary of the Issuer and Preferred Stock of any
Restricted Subsidiary of the Issuer not otherwise permitted
hereunder in an aggregate principal amount or liquidation
preference, which when aggregated with the principal amount or
liquidation preference of all other Indebtedness, Disqualified Stock
and Preferred Stock then outstanding and Incurred under this clause
(xii), does not exceed the greater of $100 million and 3.0% of Total
Assets at the time of Incurrence (it being understood that any
Indebtedness Incurred under this clause (xii) shall cease to be
deemed Incurred or outstanding for purposes of this clause (xii) but
shall be deemed Incurred for purposes of the first paragraph of this
covenant from and after the first date on which the Issuer, or the
Restricted Subsidiary, as the case may be, could have Incurred such
Indebtedness under the first paragraph of this covenant without
reliance upon this clause (xii));
(xiii) Indebtedness or Disqualified Stock of the Issuer or any
Restricted Subsidiary of the Issuer and Preferred Stock of any
Restricted Subsidiary of the Issuer not otherwise permitted
hereunder in an aggregate
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principal amount or liquidation preference not greater than 200.0%
of the Unapplied Proceeds;
(xiv) any guarantee by the Issuer or any Restricted Subsidiary
of the Issuer of Indebtedness or other obligations of the Issuer or
any of its Restricted Subsidiaries so long as the Incurrence of such
Indebtedness Incurred by the Issuer or such Restricted Subsidiary is
permitted under the terms of this Indenture; provided that (i) if
such Indebtedness is by its express terms subordinated in right of
payment to the Notes or the Guarantee of such Restricted Subsidiary,
as applicable, any such guarantee of such Guarantor with respect to
such Indebtedness shall be subordinated in right of payment to such
Guarantor's Guarantee with respect to the Notes substantially to the
same extent as such Indebtedness is subordinated to the Notes or the
Guarantee of such Restricted Subsidiary, as applicable and (ii) if
such guarantee is of Indebtedness of the Issuer, such guarantee is
Incurred in accordance with Section 4.14 hereof solely to the extent
Section 4.14 is applicable;
(xv) the Incurrence by the Issuer or any of its Restricted
Subsidiaries of Indebtedness or Disqualified Stock or Preferred
Stock of a Restricted Subsidiary of the Issuer which serves to
refund, refinance or defease any Indebtedness Incurred or
Disqualified Stock or Preferred Stock issued as permitted under
Section 4.09(a) and clauses (ii), (iii), (xiii), (xv), (xvi) and
(xx) of this Section 4.09(b) or any Indebtedness, Disqualified Stock
or Preferred Stock Incurred to so refund or refinance such
Indebtedness, Disqualified Stock or Preferred Stock, including any
additional Indebtedness, Disqualified Stock or Preferred Stock
Incurred to pay premiums (including tender premiums), defeasance
costs and fees in connection therewith (subject to the following
proviso, "Refinancing Indebtedness") prior to its respective
maturity; provided, however, that such Refinancing Indebtedness:
(A) has a Weighted Average Life to Maturity at the time
such Refinancing Indebtedness is Incurred which is not less
than the shorter of (x) the remaining Weighted Average Life to
Maturity of the Indebtedness, Disqualified Stock or Preferred
Stock being refunded, refinanced or defeased and (y) the
Weighted Average Life to Maturity that would result if all
payments of principal on the Indebtedness, Disqualified Stock
and Preferred Stock being refunded or refinanced that were due
on or after the date that is one year following the last
maturity date of any Notes then outstanding were instead due
on such date one year following the last date of maturity of
the Notes;
(B) has a Stated Maturity which is not earlier than the
earlier of (x) the Stated Maturity of the Indebtedness being
refunded or refinanced or (y) 91 days following the maturity
date of the Notes;
(C) to the extent such Refinancing Indebtedness
refinances (a) Indebtedness junior to the Notes or the
Guarantee of such Restricted Subsidiary, as applicable, such
Refinancing Indebtedness is junior to
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the Notes or the Guarantee of such Restricted Subsidiary, as
applicable, or (b) Disqualified Stock or Preferred Stock, such
Refinancing Indebtedness is Disqualified Stock or Preferred
Stock; and
(D) shall not include (x) Indebtedness of a Restricted
Subsidiary of the Issuer that is not a Guarantor that
refinances Indebtedness of the Issuer or a Guarantor, or (y)
Indebtedness of the Issuer or a Restricted Subsidiary that
refinances Indebtedness of an Unrestricted Subsidiary,
provided, further, that subclauses (A) and (B) of this clause (xv)
will not apply to any refunding or refinancing of any Secured
Indebtedness.
(xvi) Indebtedness, Disqualified Stock or Preferred Stock of
(x) the Issuer or any of its Restricted Subsidiaries incurred to
finance an acquisition or (y) Persons that are acquired by the
Issuer or any of its Restricted Subsidiaries or merged, consolidated
or amalgamated with or into the Issuer or any of its Restricted
Subsidiaries in accordance with the terms of this Indenture;
provided that after giving effect to such acquisition or merger,
consolidation or amalgamation, either:
(A) the Issuer would be permitted to incur at least
$1.00 of additional Indebtedness under Section 4.09(a) hereof;
or
(B) the Fixed Charge Coverage Ratio of the Issuer would
be equal to or greater than immediately prior to such
acquisition or merger, consolidation or amalgamation;
(xvii) Indebtedness Incurred by a Receivables Subsidiary in a
Qualified Receivables Financing that is not recourse to the Issuer
or any Restricted Subsidiary other than a Receivables Subsidiary
(except for Standard Securitization Undertakings);
(xviii) Indebtedness arising from the honoring by a bank or
other financial institution of a check, draft or similar instrument
drawn against insufficient funds in the ordinary course of business;
provided that such Indebtedness is extinguished within five Business
Days of its Incurrence;
(xix) Indebtedness of the Issuer or any Restricted Subsidiary
supported by a letter of credit or bank guarantee issued pursuant to
the Credit Agreement, in a principal amount not in excess of the
stated amount of such letter of credit;
(xx) Indebtedness of Foreign Subsidiaries; provided, however,
that the aggregate principal amount of Indebtedness Incurred under
this clause (xx), when aggregated with the principal amount of all
other Indebtedness then outstanding and Incurred pursuant to this
clause (xx), does not exceed the greater of $50 million and 1.5% of
Total Assets at any one time outstanding (it being
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understood that any Indebtedness incurred pursuant to this clause
(xx) shall cease to be deemed incurred or outstanding for purposes
of this clause (xx) but shall be deemed incurred for the purposes of
the first paragraph of this covenant from and after the first date
on which such Foreign Subsidiary could have incurred such
Indebtedness under the first paragraph of this covenant without
reliance upon this clause (xx));
(xxi) Indebtedness of the Issuer or any Restricted Subsidiary
consisting of the financing of insurance premiums;
(xxii) Indebtedness, Disqualified Stock or Preferred Stock of
the Issuer or a Restricted Subsidiary of the Issuer incurred to
finance or assumed in connection with an acquisition, and any
refinancing or replacement thereof, in a principal amount not to
exceed the greater of (A) $75 million and (B) 2.25% of Total Assets
in the aggregate at any one time outstanding together with all other
Indebtedness, Disqualified Stock and/or Preferred Stock issued under
this clause (xxii) (it being understood that any Indebtedness,
Disqualified Stock or Preferred Stock incurred pursuant to this
clause (xxii) shall cease to be deemed incurred or outstanding for
purposes of this clause (xxii) but shall be deemed incurred for the
purposes of Section 4.09(a) hereof from and after the first date on
which such Restricted Subsidiary could have incurred such
Indebtedness, Disqualified Stock or Preferred Stock under the first
paragraph of this covenant without reliance on this clause (xxii));
(xxiii) Indebtedness consisting of Indebtedness issued by the
Issuer or a Restricted Subsidiary of the Issuer to current or former
officers, directors and employees thereof or any direct or indirect
parent thereof, their respective estates, spouses or former spouses,
in each case to finance the purchase or redemption of Equity
Interests of the Issuer or any of its direct or indirect parent
companies to the extent described in clause (iv) of Section 4.07(b)
hereof; and
(xxiv) Indebtedness incurred on behalf of, or representing
Guarantees of Indebtedness of, joint ventures of the Issuer or any
Restricted Subsidiary not in excess, at any one time outstanding, of
the greater of (x) $25 million and (y) 1.0% of Total Assets.
(c) For purposes of determining compliance with this Section 4.09:
(i) in the event that an item of Indebtedness, Disqualified
Stock or Preferred Stock (or any portion thereof) meets the criteria
of more than one of the categories of permitted Indebtedness
described in clauses (i) through (xxiv) of Section 4.09(b) hereof or
is entitled to be Incurred pursuant to Section 4.09(a) hereof, the
Issuer shall, in its sole discretion, classify or reclassify, or
later divide, classify or reclassify, such item of Indebtedness,
Disqualified Stock or Preferred Stock (or any portion thereof) in
any manner and at any time that complies with this Section 4.09; and
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(ii) at the time of incurrence, the Issuer will be entitled to
divide and classify an item of Indebtedness in more than one of the
types of Indebtedness described in Sections 4.09(a) and 4.09(b)
hereof without giving pro forma effect to the Indebtedness Incurred
pursuant to Section 4.09(b) hereof when calculating the amount of
Indebtedness that may be Incurred pursuant to Section 4.09(a)
hereof.
Accrual of interest, the accretion of accreted value, the payment of
interest or dividends in the form of additional Indebtedness, Disqualified Stock
or Preferred Stock, as applicable, accretion of original issue discount, the
accretion of liquidation preference and increases in the amount of Indebtedness
outstanding solely as a result of fluctuations in the exchange rate of
currencies will not be deemed to be an Incurrence of Indebtedness, Disqualified
Stock or Preferred Stock for purposes of this Section 4.09. Guarantees of, or
obligations in respect of letters of credit relating to, Indebtedness which is
otherwise included in the determination of a particular amount of Indebtedness
shall not be included in the determination of such amount of Indebtedness;
provided that the Incurrence of the Indebtedness represented by such guarantee
or letter of credit, as the case may be, was in compliance with this Section
4.09.
For purposes of determining compliance with any U.S.
dollar-denominated restriction on the Incurrence of Indebtedness, the U.S.
dollar equivalent principal amount of Indebtedness denominated in a foreign
currency shall be calculated based on the relevant currency exchange rate in
effect on the date such Indebtedness was incurred, in the case of term debt, or
first committed or first Incurred (whichever yields the lower U.S. dollar
equivalent), in the case of revolving credit debt; provided that if such
Indebtedness is incurred to refinance other Indebtedness denominated in a
foreign currency, and such refinancing would cause the applicable U.S.
dollar-denominated restriction to be exceeded if calculated at the relevant
currency exchange rate in effect on the date of such refinancing, such U.S.
dollar-denominated restriction shall be deemed not to have been exceeded so long
as the principal amount of such refinancing Indebtedness does not exceed the
principal amount of such Indebtedness being refinanced.
Notwithstanding any other provision of this covenant, the maximum
amount of Indebtedness that the Issuer and its Restricted Subsidiaries may Incur
pursuant to this covenant shall not be deemed to be exceeded, with respect to
any outstanding Indebtedness, solely as a result of fluctuations in the exchange
rate of currencies. The principal amount of any Indebtedness incurred to
refinance other Indebtedness, if incurred in a different currency from the
Indebtedness being refinanced, shall be calculated based on the currency
exchange rate applicable to the currencies in which such respective Indebtedness
is denominated that is in effect on the date of such refinancing.
Section 4.10 Asset Sales.
(a) The Issuer shall not, and shall not permit any of its Restricted
Subsidiaries to, cause or make an Asset Sale, unless (i) the Issuer or any of
its Restricted
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Subsidiaries, as the case may be, receives consideration at the time of such
Asset Sale at least equal to the Fair Market Value (as determined in good faith
by the Issuer) of the assets sold or otherwise disposed of, and (ii) at least
75% of the consideration therefor received by the Issuer or such Restricted
Subsidiary, as the case may be, is in the form of Cash Equivalents; provided
that the amount of:
(A) any liabilities (as shown on the Issuer's or such
Restricted Subsidiary's most recent balance sheet or in the notes
thereto) of the Issuer or any Restricted Subsidiary of the Issuer
(other than liabilities that are by their terms subordinated to the
Notes or any Guarantee) that are assumed by the transferee of any
such assets;
(B) any notes or other obligations or other securities or
assets received by the Issuer or such Restricted Subsidiary of the
Issuer from such transferee that are converted by the Issuer or such
Restricted Subsidiary of the Issuer into cash within 180 days of the
receipt thereof (to the extent of the cash received); and
(C) any Designated Non-cash Consideration received by the
Issuer or any of its Restricted Subsidiaries in such Asset Sale
having an aggregate Fair Market Value (as determined in good faith
by the Issuer), taken together with all other Designated Non-cash
Consideration received pursuant to this clause (c) that is at that
time outstanding, not to exceed the greater of 3.0% of Total Assets
and $100 million at the time of the receipt of such Designated
Non-cash Consideration (with the Fair Market Value of each item of
Designated Non-cash Consideration being measured at the time
received and without giving effect to subsequent changes in value);
shall be deemed to be Cash Equivalents for the purposes of this provision.
(b) Within 15 months after the Issuer's or any Restricted Subsidiary
of the Issuer's receipt of the Net Proceeds of any Asset Sale, the Issuer or
such Restricted Subsidiary of the Issuer may apply the Net Proceeds from such
Asset Sale, at its option:
(i) to repay (a) Indebtedness constituting Bank Indebtedness
and other Pari Passu Indebtedness that is secured by a Lien
permitted under this Indenture (and, if the Indebtedness repaid is
revolving credit Indebtedness, to correspondingly reduce commitments
with respect thereto), (b) Indebtedness of a Restricted Subsidiary
that is not a Guarantor, (c) Obligations under the Notes or (d)
other Pari Passu Indebtedness (provided that if the Issuer or any
Guarantor shall so reduce Obligations under unsecured Pari Passu
Indebtedness, the Issuer will equally and ratably reduce Obligations
under the Notes as provided under Section 3.07 hereof, through
open-market purchases (provided that such purchases are at or above
100% of the principal amount thereof) or by making an offer (in
accordance with the procedures set forth below for an Asset Sale
Offer) to all Holders to purchase at a purchase price equal to 100%
of the principal
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amount thereof, plus accrued and unpaid interest and additional
interest, if any, the pro rata principal amount of Notes), in each
case other than Indebtedness owed to the Issuer or an Affiliate of
the Issuer; or
(ii) to make an Investment in any one or more businesses
(provided that if such Investment is in the form of the acquisition
of Capital Stock of a Person, such acquisition results in such
Person becoming a Restricted Subsidiary of the Issuer), assets, or
property or capital expenditures, in each case (a) used or useful in
a Similar Business or (b) that replace the properties and assets
that are the subject of such Asset Sale.
In the case of clause (ii) of this Section 4.10(b), a binding
commitment shall be treated as a permitted application of the Net Proceeds from
the date of such commitment; provided that in the event such binding commitment
is later canceled or terminated for any reason before such Net Proceeds are so
applied, the Issuer or such Restricted Subsidiary enters into another binding
commitment (a "Second Commitment") within nine months of such cancellation or
termination of the prior binding commitment; provided, further that the Issuer
or such Restricted Subsidiary may only enter into a Second Commitment under the
foregoing provision one time with respect to each Asset Sale.
(c) Pending the final application of any such Net Proceeds, the
Issuer or such Restricted Subsidiary of the Issuer may temporarily reduce
Indebtedness under a revolving credit facility, if any, or otherwise invest such
Net Proceeds in any manner not prohibited by this Indenture. Any Net Proceeds
from any Asset Sale that are not applied as provided and within the time period
set forth in this Section 4.10(b) (it being understood that any portion of such
Net Proceeds used to make an offer to purchase Notes, as described in clause (i)
of this Section 4.10(b), shall be deemed to have been invested whether or not
such offer is accepted) will be deemed to constitute "Excess Proceeds." When the
aggregate amount of Excess Proceeds exceeds $20 million, the Issuer shall make
an offer to all Holders of Notes (and, at the option of the Issuer, to holders
of any Pari Passu Indebtedness) (an "Asset Sale Offer") to purchase the maximum
principal amount of Notes (and such Pari Passu Indebtedness), that is at least
$2,000 and an integral multiple of $1,000 that may be purchased out of the
Excess Proceeds at an offer price in cash in an amount equal to 100% of the
principal amount thereof (or, in the event such Pari Passu Indebtedness was
issued with significant original issue discount, 100% of the accreted value
thereof), plus accrued and unpaid interest and additional interest, if any (or,
in respect of such Pari Passu Indebtedness, such lesser price, if any, as may be
provided for by the terms of such Pari Passu Indebtedness), to the date fixed
for the closing of such offer, in accordance with the procedures set forth in
Section 3.09 hereof. The Issuer will commence an Asset Sale Offer with respect
to Excess Proceeds within ten (10) Business Days after the date that Excess
Proceeds exceeds $20 million by mailing the notice required pursuant to the
terms this Indenture, with a copy to the Trustee. To the extent that the
aggregate amount of Notes (and such Pari Passu Indebtedness) tendered pursuant
to an Asset Sale Offer is less than the Excess Proceeds, the Issuer may use any
remaining Excess Proceeds for any
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purpose that is not prohibited by this Indenture. If the aggregate principal
amount of Notes (and such Pari Passu Indebtedness) surrendered by Holders
thereof exceeds the amount of Excess Proceeds, the Trustee shall select the
Notes to be purchased in the manner described in Section 4.10(e) hereof. Upon
completion of any such Asset Sale Offer, the amount of Excess Proceeds shall be
reset at zero.
(d) The Issuer shall comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations to the
extent such laws or regulations are applicable in connection with the repurchase
of the Notes pursuant to an Asset Sale Offer. To the extent that the provisions
of any securities laws or regulations conflict with the provisions of this
Indenture, the Issuer will comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations described
in this Indenture by virtue thereof.
(e) If more Notes (and such Pari Passu Indebtedness) are tendered
pursuant to an Asset Sale Offer than the Issuer is required to purchase,
selection of such Notes for purchase will be made by the Trustee; provided that
no Notes of $2,000 or less shall be purchased in part; provided,that PIK Notes
in definitive form will be in minimum denominations of $1.00 and integral
multiples of $1.00 in excess thereof. Selection of such Pari Passu Indebtedness
will be made pursuant to the terms of such Pari Passu Indebtedness.
Section 4.11 Transactions with Affiliates.
(a) The Issuer will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, 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 or
series of transactions, contract, agreement, understanding, loan, advance or
guarantee with, or for the benefit of, any Affiliate of the Issuer (each of the
foregoing, an "Affiliate Transaction") involving aggregate consideration in
excess of $10 million, unless:
(i) such Affiliate Transaction is on terms that are not
materially less favorable to the Issuer or the relevant Restricted
Subsidiary than those that could have been obtained in a comparable
transaction by the Issuer or such Restricted Subsidiary with an
unrelated Person; and
(ii) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of $25 million, the Issuer delivers to the Trustee a
resolution adopted in good faith by the majority of the Board of
Directors of the Issuer, approving such Affiliate Transaction and
set forth in an Officer's Certificate certifying that such Affiliate
Transaction complies with clause (i) of this Section 4.11(a).
(b) Section 4.11(a) will not apply to the following:
(i) transactions between or among the Issuer and/or any of its
Restricted Subsidiaries and any merger, consolidation or
amalgamation of the
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Issuer and any direct parent of the Issuer; provided that such
parent shall have no material liabilities and no material assets
other than cash, Cash Equivalents and the Capital Stock of the
Issuer and such merger, consolidation or amalgamation is otherwise
in compliance with the terms of this Indenture and effected for a
bona fide business purpose;
(ii) Restricted Payments permitted by Section 4.07 hereof and
Permitted Investments;
(iii) (x) the entering into of any agreement (and any
amendment or modification of any such agreement) to pay, and the
payment of, management, consulting, monitoring and advisory fees to
the Sponsors in an aggregate amount in any fiscal year not to exceed
the greater of (A) $6 million and (B) 2.0% of EBITDA of the Issuer
and its Restricted Subsidiaries for the immediately preceding fiscal
year, plus out-of-pocket expense reimbursement; provided, however,
that any payment not made in any fiscal year may be carried forward
and paid in any succeeding fiscal year and (y) the payment of the
present value of all amounts payable pursuant to any agreement
described in clause (x) of this paragraph in connection with the
termination of such agreement;
(iv) the payment of reasonable and customary fees and
reimbursement of expenses paid to, and indemnity provided on behalf
of, officers, directors, employees or consultants of the Issuer or
any Restricted Subsidiary or any direct or indirect parent of the
Issuer;
(v) payments by the Issuer or any of its Restricted
Subsidiaries to the Sponsors made for any financial advisory,
financing, underwriting or placement services or in respect of other
investment banking activities, including, without limitation, in
connection with acquisitions or divestitures, which payments are (x)
made pursuant to the agreements with the Sponsors described in the
Offering Memorandum or (y) approved by a majority of the Board of
Directors of the Issuer in good faith;
(vi) transactions in which the Issuer or any of its Restricted
Subsidiaries, as the case may be, delivers to the Trustee a letter
from an Independent Financial Advisor stating that such transaction
is fair to the Issuer or such Restricted Subsidiary from a financial
point of view or meets the requirements of Section 4.11(a) hereof;
(vii) payments or loans (or cancellation of loans) to
officers, directors, employees or consultants which are approved by
a majority of the Board of Directors of the Issuer in good faith;
(viii) any agreement as in effect as of the Issue Date or any
amendment thereto (so long as any such agreement together with all
amendments thereto, taken as a whole, is not more disadvantageous to
the Holders of the Notes
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in any material respect than the original agreement as in effect on
the Issue Date) or any transaction contemplated thereby as
determined in good faith by the Issuer;
(ix) the existence of, or the performance by the Issuer or any
of its Restricted Subsidiaries of its obligations under the terms
of, Acquisition Documents, any stockholders agreement (including any
registration rights agreement or purchase agreement related thereto)
to which it is a party as of the Issue Date, and any transaction,
agreement or arrangement described in the Offering Memorandum and,
in each case, any amendment thereto or similar transactions,
agreements or arrangements which it may enter into thereafter;
provided, however, that the existence of, or the performance by the
Issuer or any of its Restricted Subsidiaries of its obligations
under, any future amendment to any such existing transaction,
agreement or arrangement or under any similar transaction, agreement
or arrangement entered into after the Issue Date shall only be
permitted by this clause (ix) to the extent that the terms of any
such existing transaction, agreement or arrangement together with
all amendments thereto, taken as a whole, or new transaction,
agreement or arrangement are not otherwise more disadvantageous to
the Holders of the Notes in any material respect than the original
transaction, agreement or arrangement as in effect on the Issue
Date;
(x) the execution of the Transactions and the payment of all
fees and expenses related to the Transactions, including fees to the
Sponsors, which are described in the Offering Memorandum or
contemplated by the Acquisition Documents;
(xi) (a) transactions with customers, clients, suppliers or
purchasers or sellers of goods or services, or transactions
otherwise relating to the purchase or sale of goods or services, in
each case in the ordinary course of business and otherwise in
compliance with the terms of this Indenture, which are fair to the
Issuer and its Restricted Subsidiaries in the reasonable
determination of the Board of Directors or the senior management of
the Issuer, or are on terms at least as favorable as might
reasonably have been obtained at such time from an unaffiliated
party or (b) transactions with joint ventures or Unrestricted
Subsidiaries entered into in the ordinary course of business;
(xii) any transaction effected as part of a Qualified
Receivables Financing;
(xiii) the issuance of Equity Interests (other than
Disqualified Stock) of the Issuer to any Person;
(xiv) the issuances of securities or other payments, awards or
grants in cash, securities or otherwise pursuant to, or the funding
of, employment arrangements, stock option and stock ownership plans
or similar employee benefit plans approved by the Board of Directors
of the Issuer or any direct or indirect parent of the Issuer or of a
Restricted Subsidiary of the Issuer, as appropriate, in good faith;
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(xv) the entering into of any tax sharing agreement or
arrangement;
(xvi) any contribution to the capital of the Issuer;
(xvii) transactions permitted by, and complying with, Section
5.01 hereof;
(xviii) transactions between the Issuer or any of its
Restricted Subsidiaries and any Person, a director of which is also
a director of the Issuer or any direct or indirect parent of the
Issuer; provided, however, that such director abstains from voting
as a director of the Issuer or such direct or indirect parent, as
the case may be, on any matter involving such other Person;
(xix) pledges of Equity Interests of Unrestricted
Subsidiaries;
(xx) any employment agreements entered into by the Issuer or
any of its Restricted Subsidiaries in the ordinary course of
business; and
(xxi) transactions undertaken in good faith (as certified by a
responsible financial or accounting officer of the Issuer in an
Officer's Certificate) for the purpose of improving the consolidated
tax efficiency of the Issuer and its Subsidiaries and not for the
purpose of circumventing any provision in this Indenture.
Section 4.12 Liens. The Issuer shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, Incur or suffer to
exist any Lien (except Permitted Liens) on any asset or property of the Issuer
or such Restricted Subsidiary securing Indebtedness unless the Notes are equally
and ratably secured with (or on a senior basis to, in the case of obligations
subordinated in right of payment to the Notes) the obligations so secured until
such time as such obligations are no longer secured by a Lien. Any Lien which is
granted to secure the Notes or Guarantee pursuant to this covenant shall be
automatically released and discharged at the same time as the release of the
Lien that gave rise to the obligation to secure the Notes or the Guarantee.
Section 4.13 Offer to Repurchase Upon Change of Control. (a) If a Change
of Control occurs, unless the Issuer has previously or concurrently mailed a
redemption notice with respect to all the outstanding Notes as described under
Section 3.07 hereof, the Issuer shall make an offer to purchase all of the Notes
(the "Change of Control Offer") at a price in cash (the "Change of Control
Payment") equal to 101% of the aggregate principal amount thereof plus accrued
and unpaid interest and Additional Interest, if any, to the date of repurchase,
subject to the right of Holders of the Notes of record on the relevant Record
Date to receive interest due on the relevant Interest Payment Date. Within 30
days following any Change of Control, except to the extent that the Issuer has
exercised its right to redeem the Notes by delivery of a notice of redemption as
described under Section 3.03 hereof, the Issuer shall send notice of such Change
of Control Offer by first-class mail to each Holder of Notes to the address of
such
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Holder appearing in the Note Register or otherwise in accordance with Applicable
Procedures, with a copy to the Trustee, with the following information:
(1) that a Change of Control has occurred and that such Holder has
the right to require the Issuer to repurchase such Holder's Notes at a
repurchase price in cash equal to 101% of the aggregate principal amount
thereof, plus accrued and unpaid interest and Additional Interest, if any, to
the date of repurchase (subject to the right of the Holders of record on a
Record Date to receive interest on the relevant Interest Payment Date);
(2) the circumstances and relevant facts and financial information
regarding such Change of Control;
(3) the repurchase date, which will be no earlier than 30 days nor
later than 60 days from the date such notice is mailed (the "Change of Control
Payment Date");
(4) that any Note not properly tendered will remain outstanding and
continue to accrue interest;
(5) that unless the Issuer defaults in the payment of the Change of
Control Payment, all Notes accepted for payment pursuant to the Change of
Control Offer will cease to accrue interest on the Change of Control Payment
Date;
(6) that Holders electing to have any Notes purchased pursuant to a
Change of Control Offer will be required to surrender such Notes, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of such Notes
completed, to the paying agent specified in the notice at the address specified
in the notice prior to the close of business on the Change of Control Payment
Date;
(7) that Holders will be entitled to withdraw their tendered Notes
and their election to require the Issuer to purchase such Notes, provided that
the paying agent receives, not later than the close of business on the Change of
Control Payment Date, a telegram, facsimile transmission or letter setting forth
the name of the Holder of the Notes, the principal amount of Notes tendered for
purchase, and a statement that such Holder is withdrawing its tendered Notes and
its election to have such Notes purchased;
(8) that if the Holder elects to have less than all of such Holder's
Notes repurchase, the Holder will receive new Notes and such new Notes will be
equal in principal amount to the unpurchased portion of the Notes surrendered.
The unpurchased
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portion of the Notes must be equal to $2,000 or an integral multiple of $1,000
in excess of $2,000;
(9) if such notice is mailed prior to the occurrence of a Change of
Control, stating that the Change of Control Offer is conditional on the
occurrence of such Change of Control, and that a definitive agreement is in
place for the Change of Control at the time of making of the Change of Control
Offer; and
(10) the other instructions, as determined by the Issuer, consistent
with this Section 4.13, that a Holder must follow in order to have its Notes
repurchased.
The notice, if mailed in a manner herein provided, shall be
conclusively presumed to have been given, whether or not the Holder receives
such notice. If (a) the notice is mailed in a manner herein provided and (b) any
Holder fails to receive such notice or a Holder receives such notice but it is
defective, such Holder's failure to receive such notice or such defect shall not
affect the validity of the proceedings for the purchase of the Notes as to all
other Holders that properly received such notice without defect. The Issuer
shall comply, to the extent applicable, with the requirements of Rule 14(e)
under the Exchange Act and any other securities laws and regulations in
connection with the repurchase of Notes pursuant to a Change of Control Offer.
To the extent that the provisions of any securities laws or regulations conflict
with the provisions of this Section 4.13, the Issuer shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section 4.13 by virtue thereof.
In the event that at the time of such Change of Control the terms of
any Bank Indebtedness restrict or prohibit the repurchase of Notes pursuant to
this Section 4.13, then prior to the mailing of the notice to Holders provided
for in this Section 4.13 but in any event within 30 days following any Change of
Control, the Issuer shall:
(i) repay in full all Bank Indebtedness or, if doing so will
allow the purchase of Notes, offer to repay in full all Bank
Indebtedness and repay the Bank Indebtedness of each lender who has
accepted such offer; or
(ii) obtain the requisite consent under the agreements
governing the Bank Indebtedness to permit the repurchase of the
Notes as provided for in this Section 4.13.
(b) On the Change of Control Payment Date, the Issuer shall, to the
extent permitted by law:
(i) accept for payment all Notes issued by it or portions
thereof properly tendered pursuant to the Change of Control Offer;
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(ii) deposit with the Paying Agent an amount equal to the
aggregate 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 for
cancellation the Notes so accepted together with an Officer's
Certificate to the Trustee stating that such Notes or portions
thereof have been tendered to and purchased by the Issuer.
(c) The Issuer shall not be required to make a Change of Control
Offer following a Change of Control if 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 4.13 applicable to a Change of Control
Offer made by the Issuer and purchases all Notes validly tendered and not
withdrawn under such Change of Control Offer. Notes repurchased by the Issuer
pursuant to a Change of Control Offer will have the status of Notes issued but
not outstanding or will be retired and canceled at the option of the Issuer.
Notes purchased by a third party will have the status of Notes issued and
outstanding. Notwithstanding anything to the contrary herein, a Change of
Control Offer may be made in advance of a Change of Control, and conditioned
upon such Change of Control, if a definitive agreement is in place for the
Change of Control at the time of making of the Change of Control Offer.
(d) Other than as specifically provided in this Section 4.14, any
purchase pursuant to this Section 4.14 shall be made pursuant to the provisions
of Sections 3.05 and 3.06 hereof, and references therein to "redeem,"
"redemption" and similar words shall be deemed to refer to "purchase,"
"repurchase" and similar words, as applicable.
Section 4.14 Future Guarantors. The Issuer shall cause each Wholly-owned
Restricted Subsidiary that is a Domestic Subsidiary (unless such Subsidiary is a
Receivables Subsidiary or a Domestic Subsidiary that is wholly-owned by one or
more Foreign Subsidiaries and created to enhance the tax efficiency of the
Issuer and its Subsidiaries) that guarantees any Indebtedness of the Issuer
under the Credit Agreement or issues shares of Disqualified Stock to promptly
execute and deliver to the Trustee a supplemental indenture, the form of which
is attached as Exhibit D hereto, pursuant to which such Subsidiary will
guarantee payment of the Notes and become a Guarantor under Article X hereof.
Each Guarantee will be limited to an amount not to exceed the maximum amount
that can be guaranteed by that Subsidiary without rendering the Guarantee, as it
relates to such Subsidiary, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer or similar laws affecting the rights of
creditors generally.
Concurrently with the execution and delivery of such supplemental
indenture, the Issuer shall deliver to the Trustee an Opinion of Counsel and an
Officer's Certificate to the effect that such supplemental indenture has been
duly authorized, executed and delivered by such Subsidiary and that, subject to
the application of
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bankruptcy, insolvency, moratorium, fraudulent conveyance or transfer and other
similar laws relating to creditors' rights generally and to the principles of
equity, whether considered in a proceeding at law or in equity, the Guarantee of
such Subsidiary is a legal, valid and binding obligation of such Subsidiary,
enforceable against such Subsidiary in accordance with its terms and to such
other matters as the Trustee may reasonably request.
Section 4.15 Company Existence. Subject to Article V hereof, the Issuer
shall do or cause to be done all things necessary to preserve and keep in full
force and effect (i) its company existence, and the corporate, partnership or
other existence of each of its Restricted Subsidiaries, in accordance with the
respective organizational documents (as the same may be amended from time to
time) of the Issuer or any such Restricted Subsidiary and (ii) the rights
(charter and statutory), licenses and franchises of the Issuer and its
Restricted Subsidiaries; provided that the Issuer shall not be required to
preserve any such right, license or franchise, or the corporate, partnership or
other existence of any of its Restricted Subsidiaries, if the Issuer in good
faith shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Issuer and its Restricted Subsidiaries, taken
as a whole.
Section 4.16 Suspension of Covenants.
(a) If (i) the Notes have Investment Grade Ratings from both Rating
Agencies and (ii) no Default has occurred and is continuing under this Indenture
then, beginning on that day and continuing at all times thereafter regardless of
any subsequent changes in the rating of the Notes, Sections 4.07, 4.08, 4.09,
4.10, 4.11 and 4.14 hereof and clause (iv) of Section 5.01(a) hereof shall not
be applicable to the Notes.
(b) In addition, during any period of time that (i) the Notes of a
series have Investment Grade Ratings from both Rating Agencies and (ii) no
Default has occurred and is continuing under this Indenture (the occurrence of
the events described in the foregoing clauses (i) and (ii) being collectively
referred to as a "Covenant Suspension Event"), the Issuer and its Restricted
Subsidiaries will not be subject to Section 4.13 herein (the "Suspended
Covenant"). In the event that the Issuer and its Restricted Subsidiaries are not
subject to the Suspended Covenant under this Indenture for any period of time as
a result of the foregoing, and on any subsequent date (the "Reversion Date") one
or both of the Rating Agencies (x) withdraw their Investment Grade Rating or
downgrade the rating assigned to such series of Notes below an Investment Grade
Rating and/or (y) the Issuer or any of its Affiliates enters into an agreement
to effect a transaction that would result in a Change of Control and one or more
of the Rating Agencies indicate that if consummated, such transaction (alone or
together with any related recapitalization or refinancing transactions) would
cause such Rating Agency to withdraw its Investment Grade Rating or downgrade
the ratings assigned to such series of Notes below an Investment Grade Rating,
then the Issuer and its Restricted Subsidiaries will thereafter again be subject
to the Suspended Covenant under this Indenture with respect to future events,
including, without limitation, a proposed transaction described in clause (y) of
this paragraph.
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ARTICLE V
SUCCESSORS
Section 5.01 Merger, Amalgamation, Consolidation or Sale of All or
Substantially All Assets.
(a) The Issuer shall not, directly or indirectly, consolidate,
amalgamate or merge with or into or wind up or convert into (whether or not the
Issuer is the surviving Person), or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its properties or assets in one
or more related transactions, to any Person unless:
(i) the Issuer is the surviving person or the Person formed by
or surviving any such consolidation, amalgamation, merger, winding
up or conversion (if other than the Issuer) or to which such sale,
assignment, transfer, lease, conveyance or other disposition will
have been made is a corporation, partnership or limited liability
company organized or existing under the laws of the United States,
any state thereof, the District of Columbia, or any territory
thereof (the Issuer or such Person, as the case may be, being herein
called the "Successor Issuer"); provided that in the case where the
surviving Person is not a corporation, a co-obligor of the Notes is
a corporation;
(ii) the Successor Issuer (if other than the Issuer) expressly
assumes all the obligations of the Issuer under this Indenture and
the Notes pursuant to supplemental indentures or other documents or
instruments in form reasonably satisfactory to the Trustee;
(iii) immediately after giving effect to such transaction (and
treating any Indebtedness which becomes an obligation of the
Successor Issuer or any of its Restricted Subsidiaries as a result
of such transaction as having been Incurred by the Successor Issuer
or such Restricted Subsidiary at the time of such transaction) no
Default shall have occurred and be continuing;
(iv) immediately after giving pro forma effect to such
transaction, as if such transaction had occurred at the beginning of
the applicable four-quarter period (and treating any Indebtedness
which becomes an obligation of the Successor Issuer or any of its
Restricted Subsidiaries as a result of such transaction as having
been Incurred by the Successor Issuer or such Restricted Subsidiary
at the time of such transaction), either
(A) the Successor Issuer would be permitted to Incur at
least $1.00 of additional Indebtedness pursuant to Section
4.09(a) hereof; or
(B) the Fixed Charge Coverage Ratio for the Successor
Issuer and its Restricted Subsidiaries would be equal or
greater than such ratio for the Issuer and its Restricted
Subsidiaries immediately prior to such transaction;
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(v) if the Issuer is not the Successor Issuer, each Guarantor,
unless it is the other party to the transactions described above,
shall have by supplemental indenture confirmed that its Guarantee
shall apply to such Person's obligations under this Indenture, the
Registration Rights Agreement and the Notes; and
(vi) the Issuer shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, amalgamation or transfer and such
supplemental indentures, if any, comply with this Indenture. The
requirements of the foregoing clause (vi) of this Section 5.01(a)
shall not apply to the merger of the Issuer with and into Claire's
Stores, Inc., effective on the date hereof in accordance with the
terms of the Merger Agreement, and any supplemental indenture dated
the date hereof and entered into in connection with such merger.
(b) The Successor Issuer (if other than the Issuer) will succeed to,
and be substituted for, the Issuer under this Indenture and the Notes and in
such event the Issuer will automatically be released and discharged from its
obligations under this Indenture and the Notes. Notwithstanding clauses (iii)
and (iv) of Section 5.01(a) hereof, (A) any Restricted Subsidiary may merge,
consolidate or amalgamate with or transfer all or part of its properties and
assets to the Issuer or to another Restricted Subsidiary, and (B) the Issuer may
merge, consolidate or amalgamate with an Affiliate incorporated solely for the
purpose of reincorporating the Issuer in another state of the United States, the
District of Columbia or any territory of the United States or may convert into a
limited liability company, so long as the amount of Indebtedness of the Issuer
and its Restricted Subsidiaries is not increased thereby. This Section 5.01 will
not apply to a sale, assignment, transfer, conveyance or other disposition of
assets between or among the Issuer and its Restricted Subsidiaries.
(c) Subject to Section 10.04 hereof, no Guarantor shall, and the
Issuer shall not permit any Guarantor to, consolidate, amalgamate or merge with
or into or wind up into (whether or not the Guarantor is the surviving Person),
or sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its properties or assets, in one or more related
transactions, to any Person (other than any such sale, assignment, transfer,
lease, conveyance or disposition in connection with the Transactions) unless:
(i) Either (A) such Guarantor is the surviving Person or the
Person formed by or surviving any such consolidation, amalgamation
or merger (if other than such Guarantor) or to which such sale,
assignment, transfer, lease, conveyance or other disposition will
have been made is a corporation, partnership or limited liability
company organized or existing under the laws of the United States,
any state thereof, the District of Columbia, or any territory
thereof (such Guarantor or such Person, as the case may be, being
herein called the "Successor Guarantor") and the Successor Guarantor
(if other than such Guarantor) expressly assumes all the obligations
of such Guarantor under this Indenture, such Guarantor's Guarantees
pursuant to a supplemental indenture or other documents or
instruments in form reasonably satisfactory to the Trustee, or (B)
such sale or
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disposition or consolidation, amalgamation or merger is not in
violation of Section 4.10 hereof; and
(ii) the Successor Guarantor (if other than such Guarantor),
shall have delivered or caused to be delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each stating that
such consolidation, amalgamation, merger or transfer and such
supplemental indenture, if any, comply with this Indenture.
(d) The Successor Guarantor (if other than such Guarantor) will
succeed to, and be substituted for, such Guarantor under this Indenture and such
Guarantor's Guarantees, and such Guarantor will automatically be released and
discharged from its obligations under this Indenture and such Guarantor's
Guarantee. Notwithstanding the foregoing, (i) a Guarantor may merge, amalgamate
or consolidate with an Affiliate incorporated solely for the purpose of
reincorporating such Guarantor in another state of the United States, the
District of Columbia or any territory of the United States so long as the amount
of Indebtedness of such Guarantor is not increased thereby and (ii) a Guarantor
may merge, amalgamate or consolidate with another Guarantor or the Issuer.
(e) Notwithstanding anything in this Section 5.01 to the contrary,
any Guarantor may consolidate, amalgamate or merge with or into or wind up into,
or sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its properties or assets (collectively, a "Transfer") to
(x) the Issuer or any Guarantor or (y) any Restricted Subsidiary of the Issuer
that is not a Guarantor; provided that at the time of each such Transfer
pursuant to clause (y) the aggregate amount of all such Transfers pursuant to
this clause (y) since the Issue Date shall not exceed 5.0% of the consolidated
assets of the Issuer and the Guarantors as shown on the most recent available
balance sheet of the Issuer and its Restricted Subsidiaries after giving effect
to each such Transfer and including all such Transfers occurring from and after
the Issue Date (excluding Transfers in connection with the Transactions and
Transfers pursuant to clause (x) of this paragraph).
Section 5.02 Successor Corporation Substituted. Upon any consolidation or
merger, or any sale, assignment, transfer, lease, conveyance or other
disposition of all or substantially all of the assets of the Issuer or a
Guarantor in accordance with Section 5.01 hereof, the successor corporation
formed by such consolidation or into or with which the Issuer or such Guarantor,
as applicable, is merged or to which such sale, assignment, transfer, lease,
conveyance or other disposition is made shall succeed to, and be substituted for
(so that from and after the date of such consolidation, merger, sale, lease,
conveyance or other disposition, the provisions of this Indenture referring to
the Issuer or such Guarantor, as applicable, shall refer instead to the
successor corporation and not to the Issuer or such Guarantor, as applicable),
and may exercise every right and power of the Issuer or such Guarantor, as
applicable, under this Indenture with the same effect as if such successor
Person had been named as the Issuer or a Guarantor, as applicable, herein;
provided that the predecessor Issuer shall not be relieved from the obligation
to pay the principal of and interest on the Notes except in the case of a sale,
assignment, transfer,
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conveyance or other disposition of all of the Issuer's assets that meets the
requirements of Section 5.01 hereof.
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.
(a) An "Event of Default" wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(i) a default in any payment of interest (including any
Additional Interest) on any Note when due, continued for 30 days;
(ii) a default in the payment of principal or premium, if any,
of any Note when due at its Stated Maturity, upon optional
redemption, upon required repurchase, upon declaration or otherwise;
(iii) failure by the Issuer or any Restricted Subsidiary for
60 days after receipt of written notice given by the Trustee or the
Holders of not less than 30% in principal amount of the Notes to
comply with any of its obligations, covenants or agreements (other
than a default referred to in clauses (i) and (ii) above) contained
in this Indenture or the Notes;
(iv) the failure by the Issuer or any Significant Subsidiary
to pay any Indebtedness (other than Indebtedness owing to the Issuer
or a Restricted Subsidiary) within any applicable grace period after
final maturity or the acceleration of any such Indebtedness by the
holders thereof because of a default, in each case, if the total
amount of such Indebtedness unpaid or accelerated exceeds $25
million or its foreign currency equivalent (the "cross-acceleration
provision");
(v) failure by the Issuer or any Significant Subsidiary to pay
final judgments aggregating in excess of $25 million or its foreign
currency equivalent (net of any amounts which are covered by
enforceable insurance policies issued by solvent carriers), which
judgments are not discharged, waived or stayed for a period of 60
days (the "judgment default provision");
(vi) any Guarantee of a Significant Subsidiary with respect to
the Notes ceases to be in full force and effect (except as
contemplated by the terms thereof) or any Guarantor that qualifies
as a Significant Subsidiary denies or disaffirms its obligations
under this Indenture or any Guarantee with respect to the Notes and
such Default continues for 10 days;
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(vii) the Issuer or any of its Restricted Subsidiaries that is
a Significant Subsidiary (or any group of Restricted Subsidiaries
that, taken together, would constitute a Significant Subsidiary),
pursuant to or within the meaning of any Bankruptcy Law: (i)
commences proceedings to be adjudicated bankrupt or insolvent; (ii)
consents to the institution of bankruptcy or insolvency proceedings
against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under applicable Bankruptcy Law;
(iii) consents to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator or other similar official of it or
for all or substantially all of its property; (iv) makes a general
assignment for the benefit of its creditors; or (v) generally is not
paying its debts as they become due; or
(viii) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that: (i) is for relief against the
Issuer or any of its Restricted Subsidiaries that is a Significant
Subsidiary (or any group of Restricted Subsidiaries that, taken
together, would constitute a Significant Subsidiary), in a
proceeding in which the Issuer or any such Restricted Subsidiaries,
that is a Significant Subsidiary (or any group of Restricted
Subsidiaries that, taken together, would constitute a Significant
Subsidiary), is to be adjudicated bankrupt or insolvent; (ii)
appoints a receiver, liquidator, assignee, trustee, sequestrator or
other similar official of the Issuer or any of its Restricted
Subsidiaries that is a Significant Subsidiary (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 Issuer or any of its Restricted Subsidiaries that is
a Significant Subsidiary (or any group of Restricted Subsidiaries
that, taken together, would constitute a Significant Subsidiary); or
(iii) orders the liquidation of the Issuer or any of its Restricted
Subsidiaries that is a Significant Subsidiary (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. If any Event of Default (other than an Event of
Default specified in clause (vii) or (viii) of Section 6.01 hereof) occurs and
is continuing under this Indenture, the Trustee or the Holders of at least 30%
in principal amount of the then total outstanding Notes may declare the
principal, premium, if any, interest and any other monetary obligations on all
the then outstanding Notes to be due and payable provided, however, that so long
as any Bank Indebtedness remains outstanding, no such acceleration shall be
effective until the earlier of (i) five Business Days after the giving of
written notice to the Issuer and the Representative under the Credit Agreement
and (ii) the day on which any Bank Indebtedness is accelerated. Upon the
effectiveness of such declaration, such principal and interest shall be due and
payable immediately. The Trustee shall have no obligation to accelerate the
Notes if in the best judgment of the Trustee acceleration is not in the best
interests of the Holders of the Notes.
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Notwithstanding the foregoing, in the case of an Event of Default
arising under clause (vii) or (viii) of Section 6.01 hereof, all outstanding
Notes shall be due and payable immediately without further action or notice.
The Holders of a majority in aggregate principal amount of the then
outstanding Notes by written notice to the Trustee may on behalf of all of the
Holders of all of the Notes rescind any acceleration with respect to the Notes
and its consequences if such rescission would not conflict with any judgment or
decree of a court of competent jurisdiction and if all existing Events of
Default (except nonpayment of principal, interest or premium that has become due
solely because of the acceleration) have been cured or waived.
In the event of any Event of Default specified in clause (iv) of
Section 6.01 hereof, such Event of Default and all consequences thereof
(excluding any resulting payment default, other than as a result of acceleration
of the Notes) shall be annulled, waived and rescinded, automatically and without
any action by the Trustee or the Holders, if within 20 days after such Event of
Default arose the Issuer deliver's an Officer's Certificate to the Trustee
stating that:
(1) the Indebtedness or guarantee that is the basis for such Event
of Default has been discharged; or
(2) Holders thereof have rescinded or waived the acceleration,
notice or action (as the case may be) giving rise to such Event of Default; or
(3) the default that is the basis for such Event of Default has been
cured.
Section 6.03 Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal, premium, if any, and interest on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any 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. Subject to Section 6.02 hereof,
Holders of not less than a majority in aggregate principal amount of the then
outstanding Notes by
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notice to the Trustee may on behalf of the Holders of all of the Notes waive any
existing Default and its consequences hereunder (except a continuing Default in
the payment of the principal of, premium, if any, or interest on, any Note held
by a non-consenting Holder) (including in connection with an Asset Sale Offer or
a Change of Control Offer). 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. Holders of a majority in principal
amount of the then total outstanding Notes may direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. The Trustee, however,
may refuse to follow any direction that conflicts with law or this Indenture or
that the Trustee determines is unduly prejudicial to the rights of any other
Holder of a Note or that would involve the Trustee in personal liability. Prior
to taking any action under this Indenture, the Trustee will be entitled to
indemnification satisfactory to it in its sole discretion against any losses or
expenses caused by taking or not taking such action.
Section 6.06 Limitation on Suits. Subject to Section 6.07 hereof, no
Holder of a Note may pursue any remedy with respect to this Indenture or the
Notes unless:
(i) such Holder has previously given the Trustee notice that an
Event of Default is continuing;
(ii) Holders of at least 30% in principal amount of the total
outstanding Notes have requested the Trustee to pursue the remedy;
(iii) Holders of the Notes have offered the Trustee reasonable
security or indemnity against any loss, liability or expense;
(iv) the Trustee has not complied with such request within 60 days
after the receipt thereof and the offer of security or indemnity; and
(v) Holders of a majority in principal amount of the total
outstanding Notes have not given the Trustee a direction inconsistent with
such request within such 60 day period.
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 principal of, premium, if any, and interest on
the Note, on or after the respective due dates expressed in the Note (including
in connection with an Asset Sale Offer or a Change of Control Offer), or to
bring suit for the enforcement of any such
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payment on or after such respective dates, 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(i) or (ii) hereof occurs and is continuing, the Trustee is
authorized to recover judgment in its own name and as trustee of an express
trust against the Issuer for the whole amount of principal of, premium, if any,
and interest remaining unpaid on the Notes and interest on overdue principal
and, to the extent lawful, interest and such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
Section 6.09 Restoration of Rights and Remedies. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then and in
every such case, subject to any determination in such proceedings, the Issuer,
the Trustee and the Holders shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding has been
instituted.
Section 6.10 Rights and Remedies Cumulative. Except as otherwise provided
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Notes in Section 2.07 hereof, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent permitted
by law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
Section 6.11 Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder of any Note to exercise any right or remedy accruing
upon any Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or an acquiescence therein. Every right and
remedy given by this Article or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders, as the case may be.
Section 6.12 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 Issuer (or any other obligor upon the Notes
including the Guarantors), its creditors or its property and shall be entitled
and empowered to participate as a member in any official committee of creditors
appointed in such matter and to collect, receive and distribute any
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money or other 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 hereof. 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 hereof out of the estate in any such proceeding, shall be denied
for any reason, payment of the same shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the 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 6.13 Priorities. If the Trustee or any Agent collects any money
pursuant to this Article VI, it shall pay out the money in the following order:
(i) to the Trustee, such Agent, their agents and attorneys for
amounts due under Section 7.07 hereof, including payment of all
compensation, expenses and liabilities incurred, and all advances made, by
the Trustee or such Agent and the costs and expenses of collection;
(ii) to Holders of Notes for amounts due and unpaid on the Notes for
principal, premium, if any, and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Notes for principal, premium, if any, and interest, respectively; and
(iii) to the Issuer or to such party as a court of competent
jurisdiction shall direct including a Guarantor, if applicable.
The Trustee may fix a record date and payment date for any payment
to Holders of Notes pursuant to this Section 6.13.
Section 6.14 Undertaking for Costs. In any suit for the enforcement of any
right or remedy under this Indenture or in any suit against the Trustee for any
action taken or omitted by it as a Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 6.14 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 10% in principal amount of the then outstanding Notes.
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ARTICLE VII
TRUSTEE
Section 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its 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 duties of the Trustee shall be determined solely by
the express provisions of this Indenture and the Trustee need
perform only those duties that are specifically set forth in this
Indenture and no others, and no implied covenants or obligations
shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, 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 the
certificates and opinions to determine whether or not they conform
to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of 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 in
a court of competent jurisdiction 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 6.02, 6.04 or 6.05
hereof.
(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) The Trustee shall be under no obligation to exercise any of its
rights or powers under this Indenture at the request or direction of any of the
Holders of the Notes unless the Holders have offered to the Trustee reasonable
indemnity or security against any loss, liability or expense.
(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 Issuer. Money
held in trust by the Trustee need not be segregated from other funds except to
the extent required by law.
Section 7.02 Rights of Trustee.
(a) The Trustee may conclusively rely upon any document believed by
it to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Issuer and its Restricted Subsidiaries,
personally or by agent or attorney at the sole cost of the Issuer and shall
incur no liability or additional liability of any kind by reason of such inquiry
or investigation.
(b) Before the Trustee acts or refrains from acting, it may require
an Officer's Certificate of the Issuer 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 Officer's Certificate or Opinion of Counsel. The
Trustee may consult with counsel of its selection and the written 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 its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent or attorney
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) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Issuer shall be sufficient if
signed by an Officer of the Issuer.
(f) None of the provisions of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise to incur any liability,
financial or otherwise, in the performance of any of its duties hereunder, or in
the exercise of any of its rights or powers if it shall have reasonable grounds
for believing that repayment of such funds or indemnity satisfactory to it
against such risk or liability is not assured to it.
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(g) 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,
and such notice references the Notes and this Indenture.
(h) In no event shall the Trustee be responsible or liable for
special, indirect, or consequential loss or damage of any kind whatsoever
(including, but not limited to, loss of profit) irrespective of whether the
Trustee has been advised of the likelihood of such loss or damage and regardless
of the form of action.
(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 each agent, custodian and other Person employed
to act hereunder.
(j) In the event the Issuer is required to pay Additional Interest,
the Issuer will provide written notice to the Trustee of the Issuer's obligation
to pay Additional Interest no later than 15 days prior to the next Interest
Payment Date, which notice shall set forth the amount of the Additional Interest
to be paid by the Issuer. The Trustee shall not at any time be under any duty or
responsibility to any Holders to determine whether the Additional Interest is
payable and the amount thereof.
Section 7.03 Individual Rights of Trustee. The Trustee in its individual
or any other capacity may become the owner or pledgee of Notes and may otherwise
deal with the Issuer or any Affiliate of the Issuer with the same rights it
would have if it were not Trustee. However, in the event that the Trustee
acquires any conflicting interest 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 hereof.
Section 7.04 Trustee's Disclaimer. The Trustee shall not be responsible
for and makes no representation as to the validity or adequacy of this Indenture
or the Notes, it shall not be accountable for the Issuer's use of the proceeds
from the Notes or any money paid to the Issuer or upon the Issuer's direction
under any provision of this Indenture, it shall not be responsible for the use
or application of any money received by any Paying Agent other than the Trustee,
and it shall not be responsible for any statement or recital herein or any
statement in the Notes or any other document in connection with the sale of the
Notes or pursuant to this Indenture other than its certificate of
authentication.
Section 7.05 Notice of Defaults. If a 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 within 90 days after it occurs. Except in the case of a
Default relating to the payment of principal, premium, if any, or interest on
any Note, the Trustee may withhold from the Holders notice of any continuing
Default 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. The Trustee shall not be deemed to know of any Default unless a
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Responsible Officer of the Trustee has actual knowledge thereof or unless
written notice of any event which is such a Default is received by the Trustee
in accordance with Section 12.02 hereof at the Corporate Trust Office of the
Trustee and such notice references the Notes and this Indenture.
Section 7.06 Reports by Trustee to Holders of the Notes. Within 60 days
after each June 15, beginning with the June 15 following the date of this
Indenture, 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 Trust Indenture Act Section 313(a) (but if no event described in
Trust Indenture Act Section 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with Trust Indenture Act Section 313(b)(2). The Trustee shall also
transmit by mail all reports as required by Trust Indenture Act Section 313(c).
A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Issuer and filed with the SEC and each stock
exchange on which the Notes are listed in accordance with Trust Indenture Act
Section 313(d). The Issuer shall promptly notify the Trustee when the Notes are
listed on any stock exchange.
Section 7.07 Compensation and Indemnity. The Issuer shall pay to the
Trustee from time to time such compensation for its acceptance of this Indenture
and services hereunder as the parties shall agree in writing from time to time.
The Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Issuer shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
The Issuer and the Guarantors, jointly and severally, shall
indemnify the Trustee and its officers, directors, employees, agents and any
predecessor trustee and its officers, directors, employees and agents for, and
hold the Trustee harmless against, any and all loss, damage, claims, liability
or expense (including attorneys' fees) incurred by it in connection with the
acceptance or administration of this trust and the performance of its duties
hereunder (including the costs and expenses of enforcing this Indenture against
the Issuer or any of the Guarantors (including this Section 7.07) or defending
itself against any claim whether asserted by any Holder, the Issuer or any
Guarantor, or liability in connective with the acceptance, exercise or
performance of any of its powers or duties hereunder). The Trustee shall notify
the Issuer promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Issuer shall not relieve the Issuer of its obligations
hereunder. The Issuer shall defend the claim and the Trustee may have separate
counsel and the Issuer shall pay the fees and expenses of such counsel. The
Issuer need not reimburse any expense or indemnify against any loss, liability
or expense incurred by the Trustee through the Trustee's own willful misconduct,
negligence or bad faith.
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The obligations of the Issuer under this Section 7.07 shall survive
the satisfaction and discharge of this Indenture or the earlier resignation or
removal of the Trustee.
To secure the payment obligations of the Issuer and the Guarantors
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.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(vi) or (vii) hereof occurs, the expenses
and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any Bankruptcy Law.
The Trustee shall comply with the provisions of Trust Indenture Act
Section 313(b)(2) to the extent applicable.
Section 7.08 Replacement of Trustee. A resignation or removal of the
Trustee and appointment of a successor Trustee shall become effective only upon
the successor Trustee's acceptance of appointment as provided in this Section
7.08. The Trustee may resign in writing at any time and be discharged from the
trust hereby created by so notifying the Issuer. The Holders of a majority in
principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Issuer in writing. The Issuer may remove the
Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof or Section
310 of the Trust Indenture Act;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Issuer 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 Issuer.
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If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee (at the Issuer's
expense), the Issuer or the Holders of at least 10% in principal amount of the
then outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
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 hereof, such
Holder may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuer. 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 hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Issuer's obligations under Section 7.07 hereof shall continue for the
benefit of the retiring 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 corporation, the successor corporation
without any further act shall be the successor Trustee.
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 trustee power, that is subject to
supervision or examination by federal or state authorities and that has,
together with its parent, a combined capital and surplus of at least $50,000,000
as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of Trust Indenture Act Sections 310(a)(1), (2) and (5). The Trustee
is subject to Trust Indenture Act Section 310(b).
Section 7.11 Preferential Collection of Claims Against Issuer. The Trustee
is subject to Trust Indenture Act Section 311(a), excluding any creditor
relationship listed in Trust Indenture Act Section 311(b). A Trustee who has
resigned or been removed shall be subject to Trust Indenture Act Section 311(a)
to the extent indicated therein.
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ARTICLE VIII
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance. The
Issuer may, at its option and at any time, elect to have either Section 8.02 or
8.03 hereof applied to all outstanding Notes upon compliance with the conditions
set forth below in this Article 8.
Section 8.02 Legal Defeasance and Discharge. Upon the Issuer's exercise
under Section 8.01 hereof of the option applicable to this Section 8.02, the
Issuer and the Guarantors shall, subject to the satisfaction of the conditions
set forth in Section 8.04 hereof, be deemed to have been discharged from their
obligations with respect to all outstanding Notes and Guarantees on the date the
conditions set forth below are satisfied ("Legal Defeasance"). For this purpose,
Legal Defeasance means that the Issuer shall be deemed to have paid and
discharged the entire Indebtedness represented by the outstanding Notes, which
shall thereafter be deemed to be "outstanding" only for the purposes of Section
8.05 hereof 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 including that of the Guarantors (and the Trustee, on demand of and at
the expense of the Issuer, 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 Notes to receive payments in respect of
the principal of, premium, if any, and interest on the Notes when such
payments are due solely out of the trust created pursuant to this
Indenture referred to in Section 8.04 hereof;
(B) the Issuer's obligations with respect to Notes concerning the
issuance of temporary Notes, the registration of the transfer or exchange
of Notes, the replacement of mutilated, destroyed, lost or stolen Notes
and the maintenance of an office or agency for payment and money for
security payments held in trust;
(C) the rights, powers, trusts, duties and immunities of the
Trustee, and the Issuer's obligations in connection therewith; and
(D) this Section 8.02.
Subject to compliance with this Article VIII, the Issuer may exercise its option
under this Section 8.02 notwithstanding the prior exercise of its option under
Section 8.03 hereof.
Section 8.03 Covenant Defeasance. Upon the Issuer's exercise under Section
8.01 hereof of the option applicable to this Section 8.03, the Issuer 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 4.03, 4.04, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14
and 4.15 hereof and clauses (iv) and (v) of Section
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5.01(a) hereof with respect to the outstanding Notes on and after the date the
conditions set forth in Section 8.04 hereof are satisfied ("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 Issuer 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
hereof, but, except as specified above, the remainder of this Indenture and such
Notes shall be unaffected thereby. In addition, upon the Issuer's exercise under
Section 8.01 hereof of the option applicable to this Section 8.03 hereof,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
Sections 6.01(3) (solely with respect to the covenants that are released upon a
Covenant Defeasance), 6.01(a)(iv), 6.01(a)(v), 6.01(a)(vi), 6.01(a)(vii) (solely
with respect to Significant Subsidiaries) and 6.01(a)(viii) (solely with respect
to Significant Subsidiaries) hereof shall not constitute Events of Default.
Section 8.04 Conditions to Legal or Covenant Defeasance. The following
shall be the conditions to the application of either Section 8.02 or 8.03 hereof
to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance
with respect to the Notes:
(1) the Issuer must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders of the Notes, cash in U.S. dollars, U.S.
Government Obligations, or a combination thereof, in such amounts as will
be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium, if any,
and interest due on the Notes on the Stated Maturity or on the Redemption
Date, as the case may be, of such principal, premium, if any, or interest
on such Notes and the Issuer must specify whether such Notes are being
defeased to maturity or to a particular Redemption Date.
(2) in the case of Legal Defeasance, the Issuer shall have delivered
to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee
confirming that, subject to customary assumptions and exclusions,
(A) the Issuer has received from, or there has been published
by, the United States Internal Revenue Service a ruling, or
(B) since the issuance of the Notes, there has been a change
in the applicable U.S. federal income tax law,
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in either case to the effect that, and based thereon such Opinion of
Counsel shall confirm that, subject to customary assumptions and
exclusions, the Holders of the Notes will not recognize income, gain or
loss for U.S. federal income tax purposes, as applicable, as a result of
such Legal Defeasance and will be subject to U.S. 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;
(3) in the case of Covenant Defeasance, the Issuer shall have
delivered to the Trustee an Opinion of Counsel reasonably acceptable to
the Trustee confirming that, subject to customary assumptions and
exclusions, the Holders of the Notes will not recognize income, gain or
loss for U.S. federal income tax purposes as a result of such Covenant
Defeasance and will be subject to such tax on the same amounts, in the
same manner and at the same times as would have been the case if such
Covenant Defeasance had not occurred;
(4) no Default (other than that resulting from borrowing funds to be
applied to make such deposit and any similar and simultaneous deposit
relating to other Indebtedness and, in each case, the granting of Liens in
connection therewith) shall have occurred and be continuing on the date of
such deposit;
(5) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under the Credit
Agreement, the Senior Notes, the Senior Notes Indenture, the Senior
Subordinated Notes, the Senior Subordinated Notes Indenture or any other
material agreement or instrument (other than this Indenture) to which, the
Issuer or any Guarantor is a party or by which the Issuer or any Guarantor
is bound (other than that resulting from any borrowing of funds to be
applied to make the deposit required to effect such Legal Defeasance or
Covenant Defeasance and any similar and simultaneous deposit relating to
other Indebtedness, and the granting of Liens in connection therewith);
(6) the Issuer shall have delivered to the Trustee an Opinion of
Counsel to the effect that, as of the date of such opinion and subject to
customary assumptions and exclusions following the deposit, the trust
funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization, or similar laws affecting creditors' rights
generally (including Section 547 of Title 11 of the United States Code)
under any applicable U.S. Federal or state law, and that the Trustee has a
perfected security interest in such trust funds for the ratable benefit of
the Holders;
(7) the Issuer shall have delivered to the Trustee an Officer's
Certificate stating that the deposit was not made by the Issuer with the
intent of defeating, hindering, delaying or defrauding any creditors of
the Issuer or any Guarantor or others; and
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(8) the Issuer shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel (which Opinion of Counsel may be
subject to customary assumptions and exclusions) each stating that all
conditions precedent provided for or relating to the Legal Defeasance or
the Covenant Defeasance, as the case may be, have been complied with.
Section 8.05 Deposited Money and Government Securities to Be Held in
Trust; Other Miscellaneous Provisions. Subject to Section 8.06 hereof, all money
and Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
8.05, the "Trustee") pursuant to Section 8.04 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 Issuer or a Guarantor
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 interest, but such money need not be segregated from other funds except to
the extent required by law.
The Issuer shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or Government Securities
deposited pursuant to Section 8.04 hereof 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.
Anything in this Article VIII to the contrary notwithstanding, the
Trustee shall deliver or pay to the Issuer from time to time upon the request of
the Issuer any money or Government Securities held by it as provided in Section
8.04 hereof 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) hereof), 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 Issuer. Subject to any applicable abandoned
property law, any money deposited with the Trustee or any Paying Agent, or then
held by the Issuer, in trust for the payment of the principal of, premium, if
any, or interest on any Note and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable shall be
paid to the Issuer on its request or (if then held by the Issuer) shall be
discharged from such trust; and the Holder of such Note shall thereafter look
only to the Issuer for payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the Issuer
as trustee thereof, shall thereupon cease.
Section 8.07 Reinstatement. If the Trustee or Paying Agent is unable to
apply any United States dollars or Government Securities in accordance with
Section 8.02 or 8.03 hereof, 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,
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then the Issuer'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 hereof 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 hereof, as the
case may be; provided that, if the Issuer makes any payment of principal of,
premium, if any, or interest on any Note following the reinstatement of its
obligations, the Issuer 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.
ARTICLE IX
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes. Notwithstanding Section
9.02 hereof, the Issuer, the Guarantors and the Trustee may amend or supplement
this Indenture and any Guarantee or the Notes without the Consent of any Holder:
(1) to cure any ambiguity, omission, mistake, defect or
inconsistency;
(2) to provide for the assumption by a Successor Company of the
obligations of the Issuer under this Indenture and the Notes;
(3) to provide for the assumption by a Successor Guarantor of the
obligations of a Guarantor under this Indenture and its Guarantee;
(4) to provide for uncertificated Notes in addition to or in place
of certificated Notes (provided that the uncertificated Notes are
issued in registered form for purposes of Section 163(f) of the
Code, or in a manner such that the uncertificated Notes are
described in Section 163(f)(2)(B) of the Code);
(5) to add a Guarantee with respect to the Notes;
(6) to secure the Notes;
(7) to add to the covenants of the Issuer for the benefit of the
Holders or to surrender any right or power conferred upon the
Issuer;
(8) to make any change that does not adversely affect the rights of
any holder;
(9) to conform the text of this Indenture, Guarantees or the Notes
to any provision of the "Description of Senior Notes" section of the
Offering Memorandum to the extent that such provision under the
Offering Memorandum's heading, "Description of Notes" was intended
to be a verbatim recitation of a provision of this Indenture, the
Guarantees or the Notes;
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(10) to comply with any requirement of the SEC in connection with
the qualification of this Indenture under the Trust Indenture Act of
1939;
(11) to effect any provision of this Indenture; or
(12) to provide for the issuance of Additional Notes in accordance
with the limitations set forth in this Indenture as of the date
hereof.
Section 9.02 With Consent of Holders of Notes. Except as provided below in
this Section 9.02, the Issuer, the Guarantors and the Trustee may amend or
supplement this Indenture, the Notes and the Guarantees with the consent of the
Holders of at least a majority in principal amount of the Notes (including
Additional Notes, if any) then outstanding voting as a single class (including
consents obtained in connection with a tender offer or exchange offer for, or
purchase of, the Notes), and, subject to Sections 6.04 and 6.07 hereof, any
existing Default or Event of Default (other than a Default or Event of Default
in the payment of the principal of, premium, if any, or interest on the Notes,
except a payment default resulting from an acceleration that has been rescinded)
or compliance with any provision of this Indenture, the Guarantees or the Notes
may be waived with the consent of the Holders of a majority in principal amount
of the then outstanding Notes (including Additional Notes, if any) voting as a
single class (including consents obtained in connection with a tender offer or
exchange offer for, or purchase of, the Notes).
Upon the request of the Issuer accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
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 hereof, the Trustee shall
join with the Issuer in the execution of such amended or supplemental indenture
unless such amended or supplemental indenture 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 amended or supplemental indenture.
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
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Issuer shall mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Issuer to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental indenture or waiver.
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Without the consent of each affected Holder of Notes, an amendment
or waiver under this Section 9.02 may not (with respect to any Notes held by a
non-consenting Holder):
(1) reduce the amount of the Notes whose Holders must consent to an
amendment,
(2) reduce the rate of or extend the time for payment of interest on
the Notes,
(3) reduce the principal of or change the Stated Maturity of the
Notes,
(4) reduce the premium payable upon the redemption of the Notes or
change the time at which the Notes may be redeemed as described under Section
3.07 herein,
(5) make the Notes payable in money other than that stated in the
Notes,
(6) expressly subordinate the Notes or the Guarantees to any other
Indebtedness of the Issuer or the Guarantor,
(7) impair the right of any holder to receive payment of principal
of, premium, if any, and interest on such Holder's Notes on or after the due
dates therefor or to institute suit for the enforcement of any payment on or
with respect to such Holder's Notes,
(8) make any change in the amendment provisions which require each
Holder's consent or in the waiver provisions, or
(9) modify any Guarantee in any manner adverse to the Holders.
Section 9.03 Compliance with Trust Indenture Act. Every amendment or
supplement to this Indenture or the Notes shall be set forth in an amended or
supplemental indenture that complies in all material respects with the Trust
Indenture Act 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
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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.
The Issuer may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement, or waiver. If a record date is fixed, then, notwithstanding the
preceding paragraph, those Persons who were Holders at such record date (or
their duly designated proxies), and only such Persons, shall be entitled to
consent to such amendment, supplement, or waiver or to revoke any consent
previously given, whether or not such Persons continue to be Holders after such
record date. No such consent shall be valid or effective for more than 120 days
after such record date unless the consent of the requisite number of Holders has
been obtained.
Section 9.05 Notation on or Exchange of Notes. The Trustee may place an
appropriate notation about an amendment, supplement or waiver on any Note
thereafter authenticated. The Issuer 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.
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, supplement or waiver authorized pursuant to this Article IX if the
amendment or supplement does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. The Issuer may not sign an amendment,
supplement or waiver until the Board of Directors of the Issuer approves it. In
executing any amendment, supplement or waiver, the Trustee shall be entitled to
receive, upon request, and (subject to Section 7.01 hereof) shall be fully
protected in relying upon, in addition to the documents required by Section
12.04 hereof, an Officer's Certificate and an Opinion of Counsel stating that
the execution of such amended or supplemental indenture is authorized or
permitted by this Indenture and that such amendment, supplement or waiver is the
legal, valid and binding obligation of the Issuer and any Guarantors party
thereto, enforceable against them in accordance with its terms, subject to
customary exceptions, and complies with the provisions hereof (including Section
9.03). Notwithstanding the foregoing, except as required by Section 4.15 hereof,
neither an Opinion of Counsel nor an Officer's Certificate will be required for
the Trustee to execute a supplemental indenture to this Indenture, whereby
Claire's Stores, Inc. assumes the obligations of the Issuer under this Indenture
in connection with the merger of the Issuer with and into Claire's Stores, Inc.
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Section 9.07 Payment for Consent. Neither the Issuer, the Issuer nor any
Affiliate of the Issuer shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Notes unless such consideration is
offered to all Holders and is paid to all Holders that so consent, waive or
agree to amend in the time frame set forth in solicitation documents relating to
such consent, waiver or agreement.
Section 9.08 Additional Voting Terms; Calculation of Principal Amount.
Except as provided in the proviso to the first sentence of Section 9.02, all
Notes issued under this Indenture shall vote and consent together on all matters
(as to which any of such Notes may vote) as one class and no Notes will have the
right to vote or consent as a separate series on any matter. Determinations as
to whether Holders of the requisite aggregate principal amount of Notes have
concurred in any direction, waiver or consent shall be made in accordance with
this Article IX and Section 2.14.
ARTICLE X
GUARANTEES
Section 10.01 Guarantee. Subject to this Article X, each of the Guarantors
hereby, jointly and severally irrevocably and unconditionally guarantees on a
senior basis 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 Issuer
hereunder or thereunder, that: (a) the principal of, premium, if any, or
interest or Additional Interest on the Notes, expenses, indemnification or
otherwise shall be promptly paid in full when due, whether at Stated Maturity,
by acceleration, redemption or otherwise, and interest on the overdue principal
of and interest on the Notes, if any, if lawful, and all other obligations of
the Issuer to the Holders or the Trustee hereunder or thereunder shall be
promptly paid in full or performed, all in accordance with the terms hereof and
thereof; and (b) in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, that same shall be promptly paid in full
when due or performed in accordance with the terms of the extension or renewal,
whether at Stated Maturity, by acceleration, redemption or otherwise. Failing
payment when due of any amount so guaranteed or any performance 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.
The Guarantors hereby agree that their obligations hereunder shall
be unconditional, irrespective of the validity, regularity or enforceability of
the Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Issuer, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a Guarantor. Each Guarantor hereby
waives diligence, presentment, demand of payment, filing of
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claims with a court in the event of insolvency or bankruptcy of the Issuer, any
right to require a proceeding first against the Issuer, protest, notice and all
demands whatsoever and covenants that this Guarantee shall not be discharged
except by complete performance of the obligations contained in the Notes and
this Indenture.
Each Guarantor also agrees to pay any and all costs and expenses
(including reasonable attorneys' fees and expenses) incurred by the Trustee or
any Holder in enforcing any rights under this Section 10.01.
If any Holder or the Trustee is required by any court or otherwise
to return to the Issuer, the Guarantors or any custodian, trustee, liquidator or
other similar official acting in relation to either the Issuer or the
Guarantors, any amount paid either to the Trustee or such Holder, this
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect.
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 VI
hereof for the purposes of this Guarantee, notwithstanding any stay, injunction
or other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such obligations as provided in Article VI hereof, such obligations (whether or
not due and payable) shall forthwith become due and payable by the Guarantors
for the purpose of this 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 Guarantees.
Each Guarantee shall remain in full force and effect and continue to
be effective should any petition be filed by or against the Issuer for
liquidation, reorganization, should the Issuer become insolvent or make an
assignment for the benefit of creditors or should a receiver or trustee be
appointed for all or any significant part of the Issuer's assets, and shall, to
the fullest extent permitted by law, continue to be effective or be reinstated,
as the case may be, if at any time payment and performance of the Notes are,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee on the Notes or Guarantees, whether as a
"voidable preference," "fraudulent transfer" or otherwise, all as though such
payment or performance had not been made. In the event that any payment or any
part thereof, is rescinded, reduced, restored or returned, the Notes shall, to
the fullest extent permitted by law, be reinstated and deemed reduced only by
such amount paid and not so rescinded, reduced, restored or returned.
In case any provision of any Guarantee shall be invalid, illegal or
unenforceable, the validity, legality, and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
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The Guarantee issued by any Guarantor shall be a general unsecured
senior obligation of such Guarantor and shall be pari passu in right of payment
with all existing and future Senior Indebtedness of such Guarantor, if any.
Each payment to be made by a Guarantor in respect of its Guarantee
shall be made without set-off, counterclaim, reduction or diminution of any kind
or nature.
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 Guarantee of such Guarantor not constitute 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 any Guarantee. To effectuate
the foregoing intention, the Trustee, the Holders and the Guarantors hereby
irrevocably agree that the obligations of each Guarantor shall be limited to the
maximum amount as will, after giving effect to such maximum amount and 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 X, result
in the obligations of such Guarantor under its Guarantee not constituting a
fraudulent conveyance or fraudulent transfer under applicable law. Each
Guarantor that makes a payment under its Guarantee shall be entitled upon
payment in full of all guaranteed obligations under this Indenture to a
contribution from each other Guarantor in an amount equal to such other
Guarantor's pro rata portion of such payment based on the respective net assets
of all the Guarantors at the time of such payment determined in accordance with
GAAP.
Section 10.03 Execution and Delivery. To evidence its Guarantee set forth
in Section 10.01 hereof, each Guarantor hereby agrees that this Indenture shall
be executed on behalf of such Guarantor by its President, one of its Vice
Presidents or one of its Assistant Vice Presidents.
Each Guarantor hereby agrees that its Guarantee set forth in Section
10.01 hereof shall remain in full force and effect notwithstanding the absence
of the endorsement of any notation of such Guarantee on the Notes.
If an Officer whose signature is on this Indenture no longer holds
that office at the time the Trustee authenticates the Note, the Guarantee shall
be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Guarantee set forth in
this Indenture on behalf of the Guarantors.
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If required by Section 4.14 hereof, the Issuer shall cause any newly
created or acquired Restricted Subsidiary to comply with the provisions of
Section 4.14 hereof and this Article X, to the extent applicable.
Section 10.04 Subrogation. Each Guarantor shall be subrogated to all
rights of Holders of Notes against the Issuer in respect of any amounts paid by
any Guarantor pursuant to the provisions of Section 10.01 hereof; provided that
if an Event of Default has occurred and is continuing, no Guarantor shall be
entitled to enforce or receive any payments arising out of, or based upon, such
right of subrogation until all amounts then due and payable by the Issuer under
this Indenture or the Notes shall have been paid in full.
Section 10.05 Benefits Acknowledged. Each Guarantor acknowledges that it
will receive direct and indirect benefits from the financing arrangements
contemplated by this Indenture and that the guarantee and waivers made by it
pursuant to its Guarantee are knowingly made in contemplation of such benefits.
Section 10.06 Release of Guarantees(a) . A Guarantee of a Guarantor will
be automatically released upon:
(a) the sale, disposition, exchange or other transfer (including
through merger, consolidation, amalgamation or otherwise) of the Capital Stock
(including any sale, disposition or other transfer following which the
applicable Guarantor is no longer a Restricted Subsidiary) of the applicable
Guarantor if such sale, disposition, exchange or other transfer is made in a
manner not in violation of this Indenture;
(b) the Issuer designating such Guarantor to be an Unrestricted
Subsidiary in accordance with Section 4.07 and the definition of "Unrestricted
Subsidiary";
(c) the release or discharge of the guarantee by such Restricted
Subsidiary of the Credit Agreement or the guarantee of any other Indebtedness
which resulted in the obligation to guarantee the Notes;
(d) the Issuer's exercise of its legal defeasance option or covenant
defeasance option as described under Article VIII or if the Issuer's obligations
under the this Indenture are discharged in accordance with the terms of this
Indenture; or
(e) the applicable Guarantor ceasing to be a Subsidiary as a result
of any foreclosure of any pledge or security interest securing Bank Indebtedness
or other exercise of remedies in respect thereof.
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ARTICLE XI
SATISFACTION AND DISCHARGE
Section 11.01 Satisfaction and Discharge. This Indenture shall be
discharged and shall cease to be of further effect (except as to surviving
rights of registration or transfer or exchange of Notes as expressly provided
for in this Indenture) as to all Notes, when either:
(1) all Notes heretofore authenticated and delivered, except lost,
stolen or destroyed Notes which have been replaced or paid and Notes for
whose payment money has heretofore been deposited in trust, have been
delivered to the Trustee for cancellation; or
(2) (A) all Notes not heretofore delivered to the Trustee for
cancellation have become due and payable by reason of the making of a
notice of redemption or otherwise, will become due and payable within one
year or are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the Issuer, and the Issuer 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 of
the Notes, cash in U.S. dollars, U.S. dollar-denominated 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 heretofore
delivered to the Trustee for cancellation for principal, premium, if any,
and accrued interest to the date of maturity or redemption;
(B) the Issuer has paid or caused to be paid all sums payable by it
under this Indenture; and
(C) the Issuer has delivered irrevocable instructions to the Trustee
to apply the deposited money toward the payment of the Notes at maturity
or the Redemption Date, as the case may be.
In addition, the Issuer must deliver an Officer's Certificate and an
Opinion of Counsel to the Trustee stating that all conditions precedent to
satisfaction and discharge have been satisfied.
Notwithstanding the satisfaction and discharge of this Indenture, if money shall
have been deposited with the Trustee pursuant to subclause (A) of clause (2) of
this Section 11.01, the provisions of Sections 7.07, 8.06 and 11.02 hereof shall
survive.
Section 11.02 Application of Trust Money. Subject to the provisions of
Section 8.06 hereof, all money deposited with the Trustee pursuant to Section
11.01 hereof shall be held in trust and applied by it, in accordance with the
provisions of the Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Issuer acting as its own Paying Agent)
as the Trustee may determine, to the Persons
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entitled thereto, of the principal (and premium, if any) and interest for whose
payment such money has been deposited with the Trustee; but such money need not
be segregated from other funds except to the extent required by law.
If the Trustee or Paying Agent is unable to apply any money or
Government Securities in accordance with Section 11.01 hereof by reason of any
legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Issuer's and any Guarantor's obligations under this Indenture
and the Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Section 11.01 hereof; provided that if the Issuer has made any
payment of principal of, premium, if any, or interest on any Notes because of
the reinstatement of its obligations, the Issuer shall be subrogated to the
rights of the Holders of such Notes to receive such payment from the money or
Government Securities held by the Trustee or Paying Agent.
ARTICLE XII
MISCELLANEOUS
Section 12.01 Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with the duties imposed by Trust
Indenture Act Section 318(c), the imposed duties shall control.
Section 12.02 Notices. Any notice or communication by the Issuer, any
Guarantor or the Trustee to the others is duly given if in writing and delivered
in person or mailed by first-class mail (registered or certified, return receipt
requested), fax or overnight air courier guaranteeing next day delivery, to the
others' address:
If to the Issuer:
Bauble Acquisition Sub, Inc.
c/o Apollo Management, L.P.
10250 Constellation Boulevard
Suite 2900
Los Angeles, California 90067
Fax No.: 310-843-1950
Attention: Lance A. Milken
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If to the Trustee:
The Bank of New York
101 Barclay Street
Corporate Trust Administration
Floor 8W
New York, New York 10286
Fax No.: 212-815-5704
Attn: Claire's Stores, Inc. Trustee
The Issuer, any Guarantor or the Trustee, by notice to the others,
may designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five calendar days after being deposited in the mail,
postage prepaid, if mailed by first-class mail; when receipt acknowledged, if
faxed; and the next Business Day after timely delivery to the courier, if sent
by overnight air courier guaranteeing next day delivery; provided that any
notice or communication delivered to the Trustee shall be deemed effective upon
actual receipt thereof.
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
Note Register kept by the Registrar. Any notice or communication shall also be
so mailed to any Person described in Trust Indenture Act Section 313(c), to the
extent required by the Trust Indenture Act. Failure to mail a notice or
communication to a Holder or any defect in it shall not affect its sufficiency
with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Issuer mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
Section 12.03 Communication by Holders of Notes with Other Holders of
Notes. Holders may communicate pursuant to Trust Indenture Act Section 312(b)
with other Holders with respect to their rights under this Indenture or the
Notes. The Issuer, the Trustee, the Registrar and anyone else shall have the
protection of Trust Indenture Act Section 312(c).
Section 12.04 Certificate and Opinion as to Conditions Precedent. Upon any
request or application by the Issuer or any of the Guarantors to the Trustee to
take any
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action under this Indenture, the Issuer or such Guarantor, as the case may be,
shall furnish to the Trustee:
(a) An Officer's Certificate of the Issuer in form and substance
reasonably satisfactory to the Trustee (which shall include the statements set
forth in Section 12.05 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
(b) An Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 12.05 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.
Section 12.05 Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture (other than a certificate provided pursuant to
Section 4.04 hereof or Trust Indenture Act Section 314(a)(4)) shall comply with
the provisions of Trust Indenture Act Section 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
complied with (and, in the case of an Opinion of Counsel, may be limited to
reliance on an Officer's Certificate as to matters of fact); and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been complied with.
Section 12.06 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 12.07 No Personal Liability of Directors, Officers, Employees and
Stockholders. No director, officer, employee, incorporator or stockholder, the
Issuer or any other Guarantor (other than in the case of stockholders of the
Issuer, any Parent Guarantor or any Subsidiary Guarantor, any Parent Guarantor,
the Issuer or another Subsidiary Guarantor) or any of their parent companies
shall have any liability for any obligations of the Issuer or the Guarantors
under the Notes, the Guarantees or this Indenture or for any claim based on, in
respect of, or by reason of such obligations or
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their creation. Each Holder by accepting Notes waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes.
Section 12.08 Governing Law. THIS INDENTURE, THE NOTES AND ANY GUARANTEE
WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.
Section 12.09 Waiver of Jury Trial. EACH OF THE ISSUER, THE GUARANTORS AND
THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
Section 12.10 Force Majeure. In no event shall the Trustee be responsible
or liable for any failure or delay in the performance of its obligations under
this Indenture arising out of or caused by, directly or indirectly, forces
beyond its reasonable control, including without limitation strikes, work
stoppages, accidents, acts of war or terrorism, civil or military disturbances,
nuclear or natural catastrophes or acts of God, and interruptions, loss or
malfunctions of utilities, communications or computer (software or hardware)
services.
Section 12.11 No Adverse Interpretation of Other Agreements. this
Indenture may not be used to interpret any other indenture, loan or debt
agreement of the Issuer or its Restricted Subsidiaries or of any other Person.
Any such indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section 12.12 Successors. All agreements of the Issuer 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 its successors, except as otherwise provided in Section
10.05 hereof.
Section 12.13 Severability. In case any provision in this Indenture or in
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 12.14 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 12.15 Table of Contents, Headings, etc. The Table of Contents,
Cross-Reference Table and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part of this Indenture and shall in no way modify or restrict any
of the terms or provisions hereof.
Section 12.16 Qualification of Indenture. The Issuer and the Guarantors
shall qualify this Indenture under the Trust Indenture Act in accordance with
the terms and conditions of the Registration Rights Agreement and shall pay all
reasonable costs and
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expenses (including attorneys' fees and expenses for the Issuer, the Guarantors
and the Trustee) incurred in connection therewith, including, but not limited
to, costs and expenses of qualification of this Indenture and the Notes and
printing this Indenture and the Notes. The Trustee shall be entitled to receive
from the Issuer and the Guarantors any such Officer's Certificates, Opinions of
Counsel or other documentation as it may reasonably request in connection with
any such qualification of this Indenture under the Trust Indenture Act.
Section 12.17 Currency of Account; Conversion of Currency; Foreign
Exchange Restrictions.
(a) U.S. dollars are the sole currency of account and payment for
all sums payable by the Issuer and the Guarantors under or in connection with
the Notes, the Guarantees of the Notes or this Indenture, including damages
related thereto or hereto. Any amount received or recovered in a currency other
than U.S. dollars by a Holder of Notes (whether as a result of, or of the
enforcement of, a judgment or order of a court of any jurisdiction, in the
winding-up or dissolution of the Issuer or otherwise) in respect of any sum
expressed to be due to it from the Issuer shall only constitute a discharge to
the Issuer to the extent of the U.S. dollar amount, which the recipient is able
to purchase with the amount so received or recovered in that other currency on
the date of that receipt or recovery (or, if it is not practicable to make that
purchase on that date, on the first date on which it is practicable to do so).
If that U.S. dollar amount is less than the U.S. dollar amount expressed to be
due to the recipient under the applicable Notes, the Issuer shall indemnify it
against any loss sustained by it as a result as set forth in Section 12.17(b).
In any event, the Issuer and the Guarantors shall indemnify the recipient
against the cost of making any such purchase. For the purposes of this Section
12.17, it will be sufficient for the Holder of a Note to certify in a
satisfactory manner (indicating sources of information used) that it would have
suffered a loss had an actual purchase of U.S. dollars been made with the amount
so received in that other currency on the date of receipt or recovery (or, if a
purchase of U.S. dollars on such date had not been practicable, on the first
date on which it would have been practicable, it being required that the need
for a change of date be certified in the manner mentioned above).
(b) The Issuer and the Guarantors, jointly and severally, covenant
and agree that the following provisions shall apply to conversion of currency in
the case of the Notes, the Guarantees and this Indenture:
(i) (A) If for the purpose of obtaining judgment in, or
enforcing the judgment of, any court in any country, it becomes
necessary to convert into a currency (the "Judgment Currency") an
amount due in any other currency (the "Base Currency"), then the
conversion shall be made at the rate of exchange prevailing on the
Business Day before the day on which the judgment is given or the
order of enforcement is made, as the case may be (unless a court
shall otherwise determine).
(B) If there is a change in the rate of exchange
prevailing between the Business Day before the day on which
the judgment is
142
given or an order of enforcement is made, as the case may be
(or such other date as a court shall determine), and the date
of receipt of the amount due, the Issuer and the Guarantors
will pay such additional (or, as the case may be, such lesser)
amount, if any, as may be necessary so that the amount paid in
the Judgment Currency when converted at the rate of exchange
prevailing on the date of receipt will produce the amount in
the Base Currency originally due.
(ii) In the event of the winding-up of the Issuer or any
Guarantor at any time while any amount or damages owing under the
Notes, the Guarantees and this Indenture, or any judgment or order
rendered in respect thereof, shall remain outstanding, the Issuer
and the Guarantors shall indemnify and hold the Holders and the
Trustee harmless against any deficiency arising or resulting from
any variation in rates of exchange between (i) the date as of which
the Applicable Currency Equivalent of the amount due or contingently
due under the Notes, the Guarantees and this Indenture (other than
under this subsection (b)(ii)) is calculated for the purposes of
such winding-up and (ii) the final date for the filing of proofs of
claim in such winding-up. For the purpose of this subsection
(b)(ii), the final date for the filing of proofs of claim in the
winding-up of the Issuer or any Guarantor shall be the date fixed by
the liquidator or otherwise in accordance with the relevant
provisions of applicable law as being the latest practicable date as
at which liabilities of the Issuer or such Guarantor may be
ascertained for such winding-up prior to payment by the liquidator
or otherwise in respect thereto.
(c) The obligations contained in this Section 12.17 shall constitute
separate and independent obligations from the other obligations of the Issuer
and the Guarantors under this Indenture, shall give rise to separate and
independent causes of action against the Issuer and the Guarantors, shall apply
irrespective of any waiver or extension granted by any Holder or the Trustee or
either of them from time to time and shall continue in full force and effect
notwithstanding any judgment or order or the filing of any proof of claim in the
winding-up of the Issuer or any Guarantor for a liquidated sum in respect of
amounts due hereunder (other than under subsection (b)(ii) above) or under any
such judgment or order. Any such deficiency as aforesaid shall be deemed to
constitute a loss suffered by the Holders or the Trustee, as the case may be,
and no proof or evidence of any actual loss shall be required by the Issuer or
any Guarantor or the liquidator or otherwise or any of them. In the case of
subsection (b)(ii) above, the amount of such deficiency shall not be deemed to
be reduced by any variation in rates of exchange occurring between the said
final date and the date of any liquidating distribution.
(d) The term "rate(s) of exchange" shall mean the rate of exchange
quoted by Reuters at 10:00 a.m. (New York City time) for spot purchases of the
Base Currency with the Judgment Currency other than the Base Currency referred
to in subsections (b)(i) and (b)(ii) above and includes any premiums and costs
of exchange payable.
143
Section 12.18 Consent to Jurisdiction and Service.
Any Subsidiary Guarantor that is a Foreign Subsidiary shall appoint
CT Corporation System as its agent for actions relating to the Notes, this
Indenture or the Registration Rights Agreement or brought under U.S. Federal or
state securities laws brought in any U.S. Federal or state court located in the
Borough of Manhattan in The City of New York and shall submit to such
jurisdiction.
[Signatures on following page]
144
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the date first above written.
BAUBLE ACQUISITION SUB, INC.,
as Issuer
By: /s/ Lance Milken
-----------------------------------------
Name: Lance Milken
Title: Treasurer and Secretary
THE BANK OF NEW YORK,
as Trustee
By: /s/ Remo J. Reale
-----------------------------------------
Name: Remo J. Reale
Title: Vice President
EXHIBIT A
[Global Note Legend]
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 2.06(h) OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO
A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUER. UNLESS AND
UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS
NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF
THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC") TO THE ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
[Private Placement Legend]
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE
SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT. THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT
OF THE ISSUER THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY (1) (a) IN THE UNITED STATES TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
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BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (b) OUTSIDE THE
UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (c) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, (d) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN
RULE 501 (a) (1), (2), (3) OR (7) UNDER THE SECURITIES ACT (AN "INSTITUTIONAL
ACCREDITED INVESTOR")) THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS (THE FORM OF
WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF
AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL
ACCEPTABLE TO THE ISSUER THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES
ACT OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE
ISSUER SO REQUESTS), (2) TO THE ISSUER OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS SET FORTH
IN (A) ABOVE.
[Regulation S Temporary Global Note Legend]
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY
EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR
THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL
APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO
THEM IN REGULATION S UNDER THE SECURITIES ACT.
A-2
CUSIP [ ]
ISIN [ ](1)
[RULE 144A][REGULATION S] GLOBAL NOTE
representing up to
$350,000,000
No. ___ [$______________]
BAUBLE ACQUISITION SUB, INC.
promises to pay to Cede & Co., or registered assigns, the principal sum [set
forth on the Schedule of Exchanges of Interests in the Global Note attached
hereto] [of ________________________ United States Dollars] on June 1, 2015.
Interest Payment Dates: June 1 and December 1, commencing December 1, 2007
Record Dates: May 15 and November 15
[SIGNATURE PAGE FOLLOWS]
- ----------
(1) 144A CUSIP: 179584 AD9
144A ISIN: US179584AD92
Regulation S CUSIP: U17926 AB9
Regulation S ISIN: USU17926AB96
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IN WITNESS HEREOF, the Issuer has caused this instrument to be duly
executed.
Dated: __________________
BAUBLE ACQUISITION SUB, INC.
By: ________________________
Name:
Title:
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This is one of the Notes referred to in the within-mentioned Indenture:
THE BANK OF NEW YORK,
as Trustee
By: _________________________
Authorized Signatory
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[REVERSE OF NOTE]
BAUBLE ACQUISITION SUB, INC.
9.625%/10.375% SENIOR TOGGLE NOTES DUE 2015
Capitalized terms used herein shall have the meanings assigned to
them in the Indenture referred to below unless otherwise indicated.
1. INTEREST. Bauble Acquisition Sub, Inc., a Florida corporation
(the "Issuer"), promises to pay interest on the principal amount of this Note at
a rate per annum set forth below from May 29, 2007 until maturity and to pay the
Additional Interest, if any, payable pursuant to the Registration Rights
Agreement referred to below. The Issuer will pay interest on this Note
semi-annually in arrears on June 1 and December 1 of each year commencing on
December 1, 2007, or if any such day is not a Business Day, on the next
succeeding Business Day (each, an "Interest Payment Date"). The Issuer will make
each interest payment to the Holder of record of this Note on the immediately
preceding May 15 and November 15 (each, a "Record Date"). Interest on this Note
will accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from and including May 29, 2007. The Issuer will pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand at the rate borne by this Note; it shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest (without regard to any applicable grace periods) from
time to time on demand at the rate borne by this Note. Interest will be computed
on the basis of a 360-day year comprised of twelve 30-day months.
For any Interest Period through June 1, 2011, the Issuer, may, at
its option, elect to pay interest on this Note (i) entirely in cash ("Cash
Interest"), (ii) entirely by increasing the principal amount of this Note or by
issuing PIK Notes ("PIK Interest") or (iii) 50% as Cash Interest and 50% as PIK
Interest. The Issuer must elect the form of interest payment with respect to
each Interest Period by delivering a notice to the Trustee prior to the
beginning of each Interest Period. The Trustee shall promptly deliver a
corresponding notice to the Holders. In the absence of such an election for any
Interest Period, interest on this Note will be payable in the form of the
interest payment for the prior Interest Period. Interest for the first Interest
Period commencing on the Issue Date shall be payable in cash. After June 1,
2011, the Issuer will make all interest payments on this Note in cash.
Cash Interest on this Note will accrue at the rate of 9.625%/10.375%
per annum. PIK Interest on this Note will accrue at the Cash Interest rate per
annum plus 0.75% and be payable [by increasing the principal amount of this Note
by an amount equal to the amount of PIK Interest for the applicable Interest
Period (rounded up to the nearest $1,000)](2) [by issuing PIK Notes in an
aggregate principal amount equal to the amount of PIK Interest for the
applicable Interest Period (rounded up to the nearest whole dollar) and the
Trustee will, at the
- ----------
(2) For Global Notes only.
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request of the Issuer, authenticate and deliver such PIK Notes for original
issuance to the Holders on the relevant Record Date, as shown on the Note
Register](3). [Following an increase in the principal amount of this Note as a
result of the payment of PIK Interest, this Note will bear interest on such
increased principal amount from and after the date of such PIK Payment.](4) [Any
PIK Notes will be dated as of the applicable Interest Payment Date and will bear
interest from and after such date.](2) All PIK Notes issued pursuant to the
payment of PIK Interest will mature on June 1, 2015 and will be governed by, and
subject to the terms, provisions and conditions of, the Indenture and shall have
the same rights and benefits as the Notes issued on the Issue Date. [Any PIK
Notes will be issued with the description "PIK" on the face of such PIK
Note.](2)
2. METHOD OF PAYMENT. The Issuer will pay interest on this Note to
the Person who is the registered Holder of this Note at the close of business on
May 15 or November 15 (whether or not a Business Day), as the case may be, next
preceding the Interest Payment Date, even if this Note is canceled after such
record date and on or before such Interest Payment Date, except as provided in
Section 2.12 of the Indenture with respect to defaulted interest. Cash payment
of interest may be made by check mailed to the Holders at their addresses set
forth in the Note Register; provided that (a) all cash payments of principal,
premium, if any, and interest on, Notes represented by Global Notes registered
in the name of or held by DTC or its nominee will be made by wire transfer of
immediately available funds to the accounts specified by the Holder or Holders
thereof and (b) all cash payments of principal, premium, if any, and interest
with respect to certificated Notes will be made by wire transfer to a U.S.
dollar account maintained by the payee with a bank in the United States if such
Holder elects payment by wire transfer by giving written notice to the Trustee
or the Paying Agent to such effect designating such account no later than 30
days immediately preceding the relevant due date for payment (or such other date
as the Trustee may accept in its discretion). 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 Bank of New York, the
Trustee under the Indenture, will act as Paying Agent and Registrar. The Issuer
may change any Paying Agent or Registrar without notice to the Holders. The
Issuer or any of its Subsidiaries may act in any such capacity.
4. INDENTURE. The Issuer issued the Notes under an Indenture, dated
as of May 29, 2007 (the "Indenture"), between the Issuer and the Trustee. This
Note is one of a duly authorized issue of notes of the Issuer designated as its
9.25%/10.375% Senior Notes due 2015. The Issuer shall be entitled to issue
Additional Notes pursuant to Section 2.01 and 4.09 of the Indenture. The terms
of the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"). 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.
- ----------
(3) For certificated Notes only.
(4) For Global Notes only.
A-7
5. OPTIONAL REDEMPTION.
(a) Except as described below under clauses 5(b), 5(c) and 5(d)
hereof, the Notes will not be redeemable at the Issuer's option.
(b) On or after June 1, 2011, the Issuer may redeem the Notes at its
option, in whole at any time or in part from time to time, at the following
redemption prices (expressed as a percentage of principal amount), plus accrued
and unpaid interest and Additional Interest, if any, to the date of redemption
(the "Redemption Date"), if redeemed during the 12-month period commencing on
June 1 of the years set forth below:
Period Redemption Price
------ ----------------
2011 ........................................... 104.813%
2012 ........................................... 102.406%
2013 and thereafter ............................ 100.000%
(c) Prior to June 1, 2011, the Issuer may redeem the Notes at its
option, in whole at any time or in part from time to time, at a redemption price
equal to 100% of the principal amount of the Notes redeemed plus the Applicable
Premium as of, and accrued and unpaid interest and Additional Interest, if any,
to, the Redemption Date.
(d) At any time and from time to time on or prior to June 1, 2010,
the Issuer may redeem in the aggregate up to 35% of the original aggregate
principal amount of the Notes (calculated after giving effect to any issuance of
Additional Notes and PIK Notes) with the net cash proceeds of one or more Equity
Offerings (1) by the Issuer or (2) by any direct or indirect parent of the
Issuer, in each case to the extent the net cash proceeds thereof are contributed
to the common equity capital of the Issuer or used to purchase Capital Stock
(other than Disqualified Stock) of the Issuer from it, at a redemption price
(expressed as a percentage of principal amount thereof) of 109.625%, plus
accrued and unpaid interest and Additional Interest, if any, to the Redemption
Date (subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant Interest Payment Date); provided, however,
that at least 65% of the original aggregate principal amount of the Notes
(calculated after giving effect to any issuance of Additional Notes and PIK
Notes) must remain outstanding after each such redemption; provided, further,
that such redemption shall occur within 90 days after the date on which any
Equity Offering is consummated.
(e) Any redemption pursuant to this paragraph 5 shall be made
pursuant to the provisions of Sections 3.01 through 3.06 of the Indenture.
A-8
6. MANDATORY REDEMPTION. The Issuer shall not be required to make
mandatory redemption or sinking fund payments with respect to the Notes.
7. NOTICE OF REDEMPTION. Subject to Section 3.03 of the Indenture,
notice of redemption will be mailed by first-class mail at least 30 days but not
more than 60 days before the redemption date (except that redemption notices may
be mailed more than 60 days prior to a redemption date if the notice is issued
in connection with Article VIII or Article XI of the Indenture) to each Holder
whose Notes are to be redeemed at its registered address. Notes in denominations
larger than $2,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the Redemption Date, interest ceases to accrue on this Note or portions
thereof called for redemption.
8. OFFERS TO REPURCHASE. Upon the occurrence of a Change of Control,
the Issuer shall make a Change of Control Offer in accordance with Section 4.13
of the Indenture. In connection with certain Asset Sales, the Issuer shall make
an Asset Sale Offer as and when provided in accordance with Section 4.10 of the
Indenture.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
form without coupons in denominations of $2,000 and integral multiples of $1,000
thereafter. 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 Issuer may require a Holder to pay any taxes and fees required
by law or permitted by the Indenture. The Issuer need not exchange or register
the transfer of any Note or portion of a Note selected for redemption, except
for the unredeemed portion of any Note being redeemed in part. Also, the Issuer
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. The Indenture, the Guarantees
or the Notes may be amended or supplemented as provided in the Indenture.
12. DEFAULTS AND REMEDIES. The Events of Default relating to the
Notes are defined in Section 6.01 of the Indenture. If any Event of Default
occurs and is continuing, the Trustee or the Holders of at least 30% in
principal amount of the then outstanding Notes may declare the principal,
premium, if any, interest and any other monetary obligations on all the then
outstanding Notes to be due and payable immediately. Notwithstanding the
foregoing, in the case of an Event of Default arising from certain events of
bankruptcy or insolvency, all outstanding Notes will become due and payable
immediately without further action or notice. Holders may not enforce the
Indenture, the Notes or the Guarantees except as provided in the Indenture.
Subject to certain limitations, Holders of a majority in aggregate 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 continuing Default (except a Default relating to the payment of principal,
premium, if any, or interest) if it
A-9
determines that withholding notice is in their interest. The 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 and its consequences under the Indenture except a continuing
Default in payment of the principal of, premium, if any, or interest on, any of
the Notes held by a non-consenting Holder. The Issuer is required to deliver to
the Trustee annually a statement regarding compliance with the Indenture, and
the Issuer is required, after becoming aware of any Default, to deliver to the
Trustee a statement specifying such Default and what action the Issuer proposes
to take with respect thereto.
13. AUTHENTICATION. This Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose until
authenticated by the manual signature of the Trustee or an authentication agent.
14. TRUSTEE DEALINGS WITH ISSUER. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Issuer or its Affiliates, and may otherwise deal with the
Issuer or its Affiliates, as if it were not the Trustee.
15. NO RECOURSE AGAINST OTHERS. No director, officer, employee,
incorporator or stockholder of the Issuer or any Guarantor, as such, will have
any liability for any obligations of the Issuer or the Guarantors under the
Notes, the Indenture, the Guarantees or for any claim based on, in respect of,
or by reason of, such obligations or their creation. Each Holder of Notes by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes.
16. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders of
Notes 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 May 29, 2007, among Claire's Stores, Inc., the Guarantors
named therein and the other parties named on the signature pages thereof (the
"Registration Rights Agreement"), including the right to receive Additional
Interest (as defined in the Registration Rights Agreement).
17. GOVERNING LAW. THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN
AND BE USED TO CONSTRUE THE INDENTURE, THE NOTES AND THE GUARANTEES.
18. CUSIP AND ISIN NUMBERS. Pursuant to a recommendation promulgated
by the Committee on Uniform Security Identification Procedures, the Issuer has
caused CUSIP and ISIN numbers to be printed on the Notes and the Trustee may use
CUSIP and ISIN numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be placed
only on the other identification numbers placed thereon.
The Issuer will 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 the Issuer at the following address:
A-10
Bauble Acquisition Sub, Inc.
c/o Apollo Management, L.P.
10250 Constellation Boulevard
Suite 2900
Los Angeles, California 90067
Attention: Lance Milken
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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 social security number or taxpayer identification number.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Note on the books of the Issuer. 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(s) must be guaranteed by an "eligible
guarantor institution" meeting the requirements of
the Registrar, which requirements include
membership or participation in the Security
Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be
determined by the Registrar in addition to, or in
substitution for, STAMP, al in accordance with the
Securities Exchange Act of 1934, as amended.
__________________________________________________
Signature Guarantee
A-12
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuer
pursuant to Section 4.10 or 4.13 of the Indenture, check the appropriate box
below:
[ ] Section 4.10 [ ] Section 4.13
If you want to elect to have only part of this Note purchased by the Issuer
pursuant to Section 4.10 or Section 4.13 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(s) must be guaranteed by an "eligible
guarantor institution" meeting the requirements of
the Registrar, which requirements include
membership or participation in the Security
Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be
determined by the Registrar in addition to, or in
substitution for, STAMP, al in accordance with the
Securities Exchange Act of 1934, as amended.
___________________-______________________________
Signature Guarantee
A-13
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*
The following increases or decreases in the principal amount of this Global Note
have been made:
Amount of Principal Amount of
decrease Amount of increase this Global Note Signature of
Date of in Principal in Principal following such authorized officer
Exchange or Amount of this Amount of this decrease or of Trustee or
PIK Payment Global Note Global Note increase Custodian
- ----------- -------------- ------------------ ------------------- ------------------
- ----------
* This schedule should be included only if the Note is issued in global
form.
A-14
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Bauble Acquisition Sub, Inc.
c/o Apollo Management, L.P.
10250 Constellation Boulevard
Suite 2900
Los Angeles, California 90067
Attention: Lance Milken
The Bank of New York
101 Barclay Street
Corporate Trust Administration
Floor 8W
New York, New York 10286
Fax No.: (212) 815-5704
Attention: Claire's Stores Acquisition
Re: 9.625%/10.375% Senior Toggle Notes due 2015
Reference is hereby made to the Indenture, dated as of May 29, 2007
(the "Indenture"), between Bauble Acquisition Sub, Inc. and The Bank of New
York, as trustee (the "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] in the principal amount of $___________ (the
"Transfer"), to _______________ (the "Transferee"). 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 RELEVANT 144A GLOBAL NOTE OR RELEVANT DEFINITIVE NOTE PURSUANT
TO RULE 144A. The Transfer is being effected pursuant to and in accordance with
Rule 144A under the United States 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 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
B-1
Placement Legend printed on the 144A Global Note and/or the Restricted
Definitive Note and in the Indenture and the Securities Act.
2. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE RELEVANT REGULATION S GLOBAL NOTE OR RELEVANT DEFINITIVE NOTE
PURSUANT TO REGULATION S. The Transfer is being effected pursuant to and in
accordance with Rule 903 or Rule 904 under the 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) if the proposed transfer is being
made prior to the expiration of the Restricted Period, 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 Regulation S Global Note and/or the
Restricted Definitive Note and the Indenture and the Securities Act.
3. [ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN THE RELEVANT DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF
THE SECURITIES ACT OTHER THAN 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 pursuant to and in
accordance with Rule 144 under the Securities Act;
or
(b) [ ] such Transfer is being effected to the Issuer or a
subsidiary thereof;
or
(c) [ ] such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act.
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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 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 (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 Issuer.
[Insert Name of Transferor]
By: ____________________________
Name:
Title:
Dated: _______________________
B-4
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Bauble Acquisition Sub, Inc.
c/o Apollo Management, L.P.
10250 Constellation Boulevard
Suite 2900
Los Angeles, California 90067
Attention: Lance Milken
The Bank of New York
101 Barclay Street
Corporate Trust Administration
Floor 8W
New York, New York 10286
Fax No.: (212) 815-5704
Attention: Claire's Stores Acquisition
Re: 9.625%/10.375% Senior Toggle Notes due 2015
Reference is hereby made to the Indenture, dated as of May 29, 2007
(the "Indenture"), between Bauble Acquisition Sub, Inc. and the 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 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 OF THE SAME SERIES
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL
NOTE OF THE SAME SERIES. 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 of the same series in an equal principal
amount, 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
C-1
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 OF THE SAME SERIES.
In connection with the Exchange of the Owner's beneficial interest in a
Restricted Global Note for an Unrestricted Definitive Note of the same
series, 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 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 OF THE SAME SERIES. In
connection with the Owner's Exchange of a Restricted Definitive Note for a
beneficial interest in an Unrestricted Global Note of the same series, 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 OF THE SAME SERIES. In connection with the
Owner's Exchange of a Restricted Definitive Note for an Unrestricted
Definitive Note of the same series, 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 OF THE SAME SERIES OR
BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES OF THE SAME SERIES
C-2
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE OF THE SAME SERIES.
In connection with the Exchange of the Owner's beneficial interest in a
Restricted Global Note for a Restricted Definitive Note of the same series
with an equal principal amount, 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 OF THE SAME SERIES. 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 of the same series, with an equal principal
amount, 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 Issuer and are dated ______________________.
C-3
[Insert Name of Transferor]
By: _______________________________
Name:
Title:
Dated: _______________________
C-4
EXHIBIT D
[FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS]
SENIOR TOGGLE NOTES SUPPLEMENTAL INDENTURE (this "Supplemental
Indenture"), dated as of __________, by and among Claire's Stores, Inc., a
Florida corporation (the "Company"), [insert each Guarantor executing this
Supplemental Indenture and its jurisdiction of incorporation], as guarantors
(the "Guarantors"), and The Bank of New York, as Trustee (the "Trustee"), to the
Senior Toggle Notes Indenture (the "Indenture"), dated as of May 29, 2007, among
Bauble Acquisition Sub, Inc., a Florida corporation (the "Issuer"), and the
Trustee.
W I T N E S S E T H:
WHEREAS, the Issuer has heretofore executed and delivered to the
Trustee the Indenture providing for the issuance of $350,000,000 aggregate
principal amount of 9.625%/10.375% Senior Toggle Notes due 2015 (the "Notes");
WHEREAS, the Issuer has merged with and into the Company (the
"Merger"), with the Company as the surviving entity in the Merger;
WHEREAS, as a result of the Merger, the Company is assuming, by and
under this Supplemental Indenture, the obligations of the Issuer for the due and
punctual payment of the principal of, premium, if any, and interest on all the
Notes and the performance and observance of the Indenture on the part of the
Issuer;
WHEREAS, Sections 5.01 and 9.01 of the Indenture provide that the
Trustee, the Company and each of the Guarantors are authorized to execute and
deliver this Supplemental Indenture; and
WHEREAS, this Supplemental Indenture has been duly authorized by all
necessary corporate or other action on the part of the Trustee, the Company and
each of the Guarantors.
NOW, THEREFORE, for and in consideration of the foregoing premises
and for good and valuable consideration, the receipt of which is hereby
acknowledged, it is mutually covenanted and agreed, for the equal and ratable
benefit of the Holders of the Notes, as follows:
D-1
Section 1. Capitalized Terms. Capitalized terms used herein but not
defined shall have the meanings assigned to them in the Indenture.
Section 2. Assumption by the Company. The Company hereby assumes the
obligations of the Issuer for the due and punctual payment of the principal of,
premium, if any, and interest on all outstanding Notes issued pursuant to the
Indenture and the performance and observance of each other obligation and
covenant set forth in the Indenture to be performed or observed on the part of
the Issuer. The Company is hereby substituted for, and may exercise every right
and power of, the Issuer under the Indenture with the same effect as if the
Company had been named as the Issuer in the Indenture, and the Company is a
Successor Issuer under the Indenture.
Section 3. Agreement to Guarantee. Each of the Guarantors, by its
execution of this Supplemental Indenture, agrees to be a Guarantor under the
Indenture and to be bound by the terms of the Indenture applicable to
Guarantors, including but not limited to Article X thereof.
Section 4. Ratification of Indenture; Supplemental Indenture Part of
Indenture. Except as expressly amended hereby, the Indenture is in all respects
ratified and confirmed and all the terms, conditions and provisions thereof
shall remain in full force and effect. This Supplemental Indenture shall form a
part of the Indenture for all purposes, and every Holder of Notes heretofore or
hereafter authenticated and delivered shall be bound hereby.
Section 5. The 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.
Except as otherwise expressly provided herein, no duties, responsibilities or
liabilities are assumed, or shall be construed to be assumed by the Trustee by
reason of this Supplemental Indenture. This Supplemental Indenture is executed
and accepted by the Trustee subject to all the terms and conditions set forth in
the Indenture with the same force and effect as if those terms and conditions
were repeated at length herein and made applicable to the Trustee with respect
hereto. In entering into this Supplemental Indenture, the Trustee shall be
entitled to the benefit of every provision of the Indenture relating to the
conduct or affecting the liability or affording protection to the Trustee,
whether or not elsewhere herein so provided.
Section 6. Notices. For purposes of the Indenture, the address for
notices to the Company shall be as set forth below:
Claire's Stores, Inc.
3 SW 129th Avenue
Pembroke Pines, FL 33027
Attention: Chief Financial Officer
Section 7. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
D-2
Section 8. 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.
Section 9. Effect of Headings. The Section headings herein are for
convenience only and shall not effect the construction of this Supplemental
Indenture and shall in no way modify or restrict any of the terms or provisions
hereof.
Section 10. Severability. In case any provision of this Supplemental
Indenture shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 11. Benefits Acknowledged. The Guarantors' guarantees are
subject to the terms and conditions set forth in the Indenture. Each of the
Guarantors acknowledges that it will receive direct and indirect benefits from
the financing arrangements contemplated by the Indenture and this Supplemental
Indenture and that the guarantee and waivers made by it pursuant to this
Supplemental Indenture are knowingly made in contemplation of such benefits.
[Signatures on following page]
D-3
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, all as of the date first above written.
CLAIRE'S STORES, INC.
By: _______________________________
Name:
Title:
[GUARANTEEING SUBSIDIARY]
By: _______________________________
Name:
Title:
D-4
THE BANK OF NEW YORK,
AS TRUSTEE
By: _______________________________
Name:
Title:
D-5