Exhibit 4.1
- --------------------------------------------------------------------------------
----------------------------
LBI MEDIA, INC.
----------------------------
INDENTURE
Dated as of July 9, 2002
----------------------------
U.S. Bank, N.A.
Trustee
----------------------------
- --------------------------------------------------------------------------------
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310(a)(1) ........................................... 7.10
(a)(2) ........................................... 7.10
(a)(3) ........................................... N.A.
(a)(4) ........................................... N.A.
(a)(5) ........................................... 7.10
(b) .............................................. 7.10
(c) .............................................. N.A.
311(a) .............................................. 7.11
(b) .............................................. 7.11
(c) .............................................. N.A.
312(a) .............................................. 2.05
(b) .............................................. 13.03
(c) .............................................. 13.03
313(a) .............................................. 7.06
(b)(1) ........................................... N.A.
(b)(2) ........................................... 7.06; 7.07
(c) .............................................. 7.06;13.02
(d) .............................................. 7.06
314(a) .............................................. 4.03; 13.02
(b) .............................................. N.A.
(c)(1) ........................................... N.A.
(c)(2) ........................................... N.A.
(c)(3) ........................................... N.A.
(e) .............................................. 13.05
(f) .............................................. N.A.
315(a) .............................................. N.A.
(b) .............................................. N.A.
(c) .............................................. N.A.
(d) .............................................. N.A.
(e) .............................................. N.A.
316(a) (last sentence) .............................. N.A.
(a)(1)(A) ........................................ N.A.
(a)(1)(B) ........................................ N.A.
(a)(2) ........................................... N.A.
(b) .............................................. N.A.
(c) .............................................. N.A.
317(a)(1) ........................................... N.A.
(a)(2) ........................................... N.A.
(b) .............................................. N.A.
318(a) .............................................. N.A.
(b) .............................................. N.A.
(c) .............................................. 13.01
N.A. means not applicable.
*This Cross Reference Table is not part of the Indenture.
TABLE OF CONTENTS
Page
----
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions ...................................................... 1
Section 1.02. Other Definitions ................................................ 26
Section 1.03. Incorporation by Reference of Trust Indenture Act ................ 26
Section 1.04. Rules of Construction 26
ARTICLE 2.
THE NOTES
Section 2.01. Form and Dating .................................................. 27
Section 2.02. Execution and Authentication ..................................... 28
Section 2.03. Registrar and Paying Agent ....................................... 28
Section 2.04. Paying Agent to Hold Money in Trust .............................. 29
Section 2.05. Holder Lists ..................................................... 29
Section 2.06. Transfer and Exchange ............................................ 29
Section 2.07. Replacement Notes ................................................ 41
Section 2.08. Outstanding Notes ................................................ 41
Section 2.09. Treasury Notes ................................................... 41
Section 2.10. Temporary Notes .................................................. 42
Section 2.11. Cancellation ..................................................... 42
Section 2.12. Defaulted Interest ............................................... 42
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee ............................................... 42
Section 3.02. Selection of Notes to Be Redeemed or Purchased ................... 42
Section 3.03. Notice of Redemption ............................................. 43
Section 3.04. Effect of Notice of Redemption ................................... 44
Section 3.05. Deposit of Redemption or Purchase Price .......................... 44
Section 3.06. Notes Redeemed or Purchased in Part .............................. 44
Section 3.07. Optional Redemption .............................................. 44
Section 3.08. Mandatory Redemption ............................................. 45
Section 3.09. Offer to Purchase by Application of Excess Proceeds .............. 45
ARTICLE 4.
COVENANTS
Section 4.01. Payment of Notes ................................................. 47
Section 4.02. Maintenance of Office or Agency .................................. 47
Section 4.03. Reports .......................................................... 47
Section 4.04. Compliance Certificate ........................................... 48
Section 4.05. Taxes ............................................................ 49
Section 4.06. Stay, Extension and Usury Laws ................................... 49
Section 4.07. Restricted Payments .............................................. 49
Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries ... 52
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock ....... 54
Section 4.10. Asset Sales ...................................................... 57
i
Section 4.11. Transactions with Affiliates ..................................... 59
Section 4.12. Liens ............................................................ 60
Section 4.13. Corporate Existence .............................................. 60
Section 4.14. Business Activities .............................................. 60
Section 4.15. Offer to Repurchase Upon Change of Control ....................... 60
Section 4.16. No Senior Subordinated Debt ...................................... 62
Section 4.17. Additional Subsidiary Guarantees ................................. 62
Section 4.18. Limitation on Issuances of Equity Interests in Wholly Owned
Restricted Subsidiaries .......................................... 62
Section 4.19. Payments for Consent ............................................. 63
Section 4.20. Designation of Restricted and Unrestricted Subsidiaries .......... 63
ARTICLE 5.
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets ......................... 63
Section 5.02. Successor Corporation Substituted ................................ 64
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01. Events of Default ................................................ 64
Section 6.02. Acceleration ..................................................... 66
Section 6.03. Other Remedies ................................................... 67
Section 6.04. Waiver of Past Defaults .......................................... 67
Section 6.05. Control by Majority .............................................. 68
Section 6.06. Limitation on Suits .............................................. 68
Section 6.07. Rights of Holders of Notes to Receive Payment .................... 68
Section 6.08. Collection Suit by Trustee ....................................... 68
Section 6.09. Trustee May File Proofs of Claim ................................. 69
Section 6.10. Priorities ....................................................... 69
Section 6.11. Undertaking for Costs ............................................ 69
ARTICLE 7.
TRUSTEE
Section 7.01. Duties of Trustee ................................................ 70
Section 7.02. Rights of Trustee ................................................ 71
Section 7.03. Individual Rights of Trustee ..................................... 71
Section 7.04. Trustee's Disclaimer ............................................. 71
Section 7.05. Notice of Defaults ............................................... 72
Section 7.06. Reports by Trustee to Holders of the Notes ....................... 72
Section 7.07. Compensation and Indemnity ....................................... 72
Section 7.08. Replacement of Trustee ........................................... 73
Section 7.09. Successor Trustee by Merger, etc ................................. 74
Section 7.10. Eligibility; Disqualification .................................... 74
Section 7.11. Preferential Collection of Claims Against Company ................ 74
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance ......... 75
Section 8.02. Legal Defeasance and Discharge ................................... 75
Section 8.03. Covenant Defeasance .............................................. 75
Section 8.04. Conditions to Legal or Covenant Defeasance ....................... 76
ii
Section 8.05. Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions ................................... 77
Section 8.06. Repayment to Company ............................................. 77
Section 8.07. Reinstatement .................................................... 77
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes .............................. 78
Section 9.02. With Consent of Holders of Notes ................................. 78
Section 9.03. Compliance with Trust Indenture Act .............................. 80
Section 9.04. Revocation and Effect of Consents ................................ 80
Section 9.05. Notation on or Exchange of Notes ................................. 80
Section 9.06. Trustee to Sign Amendments, etc .................................. 80
ARTICLE 10.
SUBORDINATION
Section 10.01. Agreement to Subordinate ......................................... 81
Section 10.02. Liquidation; Dissolution; Bankruptcy ............................. 81
Section 10.03. Default on Designated Senior Debt ................................ 81
Section 10.04. Acceleration of Notes ............................................ 82
Section 10.05. When Distribution Must Be Paid Over .............................. 82
Section 10.06. Notice by Company ................................................ 83
Section 10.07. Subrogation ...................................................... 83
Section 10.08. Relative Rights .................................................. 83
Section 10.09. Subordination May Not Be Impaired by Company ..................... 84
Section 10.10. Distribution or Notice to Representative ......................... 84
Section 10.11. Rights of Trustee and Paying Agent ............................... 84
Section 10.12. Authorization to Effect Subordination ............................ 84
Section 10.13. Amendments ....................................................... 85
ARTICLE 11.
SUBSIDIARY GUARANTEES
Section 11.01. Guarantee ........................................................ 85
Section 11.02. Subordination of Subsidiary Guarantee ............................ 86
Section 11.03. Limitation on Guarantor Liability ................................ 86
Section 11.04. Execution and Delivery of Subsidiary Guarantee ................... 86
Section 11.05. Guarantors May Consolidate, etc., on Certain Terms ............... 87
Section 11.06. Releases Following Sale of Assets ................................ 87
ARTICLE 12.
SATISFACTION AND DISCHARGE
Section 12.01. Satisfaction and Discharge ....................................... 88
Section 12.02. Application of Trust Money ....................................... 89
ARTICLE 13.
MISCELLANEOUS
Section 13.01. Trust Indenture Act Controls ..................................... 89
Section 13.02. Notices .......................................................... 89
Section 13.03. Communication by Holders of Notes with Other Holders of Notes .... 90
Section 13.04. Certificate and Opinion as to Conditions Precedent ............... 90
Section 13.05. Statements Required in Certificate or Opinion .................... 91
iii
Section 13.06. Rules by Trustee and Agents ...................................... 91
Section 13.07. No Personal Liability of Directors, Officers, Employees and
Stockholders ..................................................... 91
Section 13.08. Governing Law .................................................... 91
Section 13.09. No Adverse Interpretation of Other Agreements .................... 91
Section 13.10. Successors ....................................................... 92
Section 13.11. Severability ..................................................... 92
Section 13.12. Counterpart Originals ............................................ 92
Section 13.13. Table of Contents, Headings, etc ................................. 92
EXHIBITS
Exhibit A-1 FORM OF NOTE
Exhibit A-2 FORM OF REGULATION S TEMPORARY GLOBAL NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED
INVESTOR
Exhibit E FORM OF SUBSIDIARY GUARANTEE
Exhibit F FORM OF SUPPLEMENTAL INDENTURE
SCHEDULES
Schedule I SCHEDULE OF GUARANTORS
iv
INDENTURE dated as of July 9, 2002 among LBI Media, Inc., a California
corporation (the "Company"), the Guarantors listed on Schedule I hereto (the
"Guarantors") and U.S. Bank, N.A., a national banking association, as trustee
(the "Trustee").
The Company, the Guarantors and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders (as
defined below) of the 10?% Senior Subordinated Notes due 2012 (the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions.
"144A Global Note" means a Global Note substantially in the form of
Exhibit A-1 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 the Notes sold in reliance on Rule 144A.
"Acquired Debt" means, with respect to any specified Person: (1)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, whether or
not such Indebtedness is incurred in connection with, or in contemplation of,
such other Person merging with or into, or becoming a Subsidiary of, such
specified Person; and (2) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person.
"Acquisition Debt" means Indebtedness, the proceeds of which are
utilized solely to acquire all or a portion of the assets or a majority of the
Voting Stock of an existing radio or television broadcasting business or station
or any other business engaged in a Permitted Business.
"Additional Notes" means up to $250.0 million aggregate principal
amount of Notes (other than the Initial Notes) issued under this Indenture in
accordance with Sections 2.02 and 4.09 hereof, as part of the same series as the
Initial Notes.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, 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. For purposes of this definition, the terms
"controlling," "controlled by" and "under common control with" have correlative
meanings.
"Agent" means any Registrar, co-registrar, Paying Agent or additional
paying agent.
"Applicable Procedures" means, with respect to any transfer or exchange
of or for beneficial interests in any Global Note, the rules and procedures of
the Depositary, Euroclear and Clearstream that apply to such transfer or
exchange.
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any
assets or rights, other than in the ordinary course of business;
provided that the sale, conveyance or other disposition of all or
substantially all of the assets (which term shall include Media
Licenses) owned by the Company
1
and its Subsidiaries taken as a whole will be governed by the
provisions of this Indenture described in Sections 4.15 and/or 5.01 and
not by the provisions of Section 4.10; and
(2) the issuance of Equity Interests by any Restricted
Subsidiary or the sale of Equity Interests in any Restricted
Subsidiary.
Notwithstanding the preceding, none of the following items will be
deemed to be an Asset Sale:
(1) any single transaction or series of related transactions
that involves assets or rights having a fair market value of less than
$2.0 million;
(2) a transfer of assets or rights between or among the
Company and its Wholly Owned Restricted Subsidiaries;
(3) an issuance of Equity Interests by a Subsidiary of the
Company to the Company or to another Subsidiary of the Company;
(4) the sale or lease of equipment, inventory, accounts
receivable or other assets or rights in the ordinary course of
business;
(5) the disposition of equipment no longer used or useful in
the business of the Company or any of its Restricted Subsidiaries;
(6) the sale and leaseback of any assets within 90 days of the
acquisition thereof;
(7) a Relocation; provided, however, that any Net Proceeds
received by the Company or any of its Restricted Subsidiaries in
exchange therefor will be subject to the restrictions set forth in
Section 4.10;
(8) the sale or other disposition of Cash Equivalents;
(9) a Restricted Payment that is permitted by Section 4.07,
or a Permitted Investment;
(10) the sale of the Hollywood Office Property;
(11) foreclosures on assets;
(12) Permitted Liens;
(13) the grant of any license of patents, trademarks,
registrations therefor and other similar intellectual property in the
ordinary course of business; and
(14) the cancellation or forgiveness of any loan made by the
Company or any of its Restricted Subsidiaries (i) permitted by clause
(10) of Section 4.07(b) or (ii) permitted by clauses (8), (9), (10) or
(14) of the definition of "Permitted Investments."
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3
and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that
2
term is used in Section 13(d)(3) of the Exchange Act), such "person" will be
deemed to have beneficial ownership of all securities that such "person" has the
right to acquire by conversion or exercise of other securities, whether such
right is currently exercisable or is exercisable only upon the occurrence of a
subsequent condition. The terms "Beneficially Owns" and "Beneficially Owned"
have a corresponding meaning.
"Board of Directors" means:
(1) with respect to a corporation, the board of directors of
the corporation;
(2) with respect to a partnership, the general partner of
which is a corporation, the board of directors of the general partner
of the partnership; and
(3) with respect to any other Person, the board or committee
of such Person serving a similar function.
"Broker-Dealer" has the meaning set forth in the Registration Rights
Agreement.
"Business Day" means any day other than a Legal Holiday.
"California Taxable Income" means the taxable income of Parent for any
taxable year computed pursuant to Section 23802 (or any successor provision) of
the California Revenue and Tax Code but calculated as if the taxable year of
Parent ended on the date with respect to which such taxable income calculation
is made, reduced, but not below zero, by the amount of any Suspended Losses
which are treated as incurred by Parent in, and allowed as deductions on the tax
returns of Parent's stockholders for, such taxable year.
"Capital Lease Obligation" means, at the time any determination is to
be made, the amount of the liability in respect of a capital lease that would at
that time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents
(however designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and
(4) any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"Cash Equivalents" means:
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or
insured by the United States government or any agency or
instrumentality of the United States government having maturities of
not more than one year from the date of acquisition;
3
(3) certificates of deposit and eurodollar time deposits with
maturities of one year or less from the date of acquisition, bankers'
acceptances with maturities not exceeding one year and overnight bank
deposits, in each case, with any lender party to the Credit Facility or
with any domestic commercial bank having capital and surplus in excess
of $500.0 million and a Thomson Bank Watch Rating of "B" or better;
(4) repurchase obligations with a term of not more than 30
days 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 having one of the two highest ratings
obtainable from Moody's Investors Service, Inc. or Standard & Poor's
Rating Services and in each case maturing within one year after the
date of acquisition; and
(6) money market funds at least 95% of the assets of which
constitute Cash Equivalents of the kinds described in clauses (1)
through (5) of this definition.
"Change of Control" means the occurrence of any of the following:
(1) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the
properties or assets (which term shall include Media Licenses) of the
Company and its Restricted Subsidiaries taken as a whole to any
"person" (as that term is used in Section 13(d)(3) of the Exchange Act)
other than a Principal or a Related Party of a Principal;
(2) the adoption of a plan relating to the liquidation or
dissolution of the Company; or
(3) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that
any "person" (as defined above), other than the Principals and their
Related Parties, becomes the Beneficial Owner, directly or indirectly,
of more than 50% of the Voting Stock of the Company, measured by voting
power rather than number of shares.
"Clearstream" means Clearstream Banking, S.A.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means LBI Media, Inc. (formerly known as LBI Holdings II,
Inc.), and any and all successors thereto.
"Consolidated Cash Flow" means, with respect to any specified Person
for any period, the Consolidated Net Income of such Person for such period plus:
(1) an amount equal to any extraordinary loss plus any net
loss (together with any related provision for taxes) realized by such
Person or any of the Restricted Subsidiaries in connection with (a) an
Asset Sale (including any sale and leaseback transaction), or (b) the
disposition of any securities by such Person or any of the Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person
or any of the Restricted Subsidiaries, to the extent such losses were
deducted in computing such Consolidated Net Income; plus
4
(2) provision for taxes based on income or profits of such
Person and the Restricted Subsidiaries for such period (and to the
extent not included in the foregoing, Permitted Shareholder Tax
Distributions and Permitted Holdings Tax Distributions), to the extent
that such provision for taxes, Permitted Shareholder Tax Distributions
or Permitted Holdings Tax Distributions were deducted in computing such
Consolidated Net Income; plus
(3) consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued and
whether or not capitalized (including, without limitation, amortization
of debt issuance costs and original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations,
the interest component of all payments associated with Capital Lease
Obligations, imputed interest with respect to obligations with respect
to any sale and leaseback transaction, fees, including but not limited
to agency fees, letter of credit fees, commitment fees, commissions,
discounts and other fees and charges incurred in respect of
Indebtedness and net of the effect of all payments made or received
pursuant to Hedging Obligations), to the extent that any such expense
was deducted in computing such Consolidated Net Income; plus
(4) depreciation, amortization (including non-cash employee
and officer equity compensation expenses, amortization of goodwill and
other intangibles, amortization of programming costs (net of program
payments made or to be made), barter expenses and impairment charges
under SFAS 142 for broadcast licenses, goodwill or other indefinite
lived intangible assets, but excluding amortization of prepaid cash
expenses that were paid in a prior period) and other non-cash expenses
(excluding any such non-cash expense to the extent that it represents
amortization of a prepaid cash expense that was paid in a prior period)
of such Person and its Restricted Subsidiaries for such period, to the
extent that such depreciation, amortization, impairment charges and
other non-cash expenses were deducted in computing such Consolidated
Net Income; plus
(5) any extraordinary or non-recurring expenses and charges of
such Person and the Restricted Subsidiaries for such period, including,
without limitation, transaction costs in respect of acquisitions, to
the extent that such expenses and charges were deducted in computing
such Consolidated Net Income; minus
(6) non-cash items increasing such Consolidated Net Income for
such period, other than the accrual of revenue in the ordinary course
of business; minus
(7) cash payments related to non-cash charges that increased
Consolidated Cash Flow in any prior period; minus
(8) barter revenues,
in each case, on a consolidated basis and determined in accordance with GAAP.
Notwithstanding the foregoing, the provision for taxes based on the
income or profits of, and the depreciation and amortization and other non-cash
expenses of, a Subsidiary of the Company will be added to Consolidated Net
Income to compute Consolidated Cash Flow of the Company only to the extent that
a corresponding amount would be permitted at the date of determination to be
dividended, distributed or loaned to the Company by such Subsidiary without
prior governmental approval (that has not been obtained), and without direct or
indirect restriction pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that Subsidiary or its stockholders.
5
"Consolidated Net Income" means, with respect to any specified Person
for any period, the aggregate of the Net Income of such Person and its
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:
(1) the Net Income (but not loss) of any Unrestricted
Subsidiary will be excluded, whether or not distributed to the
specified Person or a Restricted Subsidiary of the Person;
(2) the Net Income of any Restricted Subsidiary will be
excluded to the extent that the declaration or payment of dividends or
similar distributions or loans by that Subsidiary of that Net Income is
not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or
indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Restricted Subsidiary or its
stockholders;
(3) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such
acquisition will be excluded; and
(4) the cumulative effect of a change in accounting principles
will be excluded.
"Corporate Trust Office of the Trustee" will be at the address of the
Trustee specified in Section 13.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Credit Agreement" means that certain Amended and Restated Credit
Agreement, dated as of July 9, 2002, by and among the Company, the guarantors
party thereto, Fleet National Bank, as administrative agent, and the lenders
party thereto, including any related notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith, and in each case as
amended (including any amendment and restatement thereof), modified, renewed,
refunded, replaced or refinanced from time to time, including any agreement
extending the maturity of, consolidating or otherwise restructuring (including
adding subsidiaries of the Company as additional guarantors thereunder) all or
any portion of the Indebtedness under such agreement or any successor or
replacement agreement and whether by the same or any other agent, lender or
group and whether or not increasing the amount of Indebtedness that may be
incurred thereunder.
"Credit Facility" or "Credit Facilities" means, one or more debt
facilities (including, without limitation, the Credit Agreement) or commercial
paper facilities, in each case with banks or other institutional lenders
providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or letters
of credit, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time, including any
agreement extending the maturity of, consolidating or otherwise restructuring
(including adding subsidiaries of the Company as additional guarantors
thereunder) all or any portion of the Indebtedness under such agreement or any
successor or replacement agreement and whether by the same or any other agent,
lender or group and whether or not increasing the amount of Indebtedness that
may be incurred thereunder.
"Custodian" means the Trustee, as custodian with respect to the Notes
in global form, or any successor entity thereto.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
6
"Definitive Note" means a certificated Note registered in the name of
the Holder thereof and issued in accordance with Section 2.06 hereof,
substantially in the form of Exhibit A-1 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, the 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 Senior Debt" means:
(1) any Indebtedness outstanding under the Credit Agreement;
and
(2) any other Senior Debt permitted under this Indenture the
principal amount of which is $25.0 million or more (including amounts
available under a committed facility) and that has been designated by
the Company as "Designated Senior Debt."
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder of the Capital Stock), or
upon the happening of any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or redeemable at the option of the
holder of the Capital Stock, in whole or in part, on or prior to the date that
is 91 days after the date on which the Notes mature. Notwithstanding the
preceding sentence, any Capital Stock that would constitute Disqualified Stock
solely because the holders of the Capital Stock have the right to require the
Company to repurchase such Capital Stock upon the occurrence of a change of
control or an asset sale shall not constitute Disqualified Stock if the terms of
such Capital Stock provide that the Company may not repurchase or redeem any
such Capital Stock pursuant to such provisions unless such repurchase or
redemption complies with the provisions of Section 4.07.
"Dividend Limitation" means, with respect to Parent, the sum of (1) the
product of the Maximum Effective California Rate times California Taxable Income
except that the product of this clause (1) shall be zero in the event Parent
does not qualify (or subsequently elects not) to be treated as an S Corporation
for California income tax purposes, or the Company does not qualify (or
subsequently elects not) to be treated as a qualified subchapter S subsidiary;
plus (2) the product of the Maximum Federal Rate and Federal Taxable Income.
"Domestic Subsidiary" means any Restricted Subsidiary of the Company
that was formed under the laws of the United States or any state of the United
States or the District of Columbia or that guarantees or otherwise provides
direct credit support for any Indebtedness of the Company.
"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).
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the Notes issued in the Exchange Offer pursuant
to Section 2.06(f) hereof.
7
"Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.
"Exchange Offer Registration Statement" has the meaning set forth in
the Registration Rights Agreement.
"Existing Indebtedness" means Indebtedness of the Company and its
Restricted Subsidiaries (other than Indebtedness under the Credit Agreement) in
existence on the date of this Indenture.
"Existing Parent Notes" means the $30.0 million original aggregate
principal amount of Junior Subordinated Notes of Parent, plus accrued and unpaid
interest thereon, issued and outstanding under the Parent Securities Purchase
Documents and any other notes issued thereunder in accordance with the terms
thereof as such terms exist on the date of this Indenture, as any of the
foregoing may be amended or modified from time to time after the date of this
Indenture in a manner that is not materially adverse to the Holders.
"Existing Parent Warrants" means the warrants for the purchase of
shares of common stock of Parent issued on March 20, 2001, as amended on the
date of this Indenture pursuant to the Parent Securities Purchase Documents and
any other warrants issued thereunder in accordance with the terms thereof as
such terms exist on the date of this Indenture, as any of the foregoing may be
amended or modified from time to time after the date of this Indenture in a
manner that is not materially adverse to the Holders.
"Federal Taxable Income" means the taxable income of Parent for any
taxable year computed pursuant to Section 1363(b) (or any successor provision)
of the Code but calculated as if the taxable year of Parent ended on the date
with respect to which such taxable income calculation is made, reduced, but not
below zero, by the amount of any Suspended Losses which are treated as incurred
by Parent in, and allowed as deductions on the tax returns of Parent's
stockholders for, such taxable year.
"FCC" means the Federal Communications Commission or any successor
thereto.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the date of this Indenture.
"Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, substantially in the
form of Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(iii),
2.06(b)(iv), 2.06(d)(ii) or 2.06(f) hereof.
"Global Note Legend" means the legend set forth in Section 2.06(g)(ii),
which is required to be placed on all Global Notes issued under this Indenture.
"Governmental Authority" means any nation or government, any federal,
state or other political subdivision thereof and any federal, state or local
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.
8
"Guarantee" means a guarantee, other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"Guarantors" means each of:
(1) the Company's Restricted Subsidiaries on the date of this
Indenture; and
(2) any other subsidiary of the Company that executes a
Subsidiary Guarantee in accordance with the provisions of this
Indenture;
and their respective successors and assigns.
"Hedging Obligations" means, with respect to any specified Person, the
obligations of such Person under:
(1) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements; and
(2) other agreements or arrangements designed to protect such
Person against fluctuations in currency exchange rates or interest
rates.
"Holder" means a Person in whose name a Note is registered.
"Hollywood Office Property" means those certain properties located at
5724 Hollywood Blvd. and 5718 Hollywood Blvd., Los Angeles, Los Angeles County,
California.
"IAI Global Note" means a Global Note substantially in the form of
Exhibit A-1 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 the Notes sold to Institutional Accredited
Investors.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in
respect thereof);
(3) in respect of banker's acceptances;
(4) representing Capital Lease Obligations;
(5) representing the balance deferred and unpaid of the
purchase price of any property, except any such balance that
constitutes an accrued expense or trade payable; or
(6) representing any Hedging Obligations (the amount of any
such obligations to be equal at any time to the termination value of
such agreement or arrangement giving rise to such obligation that would
be payable by such Person at such time),
9
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the Guarantee
by the specified Person of any indebtedness of any other Person; provided that
Indebtedness shall not include the pledge of the Capital Stock of an
Unrestricted Subsidiary securing Non-Recourse Debt of that Unrestricted
Subsidiary. Notwithstanding anything in this definition to the contrary, any
obligations of the Company or any of its Restricted Subsidiaries to pay Shop At
Home Relocation Profits (including any Relocation Tax Benefits (as defined in
the Shop At Home Acquisition Documents)) to the Shop At Home Sellers under the
Shop At Home Acquisition Documents shall not be Indebtedness until such time as
such obligations are (i) due and payable (unless being contested in good faith)
or (ii) represented by a separate instrument.
The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any
Indebtedness issued with original issue discount; and
(2) the principal amount of the Indebtedness, together with
any interest on the Indebtedness that is more than 30 days past due, in
the case of any other Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Indirect Participant" means a Person who holds a beneficial interest
in a Global Note through a Participant.
"Initial Notes" means the first $150.0 million aggregate principal
amount of Notes issued under this Indenture on the date hereof.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.
"Intermediate Holdings" means LBI Intermediate Holdings, Inc., a
California corporation and wholly owned subsidiary of Parent to be merged with
and into the Company.
"Investments" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees or other obligations), advances or capital
contributions (excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the Company
or any Subsidiary of the Company sells or otherwise disposes of any Equity
Interests of any direct or indirect Subsidiary of the Company such that, after
giving effect to any such sale or disposition, such Person is no longer a
Subsidiary of the Company, the Company will be deemed to have made an Investment
on the date of any such sale or disposition equal to the fair market value of
the Company's Investments in such Subsidiary that were not sold or disposed of
in an amount determined as provided in the final paragraph of Section 4.07. The
acquisition by the Company or any Subsidiary of the Company of a Person that
holds an Investment in a third Person will be deemed to be an Investment by the
Company or such Subsidiary in such third Person in an amount equal to the fair
market value of the Investments held by the acquired Person in such third Person
in an amount determined as provided in the final paragraph of Section 4.07.
10
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue on
such payment for the intervening period.
"Letter of Transmittal" means the letter of transmittal to be prepared
by the Company and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
"Leverage Ratio" means the ratio of (i) the sum of (A) the aggregate
outstanding amount of Indebtedness of each of the Company and the Restricted
Subsidiaries as of the last day of the most recently ended fiscal quarter for
which financial statements are internally available as of the date of
calculation on a combined consolidated basis in accordance with GAAP, plus (B)
the aggregate liquidation preference of all outstanding Disqualified Stock of
the Company and preferred stock of the Restricted Subsidiaries (except preferred
stock issued to the Company or a Restricted Subsidiary) as of the last day of
such fiscal quarter (in each case, subject to the terms described in the next
paragraph) to (ii) the aggregate Consolidated Cash Flow of the Company for the
last four full fiscal quarters for which financial statements are internally
available ending on or prior to the date of determination (the "Reference
Period").
For purposes of this definition, the aggregate outstanding principal
amount of Indebtedness of the Company and the Restricted Subsidiaries and the
aggregate liquidation preference of all outstanding preferred stock of the
Restricted Subsidiaries for which such calculation is made shall be determined
on a pro forma basis as if the Indebtedness and preferred stock giving rise to
the need to perform such calculation had been incurred and issued and the
proceeds therefrom had been applied, and all other transactions in respect of
which such Indebtedness is being incurred or preferred stock is being issued had
occurred, on the first day of such Reference Period. In addition to the
foregoing, for purposes of this definition, the Leverage Ratio shall be
calculated on a pro forma basis after giving effect to (i) the incurrence of the
Indebtedness of such Person and the Restricted Subsidiaries and the issuance of
the preferred stock of such Subsidiaries (and the application of the proceeds
therefrom) giving rise to the need to make such calculation and any incurrence
(and the application of the proceeds therefrom) or repayment of other
Indebtedness or preferred stock, at any time subsequent to the beginning of the
Reference Period and on or prior to the date of determination (including any
such incurrence or issuance which is the subject of an Incurrence Notice
delivered to the Trustee during such period pursuant to clause (xi) of the
definition of Permitted Debt; provided, however, that Indebtedness shall not
include any Acquisition Debt that has been the subject of an Incurrence Notice
under clause (xi) of the definition of Permitted Debt at any time after such
Incurrence Notice has been withdrawn or after the passage of 365 days following
the giving of such Incurrence Notice if and to the extent such Acquisition Debt
has not then been incurred), as if such incurrence or issuance (and the
application of the proceeds thereof), or the repayment, as the case may be,
occurred on the first day of the Reference Period (except that, in making such
computation, the amount of Indebtedness under any revolving credit facility
shall be computed based upon the average balance of such Indebtedness at the end
of each month during such period) and (ii) any acquisition at any time on or
subsequent to the first day of the Reference Period and on or prior to the date
of determination (including any such incurrence or issuance which is the subject
of an Incurrence Notice delivered to the Trustee during such period pursuant to
clause (xi) of the definition of Permitted Debt subject to the proviso in clause
(i) above), as if such acquisition (including the incurrence, assumption or
liability for any such Indebtedness and the issuance of such preferred stock and
also including any Consolidated Cash Flow associated with such acquisition)
occurred on the first day of the Reference Period giving pro forma effect to any
non-recurring expenses, non-recurring costs and cost reductions within the first
year after such acquisition the Company reasonably anticipates in good faith if
the Company delivers to the Trustee an officer's certificate executed by an
executive officer of the Company certifying to and describing and
11
quantifying with reasonable specificity such non-recurring expenses,
non-recurring costs and cost reductions. Furthermore, in calculating
consolidated interest expense for purposes of the calculation of Consolidated
Cash Flow, (a) interest on Indebtedness determined on a fluctuating basis as of
the date of determination (including Indebtedness actually incurred on the date
of the transaction giving rise to the need to calculate the Leverage Ratio) and
which will continue to be so determined thereafter shall be deemed to have
accrued at a fixed rate per annum equal to the rate of interest on such
Indebtedness as in effect on the date of determination and (b) notwithstanding
(a) above, interest determined on a fluctuating basis, to the extent such
interest is covered by Hedging Obligations, shall be deemed to accrue at the
rate per annum resulting after giving effect to the operation of such
agreements.
"Liberman Subordinated Debt" means, collectively, the amended and
restated promissory notes dated March 20, 2001, executed by Liberman
Broadcasting, Inc. in favor of Jose Liberman and Lenard Liberman in original
aggregate principal amounts of $3,667,193 and $194,414, respectively, as in
effect on the date of this Indenture.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, 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.
"Liquidated Damages" means the liquidated damages to be paid by the
Company and the Guarantors in the event of a Registration Default (as defined in
the Registration Rights Agreement).
"LMA" means a local marketing arrangement, joint sales agreement, time
brokerage agreement, shared service agreement, management agreement or similar
arrangement pursuant to which a Person, subject to customary preemption rights
and other limitations, (i) obtains the right to sell a portion of the
advertising inventory of a radio or television station of which a third party is
the licensee, (ii) obtains the right to exhibit programming and sell advertising
time during a portion of the air time of a radio or television station or (iii)
manages a portion of the operations of a radio or television station.
"Management Incentive Contracts" means employment agreements between
Parent and employees providing for payments in the event that the net value of
Parent exceeds certain thresholds.
"Maximum Effective California Rate" means the product of: (1) the
maximum California personal income tax rate imposed on individuals pursuant to
Section 17041(a) and (c) (or any successor provisions) of the California Revenue
and Tax Code times (2) the difference between one and the Maximum Federal Rate
expressed as a decimal.
"Maximum Federal Rate" means the maximum Federal income tax rate
imposed on individuals pursuant to Section 1(a)-(d) (or any successor
provisions) of the Code, as adjusted pursuant to Section 15 (or any successor
provision) of the Code, if applicable.
"Media Licenses" means any license, permit, certificate, ordinance,
approval or other authorization, or any renewal or extension thereof, from the
FCC that is necessary for the broadcast or other operations of the Company and
its Subsidiaries.
"Net Income" means, with respect to any specified Person, the net
income (loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however: (1) any
gain (but not loss), together with any related provision for taxes on such gain
12
(but not loss), realized in connection with: (a) any Asset Sale; or (b) the
disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries; and (2) any extraordinary gain (but not loss),
together with any related provision for taxes on such extraordinary gain (but
not loss).
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale or a
Relocation (including, without limitation, any cash received upon the sale or
other disposition of any non-cash consideration received in any Asset Sale), net
of (i) the costs directly related to such Asset Sale, including, without
limitation, legal, accounting and investment banking fees, and sales
commissions, and any relocation expenses incurred as a result of the Asset Sale,
(ii) taxes paid or estimated to be payable as a result of the Asset Sale (and to
the extent not included in the foregoing, that portion of any Permitted Holdings
Tax Distributions and Permitted Shareholder Tax Distributions attributable
thereto), in each case, after taking into account any available tax credits or
deductions and any tax sharing arrangements, (iii) amounts required to be
applied to the repayment of Indebtedness, (iv) any reserve for adjustment in
respect of the sale price of such asset or assets established in accordance with
GAAP, and (v) in addition to but without duplicating any amounts required to be
deducted from Net Proceeds under clauses (i) through (iv) above, Net Proceeds in
connection with any Relocation shall be net of (a) all reasonable costs (as
determined by the Company in its reasonable discretion) directly related to such
Relocation including, without limitation, (1) transaction expenses (including
professional advisor's or broker's fees and costs and financing and related
fees, commissions and expenses, including lender waiver fees), (2) engineering,
construction, equipment and moving costs, (3) marketing costs, (4) the estimated
aggregate amount of all obligations of the Company or any of its Restricted
Subsidiaries after such Relocation under leases with respect to which it is the
lessee immediately prior to such Relocation, (5) any penalties or liabilities
incurred (or estimated to be incurred) by the Company or any of its Restricted
Subsidiaries under contracts which cannot be terminated by the Company or any of
its Restricted Subsidiaries prior to such Relocation but which cannot be
performed or are no longer necessary (in the sole but reasonable discretion of
the Company) by the Company or any of its Restricted Subsidiaries following such
Relocation, (6) costs incurred in seeking governmental consents and permits
required as part of such Relocation and (7) costs incurred in seeking FCC
consent to move such replaced station's digital operations to the site of such
replacement station's analog operations (including all expenses of a type set
forth in other clauses of this definition) and (b) Shop At Home Relocation
Profits, including any Relocation Tax Benefits (as defined in the Shop At Home
Acquisition Documents), that are paid or payable to the Shop At Home Sellers
pursuant to the terms of the Shop At Home Acquisition Documents (it being
understood that any estimated amounts under this clause (v) shall be based on
good faith estimates of the Company on the date of the consummation of any
Relocation which were reasonable when made but such estimates shall be subject
to adjustment within 90 days thereafter).
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither the Company, the Guarantors, nor any
of the Restricted Subsidiaries (a) provides credit support of any kind
(including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly liable as a guarantor or
otherwise, or (c) constitutes the lender; and
(2) no default with respect to which (including any rights
that the holders of the Indebtedness may have to take enforcement
action against an Unrestricted Subsidiary) would permit upon notice,
lapse of time or both any holder of any other Indebtedness (other than
the Notes) of the Company, the Guarantors, or any of the Restricted
Subsidiaries to declare a default on such other Indebtedness or cause
the payment of the Indebtedness to be accelerated or payable prior to
its stated maturity.
13
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Notes" has the meaning assigned to it in the preamble to this
Indenture. The Initial Notes, the Additional Notes and the Exchange Notes shall
be treated as a single class for all purposes under this Indenture.
"Oaktree Notes" means the 21% senior subordinated notes of Intermediate
Holdings.
"Oaktree Notes Repayment" means the repayment in full on the date of
this Indenture of all principal, interest and premium and other obligations in
respect of the Oaktree Notes as described under the heading "Use of Proceeds" in
the Company's offering circular dated June 28, 2002 relating to the Notes.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable
(including post-petition interest) under the documentation governing any
Indebtedness.
"Offering" means the offering of the Notes by the Company.
"Officer" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary or any Vice President or Executive Vice President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 13.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
13.05 hereof. Such counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Parent" means LBI Holdings I, Inc., a California corporation, or any
successor.
"Parent Debt Ratio" means the ratio of (i) the sum of (A) the aggregate
outstanding amount of Indebtedness of each of the Company and the Restricted
Subsidiaries as of the last day of the most recently ended fiscal quarter for
which financial statements are internally available as of the date of
calculation on a combined consolidated basis in accordance with GAAP plus (B)
Specified Parent Debt as of the last day of the most recently ended fiscal
quarter for which financial statements are internally available as of the date
of calculation plus (C) the aggregate liquidation preference of all outstanding
Disqualified Stock of the Company and preferred stock of the Restricted
Subsidiaries (except preferred stock issued to the Company or a Restricted
Subsidiary) as of the last day of such fiscal quarter (in each case, subject to
the terms described in the next paragraph) to (ii) the aggregate Consolidated
Cash Flow of Parent (and, for purposes of this definition, references in the
definition of "Consolidated Cash Flow" to Restricted Subsidiaries shall include
the Company) for the last four full fiscal quarters for which financial
statements are internally available ending on or prior to the date of
determination (the "Parent Reference Period").
For purposes of this definition, the aggregate outstanding principal
amount of Specified Parent Debt and Indebtedness of the Company and the
Restricted Subsidiaries and the aggregate liquidation
14
preference of all outstanding preferred stock of the Restricted Subsidiaries for
which such calculation is made shall be determined on a pro forma basis as if
the Specified Parent Debt and Indebtedness and preferred stock giving rise to
the need to perform such calculation had been incurred and issued and the
proceeds therefrom had been applied, and all other transactions in respect of
which such Specified Parent Debt or Indebtedness is being incurred or preferred
stock is being issued had occurred, on the first day of such Parent Reference
Period. In addition to the foregoing, for purposes of this definition, the
Parent Debt Ratio shall be calculated on a pro forma basis after giving effect
to (i) the incurrence of the Specified Parent Debt and the Indebtedness of the
Company and the Restricted Subsidiaries and the issuance of the preferred stock
of such Restricted Subsidiaries (and the application of the proceeds therefrom)
giving rise to the need to make such calculation and any incurrence (and the
application of the proceeds therefrom) or repayment of other Specified Parent
Debt or Indebtedness or preferred stock, at any time subsequent to the beginning
of the Parent Reference Period and on or prior to the date of determination
(including any such incurrence or issuance which is the subject of an Incurrence
Notice delivered to the Trustee during such period pursuant to clause (xi) of
the definition of Permitted Debt; provided, however, that Indebtedness shall not
include any Acquisition Debt that has been the subject of an Incurrence Notice
under clause (xi) of the definition of Permitted Debt at any time after such
Incurrence Notice has been withdrawn or after the passage of 365 days following
the giving of such Incurrence Notice if and to the extent such Acquisition Debt
has not then been incurred), as if such incurrence or issuance (and the
application of the proceeds thereof), or the repayment, as the case may be,
occurred on the first day of the Parent Reference Period (except that, in making
such computation, the amount of Indebtedness under any revolving credit facility
shall be computed based upon the average balance of such Indebtedness at the end
of each month during such period) and (ii) any acquisition at any time on or
subsequent to the first day of the Parent Reference Period and on or prior to
the date of determination (including any such incurrence or issuance which is
the subject of an Incurrence Notice delivered to the Trustee during such period
pursuant to clause (xi) of the definition of Permitted Debt subject to the
proviso in clause (i) above), as if such acquisition (including the incurrence,
assumption or liability for any such Specified Parent Debt or Indebtedness and
the issuance of such preferred stock and also including any Consolidated Cash
Flow associated with such acquisition) occurred on the first day of the Parent
Reference Period giving pro forma effect to any non-recurring expenses,
non-recurring costs and cost reductions within the first year after such
acquisition the Company reasonably anticipates in good faith if the Company
delivers to the Trustee an officer's certificate executed by an executive
officer of the Company certifying to and describing and quantifying with
reasonable specificity such non-recurring expenses, non-recurring costs and cost
reductions. Furthermore, in calculating consolidated interest expense for
purposes of the calculation of Consolidated Cash Flow, (a) interest on Specified
Parent Debt and Indebtedness determined on a fluctuating basis as of the date of
determination (including Indebtedness actually incurred on the date of the
transaction giving rise to the need to calculate the Parent Debt Ratio) and
which will continue to be so determined thereafter shall be deemed to have
accrued at a fixed rate per annum equal to the rate of interest on such
Indebtedness as in effect on the date of determination and (b) notwithstanding
(a) above, interest determined on a fluctuating basis, to the extent such
interest is covered by Hedging Obligations, shall be deemed to accrue at the
rate per annum resulting after giving effect to the operation of such
agreements.
"Parent Securities Purchase Documents" means the Securities Purchase
Agreement dated as of March 20, 2001, as amended on July 9, 2002, governing the
Existing Parent Notes, the Warrant Agreement dated as of March 20, 2001, as
amended on July 9, 2002, governing the Existing Parent Warrants and documents
related to any of the foregoing, in each case, as amended or modified from time
to time after the date of this Indenture in a manner that is not materially
adverse to the Holders.
"Participant" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to DTC, shall include Euroclear and
Clearstream).
15
"Permitted Asset Swap" means, with respect to any Person, the
substantially concurrent exchange of assets of such Person (including Equity
Interests of a Restricted Subsidiary) for assets of another Person, which assets
are useful in a Permitted Business.
"Permitted Business" means any business of the type engaged in by the
Company or its Restricted Subsidiaries as of the date of this Indenture or any
business reasonably related, ancillary or complementary thereto.
"Permitted Dividend Amount" means, for any taxable period, the amount
(determined by a Tax Accountant) by which the Dividend Limitation for the
taxable year exceeds the aggregate Permitted Shareholder Tax Distributions paid
by the Company for such year pursuant to Section 4.07, including distributions
paid or loans made by the Company within 105 days after the end of the taxable
year for which a distribution is paid or loan is made; provided, that:
(1) if, at the end of any taxable year of the Company, the
Dividend Limitation for such year exceeds the aggregate Permitted
Shareholder Tax Distributions paid by the Company for such year
pursuant to Section 4.07, such excess shall be ignored for purposes of
computing the Permitted Dividend Amount for any subsequent period;
(2) if, at the end of any taxable year of the Company, the
aggregate Permitted Shareholder Tax Distributions paid by the Company
for such year pursuant to Section 4.07 exceed the Dividend Limitation,
the Permitted Dividend Amount shall be zero and such excess shall be
included and credited in the calculation of the aggregate Permitted
Shareholder Tax Distributions paid by the Company for the following
taxable year(s); and
(3) if Parent's S Corporation election made pursuant to Code
Section 1362 (or any successor provision) shall be determined to be
invalid, or is revoked or terminated, or the QSSS Election shall cease
to be in effect for the Company, the Permitted Dividend Amount for the
Company shall be zero from and after the date of such invalidity,
revocation or termination.
"Permitted Holdings Tax Distributions" means cash distributions or
loans (to be computed by the Tax Accountant) from the Company to Parent in
respect of any taxable year equal to the sum of estimated and final state income
taxes paid or payable by Parent which are attributable to the taxable income of
the Company for such taxable year calculated as though the Company were an S
Corporation. If in any year Parent is required to pay additional taxes with
respect to a prior year's tax return which are attributable to the taxable
income of the Company calculated as though the Company were an S Corporation
(whether because of an audit by a taxing authority, an amended return the filing
of which is required in the reasonable judgment of Parent or otherwise), the
amount of Permitted Holdings Tax Distributions which may be paid or loaned in
such year shall be increased by the amount of such additional taxes.
"Permitted Investments" means:
(1) any Investment in the Company or in a Restricted
Subsidiary;
(2) any Investment in Cash Equivalents;
(3) any Investment by the Company or any Restricted Subsidiary
in a Person, if as a result of such Investment:
(a) such Person becomes a Restricted Subsidiary of
the Company; or
16
(b) such Person is merged, consolidated or
amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into,
the Company or a Restricted Subsidiary of the Company;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with Section 4.10;
(5) any acquisition of assets (including Investments in
Unrestricted Subsidiaries) solely in exchange for the issuance of
Equity Interests (other than Disqualified Stock) of the Company or
Parent;
(6) any Investments received in compromise of obligations of
trade creditors or customers that were incurred in the ordinary course
of business, including pursuant to any plan of reorganization or
similar arrangement upon the bankruptcy or insolvency of any trade
creditor or customer;
(7) Hedging Obligations;
(8) loans and advances to employees of the Company and its
Restricted Subsidiaries and loans to Affiliates of the Company and
other Persons not in excess of $5.0 million in aggregate principal
amount at any time outstanding and the cancellation or forgiveness
thereof; provided, however, that no such cancellation or forgiveness
shall increase the aggregate amount of loans or advances otherwise
permitted under this clause (8);
(9) the loan by the Company to Intermediate Holdings for the
Oaktree Notes Repayment and the cancellation or forgiveness thereof and
any intercompany loan made by Intermediate Holdings to Parent prior to
the date of this Indenture (the ownership of which is transferred from
Intermediate Holdings to the Company by operation of law in connection
with the merger of Intermediate Holdings with and into the Company) and
the cancellation or forgiveness thereof;
(10) the receipt by the Company of notes from one or more
employees of the Company or any Restricted Subsidiary of the Company in
connection with such employees' acquisition of shares of Parent's
common stock and any cancellation or forgiveness thereof, so long as no
cash is advanced by the Company or any Restricted Subsidiary of the
Company to such officers or employees or Parent in connection with the
acquisition of any such obligations or the cancellation or forgiveness
thereof;
(11) escrow deposits made pursuant to Investments permitted
hereunder or acquisitions;
(12) Investments made in connection with, or accepted as
consideration in a Relocation;
(13) Investments relating to LMAs entered into in connection
with independently owned broadcast properties, not to exceed an
aggregate of $10.0 million;
(14) the loan to Lenard Liberman on the date of this Indenture
as described under the heading "Use of Proceeds" in the Company's
offering circular dated June 28, 2002 relating to the Notes and any
cancellation or forgiveness thereof; and
17
(15) other Investments in any Person having an aggregate fair
market value (measured on the date each such Investment was made and
without giving effect to subsequent changes in value), when taken
together with all other Investments made pursuant to this clause (15)
that are at the time outstanding not to exceed $5.0 million.
"Permitted Junior Securities" means:
(1) Equity Interests in the Company or, subject to the terms
of the Credit Agreement, any Guarantor; or
(2) debt securities that are subordinated to all Senior Debt
and any debt securities issued in exchange for Senior Debt to
substantially the same extent as, or to a greater extent than, the
Notes and the Subsidiary Guarantees are subordinated to Senior Debt
under this Indenture.
"Permitted Liens" means:
(1) Liens of the Company and any Guarantor securing
Indebtedness and other Obligations under Credit Facilities or securing
other Senior Debt permitted by the terms of this Indenture to be
incurred;
(2) Liens in favor of the Company or any Restricted
Subsidiary;
(3) Liens on property of a Person existing at the time such
Person is merged with or into or consolidated with the Company or any
Restricted Subsidiary; provided that such Liens were in existence prior
to the contemplation of such merger or consolidation and do not extend
to any assets other than those of the Person merged into or
consolidated with the Company or the Restricted Subsidiary;
(4) Liens on property existing at the time of acquisition of
the property by the Company or any Restricted Subsidiary; provided that
such Liens were in existence prior to the contemplation of such
acquisition;
(5) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations of a
like nature incurred in the ordinary course of business;
(6) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by clause (iv) of the second paragraph of
Section 4.09 covering only the assets acquired with such Indebtedness;
(7) Liens existing on the date of this Indenture;
(8) Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested in good
faith by appropriate proceedings promptly instituted and diligently
concluded; provided that any reserve or other appropriate provision as
is required in conformity with GAAP has been made therefor;
(9) Liens on assets of Unrestricted Subsidiaries that secure
Non-Recourse Debt of Unrestricted Subsidiaries;
18
(10) Liens to secure Indebtedness that is pari passu in right
of payment with the Notes; provided that the Notes are equally and
ratably secured thereby;
(11) Liens securing Permitted Refinancing Indebtedness where
the Liens securing indebtedness being refinanced were permitted under
this Indenture;
(12) easements, rights-of-way, zoning and similar restrictions
and other similar encumbrances or title defects incurred or imposed, as
applicable, in the ordinary course of business and consistent with
industry practices;
(13) any interest or title of a lessor under any Capital Lease
Obligation;
(14) Liens securing reimbursement obligations with respect to
letters of credit which encumber documents and other property relating
to letters of credit and products and proceeds thereof;
(15) Liens encumbering deposits made to secure statutory,
regulatory, contractual or warranty obligations, including rights of
offset and set-off;
(16) Liens securing Hedging Obligations permitted under this
Indenture;
(17) leases or subleases granted to others;
(18) Liens under licensing agreements;
(19) Liens arising from filing Uniform Commercial Code
financing statements regarding leases;
(20) judgment Liens not giving rise to an Event of Default;
(21) Liens encumbering property of the Company or a Restricted
Subsidiary consisting of carriers, warehousemen, mechanics,
materialmen, repairmen and landlords, and other Liens arising by
operation of law and incurred in the ordinary course of business for
sums that are not overdue or that are being contested in good faith by
appropriate proceedings and (if so contested) for which appropriate
reserves with respect thereto have been established and maintained on
the books of the Company or a Restricted Subsidiary in accordance with
GAAP;
(22) Liens encumbering property of the Company or a Restricted
Subsidiary incurred in the ordinary course of business in connection
with workers' compensation, unemployment insurance, or other forms of
governmental insurance or benefits, or to secure performance of bids,
tenders, statutory obligations, leases, and contracts (other than for
Indebtedness for borrowed money) entered into in the ordinary course of
business of the Company or a Restricted Subsidiary; and
(23) bankers' liens in the nature of rights of setoff arising
in the ordinary course of business of the Company or any of its
Restricted Subsidiaries.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided that:
19
(1) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal
amount (or accreted value, if applicable) of the Indebtedness extended,
refinanced, renewed, replaced, defeased or refunded (plus all accrued
interest on the Indebtedness and the amount of all expenses and
premiums incurred in connection therewith);
(2) such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of, the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded;
(3) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to
the Notes, such Permitted Refinancing Indebtedness has a final maturity
date later than the final maturity date of, and is subordinated in
right of payment to, the Notes on terms at least as favorable to the
Holders of Notes as those contained in the documentation governing the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; and
(4) such Indebtedness is incurred either by the Company or by
the Restricted Subsidiary who is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.
"Permitted Shareholder Tax Distributions" means cash distributions or
loans in amounts computed by a Tax Accountant and made by the Company to Parent
or the shareholders of Parent to permit the shareholders of Parent to pay their
estimated and final federal and state income tax liabilities attributable to the
income of the Company calculated as though the Company were an S Corporation.
Permitted Shareholder Tax Distributions may not be made more frequently than
quarterly with respect to each period for which an installment of estimated tax
would be required to be paid by the shareholders of Parent; provided, however,
that the amount of such distributions or loans shall not exceed the Permitted
Dividend Amount. For purposes of computing the amount of aggregate Permitted
Shareholder Tax Distributions for any taxable year, amounts paid in such taxable
year by the Company to the State of California on behalf of nonresident
shareholders as estimated taxes or as withholding taxes pursuant to the
California Revenue and Taxation Code shall be treated as Permitted Shareholder
Tax Distributions. If nonresident shareholders recontribute to the Company any
such amounts paid on their behalf, however, the amounts contributed shall be
subtracted from the amount of aggregate Permitted Shareholder Tax Distributions
for the taxable year in which the contributions are made. If, in any year
Parent's shareholders are required to pay additional taxes with respect to a
prior year's tax return which are attributable to the taxable income of the
Company calculated as through the Company were an S Corporation (whether because
of an audit by a taxing authority, an amended return the filing of which is
required in the reasonable judgment of Parent, or otherwise), the amount of
Permitted Shareholder Tax Distributions which may be paid in such year shall be
increased by the amount of such additional taxes as determined by a Tax
Accountant.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"Principals" means Jose Liberman and Lenard Liberman.
"Private Placement Legend" means the legend set forth in Section
2.06(g)(i) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
20
"Public Equity Offering" means an underwritten primary public offering
of common stock of the Company or Parent; provided, however, that in the event
of a Public Equity Offering by Parent, all or a portion of the net proceeds
therefrom are contributed to the Company.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"QSSS Election" means the election to treat any Person as a qualified
Subchapter S subsidiary pursuant to Code Section 1361(b)(3) (or any successor
provision).
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of July 9, 2002, by and among the Company and the other
parties named on the signature pages thereof, as such agreement may be amended,
modified or supplemented from time to time, and, with respect to any Additional
Notes, one or more registration rights agreements between the Company and the
other parties thereto, as such agreement(s) may be amended, modified or
supplemented from time to time, relating to rights given by the Company to the
purchasers of Additional Notes to register such Additional Notes under the
Securities Act.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means a Regulation S Temporary Global Note
or Regulation S Permanent Global Note, as appropriate.
"Regulation S Permanent Global Note" means a permanent Global Note in
the form of Exhibit A-1 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, issued in a denomination equal to the
outstanding principal amount of the Regulation S Temporary Global Note upon
expiration of the Restricted Period.
"Regulation S Temporary Global Note" means a temporary Global Note in
the form of Exhibit A-2 hereto bearing 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 Notes initially sold in reliance on Rule 903 of Regulation S.
"Related Party" means:
(1) any family member, spouse, heir, devisee, executor or
similar legal representative of any Principal; or
(2) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons beneficially
holding an 80% or more controlling interest of which consist of any one
or more Principals and/or such other Persons referred to in the
immediately preceding clause (1).
"Relocation" means with respect to any television broadcast station,
(a) any transaction in which a 700 MHz Holder (or any other Person) offers
consideration (which consideration consists of a different frequency or
frequencies and/or cash or non-cash consideration) to the Company or any
Guarantor for the cessation of broadcasting on any of the analogue and/or
digital frequencies of such broadcast station in order to accommodate the
spectrum needs of such 700 MHz Holder, including the prevention of interference
with such 700 MHz Holder's operations, and the Company or any Guarantor is not
ordered or directly or indirectly required by the FCC or any other Governmental
Authority to enter into such transaction, or (b) any transaction in which the
FCC or any other Governmental Authority orders or
21
otherwise directly or indirectly requires the Company or any Guarantor to cease
broadcasting on any of its existing analogue and/or digital frequencies in order
to accommodate the spectrum needs of any 700 MHz Holder, including the
prevention of interference with such 700 MHz Holder's operations, with or
without any consideration; it being understood that without limiting the
generality of the foregoing, the term "Relocation" will include any Relocation
as defined in the Shop At Home Acquisition Documents as in effect on March 20,
2001.
"Representative" means, as the case may be, a trustee, agent or
representative appointed for the holders of any Senior Debt under an agreement
to which such Senior Debt was issued.
"Restricted Definitive Note" means a Definitive Note bearing the
Private Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private
Placement Legend.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Period" means the 40-day restricted period as defined in
Regulation S.
"Restricted Subsidiary" means any Subsidiary of the Company that is not
an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated the Securities Act.
"S Corporation" means a small business corporation within the meaning
of Code Section 1361 (or any successor provision) for which an election is in
effect under Code Section 1362(a) (or any successor provision).
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Debt" means:
(1) the Indebtedness of the Company or any Restricted
Subsidiary outstanding under Credit Facilities and all Hedging
Obligations with respect thereto;
(2) any other Indebtedness of the Company or any Guarantor
permitted to be incurred under the terms of this Indenture, unless the
instrument under which such Indebtedness is incurred expressly provides
that it is on a parity with or subordinated in right of payment to the
Notes or any Subsidiary Guarantee; and
(3) all Obligations with respect to the items listed in the
preceding clauses (1) and (2).
Notwithstanding anything to the contrary in the preceding,
Senior Debt will not include:
22
(1) any liability for federal, state, local or other taxes
owed or owing by the Company or any Restricted Subsidiary;
(2) any intercompany Indebtedness of the Company or any of its
Restricted Subsidiaries to the Company or any of its Affiliates;
(3) any trade payables; or
(4) the portion of any Indebtedness that is incurred in
violation of this Indenture; provided that such Indebtedness shall be
deemed not to have been incurred in violation of this Indenture for
purposes of this clause (4) if such Indebtedness consists of
Indebtedness under any Credit Facility and holders of such Indebtedness
or their agent or representative (i) had no actual knowledge at the
time of the incurrence that the incurrence of such Indebtedness
violated this Indenture and (ii) shall have received an Officers'
Certificate to the effect that the incurrence of such Indebtedness does
not violate the provisions of this Indenture (but nothing in this
clause (4) shall preclude the existence of any Default or Event of
Default in the event that the Indebtedness is in fact incurred in
violation of this Indenture).
"700 MHz Holder" means a holder of a 700 MHz license or construction
permit.
"Shelf Registration Statement" means the Shelf Registration Statement
as defined in the Registration Rights Agreement.
"Shop At Home Acquisition Documents" means that certain Asset Purchase
Agreement dated as of November 10, 2000, among the Company, Liberman Television
of Houston, Inc., KZJL License Corp. and the Shop At Home Sellers, as amended,
in respect of the acquisition by Liberman Television of Houston, Inc. and KZJL
License Corp. of the Broadcast Station KZJL-TV in Houston, Texas.
"Shop At Home Relocation" means a Relocation that constitutes a
Voluntary Relocation or specified Involuntary Relocation as defined in the Shop
At Home Acquisition Documents.
"Shop At Home Relocation Profits" means Relocation Profits (as defined
in the Shop At Home Acquisition Documents) received by the Company pursuant to a
Shop At Home Relocation which entitles Shop At Home Sellers to a portion of such
Relocation Profit.
"Shop At Home Sellers" means Shop At Home, Inc., SAH-Houston
Corporation, SAH-Houston License Corp. and SAH License, Inc.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.
"Specified Parent Debt" means indebtedness of Parent other than (i)
indebtedness under the Existing Parent Notes, (ii) indebtedness under any note
issued by Parent to satisfy its obligations under the Management Incentive
Contracts, (iii) any indebtedness owing to the Company or any of its Restricted
Subsidiaries and (iv) indebtedness of any Subsidiary of Parent.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
23
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity of
which more than 50% of the total voting power of shares of Capital
Stock entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees of the
corporation, association or other business entity is at the time owned
or controlled, directly or indirectly, by that Person or one or more of
the other Subsidiaries of that Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the
managing general partner of which is such Person or a Subsidiary of
such Person or (b) the only general partners of which are that Person
or one or more Subsidiaries of that Person (or any combination
thereof).
"Subsidiary Guarantee" means the Guarantee by each Guarantor of the
Company's payment obligations under this Indenture and on the Notes, executed
pursuant to the provisions of this Indenture.
"Suspended Losses" means the aggregate amount of losses and deductions
of Parent which have been taken into account by the shareholders of Parent and
disallowed under Code Section 1366(d) (or any successor provision) in a prior
taxable year.
"Tax Accountant" means any one of the five largest nationally
recognized independent accounting firms, or any other independent accounting
firm jointly approved by the Trustee and the Company.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S)
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"Trust Officer," when used with respect to the Trustee, means any
officer within the corporate trust administration group of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any such officers and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of his knowledge of and familiarity with
the particular subject.
"Trustee" means the party named as such in the preamble to this
Indenture until a successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means the successor serving
hereunder.
"Unrestricted Global Note" means a permanent Global Note substantially
in the form of Exhibit A-1 attached hereto 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 a series of Notes that do not bear the Private
Placement Legend.
"Unrestricted Definitive Note" means one or more Definitive Notes that
do not bear and are not required to bear the Private Placement Legend.
"Unrestricted Subsidiary" means any Subsidiary of the Company that is
designated by the Board of Directors of the Company as an Unrestricted
Subsidiary pursuant to a resolution of the Board of Directors, but only to the
extent that such Subsidiary:
24
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of the
Company unless the terms of any such agreement, contract, arrangement
or understanding are no less favorable to the Company or such
Restricted Subsidiary than those that might be obtained at the time
from Persons who are not Affiliates of the Company;
(3) is a Person with respect to which neither the Company nor
any of its Restricted Subsidiaries has any direct or indirect
obligation (a) to subscribe for additional Equity Interests or (b) to
maintain or preserve such Person's financial condition or to cause such
Person to achieve any specified levels of operating results; and
(4) has not guaranteed or otherwise directly or indirectly
provided credit support for any Indebtedness of the Company or any of
its Restricted Subsidiaries.
Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary will be evidenced to the Trustee by filing with the Trustee a
certified copy of the resolution of the Board of Directors of the Company giving
effect to such designation and an Officers' Certificate certifying that such
designation complied with the preceding conditions and was permitted by the
terms of Section 4.07 hereof. If, at any time, any Unrestricted Subsidiary would
fail to meet the preceding requirements as an Unrestricted Subsidiary, it will
thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture
and any Indebtedness of such Subsidiary will be deemed to be incurred by a
Restricted Subsidiary of the Company as of such date and, if such Indebtedness
is not permitted to be incurred as of such date pursuant to Section 4.09, the
Company will be in default under such section. The Board of Directors of the
Company may at any time designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided that such designation will be deemed to be an incurrence of
Indebtedness by a Restricted Subsidiary of the Company of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation will only be
permitted if (1) such Indebtedness is permitted pursuant to Section 4.09,
calculated on a pro forma basis as if such designation had occurred at the
beginning of the four-quarter reference period; and (2) no Default or Event of
Default would be in existence following such designation.
"U.S. Person" means a U.S. person as defined in Rule 902(o) under the
Securities Act.
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the
amount of each then remaining installment, sinking fund, serial
maturity or other required payments of principal, including payment at
final maturity, in respect of the Indebtedness, by (b) the number of
years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment; by
(2) the then outstanding principal amount of such
Indebtedness.
"Wholly Owned Restricted Subsidiary" of any specified Person means a
Restricted Subsidiary of such Person all of the outstanding Capital Stock or
other ownership interests of which (other than
25
directors' qualifying shares) will at the time be owned by such Person or by one
or more Wholly Owned Restricted Subsidiaries of such Person.
Section 1.02. Other Definitions.
Defined in
Term Section
---- -------
"Affiliate Transaction" .................................... 4.11
"Asset Sale Offer" ......................................... 3.09
"Authentication Order" ..................................... 2.02
"Change of Control Offer" .................................. 4.15
"Change of Control Payment" ................................ 4.15
"Change of Control Payment Date" ........................... 4.15
"Covenant Defeasance" ...................................... 8.03
"DTC" ...................................................... 2.03
"Event of Default" ......................................... 6.01
"Excess Proceeds" .......................................... 4.10
"incur" .................................................... 4.09
"Incurrence Notice" ........................................ 4.09
"Insignificant Subsidiaries" ............................... 6.01
"Legal Defeasance" ......................................... 8.02
"Offer Amount" ............................................. 3.09
"Offer Period" ............................................. 3.09
"Paying Agent" ............................................. 2.03
"Payment Blockage Notice" .................................. 10.03
"Payment Default" .......................................... 6.01
"Permitted Debt" ........................................... 4.09
"Purchase Date" ............................................ 3.09
"Registrar" ................................................ 2.03
"Restricted Payments" ...................................... 4.07
Section 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
The following TIA term used in this Indenture has the following
meaning:
"obligor" on the Notes and the Subsidiary Guarantees means the Company
and the Guarantors, respectively, and any successor obligor upon the Notes and
the Subsidiary Guarantees, respectively.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
Section 1.04. Rules of Construction.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
26
(b) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and in the plural
include the singular;
(e) "will" shall be interpreted to express a command;
(f) provisions apply to successive events and transactions; and
(g) references to sections of or rules under the Securities Act
will be deemed to include substitute, replacement of successor sections or rules
adopted by the SEC from time to time.
ARTICLE 2.
THE NOTES
Section 2.01. Form and Dating.
(a) General. The Notes and the Trustee's certificate of
authentication will be substantially in the form of Exhibit A hereto. The Notes
may have notations, legends or endorsements required by law, stock exchange rule
or usage. Each Note will be dated the date of its authentication. The Notes
shall be in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes will constitute, and
are hereby expressly made, a part of this Indenture; and the Company, the
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture shall govern and be
controlling.
(b) Global Notes. Notes issued in global form will be substantially
in the form of Exhibit A-1 or A-2 attached 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 will be substantially in the
form of Exhibit A-1 attached 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 will represent such of the outstanding Notes as will
be specified therein and each shall provide that it represents the aggregate
principal amount of outstanding Notes from time to time endorsed thereon and
that the aggregate principal amount of outstanding Notes represented thereby may
from time to time be reduced or increased, as appropriate, to reflect exchanges
and redemptions. Any endorsement of a Global Note to reflect the amount of any
increase or decrease in the aggregate principal amount of outstanding Notes
represented thereby will be made by the Trustee or the Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.06 hereof.
(c) Temporary Global Notes. Notes offered and sold in reliance on
Regulation S will be issued initially in the form of the Regulation S Temporary
Global Note, which will be deposited on behalf of the purchasers of the Notes
represented thereby with the Trustee, at its New York office, as custodian for
the Depositary, and registered in the name of the Depositary or the nominee of
the Depositary for the accounts of designated agents holding on behalf of
Euroclear or Clearstream, duly executed by the Company and authenticated by the
Trustee as hereinafter provided. The Restricted Period will be terminated upon
the receipt by the Trustee of:
27
(i) a written certificate from the Depositary, together with
copies of certificates from Euroclear and Clearstream certifying that
they have received certification of non-United States beneficial
ownership of 100% of the aggregate principal amount of the Regulation S
Temporary Global Note (except to the extent of any beneficial owners
thereof who acquired an interest therein during the Restricted Period
pursuant to another exemption from registration under the Securities
Act and who will take delivery of a beneficial ownership interest in a
144A Global Note or an IAI Global Note bearing a Private Placement
Legend, all as contemplated by Section 2.06(a)(ii) hereof); and
(ii) an Officers' Certificate from the Company.
Following the termination of the Restricted Period, beneficial
interests in the Regulation S Temporary Global Note will be exchanged for
beneficial interests in Regulation S Permanent Global Notes pursuant to the
Applicable Procedures. Simultaneously with the authentication of Regulation S
Permanent Global Notes, the Trustee will cancel the Regulation S Temporary
Global Note. The aggregate principal amount of the Regulation S Temporary Global
Note and the Regulation S Permanent Global Notes 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.
(d) Euroclear and Clearstream Procedures Applicable. The provisions
of the "Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of
Clearstream" and "Customer Handbook" of Clearstream will be applicable to
transfers of beneficial interests in the Regulation S Temporary Global Note and
the Regulation S Permanent Global Notes that are held by Participants through
Euroclear or Clearstream.
Section 2.02. Execution and Authentication.
One Officer will sign the Notes for the Company by manual or facsimile
signature.
If an Officer whose signature is on a Note no longer holds that office
at the time a Note is authenticated, the Note will nevertheless be valid.
A Note will not be valid until authenticated by the manual signature of
the Trustee. The signature will be conclusive evidence that the Note has been
authenticated under this Indenture.
The Trustee will, upon a written order of the Company signed by an
Officer (an "Authentication Order"), authenticate Notes for original issue up to
the aggregate principal amount stated in paragraph 4 of the Initial Notes plus
the aggregate principal amount stated in paragraph 4 of any Additional Notes
permitted to be issued under this Indenture. The aggregate principal amount of
Notes outstanding at any time may not exceed such amount except as provided in
Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company 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 Company.
Section 2.03. Registrar and Paying Agent.
The Company will maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment
28
("Paying Agent"). The Registrar will keep a register of the Notes and of their
transfer and exchange. The Company may appoint one or more co-registrars and one
or more additional paying agents. The term "Registrar" includes any co-registrar
and the term "Paying Agent" includes any additional paying agent. The Company
may change any Paying Agent or Registrar without notice to any Holder. The
Company will notify the Trustee in writing of the name and address of any Agent
not a party to this Indenture. If the Company fails to appoint or maintain
another entity as Registrar or Paying Agent, the Trustee shall act as such. The
Company or any of its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Custodian with respect to the Global Notes.
Section 2.04. Paying Agent to Hold Money in Trust.
The Company will require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Liquidated Damages, if any, or interest on the Notes, and
will notify the Trustee of any default by the Company in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) will have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it will segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Company, the
Trustee will serve as Paying Agent for the Notes.
Section 2.05. Holder Lists.
The Trustee will preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA (S) 312(a). If the Trustee is
not the Registrar, the Company will furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA (S) 312(a).
Section 2.06. Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Company for Definitive Notes if:
(i) the Company delivers to the Trustee notice from the
Depositary that it is unwilling or unable to continue to act as
Depositary or that it is no longer a clearing agency registered under
the Exchange Act and, in either case, a successor Depositary is not
appointed by the Company within 120 days after the date of such notice
from the Depositary; or
29
(ii) the Company in its sole discretion determines that the
Global Notes (in whole but not in part) should be exchanged for
Definitive Notes and delivers a written notice to such effect to the
Trustee; provided that in no event shall the Regulation S Temporary
Global Note be exchanged by the Company for Definitive Notes prior to
(x) the expiration of the Restricted Period and (y) the receipt by the
Registrar of any certificates required pursuant to Rule
903(b)(3)(ii)(B) under the Securities Act.
Upon the occurrence of either of the preceding events in (i) or (ii)
above, Definitive Notes shall be issued in such names as the Depositary shall
instruct the Trustee. Global Notes also may be exchanged or replaced, in whole
or in part, as provided in Sections 2.07 and 2.10 hereof. Every Note
authenticated and delivered in exchange for, or in lieu of, a Global Note or any
portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof,
shall be authenticated and delivered in the form of, and shall be, a Global
Note. A Global Note may not be exchanged for another Note other than as provided
in this Section 2.06(a), 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
will be effected through the Depositary, in accordance with the provisions of
this Indenture and the Applicable Procedures. Beneficial interests in the
Restricted Global Notes will 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 will 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, however, 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 an Initial Purchaser).
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) above, the transferor of such beneficial interest must
deliver to the Registrar either (A) (1) a written order from a
Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to
credit or cause to be credited a beneficial interest in another Global
Note in an amount equal to the beneficial interest to be transferred or
exchanged and (2) instructions given in accordance with the Applicable
Procedures containing information regarding the Participant account to
be credited with such increase or (B) (1) a written order from a
Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to
cause to be issued a Definitive Note in an amount equal to the
beneficial interest to be transferred or exchanged and (2) instructions
given by the Depositary to the Registrar containing information
regarding the Person in whose name such Definitive Note shall be
registered to effect the transfer or exchange referred to in (1) above;
provided that in no event shall Definitive Notes be issued upon the
transfer or exchange of beneficial interests in the Regulation S
Temporary Global Note prior to (x) the expiration of the Restricted
Period and (y) the receipt by the Registrar of any
30
certificates required pursuant to Rule 903 under the Securities Act.
Upon consummation of an Exchange Offer by the Company in accordance
with Section 2.06(f) hereof, the 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) above and the
Registrar receives the following:
(A) if the transferee will take delivery in the form
of a beneficial interest in the 144A Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (1) thereof;
(B) if the transferee will take delivery in the form
of a beneficial interest in the Regulation S Temporary Global
Note or the Regulation S Permanent Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form
of a beneficial interest in the IAI Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications, certificates and Opinion
of Counsel required by item (3) thereof, if applicable.
(iv) Transfer and Exchange of Beneficial Interests in a
Restricted Global Note for Beneficial Interests in the 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) above and:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the holder of the beneficial interest to be
transferred, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of
Transmittal 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
Company;
(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:
31
(1) if the holder of such beneficial interest in
a Restricted Global Note proposes to exchange such
beneficial interest for a beneficial interest in an
Unrestricted Global Note, a certificate from such holder
in the form of Exhibit C 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, 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
Company shall issue and, upon receipt of an Authentication Order in accordance
with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be exchanged
for, or transferred to Persons who take delivery thereof in the form of, a
beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive
Notes.
(i) Beneficial Interests in Restricted Global Notes to
Restricted Definitive Notes. If any holder of a beneficial interest in
a Restricted Global Note proposes to exchange such beneficial interest
for a Restricted Definitive Note or to transfer such beneficial
interest to a Person who takes delivery thereof in the form of a
Restricted Definitive Note, then, upon receipt by the Registrar of the
following documentation:
(A) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Restricted Definitive Note, a certificate from
such holder in the form of Exhibit C 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 to the
effect set forth in 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 to the effect set forth
in 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
32
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred
to an Institutional Accredited Investor in reliance on an
exemption from the registration requirements of the Securities
Act other than those listed in subparagraphs (B) through (D)
above, a certificate to the effect set forth in Exhibit B
hereto, including the certifications, certificates and Opinion
of Counsel required by item (3) thereof, if applicable;
(F) if such beneficial interest is being transferred
to the Company or any of its Subsidiaries, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof; or
(G) if such beneficial interest is being transferred
pursuant to an effective registration statement under the
Securities Act, a certificate to the effect set forth in 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 Company shall execute and the Trustee shall
authenticate and deliver to the Person designated in the instructions a
Definitive Note in the appropriate principal amount. Any Definitive
Note issued in exchange for a beneficial interest in a Restricted
Global Note pursuant to this Section 2.06(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 deliver such Definitive Notes
to the Persons in whose names such Notes are so registered. Any
Definitive Note issued in exchange for a beneficial interest in a
Restricted Global Note pursuant to this Section 2.06(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 (x) the expiration of the Restricted Period and (y) the
receipt by the Registrar of any certificates required pursuant to Rule
903(b)(3)(ii)(B) under the Securities Act, except in the case of a
transfer pursuant to an exemption from the registration requirements of
the Securities Act other than Rule 903 or Rule 904.
(iii) Beneficial Interests in Restricted Global Notes to
Unrestricted Definitive Notes. A holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial interest
to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note only if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the holder of such beneficial interest, in the
case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal that
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 Company;
33
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest
in a Restricted Global Note proposes to exchange such
beneficial interest for a Definitive Note that does not
bear the Private Placement Legend, a certificate from
such holder 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 a Definitive Note that does not
bear the Private Placement Legend, 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.
(iv) Beneficial Interests in Unrestricted Global Notes to
Unrestricted Definitive Notes. If any holder of a beneficial interest
in an Unrestricted Global Note proposes to exchange such beneficial
interest for a Definitive Note or to transfer such beneficial interest
to a Person who takes delivery thereof in the form of a Definitive
Note, then, upon satisfaction of the conditions set forth in Section
2.06(b)(ii) hereof, the Trustee will cause the aggregate principal
amount of the applicable Global Note to be reduced accordingly pursuant
to Section 2.06(h) hereof, and the Company will execute and the Trustee
will authenticate and deliver to the Person designated in the
instructions a Definitive Note in the appropriate principal amount. Any
Definitive Note issued in exchange for a beneficial interest pursuant
to this Section 2.06(c)(iii) will be registered in such name or names
and in such authorized denomination or denominations as the holder of
such beneficial interest instructs the Registrar through instructions
to the Registrar from or through the Depositary and the Participant or
Indirect Participant. The Trustee will deliver such Definitive Notes to
the Persons in whose names such Notes are so registered. Any Definitive
Note issued in exchange for a beneficial interest pursuant to this
Section 2.06(c)(iii) will 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:
34
(A) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note, a certificate from such Holder in the
form of Exhibit C 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
to the effect set forth in 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 to the
effect set forth in 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 to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being
transferred to an Institutional Accredited Investor in reliance
on an exemption from the registration requirements of the
Securities Act other than those listed in subparagraphs (B)
through (D) above, a certificate to the effect set forth in
Exhibit B hereto, including the certifications, certificates and
Opinion of Counsel required by item (3) thereof, if applicable;
(F) if such Restricted Definitive Note is being
transferred to the Company or any of its Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof; or
(G) if such Restricted Definitive Note is being
transferred pursuant to an effective registration statement
under the Securities Act, a certificate to the effect set forth
in Exhibit B hereto, including the certifications in item (3)(c)
thereof,
the Trustee shall cancel such Restricted Definitive Note, increase or
cause to be increased the aggregate principal amount of, in the case of
clause (A) above, the appropriate Restricted Global Note, in the case
of clause (B) above, the 144A Global Note, in the case of clause (C)
above, the Regulation S Global Note, and in all other cases, the IAI
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 Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
35
(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 Note proposes
to exchange such Note for a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder
in the form of Exhibit C hereto, including the
certifications in item (1)(c) thereof; or
(2) if the Holder of such Definitive Note proposes
to transfer such Note to a Person who shall take
delivery thereof in the form of a beneficial interest in
the Unrestricted Global Note, a certificate from such
Holder in the form of Exhibit B 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 thesubparagraphs
in this Section 2.06(d)(ii), the Trustee will cancel the Definitive
Notes so transferred or exchanged and increase or cause to be increased
the aggregate principal amount of the applicable 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 Note to a Person who takes
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note at any time. Upon receipt of a request for
such an exchange or transfer, the Trustee will cancel the applicable
Unrestricted Definitive Note and increase or cause to be increased the
aggregate principal amount of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (ii)(B),
(ii)(D) or (iii) above at a time when an Unrestricted Global Note has
not yet been issued, the Company will issue and, upon receipt of an
Authentication Order in accordance with Section 2.02 hereof, the
Trustee will 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 will register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder will 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
will provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
36
(i) Restricted Definitive Notes to Restricted Definitive
Notes. Any Restricted Definitive Note may be transferred to and
registered in the name of Persons who take delivery thereof in the form
of a Restricted Definitive Note if the Registrar receives the
following:
(A) if the transfer will be made pursuant to Rule 144A
then the transferor must deliver a certificate 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; and
(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, certificates
and Opinion of Counsel required by item (3) thereof, if
applicable.
(ii) Restricted Definitive Notes to Unrestricted Definitive
Notes. Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted Definitive Note or transferred to a Person
or Persons who take delivery thereof in the form of an Unrestricted
Definitive Note if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement, and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that 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 Company;
(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 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 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, an Opinion of Counsel in form
reasonably acceptable to the Company to the effect that such
exchange or transfer is in compliance with the Securities Act
and that the restrictions on
37
transfer contained herein and in the Private Placement Legend
are no longer required in order to maintain compliance with the
Securities Act.
(iii) Unrestricted Definitive Notes to Unrestricted Definitive
Notes. A Holder of Unrestricted Definitive Notes may transfer such
Notes to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note. Upon receipt of a request to register
such a transfer, the Registrar shall register the Unrestricted
Definitive Notes pursuant to the instructions from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company will issue and,
upon receipt of an Authentication Order in accordance with Section 2.02, the
Trustee will authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered into the Exchange Offer 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
Company and (ii) Unrestricted Definitive Notes in an aggregate principal amount
equal to the principal amount of the Restricted Definitive Notes accepted for
exchange in the Exchange Offer. Concurrently with the issuance of such Notes,
the Trustee will cause the aggregate principal amount of the applicable
Restricted Global Notes to be reduced accordingly, and the Company will execute
and the Trustee will authenticate and deliver to the Persons designated by the
Holders of Definitive Notes so accepted Definitive Notes in the appropriate
principal amount.
(g) Legends. The following legends will 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:
"THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, RESOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS NOTE IS NOTIFIED THAT THE SELLER OF THIS NOTE
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS NOTE
MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) INSIDE THE
UNITED STATES TO A PERSON WHOM 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, (II) OUTSIDE THE UNITED
STATES IN A TRANSACTION COMPLYING WITH THE PROVISIONS OF RULE 904 UNDER THE
SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 (IF AVAILABLE), (IV) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
38
ACT, OR (V) TO THE ISSUER, ITS SUBSIDIARIES OR ITS DIRECT OR INDIRECT PARENT, IN
EACH OF CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE."
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(iv),
(c)(iii), (c)(iv), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f)
to this Section 2.06 (and all Notes issued in exchange therefor
or substitution thereof) will not bear the Private Placement
Legend.
(ii) Global Note Legend. Each Global Note will bear a legend
in substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 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 COMPANY.
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 COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS 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 will bear a legend in substantially
the following form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF INTEREST HEREON."
39
(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 will 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 will be
reduced accordingly and an endorsement will 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 will be increased accordingly and
an endorsement will 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
Company will execute and the Trustee will authenticate Global Notes and
Definitive Notes upon receipt of an Authentication Order in accordance
with Section 2.02 or at the Registrar's request.
(ii) No service charge will be made to a Holder of a Global
Note or to a Holder of a Definitive Note for any registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax or similar governmental charge
payable in connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchange or transfer pursuant
to Sections 2.10, 3.06, 3.09, 4.10, 4.15 and 9.05 hereof).
(iii) The Registrar will not be required to register the
transfer of or exchange any Note selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive
Notes will be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the
Global Notes or Definitive Notes surrendered upon such registration of
transfer or exchange.
(v) The Company will 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 and the next succeeding interest payment date.
(vi) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Company may deem
and treat the Person in whose name any Note is registered as the
absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Notes and for all other purposes, and
none of the Trustee, any Agent or the Company shall be affected by
notice to the contrary.
(vii) The Trustee will authenticate Global Notes and
Definitive Notes in accordance with the provisions of Section 2.02
hereof.
40
(viii) 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.
Section 2.07. Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Company and
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, the Company will issue and the Trustee, upon receipt of an
Authentication Order, will authenticate a replacement Note if the Trustee's
requirements are met. If required by the Trustee or the Company, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Company or, if applicable, the Trustee may charge the Holder of
any lost or mutilated Note for its expenses in replacing a Note. In the event
any such Note shall have matured, instead of issuing a replacement Note as
provided above, the Trustee may pay the same upon receipt by the Company and the
Trustee of indemnity satisfactory to each of them.
Every replacement Note is an additional obligation of the Company and
will 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 as not outstanding. Except as set forth in Section 2.09 hereof, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note; however, Notes held by the Company or a Subsidiary of
the Company shall not be deemed to be outstanding for purposes of Section
3.07(a)(i) hereof.
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.
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 Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes will be deemed to be no longer outstanding and will 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
Company, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company, will be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee will be protected in relying on any such direction, waiver or consent,
only Notes that the Trustee knows are so owned will be so disregarded.
41
Section 2.10. Temporary Notes.
Until certificates representing Notes are ready for delivery, the
Company may prepare and the Trustee, upon receipt of an Authentication Order,
will authenticate temporary Notes. Temporary Notes will be substantially in the
form of certificated Notes but may have variations that the Company considers
appropriate for temporary Notes and as will be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company will prepare and the Trustee
will authenticate definitive Notes in exchange for temporary Notes.
Holders of temporary Notes will be entitled to all of the benefits of
this Indenture.
Section 2.11. Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent will forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else will cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and will destroy
canceled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all canceled Notes will be delivered
to the Company. The Company may not issue new Notes to replace Notes that it has
paid or that have been delivered to the Trustee for cancellation.
Section 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, the
Company will pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Notes and in Section 4.01 hereof. The Company will notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note and
the date of the proposed payment. The Company will fix or cause to be fixed each
such special record date and payment date, provided that no such special record
date will be less than 10 days prior to the related payment date for such
defaulted interest. At least 15 days before the special record date, the Company
(or, upon the written request of the Company, the Trustee in the name and at the
expense of the Company) will mail or cause to be mailed to Holders a notice that
states the special record date, the related payment date and the amount of such
interest to be paid.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it will furnish to the Trustee, at
least 35 days, but not more than 60 days before a redemption date, an Officers'
Certificate setting forth (i) the clause of this Indenture pursuant to which the
redemption shall occur, (ii) the redemption date, (iii) the principal amount of
Notes to be redeemed and (iv) the redemption price.
Section 3.02. Selection of Notes to Be Redeemed or Purchased.
If less than all of the Notes are to be redeemed or purchased in an
offer to purchase at any time, the Trustee will select Notes for redemption or
repurchase as follows:
42
(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; or
(b) if the Notes are not listed on any national securities exchange,
on a pro rata basis, by lot or by such method as the Trustee deems fair and
appropriate.
In the event of partial redemption or purchase by lot, the particular Notes to
be redeemed or purchased will be selected, unless otherwise provided herein, not
less than 30 nor more than 60 days prior to the redemption or purchase date by
the Trustee from the outstanding Notes not previously called for redemption or
purchase.
The Trustee will promptly notify the Company in writing of the Notes
selected for redemption or purchase and, in the case of any Note selected for
partial redemption or purchase, the principal amount thereof to be redeemed or
repurchased. Notes and portions of Notes selected will be in amounts of $1,000
or whole multiples of $1,000; except that if all of the Notes of a Holder are to
be redeemed, the entire outstanding amount of Notes held by such Holder, even if
not a multiple of $1,000, shall be redeemed or purchased. Except as provided in
the preceding sentence, provisions of this Indenture that apply to Notes called
for redemption or purchase also apply to portions of Notes called for redemption
or purchase.
Section 3.03. Notice of Redemption.
Subject to the provisions of Section 3.09 hereof, at least 30 days but
not more than 60 days before a redemption date, the Company will mail or cause
to be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address, except that redemption
notices may be mailed more than 60 days prior to a redemption date if the notice
is issued in connection with a defeasance of the Notes or a satisfaction and
discharge of this Indenture pursuant to Article 8 of this Indenture.
The notice will identify the Notes to be redeemed and will state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption date
upon surrender of such Note, a new Note or Notes in principal amount equal to
the unredeemed portion will be issued 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 Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and after
the redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the Notes.
43
At the Company's request, the Trustee will give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company has delivered to the Trustee, at least 45 days prior to the redemption
date, an Officers' Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in such notice as provided in the
preceding paragraph.
Section 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.
Section 3.05. Deposit of Redemption or Purchase Price.
One Business Day prior to the redemption or purchase date, the Company
will deposit with the Trustee or with the Paying Agent money sufficient to pay
the redemption or purchase price of and accrued interest and Liquidated Damages,
if any, on all Notes to be redeemed or purchased on that date. The Trustee or
the Paying Agent will promptly return to the Company any money deposited with
the Trustee or the Paying Agent by the Company in excess of the amounts
necessary to pay the redemption or purchase price of, and accrued interest and
Liquidated Damages, if any, on, all Notes to be redeemed or purchased.
If the Company complies with the provisions of the preceding paragraph,
on and after the redemption or purchase date, interest will cease to accrue on
the Notes or the portions of Notes called for redemption or purchase. If a Note
is redeemed or purchased on or after an interest record date but on or prior to
the related interest payment date, then any accrued and unpaid interest shall be
paid to the Person in whose name such Note was registered at the close of
business on such record date. If any Note called for redemption or purchase is
not so paid upon surrender for redemption because of the failure of the Company
to comply with the preceding paragraph, interest shall be paid on the unpaid
principal, from the redemption or purchase date until such principal is paid,
and to the extent lawful on any interest not paid on such unpaid principal, in
each case at the rate provided in the Notes and in Section 4.01 hereof.
Section 3.06. Notes Redeemed or Purchased in Part.
Upon surrender of a Note that is redeemed or purchased in part, the
Company will issue and, upon receipt of an Authentication Order, the Trustee
will authenticate for the Holder at the expense of the Company a new Note equal
in principal amount to the unredeemed or unpurchased portion of the Note
surrendered.
Section 3.07. Optional Redemption.
(a) At any time prior to July 15, 2005, the Company may on any one
or more occasions redeem up to 35% of the aggregate principal amount of Notes
issued under this Indenture at a redemption price of 110.125% of the principal
amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any,
thereon to the applicable redemption date, with all or a portion of the net cash
proceeds of one or more Public Equity Offerings; provided that:
(i) at least 65% of the aggregate principal amount of Notes
issued under this Indenture remains outstanding immediately after the
occurrence of such redemption (excluding Notes held by the Company and
its Affiliates); and
44
(ii) the redemption occurs within 90 days of the date of the
closing of such Public Equity Offering.
(b) Except pursuant to the preceding paragraph, the Notes will not
be redeemable at the Company's option prior to July 15, 2007.
(c) On or after July 15, 2007, the Company may redeem all or a part
of the Notes upon not less than 30 nor more than 60 days' notice, at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest and Liquidated Damages, if any, on the Notes
redeemed, to the applicable redemption date, if redeemed during the twelve-month
period beginning on July 15 of the years indicated below:
Year Percentage
2007 .................................... 105.063%
2008 .................................... 103.375%
2009 .................................... 101.688%
2010 and thereafter ..................... 100.000%
(d) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Section 3.01 through 3.06 hereof.
Section 3.08. Mandatory Redemption.
The Company is not required to make mandatory redemption payments with
respect to the Notes.
Section 3.09. Offer to Purchase by Application of Excess Proceeds.
In the event that, pursuant to Section 4.10 hereof, the Company is
required to commence an offer to all Holders to purchase Notes (an "Asset Sale
Offer"), it will follow the procedures specified below.
The Asset Sale Offer shall be made to all Holders and all holders of
other Indebtedness that is pari passu with the Notes containing provisions
similar to those set forth in this Indenture with respect to offers to purchase
or redeem with the proceeds of sales of assets. The Asset Sale Offer will remain
open for a period of at least 20 Business Days following its commencement and
not more than 30 Business Days, 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
Company will apply all Excess Proceeds (the "Offer Amount") to the purchase of
Notes and such other pari passu indebtedness (on a pro rata basis, if
applicable) or, if less than the Offer Amount has been tendered, all Notes and
other Indebtedness tendered in response to the Asset Sale Offer. Payment for any
Notes so purchased will be made in the same manner as interest payments are
made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest, and
Liquidated Damages, if any, will 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 will be payable to Holders who tender Notes pursuant to the Asset Sale
Offer.
Upon the commencement of an Asset Sale Offer, the Company will send, by
first class mail, a notice to the Trustee and each of the Holders, with a copy
to the Trustee. The notice will contain all instructions and materials necessary
to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The
notice, which will govern the terms of the Asset Sale Offer, will state:
45
(a) 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 will
remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment will continue
to accrue interest;
(d) that, unless the Company defaults in making such payment, any
Note accepted for payment pursuant to the Asset Sale Offer will cease to accrue
interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to an
Asset Sale Offer may elect to have Notes purchased in integral multiples of
$1,000 only;
(f) that Holders electing to have a Note purchased pursuant to any
Asset Sale Offer will be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, or
transfer by book-entry transfer, to the Company, a depositary, if appointed by
the Company, or a Paying Agent at the address specified in the notice at least
three days before the Purchase Date;
(g) that Holders will be entitled to withdraw their election if the
Company, the depositary or the Paying Agent, as the case may be, receives, not
later than the expiration of the Offer Period, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Note the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes and other pari
passu Indebtedness, as the case may be, surrendered by Holders or holders of
such pari passu Indebtedness exceeds the Offer Amount, the Company will select
the Notes and other pari passu Indebtedness to be purchased on a pro rata basis
based on the principal amount of Notes and such other pari passu Indebtedness
surrendered (with such adjustments as may be deemed appropriate by the Company
so that only Notes in denominations of $1,000, or integral multiples thereof,
will be purchased); and
(i) that Holders whose Notes were purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion of the
Notes surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Company will, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Notes and any pari passu Indebtedness or portions thereof tendered
pursuant to the Asset Sale Offer, or if less than the Offer Amount has been
tendered, all Notes and other pari passu Indebtedness tendered, and will deliver
to the Trustee an Officers' Certificate stating that such Notes and pari passu
Indebtedness or portions thereof were accepted for payment by the Company in
accordance with the terms of this Section 3.09. The Company, the Depositary or
the Paying Agent, as the case may be, will promptly (but in any case not later
than five days after the Purchase Date) mail or deliver to each tendering Holder
an amount equal to the purchase price of the Notes tendered by such Holder and
accepted by the Company for purchase, and the Company will promptly issue a new
Note, and the Trustee, upon written request from the Company will authenticate
and mail or deliver such new Note to such Holder, in a principal amount equal to
any unpurchased portion of the Note surrendered. Any Note not so accepted shall
be promptly mailed or delivered by the Company to the Holder thereof. The
Company will publicly announce the results of the Asset Sale Offer on the
Purchase Date.
46
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
ARTICLE 4.
COVENANTS
Section 4.01. Payment of Notes.
The Company will pay or cause to be paid the principal of, premium, if
any, and interest and Liquidated Damages, if any, on the Notes on the dates and
in the manner provided in the Notes. Principal, premium, if any, and interest
and Liquidated Damages, if any, will be considered paid on the date due if the
Paying Agent, if other than the Company or a Subsidiary thereof, holds as of
12:00 p.m. Eastern Time on the due date money deposited by the Company in
immediately available funds and designated for and sufficient to pay all
principal, premium, if any, and interest then due. The Company will pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement.
The Company will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace period) at the same
rate to the extent lawful.
Section 4.02. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
will fail to maintain any such required office or agency or will 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 Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission will in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company will give 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 Company hereby designates the Corporate Trust Office of the Trustee
as one such office or agency of the Company in accordance with Section 2.03.
Section 4.03. Reports
(a) Whether or not required by the SEC, so long as any Notes are
outstanding, the Company will furnish to the Holders of Notes, within the time
periods specified in the SEC's rules and regulations:
(i) all quarterly and annual financial information that
would be required to be contained in a filing with the SEC on Forms
10-Q and 10-K if the Company were required to file
47
such forms, including a "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and, with respect to the
annual information only, a report on the annual financial statements by
the Company's certified independent accountants; and
(ii) all current reports that would be required to be filed
with the SEC on Form 8-K if the Company were required to file such
reports.
If the Company has designated any of its Subsidiaries as Unrestricted
Subsidiaries, then the quarterly and annual financial information required by
the preceding sentence will include a reasonably detailed presentation, either
on the face of the financial statements or in the footnotes thereto, and in
Management's Discussion and Analysis of Financial Condition and Results of
Operations, of the financial condition and results of operations of the Company
and its Restricted Subsidiaries separate from the financial condition and
results of operations of the Unrestricted Subsidiaries of the Company. The
Company will be deemed to have satisfied such requirements if Parent files and
provides reports, documents and information of the types otherwise required by
this paragraph and the preceding paragraph within the applicable time periods
and the Company is not required to file such reports, documents and information
separately under the applicable rules and regulations of the SEC (after giving
effect to any exemptive relief) because of the filings by Parent. In addition,
following consummation of the Exchange Offer, whether or not required by the
SEC, the Company will file a copy of all of the information and reports referred
to in clauses (i) and (ii) above with the SEC for public availability within the
time periods specified in the SEC's rules and regulations (unless the SEC will
not accept such a filing) and make such information available to securities
analysts and prospective investors upon request. The Company shall at all times
comply with TIA (S) 314(a).
(b) For so long as any Notes remain outstanding, the Company and the
Guarantors will furnish to the Holders and to securities analysts and
prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
Section 4.04. Compliance Certificate.
(a) The Company and each Guarantor (to the extent that such
Guarantor is so required under the TIA) shall deliver to the Trustee, within 90
days after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries and, to the extent
applicable, Parent, during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under this
Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Company has kept,
observed, performed and fulfilled each and every covenant contained in this
Indenture and that there is no default in the performance or observance of any
of the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default will have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action the Company is
taking or proposes to take with respect thereto) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such
48
violation has occurred, specifying the nature and period of existence thereof,
it being understood that such accountants shall not be liable directly or
indirectly to any Person for any failure to obtain knowledge of any such
violation.
(c) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.
Section 4.05. Taxes.
The Company will pay, and will 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 proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders of the Notes.
Section 4.06. Stay, Extension and Usury Laws.
The Company and each of the Guarantors covenants (to the extent that it
may lawfully do so) that it will not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company and
each of the Guarantors (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law has been enacted.
Section 4.07. Restricted Payments.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend or make any other payment or
distribution on account of the Company's or any of its Restricted
Subsidiaries' Equity Interests (including, without limitation, any
payment in connection with any merger or consolidation involving the
Company or any of its Restricted Subsidiaries) or to the direct or
indirect holders of the Company's or any of its Restricted
Subsidiaries' Equity Interests in their capacity as such (other than
dividends or distributions payable in Equity Interests (other than
Disqualified Stock) of the Company and other than dividends or
distributions payable to the Company or a Restricted Subsidiary of the
Company);
(ii) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or
consolidation involving the Company) any Equity Interests of the
Company or any direct or indirect parent of the Company (other than any
such Equity Interests owned by the Company or any of its Restricted
Subsidiaries);
(iii) make any payment on or with respect to, or purchase,
redeem, defease or otherwise acquire or retire for value any
Indebtedness that is subordinated to the Notes or the Subsidiary
Guarantees, except a payment of interest or principal at the Stated
Maturity thereof (except for payments into a trust within one year of
the Stated Maturity of any such subordinated Indebtedness which
payments effect a defeasance or discharge of such Indebtedness); or
49
(iv) make any Restricted Investment (all such payments and
other actions set forth in these clauses (i) through (iv) above being
collectively referred to as "Restricted Payments"),
unless, at the time of and after giving effect to such Restricted
Payment:
(a) no Default or Event of Default has occurred and is
continuing or would occur as a consequence of such Restricted
Payment; and
(b) the Company would, at the time of such Restricted
Payment and after giving pro forma effect thereto as if such
Restricted Payment had been made at the beginning of the
applicable four-quarter period, have been permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Leverage
Ratio test set forth in the first paragraph of Section 4.09; and
(c) such Restricted Payment, together with the
aggregate amount of all other Restricted Payments made by the
Company and its Restricted Subsidiaries after the date of this
Indenture (excluding Restricted Payments permitted by clauses
(2), (3), (4), (5), (7), (8), (9), (10) and, to the extent that
any payment made by Parent pursuant to the terms of the
Management Incentive Contracts reduces Consolidated Net Income
of the Company, (11) of Section 4.07(b)), is less than the sum,
without duplication, of:
(i) 50% of the aggregate Consolidated Net Income of
the Company (or, in the event such Consolidated Net
Income shall be a deficit, minus 100% of such deficit)
accrued for the period beginning July 1, 2002 and ending
on the last day of the Company's most recent calendar
month for which financial information is available to
the Company ending prior to the date of such proposed
Restricted Payment, taken as one accounting period, plus
(ii) 100% of the aggregate net cash proceeds received
by the Company since the date of this Indenture from the
issue or sale of Equity Interests of the Company (other
than Disqualified Stock) or Disqualified Stock or debt
securities of the Company that have been converted into
such Equity Interests (other than (x) Equity Interests
(or Disqualified Stock or convertible debt securities)
sold to a Restricted Subsidiary and (y) Disqualified
Stock or convertible debt securities that have been
converted into Disqualified Stock), plus
(iii) 100% of the net cash proceeds received by the
Company as bona fide equity capital contributions since
the date of this Indenture, plus
(iv) the aggregate amount returned in cash with respect
to Restricted Investments made after the date of this
Indenture whether through interest payments, principal
payments, dividends or other distributions, plus
(v) the net cash proceeds received by the Company or
any of its Restricted Subsidiaries from the disposition
(other than to a Restricted Subsidiary), retirement or
redemption of all or any portion of Restricted
Investments made after the date of this Indenture, plus
(vi) 100% of any cash dividends or other cash
distributions received by the Company or a Wholly Owned
Restricted Subsidiary after the date of this Indenture
from an Unrestricted Subsidiary to the extent that such
dividends or
50
distributions were not otherwise included in
Consolidated Net Income for such period and to the
extent that such dividends or distributions do not
represent payments in respect of taxes attributable to
the activities of such Unrestricted Subsidiary.
(b) The provisions of Section 4.07(a) will not prohibit:
(1) the payment of any dividend within 60 days after
the date of declaration of the dividend, if at the date
of declaration the dividend payment would have complied
with the provisions of this Indenture;
(2) the redemption, repurchase, retirement, defeasance
or other acquisition of any subordinated Indebtedness of
the Company or any Guarantor or of any Equity Interests
of the Company in exchange for, or out of the net cash
proceeds of the substantially concurrent sale (other
than to a Restricted Subsidiary of the Company) of,
Equity Interests of the Company (other than Disqualified
Stock); provided that the amount of any such net cash
proceeds that are utilized for any such redemption,
repurchase, retirement, defeasance or other acquisition
shall be excluded from clause (c)(ii) of the preceding
paragraph;
(3) the defeasance, redemption, repurchase or other
acquisition of subordinated Indebtedness of the Company
or any Guarantor with the net cash proceeds from an
incurrence of Permitted Refinancing Indebtedness;
(4) the declaration and payment of any dividend by a
Restricted Subsidiary of the Company to the holders of
such Restricted Subsidiary's Equity Interests on a pro
rata basis;
(5) the declaration and payment of dividends or
distributions or the making of loans by the Company to
Parent in an amount not to exceed the Permitted
Shareholder Tax Distributions and the Permitted Holdings
Tax Distributions, but only if at the time of any such
declaration, dividend, distribution or loan Parent was
an S Corporation or a substantially similar pass-through
entity for federal income tax purposes and a QSSS
Election was in effect for the Company;
(6) the declaration and payment of any dividends or
distributions or the making of any loans by the Company
or any of its Restricted Subsidiaries to Parent to be
used for, and in an amount equal to, the amount of any
dividends or distributions paid or loans made by Parent
to, or the repurchase of any Equity Interests of Parent
from, the Principals or their Related Parties, provided
that the aggregate amount of all such dividends,
distributions and loans to Parent do not exceed $1.0
million in any calendar year;
(7) the repurchase of Equity Interests of the Company
or any of its Restricted Subsidiaries deemed to occur
upon the exercise of stock options upon surrender of
Equity Interests to pay the exercise price of such
options;
(8) the declaration and payment of any dividends or
distributions or the making of any loans to Parent in an
amount not to exceed $1.0 million in any calendar year
to permit Parent to pay its corporate costs and expenses
incurred in the ordinary course of business;
51
(9) the retirement of any shares of Disqualified Stock
of the Company by conversion into, or by exchange for,
shares of Disqualified Stock of the Company, or out of
the net cash proceeds of the substantially concurrent
sale (other than to a Restricted Subsidiary of the
Company) of other shares of Disqualified Stock of the
Company; provided that the Disqualified Stock of the
Company that replaces the retired shares of Disqualified
Stock of the Company shall not require the direct or
indirect payment of the liquidation preference earlier
in time than the final stated maturity of the retired
shares of Disqualified Stock of the Company;
(10) the cancellation or forgiveness of any loan
between the Company and/or its Affiliates existing on
the date of this Indenture or any loan permitted by
subparagraphs (5), (6) and (8) above and (11) below (it
being understood that any forgiveness or cancellation of
such loans made in connection with any Permitted
Holdings Tax Distribution or Permitted Shareholder Tax
Distribution shall not reduce the amount of subsequent
Permitted Holdings Tax Distributions or Permitted
Shareholder Tax Distributions); and
(11) the declaration and payment of any dividends or
distributions or the making of any loans to Parent for
payments required to be made pursuant to the terms of
the Management Incentive Contracts in an aggregate
amount not to exceed $15.0 million.
The declaration and payment of any dividends or distributions or the
making of any loans to Parent permitted by (i) subparagraph (5) above shall not
be permitted pursuant thereto at any time when Parent is not an S Corporation or
substantially similar pass-through entity for federal income tax purposes and
(ii) subparagraphs (6) and (11) above shall not be permitted pursuant thereto at
any time following any underwritten primary public offering of common stock of
the Company or Parent.
The amount of all Restricted Payments (other than cash) will be the
fair market value on the date of the Restricted Payment of the assets or
securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any assets or securities that are required to be valued
by this Section 4.07 will be determined by the Board of Directors whose
resolution with respect thereto shall be delivered to the Trustee. The Board of
Directors' determination must be based upon an opinion or appraisal issued by an
accounting, appraisal or investment banking firm of national standing if the
fair market value exceeds $10.0 million.
Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(a) pay dividends or make any other distributions on its Capital
Stock to the Company or any of its Restricted Subsidiaries, or with respect to
any other interest or participation in, or measured by, its profits, or pay any
indebtedness owed to the Company or any of its Restricted Subsidiaries;
(b) make loans or advances to the Company or any of its Restricted
Subsidiaries; or
(c) transfer any of its properties or assets to the Company or any
of its Restricted Subsidiaries.
52
However, the preceding restrictions will not apply to encumbrances or
restrictions existing under or by reason of:
(i) agreements governing Existing Indebtedness and Credit
Facilities as in effect on the date of this Indenture and any
amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings of those
agreements; provided that the amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacement or
refinancings are not materially less favorable to the Holders than
those contained in those agreements on the date of this Indenture;
(ii) agreements governing Senior Debt permitted to be
incurred under this Indenture; provided, that provisions relating to
such encumbrances or restrictions are no more restrictive, taken as a
whole, than those provisions contained in the Credit Agreement on the
date of this Indenture;
(iii) this Indenture, the Notes and the Subsidiary Guarantees;
(iv) applicable law, rule, regulation or order;
(v) any instrument governing Indebtedness or Capital Stock
of a Person acquired by the Company or any of its Restricted
Subsidiaries as in effect at the time of such acquisition (except to
the extent such Indebtedness or Capital Stock was incurred in
connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired; provided that, in the
case of Indebtedness, such Indebtedness was permitted by the terms of
this Indenture to be incurred;
(vi) customary non-assignment provisions in leases and other
agreements entered into in the ordinary course of business;
(vii) purchase money obligations (including Capital Lease
Obligations) for property acquired in the ordinary course of business
that impose restrictions on that property of the nature described in
clause (c) of the preceding paragraph;
(viii) Permitted Refinancing Indebtedness; provided that the
restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are no more restrictive, taken as a whole,
than those contained in the agreements governing the Indebtedness being
refinanced;
(ix) Liens securing Indebtedness or other obligations
otherwise permitted to be incurred under the provisions of Section 4.12
that limit the right of the debtor to dispose of the assets subject to
such Liens;
(x) provisions with respect to the disposition or
distribution of assets or property in joint venture agreements, asset
sale agreements, stock sale agreements and other similar agreements
entered into in the ordinary course of business;
(xi) restrictions on cash or other deposits or net worth
imposed by customers under contracts or net worth provisions contained
in leases and other agreements entered into in the ordinary course of
business;
53
(xii) provisions contained in the Parent Securities Purchase
Documents; provided, however, that any amendment or modification of
such provisions after the date of this Indenture shall be no more
restrictive, taken as a whole, than those provisions contained in the
Parent Securities Purchase Documents on the date of this Indenture; and
(xiii) customary restrictions with respect to a Restricted
Subsidiary pursuant to an agreement entered into for the sale or
disposition of all or substantially all of the Capital Stock or assets
of such Restricted Subsidiary pending the closing of such sale or
disposition; provided, that such restrictions apply solely to the
Capital Stock or assets of the Restricted Subsidiary that is being
sold.
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt), and the Company will not issue any Disqualified Stock and will not permit
any of its Restricted Subsidiaries to issue any shares of preferred stock;
provided, however, that the Company or any Guarantor may incur Indebtedness
(including Acquired Debt) or issue Disqualified Stock or preferred stock if the
Company's Leverage Ratio at the time of incurrence of such Indebtedness or the
issuance of such Disqualified Stock or such preferred stock, as the case may be,
after giving pro forma effect to such incurrence or issuance as of such date and
to the use of proceeds therefrom, as if the same had occurred at the beginning
of the most recently ended four fiscal quarter period of the Company for which
internal financial statements are available, would have been no greater than 7.0
to 1.
The provisions of the first paragraph of this Section 4.09 will not
prohibit the incurrence of any of the following items of Indebtedness
(collectively, "Permitted Debt"):
(i) the incurrence by the Company or any Restricted
Subsidiary of Indebtedness and letters of credit under Credit
Facilities in an aggregate principal amount at any one time outstanding
under this clause (i) (with letters of credit being deemed to have a
principal amount equal to the maximum potential liability of the
Company and its Subsidiaries thereunder) not to exceed $150.0 million
less the aggregate amount of all Net Proceeds of Asset Sales and
Relocations applied by the Company or any of its Restricted
Subsidiaries after the date of this Indenture to repay any term
Indebtedness under a Credit Facility or to repay any revolving credit
Indebtedness under a Credit Facility and effect a corresponding
commitment reduction thereunder, in each case for both such term
Indebtedness and such revolving credit Indebtedness pursuant to Section
4.10;
(ii) the incurrence by the Company and its Restricted
Subsidiaries of the Existing Indebtedness;
(iii) the incurrence by the Company and the Guarantors of
Indebtedness represented by the Notes and the related Subsidiary
Guarantees to be issued on the date of this Indenture and the Exchange
Notes and the related Subsidiary Guarantees to be issued pursuant to
the Registration Rights Agreement;
(iv) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case,
incurred for the purpose of financing all or any part of the purchase
price or cost of construction or improvement of property, plant or
equipment used in the business
54
of the Company or such Restricted Subsidiary (whether through the
direct purchase of assets or through the acquisition of at least a
majority of the Voting Stock of any Person owning such assets), in an
aggregate principal amount, including all Permitted Refinancing
Indebtedness incurred to refund, refinance or replace any Indebtedness
incurred pursuant to this clause (iv), not to exceed $10.0 million at
any time outstanding;
(v) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or
the net proceeds of which are used to refund, refinance or replace,
Indebtedness (other than intercompany Indebtedness) that was permitted
by this Indenture to be incurred under the first paragraph of this
Section 4.09 or any of clauses (ii), (iii), (iv), (v), (viii), (ix) or
(xi) of this paragraph;
(vi) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company
and any of its Wholly Owned Restricted Subsidiaries; provided, however,
that (a) if the Company or any Guarantor is the obligor on such
Indebtedness, such Indebtedness must be (i) unsecured and (ii) if the
obligee is neither the Company nor a Guarantor, expressly subordinated
to the prior payment in full in cash of all obligations with respect to
the Notes (in the case of the Company) or the related Subsidiary
Guarantee (in the case of a Guarantor); and (b) any subsequent issuance
or transfer of Equity Interests that results in any such Indebtedness
being held by a Person other than the Company or a Subsidiary of the
Company and any sale or other transfer of any such Indebtedness to a
Person that is not either the Company or a Restricted Subsidiary of the
Company will be deemed, in each case, to constitute an incurrence of
such Indebtedness by the Company or such Restricted Subsidiary, as the
case may be, that was not permitted by this clause (vi);
(vii) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred for the purpose
of hedging (x) interest rate risk with respect to Indebtedness of the
Company or any Restricted Subsidiary permitted to be incurred under
this Indenture and which shall have a notional amount no greater than
the payments due with respect to the Indebtedness being hedged thereby,
or (y) currency exchange rate risk in connection with then existing
financial obligations or the acquisition of goods or services and not
for purposes of speculation;
(viii) guarantees provided pursuant to Section 4.17 and the
guarantee by the Company or any Restricted Subsidiary of Indebtedness
of the Company or a Restricted Subsidiary of the Company that was
permitted to be incurred by another provision of this Section 4.09;
(ix) Indebtedness incurred by the Company or any of its
Restricted Subsidiaries constituting reimbursement obligations with
respect to letters of credit issued in the ordinary course of business,
including, without limitation, letters of credit in respect to workers'
compensation claims or self-insurance, or other Indebtedness with
respect to reimbursement type obligations regarding workers'
compensation claims; provided, however, that upon the drawing of such
letters of credit or the incurrence of such Indebtedness, such
obligations are reimbursed within 30 days following such drawing or
incurrence;
(x) Obligations in respect of performance and surety bonds
and completion guarantees provided by the Company or any of its
Restricted Subsidiaries in the ordinary course of business;
(xi) Acquisition Debt of the Company or any Restricted
Subsidiary if (w) such Acquisition Debt is incurred within 365 days
after the date on which the related definitive
55
acquisition agreement was entered into by the Company or such
Restricted Subsidiary, (x) the aggregate principal amount of such
Acquisition Debt is no greater than the aggregate principal amount of
Acquisition Debt set forth in a notice from the Company to the Trustee
(an "Incurrence Notice") within 30 days after the date on which the
related definitive acquisition agreement was entered into by the
Company or such Restricted Subsidiary, which notice shall be executed
on the Company's behalf by an executive officer of the Company in such
capacity and shall describe in reasonable detail the acquisition that
such Acquisition Debt will be incurred to finance, (y) after giving pro
forma effect to the acquisition described in such Incurrence Notice,
the Company or such Restricted Subsidiary could have incurred such
Acquisition Debt under this Indenture, including compliance with the
first paragraph of this Section 4.09, as of the date upon which the
Company delivers such Incurrence Notice to the Trustee and (z) such
Acquisition Debt is utilized solely to finance the acquisition
described in such Incurrence Notice and any other pending acquisitions
previously described in one or more Incurrence Notices and which
satisfy the foregoing provisions (including to repay or refinance
indebtedness or other obligations incurred in connection with such
acquisition and to pay related fees and expenses); provided, however,
that any Incurrence Notice given hereunder may be withdrawn or the
amount of Acquisition Debt referred to therein may be reduced at any
time prior to the incurrence of such Acquisition Debt;
(xii) the incurrence by the Company's Unrestricted
Subsidiaries of Non-Recourse Debt, provided, however, that if any such
Indebtedness ceases to be Non-Recourse Debt of an Unrestricted
Subsidiary, such event will be deemed to constitute an incurrence of
Indebtedness by a Restricted Subsidiary of the Company that was not
permitted by this clause (xii);
(xiii) the incurrence by the Company or any Restricted
Subsidiary of Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument
inadvertently drawn against insufficient funds in the ordinary course
of business and such Indebtedness is extinguished within five business
days after notice thereof;
(xiv) Indebtedness in respect of the Shop At Home Relocation
Profits to the extent required to be paid to the Shop At Home Sellers
pursuant to the Shop At Home Acquisition Documents; and
(xv) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness in an aggregate principal
amount (or accreted value, as applicable) at any time outstanding,
including all Permitted Refinancing Indebtedness incurred to refund,
refinance or replace any Indebtedness incurred pursuant to this clause
(xv), not to exceed $10.0 million.
For purposes of determining compliance with this Section 4.09, in the
event that an item of proposed Indebtedness meets the criteria of more than one
of the categories of Permitted Debt described in clauses (i) through (xv) above,
or is entitled to be incurred pursuant to the first paragraph of this Section
4.09, the Company will be permitted to classify such item of Indebtedness on the
date of its incurrence, or later reclassify all or a portion of such item of
Indebtedness, in any manner that complies with this Section 4.09. Indebtedness
under the Credit Agreement, including Guarantees of such Indebtedness, on the
date on which Notes are first issued and authenticated under this Indenture will
be deemed to have been incurred on such date in reliance on the exception
provided by clause (i) of the definition of Permitted Debt.
Accrual of interest, the accretion of accreted value and the payment of
interest in the form of additional Indebtedness will not be deemed to be an
incurrence of Indebtedness for purposes of this Section 4.09.
56
Section 4.10. Asset Sales
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:
(i) the Company (or the Restricted Subsidiary, as the case
may be) receives consideration at the time of the Asset Sale at least
equal to the fair market value of the assets or Equity Interests issued
or sold or otherwise disposed of;
(ii) the fair market value is determined by the Company's
Board of Directors and evidenced by a resolution of the Board of
Directors set forth in an Officers' Certificate delivered to the
Trustee; and
(iii) at least 75% of the consideration received in the Asset
Sale by the Company or such Restricted Subsidiary is in the form of
cash or Cash Equivalents except to the extent the Company is
undertaking a Permitted Asset Swap. For purposes of this provision and
subparagraph (z) below, each of the following shall be deemed to be
cash:
(A) any liabilities, as shown on the Company's most
recent consolidated balance sheet, of the Company or any
Restricted Subsidiary (other than contingent liabilities and
liabilities that are by their terms subordinated to the Notes or
any Subsidiary Guarantee) that are assumed by the transferee of
any such assets pursuant to a customary novation agreement that
releases the Company or such Restricted Subsidiary from further
liability; and
(B) any securities, notes or other obligations
received by the Company or any such Restricted Subsidiary from
such transferee converted by the Company or such Restricted
Subsidiary within 90 days into cash or Cash Equivalents, to the
extent of the cash or Cash Equivalents received in that
conversion.
The 75% limitation referred to in clause (iii) above will not apply to
any Asset Sale in which the cash or Cash Equivalents portion of the
consideration received therefrom, determined in accordance with the preceding
provision, is equal to or greater than what the after tax proceeds would have
been had such Asset Sale complied with the aforementioned 75% limitation.
Notwithstanding the foregoing, the Company or any Restricted Subsidiary
will be permitted to consummate an Asset Sale without complying with the
foregoing if:
(x) the Company or such Restricted Subsidiary receives
consideration at the time of such Asset Sale at least equal to the fair
market value of the assets or other property sold, issued or otherwise
disposed of;
(y) the fair market value is determined by the Company's
Board of Directors and evidenced by a resolution of the Board of
Directors set forth in an Officers' Certificate delivered to the
Trustee; and
(z) at least 75% of the consideration for such Asset Sale
constitutes a controlling interest in a Permitted Business, assets used
or useful in a Permitted Business and/or cash and Cash Equivalents;
57
provided, however, that any cash or Cash Equivalents (other than any amount
deemed cash under clause (iii)(A) of the preceding paragraph) received by the
Company or such Restricted Subsidiary in connection with any Asset Sale
permitted to be consummated under this paragraph shall constitute Net Proceeds
subject to the provisions of the next paragraph.
(b) Within 365 days after the receipt of any Net Proceeds from an
Asset Sale, the Company or such Restricted Subsidiary may apply those Net
Proceeds at its option:
(i) to repay Senior Debt and, if the Senior Debt repaid is
revolving credit Indebtedness, to correspondingly reduce commitments
with respect thereto;
(ii) to acquire all or substantially all of the assets of, or
a majority of the Voting Stock of, a Permitted Business;
(iii) to make capital expenditures that are used or useful in
a Permitted Business; or
(iv) to acquire other assets that are used or useful in a
Permitted Business.
Pending the final application of any Net Proceeds, the Company may
temporarily reduce revolving credit borrowings or otherwise invest the Net
Proceeds in any manner that is not prohibited by this Indenture.
Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the preceding paragraphs will constitute "Excess Proceeds." When the
aggregate amount of Excess Proceeds exceeds $10.0 million, the Company will make
an Asset Sale Offer to all Holders of Notes and all holders of other
Indebtedness that is pari passu with the Notes containing provisions similar to
those set forth in this Indenture with respect to offers to purchase or redeem
with the proceeds of sales of assets in accordance with Section 3.09 hereof to
purchase the maximum principal amount of Notes and such other pari passu
Indebtedness that may be purchased out of the Excess Proceeds. The offer price
in any Asset Sale Offer will be equal to 100% of principal amount plus accrued
and unpaid interest and Liquidated Damages, if any, to the date of purchase, and
will be payable in cash. If the date of purchase is on or after an interest
record date and on or before the related interest payment date, accrued and
unpaid interest, if any, will be paid to the Holder in whose name a Note is
registered at the close of business on such record date, and no additional
interest will be payable to holders who tender pursuant to the Asset Sale Offer.
If any Excess Proceeds remain after consummation of an Asset Sale Offer, the
Company may use those Excess Proceeds for any purpose not otherwise prohibited
by this Indenture. If the aggregate principal amount of Notes and other pari
passu Indebtedness tendered into such Asset Sale Offer exceeds the amount of
Excess Proceeds, the Trustee shall select the Notes and such other pari passu
Indebtedness to be purchased on a pro rata basis. Upon completion of each Asset
Sale Offer, the amount of Excess Proceeds shall be reset at zero.
(c) The Company will comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent those laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the Asset Sale
provisions of this Indenture, the Company will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under the Asset Sale provisions of this Indenture by virtue of such
conflict.
58
Section 4.11. Transactions with Affiliates.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each, an "Affiliate Transaction"), unless:
(a) the Affiliate Transaction is on terms that are no less favorable
to the Company or the relevant Restricted Subsidiary than those that would have
been obtained in a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person; and
(b) the Company delivers to the Trustee:
(i) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of $1.0 million, a resolution of the Board of Directors set
forth in an Officers' Certificate certifying that such Affiliate
Transaction complies with this Section 4.11 and that such Affiliate
Transaction has been approved by a majority of the members of the Board
of Directors, which approval, if the Board of Directors includes
disinterested members at such time, shall include the approval of at
least one disinterested member; and
(ii) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of $5.0 million, an opinion as to the fairness to the Company of
such Affiliate Transaction from a financial point of view issued by an
accounting, appraisal or investment banking firm of national standing;
provided, that upon the election or appointment of one or more
disinterested members to the Board of Directors, an opinion as to
fairness required by this paragraph (b)(ii) will only be required for
Affiliate Transactions involving aggregate consideration in excess of
$10.0 million.
The following items will not be deemed to be Affiliate Transactions
and, therefore, will not be subject to the provisions of the prior paragraph:
(a) any employment agreement or other compensation arrangement
entered into by the Company or any of its Restricted Subsidiaries in the
ordinary course of business and the payment of compensation and the
reimbursement of expenses pursuant thereto;
(b) transactions between or among the Company and/or any of its
Restricted Subsidiaries;
(c) transactions with a Person that is an Affiliate of the Company
solely because the Company owns an Equity Interest in, or controls, such Person;
(d) payment of reasonable fees and expenses to directors;
(e) indemnification of officers and directors of the Company or any
Restricted Subsidiary pursuant to reasonable and customary indemnification
provisions;
(f) sales of Equity Interests (other than Disqualified Stock) to
Affiliates of the Company;
(g) Restricted Payments that are permitted by the provisions of
Section 4.07, and Permitted Investments;
59
(h) transactions under any contract or agreement of the Company or
any Restricted Subsidiary in effect on the date of this Indenture, in each case,
as the same may be amended, modified or replaced from time to time so long as
any such amendment, modification or replacement is no less favorable to the
Company and its Restricted Subsidiaries than the contract or agreement as in
effect on the date of this Indenture;
(i) services provided to any Unrestricted Subsidiary in the ordinary
course of business, which the Board of Directors has determined, pursuant to a
resolution thereof, are provided on terms at least as favorable to the Company
and its Restricted Subsidiaries as those that would have been obtained in a
comparable transaction with an unrelated Person;
(j) payments of commissions and fees to, and on-going business
dealings with, Spanish Media Rep Team, Inc. in the ordinary course of business;
(k) payments of outstanding principal and interest on the Liberman
Subordinated Debt on the date of this Indenture as described under the heading
"Use of Proceeds" in the Company's offering circular dated June 28, 2002; and
(l) any transactions permitted under Section 5.01, including the
merger of Intermediate Holdings with and into the Company.
Section 4.12. Liens.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or suffer to exist any Lien of any
kind securing Indebtedness or trade payables on any asset now owned or hereafter
acquired, except Permitted Liens.
Section 4.13. Corporate Existence.
Subject to Article 5 hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect: (i) its
corporate 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 Company or any
such Restricted Subsidiary; and (ii) the rights (charter and statutory),
licenses and franchises of the Company and its Restricted Subsidiaries;
provided, however, that the Company 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 Board of Directors shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and its Subsidiaries, taken as a whole, and that the
loss thereof is not adverse in any material respect to the Holders of the Notes.
Section 4.14. Business Activities
Until the consummation of a Public Equity Offering, the Company will
not, and will not permit any Subsidiary to, engage in any business other than
Permitted Businesses, except to such extent as would not be material to the
Company and its Subsidiaries taken as a whole.
Section 4.15. Offer to Repurchase Upon Change of Control.
(a) Upon the occurrence of a Change of Control, the Company will
make an offer (a "Change of Control Offer") to each Holder to repurchase all or
any part (equal to $1,000 or an integral multiple thereof) of each Holder's
Notes at a purchase price equal to 101% of the aggregate principal
60
amount thereof plus accrued and unpaid interest and Liquidated Damages thereon,
if any, to the date of purchase (the "Change of Control Payment"). Within 30
business days following any Change of Control, the Company will mail a notice to
each Holder describing the transaction or transactions that constitute the
Change of Control and stating:
(i) that the Change of Control Offer is being made pursuant
to this Section 4.15 and that all Notes tendered will be accepted for
payment;
(ii) the purchase price and the purchase date, which shall be
no earlier than 30 days and no later than 60 days from the date such
notice is mailed (the "Change of Control Payment Date");
(iii) that any Note not tendered will continue to accrue
interest;
(iv) that, unless the Company 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 after the
Change of Control Payment Date;
(v) that Holders electing to have any Notes purchased
pursuant to a Change of Control Offer will be required to surrender the
Notes, with the form entitled "Option of Holder to Elect Purchase" on
the reverse of the Notes completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the third
Business Day preceding the Change of Control Payment Date;
(vi) that Holders will be entitled to withdraw their election
if the Paying Agent receives, not later than the close of business on
the second Business Day preceding the Change of Control Payment Date, a
telegram, telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of Notes delivered for
purchase, and a statement that such Holder is withdrawing his election
to have the Notes purchased; and
(vii) that Holders whose Notes are being purchased only in part
will be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered, which unpurchased portion must be
equal to $1,000 in principal amount or an integral multiple thereof.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes in connection with a Change of Control. To the extent that
the provisions of any securities laws or regulations conflict with the
provisions of Sections 3.09 or 4.15 of this Indenture, the Company will comply
with the applicable securities laws and regulations and will not be deemed to
have breached its obligations under Section 3.09 or this Section 4.15 by virtue
of such conflict.
(b) On the Change of Control Payment Date, the Company will, to the
extent lawful:
(i) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer;
(ii) deposit with the Paying Agent an amount equal to the
Change of Control Payment in respect of all Notes or portions thereof
properly tendered; and
61
(iii) deliver or cause to be delivered to the Trustee the Notes
properly accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions thereof being purchased
by the Company.
The Paying Agent will promptly mail to each Holder of Notes properly
tendered the Change of Control Payment for such Notes, and the Trustee will
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; provided that each new Note will be in a
principal amount of $1,000 or an integral multiple thereof. If the Change of
Control Payment Date is on or after an interest record date and on or before the
related interest payment date, accrued and unpaid interest, if any, will be paid
to the Holder in whose name a Note is registered at the close of business on
such record date, and no additional interest will be payable to Holders who
tender pursuant to the Change of Control Offer.
(c) Prior to complying with any of the provisions of this Section
4.15, but in any event within 90 days following a Change of Control, the Company
will either repay all outstanding Senior Debt or obtain the requisite consents,
if any, under all the agreements governing outstanding Senior Debt to permit the
repurchase of the Notes required by this Section 4.15. The Company will publicly
announce the results of the Change of Control Offer on or as soon as practicable
after the Change of Control Payment Date.
(d) Notwithstanding anything to the contrary in this Section 4.15,
the Company will not be required to make a Change of Control Offer upon 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 4.15 and Section 3.09 hereof and all other provisions of this Indenture
applicable to a Change of Control Offer made by the Company and purchases all
Notes properly tendered and not withdrawn under the Change of Control Offer.
Section 4.16. No Senior Subordinated Debt
The Company will not incur, create, issue, assume, guarantee or
otherwise become liable for any Indebtedness that is subordinate or junior in
right of payment to any Senior Debt of the Company and senior in any respect in
right of payment to the Notes. No Guarantor will incur, create, issue, assume,
guarantee or otherwise become liable for any Indebtedness that is subordinate or
junior in right of payment to the Senior Debt of such Guarantor and senior in
any respect in right of payment to such Guarantor's Subsidiary Guarantee.
Section 4.17. Additional Subsidiary Guarantees.
If the Company or any of its Subsidiaries acquires or creates another
Domestic Subsidiary after the date of this Indenture, excluding all Subsidiaries
that have been properly designated as Unrestricted Subsidiaries in accordance
with this Indenture for so long as they continue to constitute Unrestricted
Subsidiaries, then that newly acquired or created Domestic Subsidiary will
become a Guarantor and execute a supplemental indenture and deliver an opinion
of counsel satisfactory to the Trustee within ten Business Days of the date on
which it was acquired or created.
Section 4.18. Limitation on Issuances of Equity Interests in Wholly Owned
Restricted Subsidiaries.
The Company will not, and will not permit any of its Subsidiaries to,
transfer, convey, sell, lease or otherwise dispose of any Equity Interests in
any Wholly Owned Restricted Subsidiary of the Company to any Person (other than
the Company or another Wholly Owned Restricted Subsidiary of the Company),
unless:
62
(i) as a result of such transfer, conveyance, sale, lease or
other disposition or as a result of such issuance described below, such
Restricted Subsidiary no longer constitutes a Subsidiary; and
(ii) the cash Net Proceeds from such transfer, conveyance,
sale, lease or other disposition are applied in accordance with Section
4.10 hereof.
In addition, the Company will not permit any Wholly Owned Restricted
Subsidiary of the Company to issue any of its Equity Interests (other than, if
necessary, shares of its Capital Stock constituting directors' qualifying
shares) to any Person other than to the Company or a Wholly Owned Restricted
Subsidiary of the Company unless the terms of clauses (i) and (ii) above are
satisfied.
Section 4.19. Payments for Consent.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, pay or cause to be paid any consideration to or for the
benefit of any Holder of Notes for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of this Indenture or the Notes
unless such consideration is offered to be paid and is paid to all Holders of
the Notes that consent, waive or agree to amend in the time frame set forth in
the solicitation documents relating to such consent, waiver or agreement.
Section 4.20. Designation of Restricted and Unrestricted Subsidiaries
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if that designation would not cause a Default. If a
Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate
fair market value of all outstanding Investments owned by the Company and its
Restricted Subsidiaries in the Subsidiary properly designated will be deemed to
be an Investment made as of the time of the designation and will reduce the
amount available for Restricted Payments under Section 4.07(a) or Permitted
Investments, as determined by the Company. That designation will only be
permitted if the Investment would be permitted at that time and if the
Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary. The Board of Directors may redesignate any Unrestricted Subsidiary
to be a Restricted Subsidiary if the redesignation would not cause a Default.
ARTICLE 5.
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets.
The Company will not, directly or indirectly: (1) consolidate or merge
with or into another Person (whether or not the Company is the surviving
corporation); or (2) sell, assign, transfer, convey or otherwise dispose of all
or substantially all of the properties or assets of the Company and its
Restricted Subsidiaries taken as a whole, in one or more related transactions,
to another Person unless:
(i) either: (a) the Company is the surviving corporation; or
(b) the Person formed by or surviving any such consolidation or merger
(if other than the Company) or to which such sale, assignment,
transfer, conveyance or other disposition has been made is a
corporation organized or existing under the laws of the United States,
any state of the United States or the District of Columbia;
(ii) the Person formed by or surviving any such consolidation
or merger (if other than the Company) or the Person to which such sale,
assignment, transfer, conveyance or other
63
disposition shall have been made assumes all the obligations of the
Company under the Notes, this Indenture and the Registration Rights
Agreement pursuant to agreements reasonably satisfactory to the
Trustee;
(iii) immediately after such transaction, no Default or Event
of Default exists; and
(iv) the Company or the Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such
sale, assignment, transfer, conveyance or other disposition has been
made (a) would, on the date of such transaction after giving pro forma
effect thereto and any related financing transactions as if the same
had occurred at the beginning of the applicable four-quarter period, be
permitted to incur at least $1.00 of additional Indebtedness pursuant
to the Leverage Ratio test set forth in the first paragraph of Section
4.09 or (b) would have a lower Leverage Ratio immediately after the
transaction, after giving pro forma effect to the transaction as if the
transaction had occurred at the beginning of the applicable four
quarter period, than the Company's Leverage Ratio immediately prior to
the transaction.
In addition, the Company may not, directly or indirectly, lease all or
substantially all of its properties or assets, in one or more related
transactions, to any other Person. This Section 5.01 will not prohibit (i) any
sale, assignment, transfer, conveyance or other disposition of assets between or
among the Company and any of its Wholly Owned Restricted Subsidiaries, (ii) any
Restricted Subsidiary from consolidating with, merging into or transferring all
or part of its assets to the Company or any Restricted Subsidiary, (iii) the
Company from merging with an Affiliate incorporated solely for the purpose of
reincorporating the Company in another jurisdiction to realize tax or other
benefits, or (iv) Intermediate Holdings from merging with and into the Company
following the date of this Indenture.
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 Company in a transaction that is subject to, and that complies with
Section 5.01 hereof, the successor corporation formed by such consolidation or
into or with which the Company 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 "Company" shall refer instead to the successor
corporation and not to the Company), and may exercise every right and power of
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein; provided, however, that the
predecessor Company 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, conveyance or other disposition of all of the Company's assets in a
transaction that is subject to, and that complies with the provisions of,
Section 5.01 hereof.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
An "Event of Default" occurs if:
(a) the Company defaults in the payment when due of interest on, or
Liquidated Damages with respect to, the Notes, whether or not prohibited by the
subordination provisions of this Indenture, and such default continues for a
period of 30 days;
64
(b) the Company defaults in the payment when due of principal of, or
premium, if any, on the Notes, whether or not prohibited by the subordination
provisions of this Indenture, when the same becomes due and payable at maturity,
upon redemption (including in connection with an offer to purchase) or
otherwise;
(c) the Company or any of its Restricted Subsidiaries fails to
comply with the provisions of Section 4.15 or 5.01 hereof;
(d) the Company or any of its Restricted Subsidiaries fails to
comply with the provisions of Section 4.07, 4.09 or 4.10 hereof for 30 days
after notice to the Company by the Trustee or the Holders of at least 25% in
aggregate principal amount of the Notes then outstanding;
(e) the Company or any of its Subsidiaries fails to observe or
perform any other covenant, representation, warranty or other agreement in this
Indenture or the Notes for 60 days after notice to the Company by the Trustee or
the Holders of at least 25% in aggregate principal amount of the Notes then
outstanding;
(f) a default occurs under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or evidenced
any Indebtedness for money borrowed by the Company or any of the Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any of the
Restricted Subsidiaries), whether such Indebtedness or Guarantee now exists, or
is created after the date hereof, if that default:
(i) is caused by a failure to pay principal of such
Indebtedness at the final stated maturity thereof (giving effect
to any applicable grace periods and any extensions thereof) (a "Payment
Default"); or
(ii) results in the acceleration of such Indebtedness prior to
its express maturity
and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under which
there has been and continues to be a Payment Default or the maturity of which
has been and continues to be so accelerated, aggregates $5.0 million or more;
(g) the Company or any of its Restricted Subsidiaries fails to pay
final judgments aggregating in excess of $5.0 million (not covered by
insurance), which judgments are not paid, vacated, discharged, bonded or stayed
for a period of 60 days;
(h) the incurrence by Parent of Specified Parent Debt (other than
the refinancing of any indebtedness under the Existing Parent Notes) if, at the
time of any such incurrence and after giving pro forma effect to such incurrence
as of such date and to the use of proceeds therefrom, as if the same had
occurred at the beginning of the most recently ended four fiscal quarter period
of Parent for which internal financial statements are available, the Parent Debt
Ratio would have exceeded 7.0 to 1 and the failure for 30 days after notice from
the Trustee or Holders of at least 25% in aggregate principal amount of the
outstanding Notes to cure such default;
(i) except as permitted by this Indenture, any Subsidiary Guarantee
of a Significant Subsidiary is held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full force and
effect or any Guarantor which is a Significant Subsidiary, or any Person acting
on behalf of any Guarantor which is a Significant Subsidiary, shall deny or
disaffirm its obligations under its Subsidiary Guarantee; provided, however,
that an Event of Default will also be deemed to occur with respect to Subsidiary
Guarantors that are not Significant Subsidiaries ("Insignificant Subsidiaries")
if the
65
Subsidiary Guarantees of such Insignificant Subsidiaries are held in any
judicial proceeding to be unenforceable or invalid or shall cease for any reason
to be in full force and effect or such Insignificant Subsidiaries deny or
disaffirm their obligations under their Subsidiary Guarantees (other than in
accordance with the terms of such Subsidiary Guarantee), if when aggregated and
taken as a whole the Insignificant Subsidiaries subject to this clause (i) would
meet the definition of a Significant Subsidiary;
(j) the Company or any of its Significant Subsidiaries or any group
of Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary, pursuant to or within the meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it
in an involuntary case,
(iii) consents to the appointment of a custodian of it or for
all or substantially all of its property,
(iv) makes a general assignment for the benefit of its
creditors,
(v) generally is not paying its debts as they become due; or
(k) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(i) is for relief against the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary in an involuntary
case;
(ii) appoints a custodian of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary or for all or
substantially all of the property of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary; or
(iii) orders the liquidation of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, 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 (j) or (k) of Section 6.01 hereof with respect to the Company, any
Significant Subsidiary or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary) occurs and is continuing, the Trustee
or the Holders of at least 25% in principal amount of the then outstanding Notes
may declare all the Notes to be due and payable immediately. Upon any such
declaration, the Notes shall become due and payable immediately. Notwithstanding
the foregoing, if an Event of Default specified in clause (j) or (k) of Section
6.01 hereof occurs with respect to the Company, any Restricted Subsidiary that
is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken
together, would constitute a Significant Subsidiary, 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 rescind an
acceleration and its consequences if the
66
rescission would not conflict with any judgment or decree 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 a declaration of acceleration of the Notes because an
Event of Default has occurred and is continuing as a result of the acceleration
of any Indebtedness described in clause (f) of Section 6.01, the declaration of
acceleration of the Notes shall be automatically annulled if the holders of any
Indebtedness described in clause (f) of Section 6.01 have rescinded the
declaration of acceleration in respect of the Indebtedness within 30 days of the
date of the declaration and if: (i) the annulment of the acceleration of Notes
would not conflict with any judgment or decree of a court of competent
jurisdiction; and (ii) all existing Events of Default, except nonpayment of
principal or interest on the Notes that became due solely because of the
acceleration of the Notes, have been cured or waived.
If an Event of Default occurs on or after July 15, 2007 by reason of
any willful action (or inaction) taken (or not taken) by or on behalf of the
Company with the intention of avoiding payment of the premium that the Company
would have had to pay if the Company then had elected to redeem the Notes
pursuant to Section 3.07 hereof, then, upon acceleration of the Notes, an
equivalent premium shall also become and be immediately due and payable, to the
extent permitted by law, anything in this Indenture or in the Notes to the
contrary notwithstanding. If an Event of Default occurs prior to July 15, 2007
by reason of any willful action (or inaction) taken (or not taken) by or on
behalf of the Company with the intention of avoiding the prohibition on
redemption of the Notes prior to such date, then, upon acceleration of the
Notes, an additional premium shall also become and be immediately due and
payable in an amount, for each of the years beginning on July 15 of the years
set forth below, as set forth below (expressed as a percentage of the principal
amount of the Notes on the date of payment that would otherwise be due but for
the provisions of this sentence):
Year Percentage
---- ----------
2003 ............................................... 111.813%
2004 ............................................... 110.125%
2005 ............................................... 108.438%
2006 and thereafter ................................ 106.750%
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, and
Liquidated Damages, 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.
Holders of not less than a majority in aggregate principal amount of
the then outstanding Notes by notice to the Trustee may on behalf of the Holders
of all of the Notes waive any existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of interest or Liquidated Damages on, or the principal of, the Notes
(including in connection
67
with an offer to purchase); provided, however, that 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 rescind an acceleration and its
consequences, including any related payment default that resulted from such
acceleration, if the rescission would not conflict with a judgment or decree 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. 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 outstanding Notes
may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the
Trustee in personal liability.
Section 6.06. Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this Indenture
or the Notes only if:
(a) such Holder gives to the Trustee written notice of a continuing
Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.
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, premium and Liquidated
Damages, if any, and interest on the Note, on or after the respective due dates
expressed in the Note (including in connection with an offer to purchase), or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(a) or (b) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Company for
68
the whole amount of principal of, premium and Liquidated Damages, 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. Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
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 6.10. Priorities.
If the Trustee collects any money pursuant to this Article 6, it shall
pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Section 7.07 hereof, including payment of all compensation,
expense and liabilities incurred, and all advances made, by the Trustee
and the costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium and Liquidated Damages, 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 and Liquidated Damages, if any and interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the
69
filing by any party litigant in the suit of an undertaking to pay the costs of
the suit, and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to 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.
ARTICLE 7.
TRUSTEE
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee will 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 will 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, the Trustee will 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;
(ii) the Trustee will not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee will not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 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.
(e) No provision of this Indenture will require the Trustee to
expend or risk its own funds or incur any liability. The Trustee will be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, unless such Holder has offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
70
(f) The Trustee will not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
Section 7.02. 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.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee will not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel will 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 will
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee will 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 Company will be sufficient if
signed by an Officer of the Company.
(f) The Trustee will be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company 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 will not be responsible for and makes no representation as
to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it will not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it will 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.
71
Section 7.05. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee will mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, premium, or
Liquidated Damages, if any, or interest on any Note, the Trustee may withhold
the notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interests of the Holders of the
Notes.
The Trustee shall not be required to take notice or be deemed to have
notice of any Default hereunder, except for Defaults arising from failure to
make any required payments to the Trustee or Defaults of which the Trustee has
actual knowledge, unless the Trustee is specifically notified in writing of such
Default by the Company or the Holders of twenty-five percent (25%) in aggregate
principal amount of the Notes then outstanding, and all such notices or other
instruments required to be delivered to the Trustee must be delivered to the
Corporate Trust Office of the Trustee.
Section 7.06. Reports by Trustee to Holders of the Notes.
(a) 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 will mail to the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA (S) 313(a) (but if no
event described in TIA (S) 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
will comply with TIA (S) 313(b)(2). The Trustee will also transmit by mail all
reports as required by TIA (S) 313(c).
(b) A copy of each report at the time of its mailing to the Holders
of Notes will be mailed by the Trustee to the Company and filed by the Trustee
with the SEC and each stock exchange on which the Notes are listed in accordance
with TIA (S) 313(d). The Company will promptly notify the Trustee when the Notes
are listed on any stock exchange.
Section 7.07. Compensation and Indemnity.
(a) The Company will pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation will not be limited by any law on compensation of a
trustee of an express trust. The Company will 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 will
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
(b) The Company will indemnify the Trustee against any and all
losses, liabilities or expenses incurred by it arising out of or in connection
with the acceptance or administration of its duties under this Indenture,
including the costs and expenses of enforcing this Indenture against the Company
and the Guarantors (including this Section 7.07) and defending itself against
any claim (whether asserted by the Company, the Guarantors or any Holder or any
other Person) or liability in connection with the exercise or performance of any
of its powers or duties hereunder, except to the extent any such loss, liability
or expense may be attributable to its negligence or bad faith. The Trustee will
notify the Company promptly of any claim for which it may seek indemnity. Such
notice shall include a copy of any complaint that may have been filed with
respect to that claim or any demand letter or other notification the Trustee has
received which the Trustee believes will give rise to a claim for which it may
seek indemnification. Failure by the Trustee to so notify the Company will not
relieve the Company or any of the Guarantors of their obligations hereunder,
except to the extent that such failure prejudices the
72
availability of defenses or counterclaims or otherwise adversely impacts the
ability of the Company or any Guarantor to conduct the defense of such action.
The Company or such Guarantor will defend the claim and shall have the right to
make all decisions with respect to conduct of any litigation or other
proceedings with respect to that claim, including but not limited to determining
the defenses or counterclaims to pursue and the right to settle any such claim.
The Trustee shall cooperate with the Company or any Guarantor in the Company's
or such Guarantor's conduct of such defense. The Trustee may retain separate
counsel to represent it in connection with that defense at the Trustee's own
expense; provided that, if the Trustee can demonstrate that a conflict of
interest exists between the Company or the applicable Guarantor and the Trustee
which makes it impossible for the Company or such Guarantor to defend the
Trustee in such matter or the Company refuses to conduct a defense, the Company
shall pay the Trustee's reasonable legal expenses in conducting that defense.
Neither the Company nor any Guarantor need pay for any settlement made without
the Company's consent, which consent will not be unreasonably withheld.
(c) The obligations of the Company and the Guarantors under this
Section 7.07 will survive the satisfaction and discharge of this Indenture.
(d) To secure the Company's payment obligations in this Section
7.07, the Trustee will 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 will survive the satisfaction and
discharge of this Indenture.
(e) When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(j) or (k) hereof occurs, the expenses
and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any Bankruptcy Law.
(f) The Trustee will comply with the provisions of TIA (S) 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 will 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 Company. The Holders of a majority
in principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Company in writing. The Company may remove the
Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(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 Company will promptly appoint a successor
Trustee. Within one year after the successor Trustee
73
takes office, the Holders of a majority in principal amount of the then
outstanding Notes may appoint a successor Trustee to replace the successor
Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of at least 10% in 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, 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 will deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee will become effective, and the
successor Trustee will have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee will mail a notice of its succession
to Holders. The retiring Trustee will 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 Company's obligations under Section 7.07 hereof will 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 will be the successor Trustee.
Section 7.10. Eligibility; Disqualification.
There will 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 a combined capital and surplus of at least $100 million
as set forth in its most recent published annual report of condition.
This Indenture will always have a Trustee who satisfies the
requirements of TIA (S) 310(a)(1), (2) and (5). The Trustee is subject to TIA
(S) 310(b).
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee is subject to TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated therein.
74
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be 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 Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company and each of the Guarantors will,
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 (including the Subsidiary Guarantees) on the date the
conditions set forth below are satisfied (hereinafter, "Legal Defeasance"). For
this purpose, Legal Defeasance means that the Company and the Guarantors will be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes (including the Subsidiary Guarantees), which will 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 their other obligations under such Notes, the Subsidiary
Guarantees and this Indenture (and the Trustee, on demand of and at the expense
of the Company, shall execute proper instruments acknowledging the same), except
for the following provisions which will survive until otherwise terminated or
discharged hereunder:
(a) the rights of Holders of outstanding Notes to receive payments
in respect of the principal of, or interest or premium and Liquidated Damages,
if any, on such Notes when such payments are due from the trust referred to
below;
(b) the Company's obligations with respect to the Notes concerning
issuing temporary Notes, registration of Notes, mutilated, destroyed, lost or
stolen Notes and the maintenance of an office or agency for payment and money
for security payments held in trust;
(c) the rights, powers, trusts, duties and immunities of the
Trustee, and the Company's and the Guarantor's obligations in connection
therewith; and
(d) this Article 8.
Section 8.03. Covenant Defeasance.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company and the Guarantors will, 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,
4.05, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.18,
4.19 and 4.20 hereof and clause (iv) of Section 5.01 hereof with respect to the
outstanding Notes on and after the date the conditions set forth in Section 8.04
are satisfied (hereinafter, "Covenant Defeasance"), and the Notes will
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 will continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Notes will not be deemed outstanding for accounting purposes). For this purpose,
Covenant Defeasance means that, with respect to the outstanding Notes and
Subsidiary Guarantees, the Company and the Guarantors may omit to comply with
and will have no liability in respect of any term, condition or
75
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 will 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 and Subsidiary Guarantees will be
unaffected thereby. In addition, upon the Company's exercise under Section 8.01
hereof of the option applicable to this Section 8.03, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, Sections
6.01(c) through 6.01(i) hereof will not constitute Events of Default.
Section 8.04. Conditions to Legal or Covenant Defeasance.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, cash in United States dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of, interest, premium and Liquidated Damages,
if any, on the outstanding Notes on the stated maturity thereof or on the
applicable redemption date, as the case may be, and the Company must specify
whether the Notes are being defeased to maturity or to a particular redemption
date;
(b) in the case of an election under Section 8.02 hereof, the
Company has delivered to the Trustee an Opinion of Counsel confirming that (A)
the Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (B) since the date hereof, there has been a change
in the applicable federal income tax law, in either case to the effect that, and
based thereon such Opinion of Counsel shall confirm that, the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the
Company must deliver to the Trustee an Opinion of Counsel confirming that the
Holders of the outstanding Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such Covenant Defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Covenant Defeasance had not
occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such deposit);
(e) such Legal Defeasance or Covenant Defeasance will not result in
a breach or violation of, or constitute a default under, any material agreement
or instrument (other than this Indenture) to which the Company or any of its
Restricted Subsidiaries is a party or by which the Company or any of its
Restricted Subsidiaries is bound;
(f) the Company must deliver to the Trustee an Officers' Certificate
stating that the deposit was not made by the Company with the intent of
preferring the Holders over the other creditors of the Company or with the
intent of defeating, hindering, delaying or defrauding creditors of the Company
or others; and
76
(g) the Company must deliver to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent relating
to the Legal Defeasance or the Covenant Defeasance have been complied with.
Section 8.05. Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable 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
will be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest, but
such money need not be segregated from other funds except to the extent required
by law.
The Company will pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 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 Eight to the contrary notwithstanding, the
Trustee will deliver or pay to the Company from time to time upon the request of
the Company any money or non-callable Government Securities held by it as
provided in Section 8.04 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 Company.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium, or
Liquidated Damages, if any, or interest on any Note and remaining unclaimed for
two years after such principal, and premium, or Liquidated Damages, if any, or
interest has become due and payable shall be paid to the Company on its request
or (if then held by the Company) will be discharged from such trust; and the
Holder of such Note will thereafter look only to the Company for payment
thereof, and all liability of the Trustee or such Paying Agent with respect to
such trust money, and all liability of the Company as trustee thereof, will
thereupon cease.
Section 8.07. Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 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, then the Company's and the Guarantors' obligations under this
Indenture and the Notes and the Subsidiary Guarantees will 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, however, that, if the Company makes any payment of principal of,
premium, or Liquidated Damages, if any, or interest on any Note following the
reinstatement of its obligations, the Company will
77
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 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes.
Notwithstanding Section 9.02 of this Indenture, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture or the Notes
(including, without limitation, the Subsidiary Guarantees) without the consent
of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place
of certificated Notes;
(c) to provide for the assumption of the Company's obligations to
the Holders of the Notes by a successor to the Company pursuant to Article 5
hereof;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the legal
rights hereunder of any such Holder;
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(f) to provide for the issuance of Additional Notes in accordance
with the limitations set forth in this Indenture as of the date hereof; or
(g) to allow any Guarantor to execute a supplemental indenture and/
or a Subsidiary Guarantee with respect to the Notes.
However, no amendment may be made to the provisions of Article 10 of
this Indenture that adversely affects the rights of any holder of Senior Debt
then outstanding unless the holders of such Senior Debt (or any group or
representative thereof authorized to give a consent) consent to such change.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee will join with the Company and the Guarantors in the
execution of any amended or supplemental Indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee will not be
obligated to enter into such amended or supplemental Indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.
Section 9.02. With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Company and the
Trustee may amend or supplement this Indenture (including, without limitation,
Section 3.09, 4.10 and 4.15 hereof) and the Notes (including the Subsidiary
Guarantees) with the consent of the Holders of at least a majority in principal
amount of the Notes then outstanding voting as a single class (including,
without limitation, 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
78
Event of Default in the payment of the principal of, premium, or Liquidated
Damages, 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 Subsidiary Guarantees or the Notes may be waived with the
consent of the Holders of a majority in principal amount of the then outstanding
Notes voting as a single class (including consents obtained in connection with a
tender offer or exchange offer for, or purchase of, the Notes). Without the
consent of at least 75% in principal amount of the Notes then outstanding
(including consents obtained in connection with a tender offer or exchange offer
for, or purchase of, such Notes), no waiver or amendment to this Indenture may
make any change relating to (1) the provisions of Article 10 hereof that
adversely affect the rights of any Holder of Notes or (2) release of any
Guarantor from any of its obligations under its Subsidiary Guarantee or this
Indenture, except in accordance with the terms of this Indenture. Section 2.08
hereof shall determine which Notes are considered to be "outstanding" for
purposes of this Section 9.02.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon 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 will
join with the Company 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 will not be obligated to, enter into such
amended or supplemental Indenture.
It is not 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 is sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company will mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, will not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a
majority in aggregate principal amount of the Notes then outstanding voting as a
single class may waive compliance in a particular instance by the Company with
any provision of this Indenture or the Notes. However, without the consent of
each Holder affected, an amendment or waiver under this Section 9.02 may not
(with respect to any Notes held by a non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must consent
to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note
or alter or waive any of the provisions with respect to the redemption of the
Notes except as provided above with respect to Sections 3.09, 4.10 and 4.15
hereof;
(c) reduce the rate of or change the time for payment of interest,
including default interest, on any Note;
(d) waive a Default or Event of Default in the payment of principal
of, or interest or premium, or Liquidated Damages, if any, on the Notes (except
a rescission of acceleration of the Notes by the Holders of at least a majority
in aggregate principal amount of the then outstanding Notes and a waiver of the
payment default that resulted from such acceleration);
79
(e) make any Note payable in money other than that stated in the
Notes;
(f) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive payments
of, principal of or interest or premium or Liquidated Damages, if any, on the
Notes;
(g) waive a redemption payment with respect to any Note except as
provided above with respect to Sections 3.09, 4.10 and 4.15 hereof; or
(h) make any change in Section 6.04 or 6.07 hereof or in the
foregoing amendment and waiver provisions.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes will be
set forth in a amended or supplemental Indenture that complies with the TIA as
then in effect.
Section 9.04. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
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 Company in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note will not
affect the validity and effect of such amendment, supplement or waiver.
Section 9.06. Trustee to Sign Amendments, etc.
The Trustee will sign any amended or supplemental indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
may not sign an amendment or supplemental indenture until the Board of Directors
approves it. In executing any amended or supplemental indenture, the Trustee
will be entitled to receive and (subject to Section 7.01 hereof) will be fully
protected in relying upon, in addition to the documents required by Section
13.04 hereof, an Officers' Certificate and an Opinion of Counsel stating that
the execution of such amended or supplemental indenture is authorized or
permitted by this Indenture.
80
ARTICLE 10.
SUBORDINATION
Section 10.01. Agreement to Subordinate.
The Company agrees, and each Holder by accepting a Note agrees, that
the Indebtedness evidenced by the Notes and any Liquidated Damages is
subordinated in right of payment, to the extent and in the manner provided in
this Article 10, to the prior payment in full of all Senior Debt (whether
outstanding on the date hereof or hereafter created, incurred, assumed or
guaranteed), and that the subordination is for the benefit of the holders of
Senior Debt.
Section 10.02. Liquidation; Dissolution; Bankruptcy.
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, in
an assignment for the benefit of creditors or in any marshaling of the Company's
assets and liabilities:
(i) holders of Senior Debt will be entitled to receive payment
in full of all Obligations due in respect of such Senior Debt
(including interest after the commencement of any bankruptcy proceeding
at the rate specified in the applicable Senior Debt) before Holders of
the Notes will be entitled to receive any payment with respect to the
Notes, on account of any purchase or redemption or other acquisition on
any Note in connection with an Asset Sale Offer or a Change of Control
Offer or on account of the payment of any Liquidated Damages (except
that Holders may receive and retain (A) Permitted Junior Securities and
(B) payments made from any defeasance trust created pursuant to Section
8.01 hereof); and
(ii) until all Obligations with respect to Senior Debt (as
provided in clause (i) above) are paid in full, any distribution or
payment of Liquidated Damages to which Holders would be entitled but
for this Article 10 will be made to holders of Senior Debt (except that
Holders of Notes may receive and retain (A) Permitted Junior Securities
and (B) payments made from any defeasance trust created pursuant to
Section 8.01 hereof), as their interests may appear.
To the extent any payment of Senior Debt (whether by or on behalf of
the Company, as proceeds of security or enforcement of any right of setoff or
otherwise) is declared to be fraudulent or preferential, set aside or required
to be paid to any receiver, trustee in bankruptcy, liquidating trustee, agent or
other similar Person under any bankruptcy, insolvency, receivership, fraudulent
conveyance or similar law, then, if such payment is recovered by, or paid over
to, such receiver, trustee in bankruptcy, liquidating trustee, agent or other
similar Person, the Senior Debt or part thereof originally intended to be
satisfied will be deemed to be reinstated and outstanding as if such payment had
not occurred.
Section 10.03. Default on Designated Senior Debt.
(a) Neither the Company nor any Guarantor may make any payment or
distribution to the Trustee or any Holder in respect of Obligations with respect
to the Notes including, without limitation, on account of any Liquidated Damages
and may not acquire from the Trustee or any Holder any Notes for cash or
property (other than (A) Permitted Junior Securities and (B) payments made from
any defeasance trust created pursuant to Section 8.01 hereof) until all
principal and other Obligations with respect to the Senior Debt have been paid
in full if:
81
(i) a default in the payment of any principal or other
Obligations with respect to Designated Senior Debt occurs and is
continuing beyond any applicable grace period in the agreement,
indenture or other document governing such Designated Senior Debt; or
(ii) any other default occurs and is continuing on any series
of Designated Senior Debt that then permits holders of that series of
Designated Senior Debt to accelerate its maturity and the Trustee
receives a notice of the default (a "Payment Blockage Notice") from the
Company or the holders of any Designated Senior Debt. If the Trustee
receives any such Payment Blockage Notice, no subsequent Payment
Blockage Notice will be effective for purposes of this Section unless
and until at least 360 days have elapsed since the delivery of the
immediately prior Payment Blockage Notice. No nonpayment default that
existed or was continuing on the date of delivery of any Payment
Blockage Notice to the Trustee will be, or be made, the basis for a
subsequent Payment Blockage Notice unless such default has been cured
or waived for a period of not less than 90 days.
(b) The Company may and will resume payments on and distributions in
respect of the Notes and may acquire them upon the earlier of:
(i) in the case of a payment default, upon the date on which
such default is cured or waived, or
(ii) in the case of a nonpayment default, upon the earlier of:
(A) the date on which such nonpayment default is cured
or waived,
(B) 179 days after the date on which the applicable
Payment Blockage Notice is received, or
(C) the date on which the Trustee receives notice from
or on behalf of the holders of Designated Senior Debt to
terminate the applicable Payment Blockage Notice, unless the
maturity of any Designated Senior Debt has been accelerated,
if this Article 10 otherwise permits the payment, distribution or acquisition at
the time of such payment or acquisition.
Section 10.04. Acceleration of Notes.
If payment of the Notes is accelerated because of an Event of Default,
the Company will promptly notify holders of Senior Debt of the acceleration.
Section 10.05. When Distribution Must Be Paid Over.
In the event that the Trustee or any Holder receives any payment of any
Obligations with respect to the Notes or on account of any Liquidated Damages
(except (A) in Permitted Junior Securities or (B) from payments and other
distributions made from any defeasance trust created pursuant to Section 8.01
hereof so long as, on the date or dates the respective amounts were paid into
trust, such payments were made without violating any of the provisions of this
Article 10) at a time such payment is prohibited by Section 10.03 hereof, such
payment will be held by the Trustee or such Holder, in trust for the benefit of,
and will be paid forthwith over and delivered, upon written request, to, the
holders of Senior Debt as their interests may appear or their Representative
under the agreement, indenture or other document (if any) pursuant to which
Senior Debt may have been issued, as their respective interests may appear, for
82
application to the payment of all Obligations with respect to Senior Debt
remaining unpaid to the extent necessary to pay such Obligations in full in
accordance with their terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Debt.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are specifically set
forth in this Article 10, and no implied covenants or obligations with respect
to the holders of Senior Debt will be read into this Indenture against the
Trustee. The Trustee will not be deemed to owe any fiduciary duty to the holders
of Senior Debt, and will not be liable to any such holders if the Trustee in
good faith shall pay over or distribute to or on behalf of Holders or the
Company money or assets to which any holders of Senior Debt are then entitled by
virtue of this Article 10, except if such payment is made as a result of the
willful misconduct or gross negligence of the Trustee.
Section 10.06. Notice by Company.
The Company will promptly notify the Trustee and the Paying Agent of
any facts known to the Company that would cause a payment of any Obligations
with respect to the Notes to violate this Article 10, but failure to give such
notice will not affect the subordination of the Notes to the Senior Debt as
provided in this Article 10.
Section 10.07. Subrogation.
After all Senior Debt is paid in full and until the Notes are paid in
full, Holders of Notes will be subrogated (equally and ratably with all other
Indebtedness pari passu with the Notes) to the rights of holders of Senior Debt
to receive distributions applicable to Senior Debt to the extent that
distributions otherwise payable to the Holders of Notes have been applied to the
payment of Senior Debt. A distribution made under this Article 10 to holders of
Senior Debt that otherwise would have been made to Holders of Notes is not, as
between the Company and Holders, a payment by the Company on the Notes.
Section 10.08. Relative Rights.
This Article 10 defines the relative rights of Holders of Notes and
holders of Senior Debt. Nothing in this Indenture will:
(i) impair, as between the Company and Holders of Notes, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Notes in accordance with their terms;
(ii) affect the relative rights of Holders of Notes and
creditors of the Company other than their rights in relation to holders
of Senior Debt; or
(iii) prevent the Trustee or any Holder of Notes from
exercising its available remedies upon a Default or Event of Default,
subject to the rights of holders and owners of Senior Debt to receive
distributions and payments otherwise payable to Holders of Notes.
If the Company fails because of this Article 10 to pay principal of or
interest on a Note on the due date, the failure is still a Default or Event of
Default.
83
Section 10.09. Subordination May Not Be Impaired by Company.
No right of any holder of Senior Debt to enforce the subordination of
the Indebtedness evidenced by the Notes will be impaired by any act or failure
to act by the Company or any Holder or by the failure of the Company or any
Holder to comply with this Indenture.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Debt may, at any time from time to time, without the
consent of or notice to the Trustee, without incurring responsibility to the
Trustee or the Holders of the Notes and without impairing or releasing the
provisions of this Article 10 or the obligations under this Indenture of the
Holders of the Notes to the holders of the Senior Debt, do any one or more of
the following: (i) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, the Senior Debt, or otherwise amend or
supplement in any manner, Senior Debt, or any instrument evidencing the same or
any agreement under which Senior Debt is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Debt; (iii) release any Person liable in any manner for the
payment or collection of Senior Debt; and (iv) exercise or refrain from
exercising any rights against the Company and any other Person.
Section 10.10. Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company referred to
in this Article 10, the Trustee and the Holders of Notes will be entitled to
rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such Representative or of the liquidating trustee or
agent or other Person making any distribution to the Trustee or to the Holders
of Notes for the purpose of ascertaining the Persons entitled to participate in
such distribution, the holders of the Senior Debt and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 10.
Section 10.11. Rights of Trustee and Paying Agent.
Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee will not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee has received at its Corporate
Trust Office at least five Business Days prior to the date of such payment
written notice of facts that would cause the payment of any Obligations with
respect to the Notes to violate this Article 10. Only the Company or a
Representative may give the notice. Nothing in this Article 10 will impair the
claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee. Any Agent may do
the same with like rights.
Section 10.12. Authorization to Effect Subordination.
Each Holder of Notes, by the Holder's acceptance thereof, authorizes
and directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 10, and appoints the Trustee to act as such Holder's attorney-in-fact
for any and all such purposes. If the Trustee does not file a proper proof of
claim or proof of debt in
84
the form required in any proceeding referred to in Section 6.09 hereof at least
30 days before the expiration of the time to file such claim, the
Representatives are hereby authorized to file an appropriate claim for and on
behalf of the Holders of the Notes.
Section 10.13. Amendments.
The provisions of this Article 10 will not be amended or modified
without the written consent of the holders of all Senior Debt.
ARTICLE 11.
SUBSIDIARY GUARANTEES
Section 11.01. Guarantee.
Subject to this Article 11, each of the Guarantors hereby, jointly and
severally, unconditionally guarantees to each Holder of a Note authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the Notes or
the obligations of the Company hereunder or thereunder, that: (a) the principal
of, premium and Liquidated Damages, if any, and interest on the Notes will be
promptly paid in full when due, whether at maturity, by acceleration, redemption
or otherwise, and interest on the overdue principal of and interest on the
Notes, if any, if lawful, and all other obligations of the Company to the
Holders or the Trustee hereunder or thereunder will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; and (b) in case
of any extension of time of payment or renewal of any Notes or any of such other
obligations, that same will 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 or otherwise. Failing payment when due of any amount
so guaranteed or any performance so guaranteed for whatever reason, the
Guarantors will 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 are
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor. Each Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenant that this Subsidiary Guarantee will not be discharged except by
complete performance of the obligations contained in the Notes and this
Indenture.
If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Guarantors or any custodian, trustee, liquidator or
other similar official acting in relation to either the Company or the
Guarantors, any amount paid by either to the Trustee or such Holder, this
Subsidiary Guarantee, to the extent theretofore discharged, will be reinstated
in full force and effect.
Each Guarantor agrees that it will 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 6 hereof
for the purposes of this Subsidiary Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
obligations
85
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such obligations as provided in Article 6 hereof, such obligations (whether or
not due and payable) will forthwith become due and payable by the Guarantors for
the purpose of this Subsidiary Guarantee. The Guarantors will 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 Guarantee.
Section 11.02. Subordination of Subsidiary Guarantee.
Notwithstanding any provision in this Article 11 to the contrary, the
Obligations of each Guarantor under its Subsidiary Guarantee pursuant to this
Article 11 will be junior and subordinated to the Senior Debt of such Guarantor
on the same basis as the Notes are junior and subordinated to Senior Debt of the
Company. For the purposes of the foregoing sentence, the Trustee and the Holders
will have the right to receive and/or retain payments by any of the Guarantors
only at such times as they may receive and/or retain payments in respect of the
Notes pursuant to this Indenture, including Article 10 hereof.
Section 11.03. 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 Subsidiary
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 Subsidiary Guarantee. To effectuate the foregoing
intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree
that the obligations of such Guarantor 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 11, result in the obligations of such Guarantor under its Subsidiary
Guarantee not constituting a fraudulent transfer or conveyance.
Section 11.04. Execution and Delivery of Subsidiary Guarantee.
To evidence its Subsidiary Guarantee set forth in Section 11.01, each
Guarantor hereby agrees that a notation of such Subsidiary Guarantee
substantially in the form included in Exhibit E will be endorsed by an Officer
of such Guarantor on each Note authenticated and delivered by the Trustee and
that this Indenture will be executed on behalf of such Guarantor by one of its
Officers.
Each Guarantor hereby agrees that its Subsidiary Guarantee set forth in
Section 11.01 will remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Subsidiary Guarantee.
If an Officer whose signature is on this Indenture or on the Subsidiary
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Subsidiary Guarantee is endorsed, the Subsidiary Guarantee will
be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, will constitute due delivery of the Subsidiary Guarantee set
forth in this Indenture on behalf of the Guarantors.
In the event that the Company creates or acquires any new Domestic
Subsidiary after the date of this Indenture, if required by Section 4.17 hereof,
the Company will cause such Domestic Subsidiary to comply with the provisions of
Section 4.17 hereof and this Article 11, to the extent applicable.
86
Section 11.05. Guarantors May Consolidate, etc., on Certain Terms.
Except as otherwise provided in Section 11.06, no Guarantor may sell or
otherwise dispose of all or substantially all of its assets to, or consolidate
with or merge with or into (whether or not such Guarantor is the surviving
Person), another Person, other than the Company or another Guarantor, unless:
(a) immediately after giving effect to such transaction, no Default
or Event of Default exists; and
(b) either:
(i) subject to Section 11.06 hereof, the Person acquiring the
property in any such sale or disposition or the Person formed by or
surviving any such consolidation or merger assumes all the obligations
of that Guarantor under this Indenture, its Subsidiary Guarantee and
the Registration Rights Agreement pursuant to a supplemental indenture
satisfactory to the Trustee; or
(ii) the Net Proceeds of such sale or other disposition are
applied in accordance with the applicable provisions of this Indenture.
In case of any such consolidation, merger, sale or conveyance and upon
the assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the
Subsidiary Guarantee endorsed upon the Notes and the due and punctual
performance of all of the covenants and conditions of this Indenture to be
performed by the Guarantor, such successor Person will succeed to and be
substituted for the Guarantor with the same effect as if it had been named
herein as a Guarantor. Such successor Person thereupon may cause to be signed
any or all of the Subsidiary Guarantees to be endorsed upon all of the Notes
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee. All the Subsidiary Guarantees so issued will in
all respects have the same legal rank and benefit under this Indenture as the
Subsidiary Guarantees theretofore and thereafter issued in accordance with the
terms of this Indenture as though all of such Subsidiary Guarantees had been
issued at the date of the execution hereof.
Except as set forth in Articles 4 and 5 hereof, and notwithstanding
clauses (a) and (b) above, nothing contained in this Indenture or in any of the
Notes will prevent any consolidation or merger of a Guarantor with or into the
Company or another Guarantor, or will prevent any sale or conveyance of the
property of a Guarantor as an entirety or substantially as an entirety to the
Company or another Guarantor.
Section 11.06. Releases Following Sale of Assets.
In the event (a) of a sale or other disposition of all or substantially
all of the assets of any Guarantor (including by way of merger or consolidation)
or a sale or other disposition of all of the Capital Stock of any Guarantor, in
each case to a Person that is not (either before or after giving effect to such
transaction) a Subsidiary of the Company, provided that the Net Proceeds of such
sale or other disposition are applied in accordance with the applicable
provisions of this Indenture, including without limitation Section 4.10 hereof,
or (b) the Company designates any Restricted Subsidiary that is a Guarantor as
an Unrestricted Subsidiary in accordance with the applicable provisions of this
Indenture, including without limitation, Section 4.20 hereof, then such
Guarantor will be released and relieved of any obligations under its Subsidiary
Guarantee. Upon delivery by the Company to the Trustee of an Officers'
Certificate and an Opinion of Counsel to the effect that such sale or other
disposition was made by the Company in accordance with the provisions of this
Indenture, including without limitation Section 4.10 hereof, the
87
Trustee will execute any documents reasonably required in order to
evidence the release of any Guarantor from its obligations under its Subsidiary
Guarantee.
Any Guarantor not released from its obligations under its Subsidiary
Guarantee will remain liable for the full amount of principal of and interest on
the Notes and for the other obligations of any Guarantor under this Indenture as
provided in this Article 11.
ARTICLE 12.
satisfaction and discharge
Section 12.01. Satisfaction and Discharge.
This Indenture will be discharged and will cease to be of further
effect as to all Notes issued hereunder, when:
(a) either:
(i) all Notes that have been authenticated (except lost, stolen
or destroyed Notes that have been replaced or paid and Notes for whose
payment money has theretofore been deposited in trust and thereafter
repaid to the Company) have been delivered to the Trustee for
cancellation; or
(ii) all Notes that have not been delivered to the Trustee for
cancellation have become due and payable by reason of the mailing of a
notice of redemption or otherwise or will become due and payable within
one year and the Company or any Guarantor has irrevocably deposited or
caused to be deposited with the Trustee as trust funds in trust solely
for the benefit of the Holders, cash in U.S. dollars, non-callable
Government Securities, or a combination thereof, in such amounts as
will be sufficient without consideration of any reinvestment of
interest, to pay and discharge the entire indebtedness on the Notes not
delivered to the Trustee for cancellation for principal, premium and
Liquidated Damages, if any, and accrued interest to the date of
maturity or redemption;
(b) no Default or Event of Default has occurred and is continuing on
the date of such deposit or will occur as a result of such deposit and such
deposit will not result in a breach or violation of, or constitute a default
under, any other instrument to which the Company or any Guarantor is a party or
by which the Company or any Guarantor is bound;
(c) the Company or any Guarantor has paid or caused to be paid all
sums payable by it under this Indenture; and
(d) the Company has delivered irrevocable instructions to the Trustee
under this Indenture to apply the deposited money toward the payment of the
Notes at maturity or the redemption date, as the case may be.
In addition, the Company must deliver an Officers' Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.
Notwithstanding the satisfaction and discharge of this Indenture, if
money has been deposited with the Trustee pursuant to subclause (ii) of clause
(a) of this Section, the provisions of Section 12.02 and Section 8.06 will
survive.
88
Section 12.02. Application of Trust Money.
Subject to the provisions of Section 8.06, all money deposited with the
Trustee pursuant to Section 12.01 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 Company acting as its
own Paying Agent) as the Trustee may determine, to the Persons 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 12.01 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's 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 12.01; provided that if the Company has made any payment of principal
of, premium, if any, or interest on any Notes because of the reinstatement of
its obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money or Government Securities held
by the Trustee or Paying Agent.
ARTICLE 13.
MISCELLANEOUS
Section 13.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA (S)318(c), the imposed duties will control.
Section 13.02. Notices.
Any notice or communication by the Company, 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),
telex, telecopier or overnight air courier guaranteeing next day delivery, to
the others' address:
If to the Company and/or any Guarantor:
LBI Media, Inc.
1845 West Empire Avenue
Burbank, CA 91504
Telecopier No.: (818) 729-5678
Attention: Lenard D. Liberman
With a copy to:
O'Melveny & Myers LLP
400 South Hope Street
Los Angeles, CA 90071
Telecopier No.: (213) 430-6000
Attention: Joseph K. Kim
89
If to the Trustee:
U.S. Bank, N.A.
1420 Fifth Avenue, 7/th/ Floor
Seattle, WA 98101
Telecopier No.: (206) 344-4630
Attention: Corporate Trust Services
The Company, 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) will
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder will be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication will also be so mailed to any
Person described in TIA (S) 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it will 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 Company mails a notice or communication to Holders, it will mail
a copy to the Trustee and each Agent at the same time.
Section 13.03. Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA (S) 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA (S)
312(c).
Section 13.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which will include the statements set forth in
Section 13.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been satisfied.
90
Section 13.05. Statements Required in Certificate or Opinion.
Each certificate or Opinion of Counsel with respect to compliance with
a condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA (S) 314(a)(4)) will comply with the provisions of TIA
(S) 314(e) and will include:
(a) a statement that the Person making such certificate or rendering
such 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
satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
Section 13.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 13.07. No Personal Liability of Directors, Officers, Employees and
Stockholders.
No director, officer, employee, incorporator or stockholder of the
Company or any Guarantor, as such, will have any liability for any obligations
of the Company or the Guarantors under the Notes, the Subsidiary Guarantees,
this Indenture, the Registration Rights Agreement or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes. The waiver may not be
effective to waive liabilities under the federal securities laws.
Section 13.08. Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES WITHOUT GIVING
EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Section 13.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
91
Section 13.10. Successors.
All agreements of the Company in this Indenture and the Notes will bind
its successors. All agreements of the Trustee in this Indenture will bind its
successors. All agreements of each Guarantor in this Indenture will bind its
successors, except as otherwise provided in Section 11.06.
Section 13.11. Severability.
In case any provision in this Indenture or in the Notes is be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions will not in any way be affected or impaired thereby.
Section 13.12. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy will be an original, but all of them together represent the same
agreement.
Section 13.13. 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 will in no
way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
92
SIGNATURES
Dated as of July 9, 2002
LBI MEDIA, INC.
By: /s/ Lenard D. Liberman
----------------------------------
Name: Lenard D. Liberman
Title: Executive Vice President
GUARANTORS:
LIBERMAN TELEVISION OF HOUSTON, INC.
KZJL LICENSE CORP.
LIBERMAN TELEVISION, INC.
KRCA TELEVISION, INC.
KRCA LICENSE CORP.
LIBERMAN BROADCASTING, INC.
LBI RADIO LICENSE CORP.
LIBERMAN BROADCASTING OF HOUSTON, INC.
LIBERMAN BROADCASTING OF HOUSTON
LICENSE CORP.
EMPIRE BURBANK STUDIOS, INC.
By: /s/ Lenard D. Liberman
----------------------------------
Name: Lenard D. Liberman
Title: As Executive Vice President
of each of the entities listed
above
U.S. BANK, N.A.
By: /s/ R.B. Colwell Jr.
----------------------------------
Name: R.B. Colwell Jr.
Title: Vice President
S-1
EXHIBIT A-1
[Face of Note]
CUSIP/CINS 501786AA5
10 1/8% Senior Subordinated Notes due 2012
No. ___ $____________
LBI MEDIA, INC.
promise to pay to _____________________________________________________________
or registered assigns,
the principal sum of __________________________________________________________
Dollars on July 15, 2012.
Interest Payment Dates: January 15 and July 15
Record Dates: January 1 and July 1
Dated: July 9, 2002
LBI MEDIA, INC.
By: _________________
Name:
Title:
This is one of the Notes referred to
in the within-mentioned Indenture:
U.S. BANK, N.A.
as Trustee
By: _____________________________
Authorized Signatory
A-1-1
[Back of Note]
10 1/8% Senior Subordinated Notes due 2012
[Insert the Global Note Legend, if applicable pursuant to the provisions of the
Indenture]
[Insert the Private Placement Legend, if applicable pursuant to the provisions
of the Indenture]
Capitalized terms used herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.
1. Interest. LBI Media, Inc., a California corporation (the "Company"),
promises to pay interest on the principal amount of this Note at 10 1/8 % per
annum from July 9, 2002 until maturity and will pay the Liquidated Damages, if
any, payable pursuant to Section 5 of the Registration Rights Agreement referred
to below. The Company will pay interest and Liquidated Damages, if any,
semi-annually in arrears on January 15 and July 15 of each year, or if any such
day is not a Business Day, on the next succeeding Business Day (each an
"Interest Payment Date"). Interest on the Notes will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from the
date of issuance; provided that if there is no existing Default in the payment
of interest, and if this Note is authenticated between a record date referred to
on the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided, further, that
the first Interest Payment Date shall be January 15, 2003. The Company 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 a rate that is 1% per annum in excess of the rate then in effect; it
will pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages
(without regard to any applicable grace periods) from time to time on demand at
the same rate to the extent lawful. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
2. Method of Payment. The Company will pay interest on the Notes
(except defaulted interest) and Liquidated Damages, if any, to the Persons who
are registered Holders of Notes at the close of business on the January 1 or
July 1 next preceding the Interest Payment Date, even if such Notes are canceled
after such record date and on or before such Interest Payment Date, except as
provided in Section 2.12 of the Indenture with respect to defaulted interest.
The Notes will be payable as to principal, premium and Liquidated Damages, if
any, and interest at the office or agency of the Company maintained for such
purpose within or without the City and State of New York, or, at the option of
the Company, payment of interest and Liquidated Damages, if any, may be made by
check mailed on the Interest Payment Date to the Holders at their addresses set
forth in the register of Holders, provided that payment by wire transfer of
immediately available funds will be required with respect to principal of and
interest, premium and Liquidated Damages, if any, on, all Global Notes and all
other Notes the Holders of which will have provided wire transfer instructions
to the Company or the Paying Agent. Such payment will 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, U.S. Bank, N.A., a national
banking association, the Trustee under the Indenture, will act as Paying Agent
and Registrar. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. Indenture. The Company issued the Notes under an Indenture dated as
of July 9, 2002 (the "Indenture") among the Company, the guarantors party
thereto (the "Guarantors") and the Trustee. The
A-1-2
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 (15
U.S. Code (S)(S) 77aaa-77bbbb). The Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of such
terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall govern and be
controlling. The Notes are unsecured obligations of the Company limited to
$150.0 million in aggregate principal amount.
5. Optional Redemption.
(a) Except as set forth in subparagraph (b) of this Paragraph 5, the
Company will not have the option to redeem the Notes prior to July 15, 2007.
Thereafter, the Company will have the option to redeem the Notes, in whole or in
part, upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest and Liquidated Damages, if any, on the Notes to be
redeemed, to the applicable redemption date, if redeemed during the twelve-month
period beginning on July 15 of the years indicated below:
Year Percentage
---- ----------
2007 ................................................. 105.063%
2008 ................................................. 103.375%
2009 ................................................. 101.688%
2010 and thereafter .................................. 100.000%
(b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, at any time prior to July 15, 2005, the Company may on one or more
occasions redeem Notes with all or a portion of the net cash proceeds of one or
more Public Equity Offerings at a redemption price equal to 110.125% of the
principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the applicable redemption date; provided that at
least 65% of the aggregate principal amount of the Notes issued under the
Indenture remains outstanding immediately after the occurrence of such
redemption (excluding Notes held by the Company and its Affiliates) and that
such redemption occurs within 90 days of the date of the closing of such Public
Equity Offering.
6. Mandatory Redemption.
The Company will not be required to make mandatory redemption payments
with respect to the Notes.
7. Repurchase at Option Holder.
(a) If there is a Change of Control, the Company will be required to
make an offer (a "Change of Control Offer") to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of each Holder's Notes at a purchase
price equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date of purchase
(the "Change of Control Payment"). Within 30 days following any Change of
Control, the Company will mail a notice to each Holder setting forth the
procedures governing the Change of Control Offer as required by the Indenture.
(b) If the Company or a Subsidiary consummates any Asset Sales,
within ten Business Days of each date on which the aggregate amount of Excess
Proceeds exceeds $10.0 million, the Company will commence an offer to all
Holders of Notes and all holders of other Indebtedness that is pari passu with
the Notes containing provisions similar to those set forth in the Indenture with
respect to offers to
A-1-3
purchase or redeem with the proceeds of sales of assets (as "Asset Sale Offer")
pursuant to Section 3.09 of the Indenture to purchase the maximum principal
amount of Notes (including any Additional Notes) 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 plus accrued and unpaid interest and Liquidated Damages
thereon, if any, to the date fixed for the closing of such offer, in accordance
with the procedures set forth in the Indenture. To the extent that the aggregate
amount of Notes (including any Additional Notes) and other pari passu
Indebtedness tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Company (or such Subsidiary) may use such deficiency for any
purpose not otherwise prohibited by the Indenture. If the aggregate principal
amount of Notes and other pari passu Indebtedness surrendered by Holders thereof
exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and
other pari passu Indebtedness to be purchased on a pro rata basis. Holders of
Notes that are the subject of an offer to purchase will receive an Asset Sale
Offer from the Company prior to any related purchase date and may elect to have
such Notes purchased by completing the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Notes.
8. Notice of Redemption. Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each Holder
whose Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 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 Notes or portions thereof
called for redemption.
9. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company 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 Company
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.
10. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.
11. Amendment, Supplement and Waiver. Subject to certain exceptions,
the Indenture, the Subsidiary Guarantees or the Notes may be amended or
supplemented with the consent of the Holders of at least a majority in principal
amount of the then outstanding Notes and Additional Notes, if any, voting as a
single class, and any existing default or compliance with any provision of the
Indenture, the Subsidiary Guarantees or the Notes may be waived with the consent
of the Holders of a majority in principal amount of the then outstanding Notes
and Additional Notes, if any, voting as a single class. Without the consent of
any Holder of a Note, the Indenture, the Subsidiary Guarantees or the Notes may
be amended or supplemented to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Notes in addition to or in place of certificated
Notes, to provide for the assumption of the Company's or Guarantor's obligations
to Holders of the Notes in case of a merger or consolidation, to make any change
that would provide any additional rights or benefits to the Holders of the Notes
or that does not adversely affect the legal rights under the Indenture of any
such Holder, to comply with the requirements of the SEC in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act, to
provide for the Issuance of Additional Notes in accordance with the limitations
set forth in the Indenture, or to allow any Guarantor to execute a supplemental
indenture to the Indenture and/or a Subsidiary Guarantee with respect to the
Notes.
A-1-4
(C) Defaults and Remedies. Events of Default include: (i) default for
30 days in the payment when due of interest or Liquidated Damages on the Notes;
(ii) default in payment when due of principal of or premium, if any, on the
Notes when the same becomes due and payable at maturity, upon redemption
(including in connection with an offer to purchase) or otherwise, (iii) failure
by the Company or any of its Restricted Subsidiaries to comply with Section 4.15
or 5.01 of the Indenture; (iv) failure by the Company or any of its Restricted
Subsidiaries for 30 days after notice to the Company by the Trustee or the
Holders of at least 25% in principal amount of the Notes then outstanding to
comply with Section 4.07, 4.09 or 4.10 of the Indenture; (v) failure by the
Company or any of its Subsidiaries for 60 days after notice to the Company by
the Trustee or the Holders of at least 25% in principal amount of the Notes then
outstanding to observe or perform any other covenant, representation, warranty
or other agreement in the Indenture or the Notes; (vi) default under certain
other agreements relating to Indebtedness of the Company which default is caused
by a failure to pay principal of such Indebtedness at the final stated maturity
thereof (giving effect to any applicable grace periods and any extensions
thereof) or results in the acceleration of such Indebtedness prior to its
express maturity; (vii) certain final judgments for the payment of money that
remain undischarged, unpaid, unrestricted, unbonded or unstayed for a period of
60 days; (viii) certain events of bankruptcy or insolvency with respect to the
Company or any of its Significant Subsidiaries; (ix) the incurrence by Parent of
Specified Parent Debt (other than the refinancing of any indebtedness under the
Existing Parent Notes) if, at the time of any such incurrence and after giving
pro forma effect to such incurrence as of such date and to the use of proceeds
therefrom, as if the same had occurred at the beginning of the most recently
ended four fiscal quarter period of Parent for which internal financial
statements are available, the Parent Debt Ratio would have exceeded 7.0 to 1 and
the failure for 30 days after notice from the Trustee or Holders of at least 25%
in aggregate principal amount of the outstanding Notes to cure such default; and
(x) except as permitted by the Indenture, any Subsidiary Guarantee of a
Significant Subsidiary shall be held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full force and
effect or any Guarantor which is a Significant Subsidiary or any Person acting
on its behalf shall deny or disaffirm its obligations under its Subsidiary
Guarantee, provided, however, that an Event of Default will also be deemed to
occur with respect to Subsidiary Guarantors that are not Significant
Subsidiaries if the Subsidiary Guarantees of such Insignificant Subsidiaries are
held in any judicial proceeding to be unenforceable or invalid or shall cease
for any reason to be in full force and effect or such Insignificant Subsidiaries
deny or disaffirm their obligations under their Subsidiary Guarantees (other
than in accordance with the terms of such Subsidiary Guarantee), if when
aggregated and taken as a whole such Insignificant Subsidiaries would meet the
definition of a Significant Subsidiary. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare all the Notes to be due and payable.
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 without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal or interest) if it 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 Event of Default and its consequences
under the Indenture except a continuing Default or Event of Default in the
payment of interest on, or the principal of, the Notes. The Company is required
to deliver to the Trustee annually a statement regarding compliance with the
Indenture, and the Company is required upon becoming aware of any Default or
Event of Default, to deliver to the Trustee a statement specifying such Default
or Event of Default.
A-1-5
12. Subordination. Payment of principal, interest and premium and
Liquidated Damages, if any, on the Notes is subordinated to the prior payment of
Senior Debt on the terms provided in the Indenture.
13. Trustee Dealings with Company. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.
14. No Recourse Against Others. A director, officer, employee,
incorporator or stockholder, of the Company or any of the Guarantors, as such,
will not have any liability for any obligations of the Company or such Guarantor
under the Notes, the Subsidiary Guarantees or the Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the Notes.
15. Authentication. This Note will not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
16. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
17. 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 will have all the rights set forth in the Registration Rights
Agreement dated as of July 9, 2002, among the Company, the Guarantors and the
other parties named on the signature pages thereof or, in the case of Additional
Notes, Holders of Restricted Global Notes and Restricted Definitive Notes will
have the rights set forth in one or more registration rights agreements, if any,
between the Company and the other parties thereto, relating to rights given by
the Company to the purchasers of any Additional Notes (collectively, the
"Registration Rights Agreement").
18. Cusip Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP 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.
19. Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL
GOVERN AND BE USED TO CONSTRUE THE NOTES WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
A-1-6
The Company 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:
LBI Media, Inc.
1845 West Empire Avenue
Burbank, CA 91504
Attention: Lenard D. Liberman
A-1-7
Assignment Form
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to: __________________________________
(Insert assignee's legal name)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint_________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date: _______________
Your Signature: ____________________________
(Sign exactly as your name appears on
the face of this Note)
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-1-8
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box
below:
.Section 4.10 .Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased:
$____________
Date: _______________
Your Signature:_________________________________
(Sign exactly as your name appears
on the face of this Note)
Tax Identification No.:_________________________
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-1-9
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*
The following exchanges of a part of this Global Note for an interest
in another Global Note or for a Definitive Note, or exchanges of a part of
another Global Note or Definitive Note for an interest in this Global Note, have
been made:
Principal Amount
of this Global Note Signature of
Amount of decrease Amount of increase in following such authorized officer
in Principal Amount Principal Amount decrease (or of Trustee or Note
Date of Exchange of this Global Note of this Global Note increase) Custodian
- ---------------- ------------------- ------------------- --------- ---------
* This schedule should be included only if the Note is issued in global form.
A-1-10
EXHIBIT A-2
[Face of Regulation S Temporary Global Note]
CUSIP/CINS U51390AA7
10 1/8% Senior Subordinated Notes due 2012
No. ___ $__________
LBI MEDIA, INC.
promise to pay to ______________________________________________________________
or registered assigns,
the principal sum of ___________________________________________________________
Dollars on July 15, 2012.
Interest Payment Dates: January 15 and July 15
Record Dates: January 1 and July 1
Dated: July 9, 2002
LBI MEDIA, INC.
By: ____________________
Name:
Title:
This is one of the Notes referred
to in the within-mentioned Indenture:
U.S. BANK, N.A.,
as Trustee
By:__________________________
Authorized Signatory
A-2-1
[Back of Regulation S Temporary Global Note]
10 1/8% Senior Subordinated Notes due 2012
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF INTEREST HEREON.
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 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 COMPANY.
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 COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS 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.
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, RESOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS NOTE IS NOTIFIED THAT THE SELLER OF THIS NOTE
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS NOTE
MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) INSIDE THE
UNITED STATES TO A PERSON WHOM 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, (II)
A-2-2
OUTSIDE THE UNITED STATES IN A TRANSACTION COMPLYING WITH THE PROVISIONS OF RULE
904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (IF AVAILABLE), (IV) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR (V) TO THE
ISSUER, ITS SUBSIDIARIES OR ITS DIRECT OR INDIRECT PARENT, IN EACH OF CASES (I)
THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE.
Capitalized terms used herein will have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. Interest. LBI Media, Inc., a California corporation (the "Company"),
promises to pay interest on the principal amount of this Note at 10?% per annum
from July 9, 2002 until maturity and will pay the Liquidated Damages, if any,
payable pursuant to Section 5 of the Registration Rights Agreement referred to
below. The Company will pay interest and Liquidated Damages, if any,
semi-annually in arrears on January 15 and July 15 of each year, or if any such
day is not a Business Day, on the next succeeding Business Day (each an
"Interest Payment Date"). Interest on the Notes will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from the
date of issuance; provided that if there is no existing Default in the payment
of interest, and if this Note is authenticated between a record date referred to
on the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided, further, that
the first Interest Payment Date shall be January 15, 2003. The Company 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 a rate that is 1% per annum in excess of the rate then in effect; it
will pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages
(without regard to any applicable grace periods) from time to time on demand at
the same rate to the extent lawful. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
Until this Regulation S Temporary Global Note is exchanged for one or
more Regulation S Permanent Global Notes, the Holder hereof shall not be
entitled to receive payments of interest hereon; until so exchanged in full,
this Regulation S Temporary Global Note shall in all other respects be entitled
to the same benefits as other Notes under the Indenture.
2. Method of Payment. The Company will pay interest on the Notes
(except defaulted interest) and Liquidated Damages, if any, to the Persons who
are registered Holders of Notes at the close of business on the January 1 or
July 1 next preceding the Interest Payment Date, even if such Notes are canceled
after such record date and on or before such Interest Payment Date, except as
provided in Section 2.12 of the Indenture with respect to defaulted interest.
The Notes will be payable as to principal, premium and Liquidated Damages, if
any, and interest at the office or agency of the Company maintained for such
purpose within or without the City and State of New York, or, at the option of
the Company, payment of interest and Liquidated Damages, if any, may be made by
check mailed on the Interest Payment Date to the Holders at their addresses set
forth in the register of Holders, provided that payment by wire transfer of
immediately available funds will be required with respect to principal of and
interest, premium and Liquidated Damages, if any, on, all Global Notes and all
other Notes the Holders of which will have provided wire transfer instructions
to the Company or the Paying Agent. Such payment will 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.
A-2-3
3. Paying Agent and Registrar. Initially, U.S. Bank, N.A., a national
banking association, the Trustee under the Indenture, will act as Paying Agent
and Registrar. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. Indenture. The Company issued the Notes under an Indenture dated as
of July 9, 2002 (the "Indenture") among the Company, the guarantors party
thereto (the "Guarantors") and the Trustee. The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939, as amended (15 U.S. Code ss.ss. 77aaa-77bbbb). The
Notes are subject to all such terms, and Holders are referred to the Indenture
and such Act for a statement of such terms. To the extent any provision of this
Note conflicts with the express provisions of the Indenture, the provisions of
the Indenture shall govern and be controlling. The Notes are unsecured
obligations of the Company limited to $150.0 million in aggregate principal
amount.
5. Optional Redemption.
(a) Except as set forth in subparagraph (b) of this Paragraph 5, the
Company will not have the option to redeem the Notes prior to July 15, 2007.
Thereafter, the Company will have the option to redeem the Notes, in whole or in
part, upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest and Liquidated Damages, if any, on the Notes to be
redeemed, to the applicable redemption date, if redeemed during the twelve-month
period beginning on July 15 of the years indicated below:
Year Percentage
---- ----------
2007 ................................................... 105.063%
2008 ................................................... 103.375%
2009 ................................................... 101.688%
2010 and thereafter .................................... 100.000%
(b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, at any time prior to July 15, 2005, the Company may on one or more
occasions redeem Notes with all or a portion of the net cash proceeds of one or
more Public Equity Offerings at a redemption price equal to 110.125% of the
principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the applicable redemption date; provided that at
least 65% of the aggregate principal amount of the Notes issued under the
Indenture remains outstanding immediately after the occurrence of such
redemption (excluding Notes held by the Company and its Affiliates) and that
such redemption occurs within 90 days of the date of the closing of such Public
Equity Offering.
6. Mandatory Redemption.
The Company will not be required to make mandatory redemption payments
with respect to the Notes.
7. Repurchase At Option of Holder.
(a) If there is a Change of Control, the Company will be required to
make an offer (a "Change of Control Offer") to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of each Holder's Notes at a purchase
price equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date of purchase
(the "Change of Control Payment"). Within 30 days following any Change of
Control, the Company will mail a notice to
A-2-4
each Holder setting forth the procedures governing the Change of Control Offer
as required by the Indenture.
(b) If the Company or a Subsidiary consummates any Asset Sales, within
ten Business Days of each date on which the aggregate amount of Excess Proceeds
exceeds $10.0 million, the Company will commence an offer to all Holders of
Notes and all holders of other Indebtedness that is pari passu with the Notes
containing provisions similar to those set forth in the Indenture with respect
to offers to purchase or redeem with the proceeds of sales of assets (as "Asset
Sale Offer") pursuant to Section 3.09 of the Indenture to purchase the maximum
principal amount of Notes (including any Additional Notes) 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 plus accrued and unpaid interest and Liquidated
Damages thereon, if any, to the date fixed for the closing of such offer, in
accordance with the procedures set forth in the Indenture. To the extent that
the aggregate amount of Notes (including any Additional Notes) and other pari
passu Indebtedness tendered pursuant to an Asset Sale Offer is less than the
Excess Proceeds, the Company (or such Subsidiary) may use such deficiency for
any purpose not otherwise prohibited by the Indenture. If the aggregate
principal amount of Notes and other pari passu Indebtedness surrendered by
Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select
the Notes and other pari passu Indebtedness to be purchased on a pro rata basis.
Holders of Notes that are the subject of an offer to purchase will receive an
Asset Sale Offer from the Company prior to any related purchase date and may
elect to have such Notes purchased by completing the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Notes.
8. Notice of Redemption. Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each Holder
whose Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 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 Notes or portions thereof
called for redemption.
9. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company 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 Company
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.
This Regulation S Temporary Global Note is exchangeable in whole or in
part for one or more Global Notes only (i) on or after the termination of the
40-day restricted period (as defined in Regulation S) and (ii) upon presentation
of certificates (accompanied by an Opinion of Counsel, if applicable) required
by Article 2 of the Indenture. Upon exchange of this Regulation S Temporary
Global Note for one or more Global Notes, the Trustee shall cancel this
Regulation S Temporary Global Note.
10. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.
11. Amendment, Supplement and Waiver. Subject to certain exceptions,
the Indenture, the Subsidiary Guarantees or the Notes may be amended or
supplemented with the consent of the Holders of at least a majority in principal
amount of the then outstanding Notes and Additional Notes, if any, voting as a
single class, and any existing default or compliance with any provision of the
Indenture, the
A-2-5
Subsidiary Guarantees or the Notes may be waived with the consent of the Holders
of a majority in principal amount of the then outstanding Notes and Additional
Notes, if any, voting as a single class. Without the consent of any Holder of a
Note, the Indenture, the Subsidiary Guarantees or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's or Guarantor's obligations to
Holders of the Notes in case of a merger or consolidation, to make any change
that would provide any additional rights or benefits to the Holders of the Notes
or that does not adversely affect the legal rights under the Indenture of any
such Holder, to comply with the requirements of the SEC in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act, to
provide for the Issuance of Additional Notes in accordance with the limitations
set forth in the Indenture, or to allow any Guarantor to execute a supplemental
indenture to the Indenture and/or a Subsidiary Guarantee with respect to the
Notes.
(c) Defaults and Remedies. Events of Default include: (i) default for
30 days in the payment when due of interest or Liquidated Damages on the Notes;
(ii) default in payment when due of principal of or premium, if any, on the
Notes when the same becomes due and payable at maturity, upon redemption
(including in connection with an offer to purchase) or otherwise, (iii) failure
by the Company or any of its Restricted Subsidiaries to comply with Section 4.15
or 5.01 of the Indenture; (iv) failure by the Company or any of its Restricted
Subsidiaries for 30 days after notice to the Company by the Trustee or the
Holders of at least 25% in principal amount of the Notes then outstanding to
comply with Section 4.07, 4.09 or 4.10 of the Indenture; (v) failure by the
Company or any of its Subsidiaries for 60 days after notice to the Company by
the Trustee or the Holders of at least 25% in principal amount of the Notes then
outstanding to observe or perform any other covenant, representation, warranty
or other agreement in the Indenture or the Notes; (vi) default under certain
other agreements relating to Indebtedness of the Company which default is caused
by a failure to pay principal of such Indebtedness at the final stated maturity
thereof (giving effect to any applicable grace periods and any extensions
thereof) or results in the acceleration of such Indebtedness prior to its
express maturity; (vii) certain final judgments for the payment of money that
remain undischarged, unpaid, unrestricted, unbonded or unstayed for a period of
60 days; (viii) certain events of bankruptcy or insolvency with respect to the
Company or any of its Significant Subsidiaries; (ix) the incurrence by Parent of
Specified Parent Debt (other than the refinancing of any indebtedness under the
Existing Parent Notes) if, at the time of any such incurrence and after giving
pro forma effect to such incurrence as of such date and to the use of proceeds
therefrom, as if the same had occurred at the beginning of the most recently
ended four fiscal quarter period of Parent for which internal financial
statements are available, the Parent Debt Ratio would have exceeded 7.0 to 1 and
the failure for 30 days after notice from the Trustee or Holders of at least 25%
in aggregate principal amount of the outstanding Notes to cure such default; and
(x) except as permitted by the Indenture, any Subsidiary Guarantee of a
Significant Subsidiary shall be held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full force and
effect or any Guarantor which is a Significant Subsidiary or any Person acting
on its behalf shall deny or disaffirm its obligations under its Subsidiary
Guarantee, provided, however, that an Event of Default will also be deemed to
occur with respect to Subsidiary Guarantors that are not Significant
Subsidiaries if the Subsidiary Guarantees of such Insignificant Subsidiaries are
held in any judicial proceeding to be unenforceable or invalid or shall cease
for any reason to be in full force and effect or such Insignificant Subsidiaries
deny or disaffirm their obligations under their Subsidiary Guarantees (other
than in accordance with the terms of such Subsidiary Guarantee), if when
aggregated and taken as a whole such Insignificant Subsidiaries would meet the
definition of a Significant Subsidiary. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare all the Notes to be due and payable.
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 without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes
A-2-6
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 or Event of
Default (except a Default or Event of Default relating to the payment of
principal or interest) if it 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 Event of Default and its consequences
under the Indenture except a continuing Default or Event of Default in the
payment of interest on, or the principal of, the Notes. The Company is required
to deliver to the Trustee annually a statement regarding compliance with the
Indenture, and the Company is required upon becoming aware of any Default or
Event of Default, to deliver to the Trustee a statement specifying such Default
or Event of Default.
12. Subordination. Payment of principal, interest and premium and
Liquidated Damages, if any, on the Notes is subordinated to the prior payment of
Senior Debt on the terms provided in the Indenture.
13. Trustee Dealings with Company. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.
14. No Recourse Against Others. A director, officer, employee,
incorporator or stockholder, of the Company or any of the Guarantors, as such,
will not have any liability for any obligations of the Company or such Guarantor
under the Notes, the Subsidiary Guarantees or the Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the Notes.
15. Authentication. This Note will not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
16. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
17. 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 will have all the rights set forth in the Registration Rights
Agreement dated as of July 9, 2002, among the Company, the Guarantors and the
other parties named on the signature pages thereof or, in the case of Additional
Notes, Holders of Restricted Global Notes and Restricted Definitive Notes will
have the rights set forth in one or more registration rights agreements, if any,
between the Company and the other parties thereto, relating to rights given by
the Company to the purchasers of any Additional Notes (collectively, the
"Registration Rights Agreement").
18. Cusip Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP 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.
A-2-7
19. Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL
GOVERN AND BE USED TO CONSTRUE THE NOTES WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
The Company 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:
LBI Media, Inc.
1845 West Empire Avenue
Burbank, CA 91504
Attention: Lenard D. Liberman
A-2-8
Assignment Form
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to:___________________________________
(Insert assignee's legal name)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date: _______________
Your Signature: __________________________
(Sign exactly as your name
appears on the face of this Note)
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-2-9
Option of Holder to Elect Purchase
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box
below:
.Section 4.10 .Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased:
$_____________
Date: _______________
Your Signature: ___________________________
(Sign exactly as your name appears
on the face of this Note)
Tax Identification No.:_____________________
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-2-10
SCHEDULE OF EXCHANGES OF REGULATION S TEMPORARY GLOBAL NOTE
The following exchanges of a part of this Regulation S Temporary Global
Note for an interest in another Global Note, or of other Restricted Global Notes
for an interest in this Regulation S Temporary Global Note, have been made:
Principal Amount
of this Global Note Signature of
Amount of decrease Amount of increase in following such authorized officer
in Principal Amount Principal Amount decrease (or of Trustee or Note
Date of Exchange of this Global Note of this Global Note increase) Custodian
- ---------------- ------------------- ------------------- --------- ---------
A-2-11
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
LBI Media, Inc.
1845 West Empire Avenue
Burbank, CA 91504
U.S. Bank, N.A.
1420 Fifth Avenue, 7/th/ Floor
Seattle, WA 98101
Re: 10 1/8 Senior Subordinated Notes due 2012
Reference is hereby made to the Indenture, dated as of July 9, 2002
(the "Indenture"), between LBI Media, Inc., a California corporation, as issuer
(the "Company"), the Guarantors party thereto, and U.S. Bank, N.A., a national
banking association, as Trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
___________________, (the "Transferor") owns and proposes to transfer
the Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to ___________________________ (the "Transferee"), as further specified in Annex
A hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [_] Check if Transferee will take delivery of a beneficial interest
in the 144A Global Note or a Definitive Note Pursuant to Rule 144A. The Transfer
is being effected pursuant to and in accordance with Rule 144A under the
Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, the
Transferor hereby further certifies that the beneficial interest or Definitive
Note is being transferred to a Person that the Transferor reasonably believed
and believes is purchasing the beneficial interest or Definitive Note for its
own account, or for one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A in a transaction
meeting the requirements of Rule 144A and such Transfer is in compliance with
any applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the 144A Global Note and/or the Definitive Note and in the
Indenture and the Securities Act.
2. [_] Check if Transferee will take delivery of a beneficial interest
in the Temporary Regulation S Global Note, the Regulation S Global Note or a
Definitive Note pursuant to Regulation S. The Transfer is being effected
pursuant to and in accordance with Rule 903 or Rule 904 under the 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
B-1
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, the
Temporary Regulation S Global Note and/or the Definitive Note and in the
Indenture and the Securities Act.
3. [_] Check and complete if Transferee will take delivery of a
beneficial interest in the IAI Global Note or a 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 Company 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;
or
(d) [_] such Transfer is being effected to an Institutional
Accredited Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A, Rule 144 or
Rule 904, and the Transferor hereby further certifies that it has not
engaged in any general solicitation within the meaning of Regulation D
under the Securities Act and the Transfer complies with the transfer
restrictions applicable to beneficial interests in a Restricted Global
Note or Restricted Definitive Notes and the requirements of the
exemption claimed, which certification is supported by (1) a
certificate executed by the Transferee in the form of Exhibit D to the
Indenture and (2) if such Transfer is in respect of a principal amount
of Notes at the time of transfer of less than $250,000, an Opinion of
Counsel provided by the Transferor or the Transferee (a copy of which
the Transferor has attached to this certification), to the effect that
such Transfer is in compliance with the Securities Act. Upon
consummation of the proposed transfer in accordance with the terms of
the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the IAI Global Note and/or the
Definitive Notes and in the Indenture and the Securities Act.
4. [_] Check if Transferee will take delivery of a beneficial interest
in an Unrestricted Global Note or of an Unrestricted Definitive Note.
(a) [_] Check if Transfer is pursuant to Rule 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement
B-2
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.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
___________________________________
[Insert Name of Transferor]
By:________________________________
Name:
Title:
Dated: _______________________
B-3
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [_] a beneficial interest in the:
(i) [_] 144A Global Note (CUSIP _________), or
(ii) [_] Regulation S Global Note (CUSIP _________),
or
(iii) [_] IAI Global Note (CUSIP _________); or
(b) [_] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [_] a beneficial interest in the:
(i) [_] 144A Global Note (CUSIP _________), or
(ii) [_] Regulation S Global Note (CUSIP _________),
or
(iii) [_[ IAI Global Note (CUSIP _________); or
(iv) [_] Unrestricted Global Note (CUSIP _________);
or
(b) [_] a Restricted Definitive Note; or
(c) [_] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-4
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
LBI Media, Inc.
1845 West Empire Avenue
Burbank, CA 91504
U.S. Bank, N.A.
1420 Fifth Avenue, 7/th/ Floor
Seattle, WA 98101
Re: 10 1/8% Senior Subordinated Notes due 2012
(CUSIP)
Reference is hereby made to the Indenture, dated as of July 9, 2002
(the "Indenture"), between LBI Media, Inc., a California corporation, as issuer
(the "Company"), the Guarantors party thereto, and U.S. Bank, N.A., a national
banking association, as Trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
__________________________, (the "Owner") owns and proposes to exchange
the Note[s] or interest in such Note[s] specified herein, in the principal
amount of $____________ in such Note[s] or interests (the "Exchange"). In
connection with the Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Definitive Notes or Beneficial Interests in
a Restricted Global Note for Unrestricted Definitive Notes or Beneficial
Interests in an Unrestricted Global Note
(a) [_] Check if Exchange is from beneficial interest in a Restricted
Global Note to beneficial interest in an Unrestricted Global Note. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, 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 Securities Act of 1933, as
amended (the "Securities Act"), (iii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial interest in
an Unrestricted Global Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
(b) [_] Check if Exchange is from beneficial interest in a Restricted
Global Note to Unrestricted Definitive Note. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.
(c) [_] Check if Exchange is from Restricted Definitive Note to
beneficial interest in an Unrestricted Global Note. In connection with the
Owner's Exchange of a Restricted Definitive Note for
C-1
a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies
(i) the beneficial interest is being acquired for the Owner's own account
without transfer, (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to Restricted Definitive Notes and pursuant to
and in accordance with the Securities Act, (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the beneficial
interest is being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.
(d) [_] Check if Exchange is from Restricted Definitive Note to
Unrestricted Definitive Note. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. Exchange of Restricted Definitive Notes or Beneficial Interests in
Restricted Global Notes for Restricted Definitive Notes or Beneficial Interests
in Restricted Global Notes
(a) [_] Check if Exchange is from beneficial interest in a Restricted
Global Note to Restricted Definitive Note. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b) [_] Check if Exchange is from Restricted Definitive Note to
beneficial interest in a Restricted Global Note. In connection with the Exchange
of the Owner's Restricted Definitive Note for a beneficial interest in the
[CHECK ONE] [_] 144A Global Note, [_] Regulation S Global Note, [_] IAI Global
Note 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.
C-2
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
___________________________________
[Insert Name of Transferor]
By:________________________
Name:
Title:
Dated: ______________________
C-3
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
LBI Media, Inc.
1845 West Empire Avenue
Burbank, CA 91504
U.S. Bank, N.A.
1420 Fifth Avenue, 7/th/ Floor
Seattle, WA 8101
Re: 10 1/8% Senior Subordinated Notes due 2012
Reference is hereby made to the Indenture, dated as of July 9, 2002
(the "Indenture"), between LBI Media, Inc., a California corporation, as issuer
(the "Company"), the Guarantors party thereto, and U.S. Bank, N.A., a national
banking association, as Trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of:
(a) [_] a beneficial interest in a Global Note, or
(b) [_] a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the Securities Act of
1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter and, if such transfer is in respect of
a principal amount of Notes, at the time of transfer of less than $250,000, an
Opinion of Counsel in form reasonably acceptable to the Company to the effect
that such transfer is in compliance with the Securities Act, (D) outside the
United States in accordance with Rule 904 of Regulation S under the Securities
Act, (E) pursuant to the provisions of Rule 144(k) under the Securities Act or
(F) pursuant to an effective registration statement under the Securities Act,
and we further agree to provide to any person purchasing the Definitive Note or
beneficial interest in a Global Note from us in a transaction meeting the
requirements of clauses (A) through (E) of this paragraph a notice advising such
purchaser that resales thereof are restricted as stated herein.
C-1
3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
5. We are acquiring the Notes or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
_________________________________________
[Insert Name of Accredited Investor]
By:______________________________________
Name:
Title:
Dated: _______________________
D-2
EXHIBIT E
[FORM OF NOTATION OF GUARANTEE]
For value received, each Guarantor (which term includes any successor
Person under the Indenture) has, jointly and severally, unconditionally
guaranteed, to the extent set forth in the Indenture and subject to the
provisions in the Indenture dated as of July 9, 2002 (the "Indenture") among LBI
Media, Inc., the Guarantors listed on Schedule I thereto and U.S. Bank, N.A., a
national banking association, as Trustee (the "Trustee"), (a) the due and
punctual payment of the principal of, premium, if any, and interest on the Notes
(as defined in the Indenture), whether at maturity, by acceleration, redemption
or otherwise, the due and punctual payment of interest on overdue principal and
premium, and, to the extent permitted by law, interest, and the due and punctual
performance of all other obligations of the Company to the Holders or the
Trustee all in accordance with the terms of the Indenture and (b) in case of any
extension of time of payment or renewal of any Notes or any of such other
obligations, that the same will 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 or otherwise. The obligations of the Guarantors to the
Holders of Notes and to the Trustee pursuant to the Subsidiary Guarantee and the
Indenture are expressly set forth in Article 11 of the Indenture and reference
is hereby made to the Indenture for the precise terms of the Subsidiary
Guarantee. Each Holder of a Note, by accepting the same, (a) agrees to and shall
be bound by such provisions, (b) authorizes and directs the Trustee, on behalf
of such Holder, to take such action as may be necessary or appropriate to
effectuate the subordination as provided in the Indenture and (c) appoints the
Trustee attorney-in-fact of such Holder for such purpose; provided, however,
that the Indebtedness evidenced by this Subsidiary Guarantee shall cease to be
so subordinated and subject in right of payment upon any defeasance of this Note
in accordance with the provisions of the Indenture.
GUARANTORS:
LIBERMAN TELEVISION OF HOUSTON, INC.
KZJL LICENSE CORP.
LIBERMAN TELEVISION, INC.
KRCA TELEVISION, INC.
KRCA LICENSE CORP.
LIBERMAN BROADCASTING, INC.
LBI RADIO LICENSE CORP.
LIBERMAN BROADCASTING OF HOUSTON, INC.
LIBERMAN BROADCASTING OF HOUSTON LICENSE CORP.
EMPIRE BURBANK STUDIOS, INC.
By:______________________
Name:
Title:
E-1
EXHIBIT F
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
_____________, 20___ among __________________ (the "Guaranteeing Subsidiary"), a
subsidiary of LBI Media, Inc. (or its permitted successor), a California
corporation (the "Company"), the Company, the other Guarantors (as defined in
the Indenture referred to herein) and U.S. Bank, N.A., a national banking
association, as trustee under the Indenture referred to below (the "Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of July 9, 2002 providing for
the issuance of an aggregate principal amount of up to $150.0 million of 10?%
Senior Subordinated Notes due 2012 (the "Notes");
WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Company's Obligations under the Notes and the Indenture on
the terms and conditions set forth herein (the "Subsidiary Guarantee"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:
1. Capitalized Terms. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
2. Agreement to Guarantee. The Guaranteeing Subsidiary hereby
agrees as follows:
(a) Along with all Guarantors named in the Indenture, to jointly
and severally Guarantee to each Holder of a Note
authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, the Notes or the
obligations of the Company hereunder or thereunder, that:
(i) the principal of and interest, and premium, if any, on
the Notes will be promptly paid in full when due, whether at
maturity, by acceleration, redemption or otherwise, and interest
on the overdue principal of and interest on the Notes, if any, if
lawful, and all other obligations of the Company to the Holders or
the Trustee hereunder or thereunder will be promptly paid in full
or performed, all in accordance with the terms hereof and thereof;
and
(ii) in case of any extension of time of payment or
renewal of any Notes or any of such other obligations, that same
will 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 or otherwise. Failing payment when due
of any amount so
F-1
guaranteed or any performance so guaranteed for whatever reason,
the Guarantors shall be jointly and severally obligated to pay the
same immediately.
(b) The obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability
of the Notes or the Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the
Notes with respect to any provisions hereof or thereof, the
recovery of any judgment against the Company, any action to
enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or
defense of a guarantor.
(c) The following is hereby waived: diligence presentment,
demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right
to require a proceeding first against the Company, protest,
notice and all demands whatsoever.
(d) This Subsidiary Guarantee shall not be discharged except by
complete performance of the obligations contained in the
Notes and the Indenture, and the Guaranteeing Subsidiary
accepts all obligations of a Guarantor under the Indenture.
(e) If any Holder or the Trustee is required by any court or
otherwise to return to the Company, the Guarantors, or any
Custodian, Trustee, liquidator or other similar official
acting in relation to either the Company or the Guarantors,
any amount paid by either to the Trustee or such Holder,
this Subsidiary Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect.
(f) The Guaranteeing Subsidiary 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.
(g) 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 6 of the Indenture for the purposes of this
Subsidiary 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 6 of the Indenture, such obligations
(whether or not due and payable) shall forthwith become due
and payable by the Guarantors for the purpose of this
Subsidiary Guarantee.
(h) 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 Guarantee.
(i) Pursuant to Section 11.03 of the Indenture, after giving
effect to any maximum amount and any other contingent and
fixed liabilities that are relevant under any applicable
Bankruptcy or fraudulent conveyance laws, and after giving
effect to any collections from, rights to receive
contribution from or payments made by or on behalf of any
other Guarantor in respect of the obligations of such other
Guarantor under Article 11 of the Indenture, this new
Subsidiary Guarantee shall
F-2
be limited to the maximum amount permissible such that the
obligations of such Guarantor under this Subsidiary
Guarantee will not constitute a fraudulent transfer or
conveyance.
3. Execution and Delivery. Each Guaranteeing Subsidiary agrees to
execute the Subsidiary Guarantee as provided by Section 11.04 of the Indenture
and Exhibit E thereto and to recognize that the Subsidiary Guarantees shall
remain in full force and effect notwithstanding any failure to endorse on each
Note a notation of such Subsidiary Guarantee.
4. Guaranteeing Subsidiary May Consolidate, Etc. On Certain Terms.
(a) Except as otherwise provided in Section 11.06 of the
Indenture, the Guaranteeing Subsidiary may not sell or
otherwise dispose of all or substantially all of its assets
to, or consolidate with or merge with or into (whether or
not such Guarantor is the surviving Person), another Person,
other than the Company or another Guarantor, unless:
(i) immediately after giving effect to such transaction,
no Default or Event of Default exists; and
(ii) either:
(1) subject to Section 11.06 hereof, the Person
acquiring the property in any such sale or disposition or
the Person formed by or surviving any such consolidation or
merger assumes all the obligations of that Guarantor under
this Indenture, its Subsidiary Guarantee and the
Registration Rights Agreement pursuant to a supplemental
indenture satisfactory to the Trustee; or
(2) the Net Proceeds of such sale or other
disposition are applied in accordance with the applicable
provisions of this Indenture.
(b) In case of any such consolidation, merger, sale or
conveyance and upon the assumption by the successor Person,
by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the
Subsidiary Guarantee endorsed upon the Notes and the due and
punctual performance of all of the covenants and conditions
of the Indenture to be performed by the Guarantor, such
successor Person shall succeed to and be substituted for the
Guarantor with the same effect as if it had been named
herein as a Guarantor. Such successor Person thereupon may
cause to be signed any or all of the Subsidiary Guarantees
to be endorsed upon all of the Notes issuable hereunder
which theretofore shall not have been signed by the Company
and delivered to the Trustee. All the Subsidiary Guarantees
so issued shall in all respects have the same legal rank and
benefit under the Indenture as the Subsidiary Guarantees
theretofore and thereafter issued in accordance with the
terms of the Indenture as though all of such Subsidiary
Guarantees had been issued at the date of the execution
hereof.
(c) Except as set forth in Articles 4 and 5 and Section 11.06 of
Article 11 of the Indenture, and notwithstanding clauses (a)
and (b) above, nothing contained in the Indenture or in any
of the Notes shall prevent any consolidation or merger of a
Guarantor with or into the Company or another Guarantor, or
shall prevent any
F-3
sale or conveyance of the property of a Guarantor as an
entirety or substantially as an entirety to the Company or
another Guarantor.
5. Releases.
(a) In the event (i) of a sale or other disposition of all of
the assets of any Guarantor (including by way of merger or
consolidation) or a sale or other disposition of all to the
capital stock of any Guarantor, in each case to a Person
that is not (either before or after giving effect to such
transaction) a Subsidiary of the Company; provided that the
Net Proceeds of such sale or other disposition are applied
in accordance with the applicable provisions of the
Indenture, including, without limitation, Section 4.10
thereof, or (ii) the Company designates any Restricted
Subsidiary that is Guarantor as an Unrestricted Subsidiary
in accordance with the applicable provisions of the
Indenture, including, without limitation, Section 4.20
thereof, then such Guarantor (in the event of a sale or
other disposition, by way of merger, consolidation or
otherwise, of all of the capital stock of such Guarantor) or
the corporation acquiring the property (in the event of a
sale or other disposition of all or substantially all of the
assets of such Guarantor) will be released and relieved of
any obligations under its Subsidiary Guarantee; provided
that the Net Proceeds of such sale or other disposition are
applied in accordance with the applicable provisions of the
Indenture, including without limitation Section 4.10 of the
Indenture. Upon delivery by the Company to the Trustee of an
Officers' Certificate and an Opinion of Counsel to the
effect that such sale or other disposition was made by the
Company in accordance with the provisions of the Indenture,
including without limitation Section 4.10 of the Indenture,
the Trustee shall execute any documents reasonably required
in order to evidence the release of any Guarantor from its
obligations under its Subsidiary Guarantee.
(b) Any Guarantor not released from its obligations under its
Subsidiary Guarantee shall remain liable for the full amount
of principal of and interest on the Notes and for the other
obligations of any Guarantor under the Indenture as provided
in Article 10 of the Indenture.
6. No Recourse Against Others. No past, present or future director,
officer, employee, incorporator, stockholder or agent of the Guaranteeing
Subsidiary, as such, shall have any liability for any obligations of the Company
or any Guaranteeing Subsidiary under the Notes, any Subsidiary Guarantees, the
Indenture or this Supplemental Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of the
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. Such waiver may
not be effective to waive liabilities under the federal securities laws and it
is the view of the SEC that such a waiver is against public policy.
7. Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL
GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE WITHOUT GIVING EFFECT
TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION
OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
9. Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
F-4
10. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
11. 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, all of which
recitals are made solely by the Guaranteeing Subsidiary and the Company.
F-5
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: _______________, ____
[Guaranteeing Subsidiary]
By: _______________________________
Name:
Title:
LBI MEDIA, INC.
By: _______________________________
Name:
Title:
GUARANTORS:
LIBERMAN TELEVISION OF HOUSTON, INC.
KZJL LICENSE CORP.
LIBERMAN TELEVISION, INC.
KRCA TELEVISION, INC.
KRCA LICENSE CORP.
LIBERMAN BROADCASTING, INC.
LBI RADIO LICENSE CORP.
LIBERMAN BROADCASTING OF HOUSTON, INC.
LIBERMAN BROADCASTING OF HOUSTON LICENSE CORP.
EMPIRE BURBANK STUDIOS, INC.
By: _______________________________
Name:
Title:
U.S. BANK, N.A.
as Trustee
By: _______________________________
Authorized Signatory
F-6
Schedule I
SCHEDULE OF GUARANTORS
The following schedule lists each Guarantor under the Indenture as of
the Closing Date:
GUARANTORS:
LIBERMAN TELEVISION OF HOUSTON, INC.
KZJL LICENSE CORP.
LIBERMAN TELEVISION, INC.
KRCA TELEVISION, INC.
KRCA LICENSE CORP.
LIBERMAN BROADCASTING, INC.
LBI RADIO LICENSE CORP.
LIBERMAN BROADCASTING OF HOUSTON, INC.
LIBERMAN BROADCASTING OF HOUSTON LICENSE CORP.
EMPIRE BURBANK STUDIOS, INC.
F-7