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EXHIBIT 4.1
COBBLESTONE GOLF GROUP, INC.
ISSUER,
AND
THE GUARANTORS NAMED HEREIN
AND
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
TRUSTEE
__________________________
INDENTURE
Dated as of June 4, 1996
___________________________
$70,000,000
11 1/2% Senior Notes due 2003
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions................................................. 1
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SECTION 1.2. Incorporation by Reference of TIA........................... 17
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SECTION 1.3. Rules of Construction....................................... 18
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ARTICLE II
THE SECURITIES
SECTION 2.1. Form and Dating............................................. 19
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SECTION 2.2. Execution and Authentication................................ 19
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SECTION 2.3. Registrar and Paying Agent.................................. 20
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SECTION 2.4. Paying Agent to Hold Assets in Trust........................ 20
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SECTION 2.5. Securityholder Lists........................................ 21
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SECTION 2.6. Transfer and Exchange....................................... 21
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SECTION 2.7. Replacement Securities...................................... 27
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SECTION 2.8. Outstanding Securities...................................... 27
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SECTION 2.9. Treasury Securities......................................... 28
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SECTION 2.10. Temporary Securities........................................ 28
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SECTION 2.11. Cancellation................................................ 28
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SECTION 2.12. Defaulted Interest.......................................... 28
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ARTICLE III
REDEMPTION
SECTION 3.1. Right of Redemption......................................... 30
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SECTION 3.2. Notices to Trustee.......................................... 30
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SECTION 3.3. Selection of Securities to Be Redeemed...................... 30
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SECTION 3.4. Notice of Redemption........................................ 31
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SECTION 3.5. Effect of Notice of Redemption.............................. 32
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SECTION 3.6. Deposit of Redemption Price................................. 32
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SECTION 3.7. Securities Redeemed in Part................................. 32
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ARTICLE IV
COVENANTS
SECTION 4.1. Payment of Securities...................................... 33
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SECTION 4.2. Maintenance of Office or Agency............................ 33
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SECTION 4.3. Limitation on Restricted Payments.......................... 33
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SECTION 4.4. Corporate and Partnership Existence........................ 35
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SECTION 4.5. Payment of Taxes and Other Claims.......................... 36
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SECTION 4.6. Maintenance of Properties and Insurance.................... 36
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SECTION 4.7. Compliance Certificate; Notice of Default.................. 37
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SECTION 4.8. Reports.................................................... 37
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SECTION 4.9. Limitation on Status as Investment Company................. 38
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SECTION 4.10. Limitation on Transactions with Affiliates................. 38
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SECTION 4.11. Limitation on Incurrence of Additional Indebtedness and
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Disqualified Capital Stock................................. 38
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SECTION 4.12. Limitations on Dividends and Other Payment Restrictions
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Affecting Subsidiaries..................................... 40
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SECTION 4.13. Limitations on Liens....................................... 40
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SECTION 4.14. Limitation on Sales of Assets and Subsidiary Stock......... 41
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SECTION 4.15. Waiver of Stay, Extension or Usury Laws.................... 45
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SECTION 4.16. Rule 144A Information Requirement.......................... 45
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SECTION 4.17. Restriction on Sale and Issuance of Subsidiary Stock....... 45
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SECTION 4.18. Future Subsidiary Guarantors............................... 46
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SECTION 4.19. Limitations on Lines of Business........................... 46
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ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1. Limitation on Merger, Sale or Consolidation................ 46
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SECTION 5.2. Successor Corporation Substituted.......................... 47
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ii
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ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1. Events of Default.......................................... 47
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SECTION 6.2. Acceleration of Maturity Date; Rescission and Annulment.... 49
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SECTION 6.3. Collection of Indebtedness and Suits for Enforcement by
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Trustee.................................................... 50
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SECTION 6.4. Trustee May File Proofs of Claim........................... 51
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SECTION 6.5. Trustee May Enforce Claims Without Possession of Securities 52
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SECTION 6.6. Priorities................................................. 52
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SECTION 6.7. Limitation on Suits........................................ 53
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SECTION 6.8. Unconditional Right of Holders to Receive Principal,
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Premium and Interest....................................... 53
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SECTION 6.9. Rights and Remedies Cumulative............................. 54
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SECTION 6.10. Delay or Omission Not Waiver............................... 54
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SECTION 6.11. Control by Holders......................................... 54
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SECTION 6.12. Waiver of Past Default..................................... 54
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SECTION 6.13. Undertaking for Costs...................................... 55
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SECTION 6.14. Restoration of Rights and Remedies......................... 55
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ARTICLE VII
TRUSTEE
SECTION 7.1. Duties of Trustee.......................................... 56
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SECTION 7.2. Rights of Trustee.......................................... 57
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SECTION 7.3. Individual Rights of Trustee............................... 58
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SECTION 7.4. Trustee's Disclaimer....................................... 58
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SECTION 7.5. Notice of Default.......................................... 58
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SECTION 7.6. Reports by Trustee to Holders.............................. 58
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SECTION 7.7. Compensation and Indemnity................................. 59
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SECTION 7.8. Replacement of Trustee..................................... 60
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SECTION 7.9. Successor Trustee by Merger, Etc........................... 61
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SECTION 7.10. Eligibility; Disqualification.............................. 61
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SECTION 7.11. Preferential Collection of Claims Against Company.......... 61
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iii
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ARTICLE VIII
DISCHARGE; LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.1. Discharge; Option to Effect Legal Defeasance or Covenant Defeasance 61
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SECTION 8.2. Legal Defeasance and Discharge..................................... 62
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SECTION 8.3. Covenant Defeasance................................................ 62
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SECTION 8.4. Conditions to Legal or Covenant Defeasance......................... 63
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SECTION 8.5. Deposited Cash and U.S. Government Obligations to be............... 64
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Held in Trust; Other Miscellaneous Provisions...................... 64
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SECTION 8.6. Repayment to the Company........................................... 64
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SECTION 8.7. Reinstatement...................................................... 65
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ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.1. Supplemental Indentures Without Consent of Holders................. 65
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SECTION 9.2. Amendments, Supplemental Indentures and Waivers with
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Consent of Holders................................................. 66
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SECTION 9.3. Compliance with TIA................................................ 68
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SECTION 9.4. Revocation and Effect of Consents.................................. 68
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SECTION 9.5. Notation on or Exchange of Securities.............................. 69
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SECTION 9.6. Trustee to Sign Amendments, Etc.................................... 69
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ARTICLE X
MEETINGS OF SECURITYHOLDERS
SECTION 10.1. Purposes for Which Meetings May Be Called.......................... 69
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SECTION 10.2. Manner of Calling Meetings......................................... 70
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SECTION 10.3. Call of Meetings by the Company or Holders......................... 70
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SECTION 10.4. Who May Attend and Vote at Meetings................................ 70
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SECTION 10.5. Regulations May Be Made by Trustee; Conduct of the
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Meeting; Voting Rights; Adjournment................................ 71
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SECTION 10.6. Voting at the Meeting and Record to Be Kept........................ 71
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SECTION 10.7. Exercise of Rights of Trustee or Securityholders May............... 71
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Not Be Hindered or Delayed by Call of Meeting...................... 72
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ARTICLE XI
RIGHT TO REQUIRE REPURCHASE
SECTION 11.1. Repurchase of Securities at Option of the Holder Upon a
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Change of Control.......................................... 72
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ARTICLE XII
GUARANTEE
SECTION 12.1. Guarantee.................................................. 75
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SECTION 12.2. Execution and Delivery of Guarantee........................ 76
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SECTION 12.3. Future Guarantors.......................................... 77
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SECTION 12.4. Certain Bankruptcy Events.................................. 77
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ARTICLE XIII
MISCELLANEOUS
SECTION 13.1. TIA Controls............................................... 77
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SECTION 13.2. Notices.................................................... 77
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SECTION 13.3. Communications by Holders with Other Holders............... 78
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SECTION 13.4. Certificate and Opinion as to Conditions Precedent......... 79
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SECTION 13.5. Statements Required in Certificate or Opinion.............. 79
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SECTION 13.6. Rules by Trustee, Paying Agent, Registrar.................. 79
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SECTION 13.7. Legal Holidays............................................. 79
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SECTION 13.8. Governing Law.............................................. 79
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SECTION 13.9. No Adverse Interpretation of Other Agreements.............. 80
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SECTION 13.10. No Recourse Against Others................................. 80
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SECTION 13.11. Successors................................................. 80
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SECTION 13.12. Duplicate Originals........................................ 81
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SECTION 13.13. Severability............................................... 81
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SECTION 13.14. Table of Contents, Headings, Etc........................... 81
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SECTION 13.15. Qualification of Indenture................................. 81
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SECTION 13.16. Registration Rights........................................ 81
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SIGNATURES................................................. 83
EXHIBIT A FORM OF SECURITY........................................... A-1
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EXHIBIT B FORM OF GUARANTEE..................................................... B-1
vi
CROSS-REFERENCE TABLE
TIA INDENTURE
SECTION SECTION
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310(a)(1).............................................. 7.10
(a)(2)................................................ 7.10
(a)(3)................................................ N.A.
(a)(4).............................................. N.A.
(a)(5).............................................. 7.10
(b)................................................. 7.8
7.10;
14.2
(c)................................................... N.A.
311(a)................................................. 7.11
(b)................................................. 7.11
(c)................................................. N.A.
312(a)................................................. 2.5
(b)................................................. 14.3
(c)................................................. 14.3
313(a)................................................. 7.6
(b)(1) ........................................... N.A.
(b)(2).............................................. 7.6
(c)................................................. 7.6;
14.2
(d)................................................. 7.6
314(a)................................................. 4.7(a);
4.8;
13.2
(b)................................................. N.A.
(c)(1).............................................. 2.2;
7.2;
14.4
(c)(2).............................................. 7.2;
14.4
(c)(3).............................................. N.A.
(d)................................................. N.A.
(e)................................................. 14.5
(f)................................................. N.A.
315(a)................................................. 7.1(b)
(b)................................................. 7.5;
7.6;
14.2
TIA INDENTURE
SECTION SECTION
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(c).............................................. 7.1(a)
(d).............................................. 2.8;
6.11;
7.1(b),
(c)
(e).............................................. 6.13
316(a)(last sentence)................................ 2.9
(a)(1)(A)........................................ 6.11
(a)(1)(B)........................................ 6.12
(a)(2)........................................... N.A.
(b).............................................. 6.12;
6.7
317(a)(1)........................................... 6.3
(a)(2)........................................... 6.4
(b).............................................. 14.1
__________
N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to
be a part of the Indenture.
viii
INDENTURE, dated as of June 4, 1996, by and among Cobblestone
Golf Group, Inc., a Delaware corporation (the "Company"), the Guarantors
referred to below and Norwest Bank Minnesota, National Association, as Trustee.
Each party hereto agrees as follows for the benefit of each other
party and for the equal and ratable benefit of the Holders of the Company's 11
1/2% Series A Senior Notes due 2003 and the class of 11 1/2% Series B Senior
Notes due 2003 to be exchanged for the 11 1/2% Series A Senior Notes due 2003:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions.
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"Acquired Indebtedness" means Indebtedness of any person existing
at the time such person becomes a subsidiary of such person or is merged or
consolidated into or with such person or one of its subsidiaries, and not
incurred in connection with or in anticipation of, such merger or consolidation
or of such person becoming a subsidiary of such person.
"Acquisition" means the purchase or other acquisition of any
person or substantially all the assets of any person by any other person,
whether by purchase, merger, consolidation, or other transfer, and whether or
not for consideration.
"Affiliate" means (i) any person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company or any of the Guarantors, (ii) any spouse, immediate family member, or
other relative who has the same principal residence of any person described in
clause (i) above, and (iii) any trust in which any person described in clause
(i) or (ii) above has a beneficial interest. For purposes of this definition,
the term "control" means the power to direct the management and policies of a
person, directly or through one or more intermediaries, whether through the
ownership of voting securities, by contract, or otherwise, provided, that a
beneficial owner of 10% or more of the total voting power normally entitled to
vote in the election of directors, managers or trustees, as applicable, shall
for such purposes be deemed to constitute control. Notwithstanding the
foregoing, the term Affiliate shall not include Subsidiary Guarantors.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Assets to Be Disposed of" means assets identified in an
Officer's Certificate at the time of an Acquisition as assets the Company or the
acquiring Subsidiary intends to dispose of within 180 days of such Acquisition.
"Asset Sale" shall have the meaning specified in Section 4.14 of
this Indenture.
"Average Life" means, as of the date of determination, with
respect to any security or instrument, the quotient obtained by dividing (i) the
sum of (a) the product of the number of years from the date of determination to
the date or dates of each successive scheduled principal (or redemption) payment
of such security or instrument and (b) the amount of each such respective
principal (or redemption) payment by (ii) the sum of all such principal (or
redemption) payments.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar
Federal, state or foreign law for the relief of debtors.
"beneficial owner," for purposes of the definition of Change of
Control, has the meaning attributed to it in Rules 13d-3 and 13d-5 under the
Exchange Act (as in effect on the Issue Date), whether or not applicable, except
that a "person" shall be deemed to have "beneficial ownership" of all shares
that any such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time or (unless not within the control
of such person) upon the occurrence of certain events.
"Board of Directors" means, with respect to any Person, the board
of directors of such Person or any committee of the board of directors of such
Person authorized, with respect to any particular matter, to exercise the power
of the board of directors of such Person.
"Board Resolution" means, with respect to any Person, a duly
adopted resolution of the Board of Directors of such Person.
"Brentwood Agreement" means the Corporate Development and
Administrative Services Agreement dated September 30, 1992 between the Company
and Brentwood Buyout Partners, L.P., as amended as of the Issue Date.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in New York, New
York are authorized or obligated by law or executive order to close.
"Capital Stock" means, with respect to any person, any capital
stock of such person and shares, interests, participations or other ownership
interests (however designated) of any person and any rights (other than debt
securities convertible into corporate stock), warrants and options to purchase
any of the foregoing, including (without limitation) each class of common stock
and preferred stock of such person if such person is a corporation and each
general and limited partnership interest of such person if such person is a
partnership.
"Capitalized Lease Obligation" means rental obligations under a
lease that are required to be capitalized for financial reporting purposes in
accordance with GAAP, and the amount of Indebtedness represented by such
obligations shall be the capitalized amount of such obligations, as determined
in accordance with GAAP.
2
"Cash" means such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts.
"Cash Equivalent" means (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof), (ii) time deposits and
certificates of deposit and commercial paper issued by the parent corporation of
any domestic commercial bank of recognized standing having capital and surplus
in excess of $500 million and commercial paper issued by others rated at least
A-2 or the equivalent thereof by Standard & Poor's Corporation or at least P-2
or the equivalent thereof by Moody's Investors Service, Inc. and in each case
maturing within one year after the date of acquisition and (iii) investments in
money market funds substantially all of whose assets comprise securities of the
types described in clauses (i) and (ii) above.
"Change of Control" means (i) the Investor Group is no longer the
"beneficial owner," directly or indirectly, of more than 50% of the total voting
power in the aggregate normally entitled to vote in the election of directors,
managers, or trustees, as applicable, of the Company and (ii) any "person" or
"group" (as such terms are used for purposes of Sections 13(d) and 14(d) of the
Exchange Act, whether or not applicable) is or becomes the "beneficial owner,"
directly or indirectly, of more of the total voting power in the aggregate
outstanding normally entitled to vote in elections of directors of the Company
than is owned collectively by Brentwood Golf Partners, L.P. and James A.
Husband.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture, and thereafter means such
successor.
"Consolidated Cash Flow Ratio" of any person on any date of
determination (the "Transaction Date"), means the ratio, on a pro forma basis,
of (a) the aggregate amount of consolidated Indebtedness of such person on the
Transaction Date to (b) the aggregate amount of Consolidated EBITDA of such
person (exclusive of amounts attributable to operations and businesses
permanently discontinued or disposed of) during the Reference Period; provided,
however, that for purposes of such calculation, (i) Acquisitions which occurred
during the Reference Period or subsequent to the Reference Period and on or
prior to the Transaction Date shall be assumed to have occurred on the first day
of the Reference Period, (ii) transactions giving rise to the need to calculate
the Consolidated Cash Flow Ratio shall be assumed to have occurred on the first
day of the Reference Period and (iii) the incurrence of any Indebtedness or
issuance of any Disqualified Capital Stock during the Reference Period or
subsequent to the Reference Period and on or prior to the Transaction Date (and
the application of the proceeds therefrom to the extent used to refinance or
retire other Indebtedness) shall be assumed to have occurred on the first day of
such Reference Period.
3
"Consolidated Depreciation and Amortization Expenses" for any
person means the total depreciation and amortization for such person and its
Consolidated Subsidiaries, as determined in accordance with GAAP.
"Consolidated EBITDA" means, with respect to any person, for any
period, the Consolidated Net Income of such person for such period adjusted to
add thereto (to the extent deducted from net revenues in determining
Consolidated Net Income), without duplication, the sum of (i) Consolidated
Income Tax Expense, (ii) Consolidated Depreciation and Amortization Expenses
(including any accelerations thereof) and (iii) Consolidated Fixed Charges.
"Consolidated Fixed Charges" of any person means, for any period,
the aggregate amount (without duplication and determined in each case in
accordance with GAAP) of (a) interest expensed or capitalized, paid, accrued, or
scheduled to be paid or accrued (including, in accordance with the following
sentence, interest attributable to Capitalized Lease Obligations) of such person
and its Consolidated Subsidiaries during such period, including (i) original
issue discount and non-cash interest payments or accruals on any Indebtedness,
(ii) the interest portion of all deferred payment obligations, and (iii) all
commissions, discounts and other fees and charges owed with respect to bankers'
acceptances and letters of credit financings and currency and Interest Swap and
Hedging Obligations, in each case to the extent attributable to such period, (b)
one-third of rental expense for such period attributable to operating leases of
such person and its Consolidated Subsidiaries, and (c) the amount of dividends
accrued or payable by such person or any of its Consolidated Subsidiaries in
respect of Disqualified Capital Stock (other than by Subsidiaries of such person
to such person or such person's wholly owned Subsidiaries). For purposes of this
definition, (x) interest on a Capitalized Lease Obligation shall be deemed to
accrue at an interest rate reasonably determined by the Company to be the rate
of interest implicit in such Capitalized Lease Obligation in accordance with
GAAP and (y) interest expense attributable to any Indebtedness represented by
the guarantee by such person or a Subsidiary of such person of an obligation of
another person shall be deemed to be the interest expense attributable to the
Indebtedness guaranteed.
"Consolidated Income Tax Expense" for any person means the total
net income tax expenses for such person and its Consolidated Subsidiaries, as
determined in accordance with GAAP.
"Consolidated Net Income" means, with respect to any person for
any period, the net income (or loss) of such person and its Consolidated
Subsidiaries (determined on a consolidated basis in accordance with GAAP) for
such period, adjusted to exclude (only to the extent included in computing such
net income (or loss) and without duplication): (a) all gains (but not losses)
which are either extraordinary (as determined in accordance with GAAP) or are
either unusual or nonrecurring (including without limitation any gain from the
sale or other disposition of assets outside the ordinary course of business or
from the issuance or sale of any Capital Stock), (b) the net income, if
positive, of any person, other than a wholly owned Consolidated Subsidiary, in
which such person or any of its Consolidated Subsidiaries has an interest,
except to the extent of the amount of any dividends or distributions actually
paid in cash to such person
4
or a wholly owned Consolidated Subsidiary of such person during such period, but
in any case not in excess of such person's pro rata share of such person's net
income for such period, (c) the net income or loss of any person acquired in a
pooling of interests transaction for any period prior to the date of such
acquisition and (d) the net income, if positive, of any of such person's
Consolidated Subsidiaries to the extent that the declaration or payment of
dividends or similar distributions is not at the time permitted by operation of
the terms of its charter or bylaws or any other agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to such
Consolidated Subsidiary.
"Consolidated Subsidiary" means, for any person, each Subsidiary
of such person (whether now existing or hereafter created or acquired) the
financial statements of which shall be (or should have been) consolidated for
financial statement reporting purposes with the financial statements of such
person in accordance with GAAP.
"Consolidated Tangible Net Worth" of any person at any date means
the total assets of such person and its Consolidated Subsidiaries, as would be
shown on the consolidated balance sheet of such person prepared in accordance
with GAAP, less (a) the total liabilities appearing on such balance sheet, and
(b) intangible assets. For purposes hereof, "intangible assets" means the value
(net of any applicable reserves), as shown on or reflected in such balance
sheet, of: (i) all trade names, trademarks, licenses, patents, copyrights and
goodwill; (ii) organizational and development costs; and (iii) unamortized debt
discount and expense, less unamortized premium.
"Corporate Trust Office" means the office of the Trustee in the
Borough of Manhattan, The City of New York.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Debt Incurrence Ratio" shall have the meaning specified in
paragraph (1) of Section 4.11 of this Indenture.
"Default" means any event or condition that is, or after notice
or passage of time or both would be, an Event of Default.
"Defaulted Interest" shall have the meaning specified in Section
2.12 of this Indenture.
"Definitive Securities" means Securities that are in the form of
Security attached hereto as Exhibit A that do not include the information called
for by footnotes 3 and 6 thereof.
"Depository" means, with respect to the Securities issuable or
issued in whole or in part in global form, the person specified in Section 2.3
of this Indenture as the Depository with respect to the Securities, until a
successor shall have been appointed and become such
5
pursuant to the applicable provision of this Indenture, and, thereafter,
"Depository" shall mean or include such successor.
"Disqualified Capital Stock" means (a) except as set forth in
(b), with respect to any person, Capital Stock of such person that, by its terms
or by the terms of any security into which it is convertible, exercisable or
exchangeable, is, or upon the happening of an event or the passage of time would
be, required to be redeemed or repurchased (including at the option of the
holder thereof) by such person or any of its Subsidiaries, in whole or in part,
on or prior to the Stated Maturity of the Securities and (b) with respect to any
Subsidiary of such person (including with respect to any Subsidiary of the
Company), any Capital Stock other than any common stock with no special rights
and no preference, privileges, or redemption or repayment provisions.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC thereunder.
"Exchange Securities" means the 11 1/2% Series B Senior Notes due
2003, as supplemented from time to time in accordance with the terms hereof, to
be issued pursuant to this Indenture in connection with the offer to exchange
Securities for the Initial Securities that may be made by the Company and the
Guarantors pursuant to the Registration Rights Agreement that contains the
changes referred to in footnotes 1 and 2 to the form of Security attached hereto
as Exhibit A.
"Existing Assets" means assets of the Company and its
Subsidiaries existing at the Issue Date (other than Cash, Cash Equivalents or
inventory held for resale in the ordinary course of business) and including
proceeds of any sale of such assets and assets acquired in whole or in part with
proceeds from the sale from any such assets.
"GAAP" means United States 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 approved by a significant segment
of the accounting profession as in effect on the Issue Date.
"Global Security" means a Security that contains the paragraph
referred to in footnote 3 and the additional schedule referred to in footnote 6
to the form of Security attached hereto as Exhibit A.
"Guarantors" means Escondido Consulting, Inc., a California
corporation, Cobblestone Texas, Inc., a Texas corporation, Pecan Grove Golf
Club, Inc., a Texas corporation, Foothills Holding Company, Inc., a Nevada
corporation, Bellows Golf Group, Inc., an Arizona corporation, Carmel Mountain
Ranch Golf Club, Inc., a California corporation, OVLC Management Corp., a
California corporation, OVLC Financial Corp., a California corporation, CSR Golf
Group, Inc., a Texas corporation, Lakeway Golf Clubs, Inc., a Texas
6
corporation, Woodcrest Golf Club, Inc., a Texas corporation, Virginia Golf
Country Club, Inc., a Virginia corporation, Ocean Vista Land Company, a
California corporation ("OVLC"), Golf Course Inns of America, Inc., a California
corporation, Oceanside Golf Management Corp., a California corporation,
Whispering Palms Country Club Joint Venture, a California general partnership,
C-RHK, Inc., a California corporation, The Liquor Club at Pecan Grove, Inc., a
Texas corporation, Lakeway Clubs, Inc., a Texas corporation, TGFC Corp., a Texas
corporation, CEL Golf Group, Inc., a Georgia corporation, and such other Persons
as shall become a party to this Indenture upon compliance with the covenant
relating thereto contained in Section 4.18 of this Indenture.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered on the Registrar's books.
"Holdings" means Cobblestone Golf Holdings, Inc., a Delaware
corporation, and the sole stockholder of the Company.
"Incur" shall have the meaning specified in Section 4.11 of this
Indenture.
"Indebtedness" of any person means, without duplication, (a) all
liabilities and obligations, contingent or otherwise, of any such person, (i) in
respect of borrowed money (whether or not the recourse of the lender is to the
whole of the assets of such person or only to a portion thereof), (ii) evidenced
by bonds, notes, debentures or similar instruments, (iii) representing the
balance deferred and unpaid of the purchase price of any property or services,
except (other than accounts payable or other obligations to trade creditors
which have remained unpaid for greater than ninety days past their original due
date, or for which adequate reserves have been established while such amounts
are being contested in good faith) those incurred in the ordinary course of its
business that would ordinarily constitute a trade payable to trade creditors,
(iv) evidenced by bankers' acceptances or similar instruments issued or accepted
by banks, (v) in respect of Capitalized Lease Obligations, or (vi) evidenced by
a letter of credit or a reimbursement obligation of such person with respect to
any letter of credit; (b) all net obligations of such person under Interest Swap
and Hedging Obligations; (c) all liabilities of others of the kind described in
the preceding clauses (a) and (b) that such person has guaranteed or that is
otherwise its legal liability and all obligations to purchase, redeem or acquire
any Capital Stock; (d) all obligations secured by a Lien to which the property
or assets (including, without limitation, leasehold interests and any other
tangible or intangible property rights) of such person are subject, whether or
not the obligations secured thereby shall have been assumed by or shall
otherwise be such person's legal liability, provided, that the amount of such
obligations shall be limited to the lesser of the fair market value of the
assets or property to which such Lien attaches and the amount of the obligation
so secured; and (e) any and all deferrals, renewals, extensions, refinancings
and refundings (whether direct or indirect) of, or amendments, modifications or
supplements to, any liability of the kind described in any of the preceding
clauses (a), (b), (c), (d) or this clause (e), whether or not between or among
the same parties.
7
"Indenture" means this Indenture, as amended or supplemented from
time to time in accordance with the terms hereof.
"Initial Purchasers" means Donaldson, Lufkin & Jenrette
Securities Corporation and BA Securities, Inc, severally, and not jointly.
"Initial Securities" means the 11 1/2% Series A Senior Notes due
2003, as supplemented from time to time in accordance with the terms hereof,
issued under this Indenture that contains the changes referred to in footnotes
4, 5 and 7 to the form of Security attached hereto as Exhibit A.
"Interest Payment Date" means the stated due date of an
installment of interest on the Securities.
"Interest Swap and Hedging Obligation" means any obligation of
any person pursuant to any interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate exchange agreement,
currency exchange agreement or any other agreement or arrangement designed to
protect against fluctuations in interest rates or currency values, including,
without limitation, any arrangement whereby, directly or indirectly, such person
is entitled to receive from time to time periodic payments calculated by
applying either a fixed or floating rate of interest on a stated notional amount
in exchange for periodic payments made by such person calculated by applying a
fixed or floating rate of interest on the same notional amount.
"Investment" by any person in any other person means (without
duplication) (a) the acquisition by such person (whether for cash, property,
services, securities or otherwise) of capital stock, bonds, notes, debentures,
partnership or other ownership interests or other securities, including any
options or warrants, of such other person or any agreement to make any such
acquisition; (b) the making by such person of any deposit with, or advance, loan
or other extension of credit to, such other person (including the purchase of
property from another person subject to an understanding or agreement,
contingent or otherwise, to resell such property from another person subject to
an understanding or agreement, contingent or otherwise, to resell such property
to such other person) or any commitment to make any such advance, loan or
extension (but excluding accounts receivable or deposits arising in the ordinary
course of business); (c) other than the Guarantees of the Securities, the
entering into by such person of any guarantee of, or other credit support or
contingent obligation with respect to, Indebtedness or other liability of such
other person; (d) the making of any capital contribution by such person to such
other person; and (e) the designation by the Board of Directors of the Company
of any person to be an Unrestricted Subsidiary. The Company shall be deemed to
make an "Investment" in an amount equal to the fair market value of the net
assets of any person (or, if neither the Company nor any of its Subsidiaries has
theretofore made an Investment in such person, in an amount equal to the
Investments being made), at the time that such person is designated an
Unrestricted Subsidiary or, if such designation is made pursuant to clause
(i)(c) of the definition of Unrestricted Subsidiary, in an amount equal to the
sum of the Investments
8
being made and the consideration paid by the Company and its Subsidiaries to
effect such Acquisition (excluding, for this purpose only, Qualified Capital
Stock of the Company issued in connection therewith). Any property transferred
to an Unrestricted Subsidiary from the Company or a Subsidiary of the Company,
shall be deemed an "Investment" valued at its fair market value at the time of
such transfer.
"Investor Group" means any one or more of the stockholders of
Holdings immediately prior to the Issue Date and any one or more Affiliates of
such persons.
"Issue Date" means the date of first issuance of the Securities
under this Indenture.
"Legal Holiday" shall have the meaning specified in Section 13.7.
"Lien" means any mortgage, lien, pledge, charge, security
interest, or other encumbrance of any kind, whether or not filed, recorded or
otherwise perfected under applicable law (including any conditional sale or
other title retention agreement and any lease deemed to constitute a security
interest and any option or other agreement to give any security interest).
"Maturity Date" means, when used with respect to any Security,
the date specified on such Security as the fixed date on which the final
installment of principal of such Security is due and payable (in the absence of
any acceleration thereof pursuant to the provisions of this Indenture regarding
acceleration of Indebtedness or any Change of Control Offer or Offer to
Purchase).
"Net Cash Proceeds" means the aggregate amount of Cash or Cash
Equivalents received by the Company in the case of a sale of Qualified Capital
Stock and by the Company and its Subsidiaries in respect of an Asset Sale plus,
in the case of an issuance of Qualified Capital Stock upon any exercise,
exchange or conversion of securities (including options, warrants, rights and
convertible or exchangeable debt) of the Company that were issued for Cash on or
after the Issue Date, the amount of Cash originally received by the Company upon
the issuance of such securities (including options, warrants, rights and
convertible or exchangeable debt) less, in each case, the sum of all payments,
fees, commissions and (in the case of Asset Sales, reasonable and customary),
expenses (including, without limitation, the fees and expenses of legal counsel
and investment banking fees and expenses) incurred in connection with such Asset
Sale or sale of Qualified Capital Stock, and, in the case of an Asset Sale only,
less the amount (estimated reasonably and in good faith by the Company) of
income, franchise, sales and other applicable taxes required to be paid by the
Company or any of its respective Subsidiaries in the current or next succeeding
taxable year of sale in connection with such Asset Sale.
"New Credit Facility" means the credit agreement to be dated as
of June 4, 1996 by and among the Company, Holdings, Bank of America NT&SA,
individually and as agent, and certain financial institutions, providing for (A)
an aggregate $45,000,000 million reducing revolving loan facility, and (B) an
aggregate $5,000,000 million working capital revolving credit
9
facility, including any related notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith, as such credit
agreement and/or related documents may be amended, restated, supplemented,
renewed, replaced or otherwise modified from time to time whether or not with
the same agent, trustee, representative lenders or holders, and, subject to the
proviso to the next succeeding sentence, irrespective of any changes in the
terms and conditions thereof. Without limiting the generality of the foregoing,
the term "New Credit Facility" shall include agreements in respect of Interest
Swap and Hedging Obligations with lenders party to the New Credit Facility and
shall also include any amendment, amendment and restatement, renewal, extension,
restructuring, supplement or modification to the New Credit Facility and all
refundings, refinancings and replacements of the New Credit Facility, including
any agreement (i) extending the maturity of any Indebtedness incurred thereunder
or contemplated thereby, (ii) adding or deleting borrowers or guarantors
thereunder, so long as borrowers and issuers include one or more of the Company
and its Subsidiaries and their respective successors and assigns, (iii)
increasing the amount of Indebtedness incurred thereunder or available to be
borrowed thereunder, provided, however, that on the date such Indebtedness is
incurred it would not be prohibited by Section 4.11 of this Indenture or (iv)
otherwise altering the terms and conditions thereof in a manner not prohibited
by the terms of this Indenture.
"Non-recourse Purchase Money Indebtedness" means Indebtedness of
the Company or its Subsidiaries to the extent that (i) under the terms thereof
or pursuant to law, no personal recourse may be had against the Company or its
Subsidiaries for the payment of the principal of or interest or premium on such
Indebtedness (or such portion), and enforcement of obligations on such
Indebtedness (or such portion), (except with respect to fraud, willful
misconduct, misrepresentation, misapplication of funds, reckless damage to
assets and undertakings with respect to environmental matters or construction
defects) is limited only to recourse against interests in specified assets and
property (the "Subject Assets"), accounts and proceeds arising therefrom, and
rights under purchase agreements or other agreements with respect to such
Subject Assets; (ii) such Indebtedness is incurred in connection with the
acquisition of such Subject Asset for the business of the Company or such
Subsidiaries, including Indebtedness assumed, which Indebtedness existed at the
time of the acquisition of such Subject Asset; (iii) such Indebtedness was
incurred at the time of such acquisition of such Subject Asset; and (iv) no
proceeds from the sale of Existing Assets were used to acquire such Subject
Asset.
"Obligation" means any principal, premium, interest, penalties,
fees, reimbursements, damages, indemnification and other liabilities relating to
obligations of the Company or any Guarantor under the Securities, the Guarantees
or this Indenture.
"Officer" means, with respect to the Company or any Guarantor,
the Chief Executive Officer, the President, any Vice President, the Chief
Financial Officer, the Treasurer, the Controller, or the Secretary of the
Company or such Guarantor.
"Officers' Certificate" means, with respect to the Company or
such Guarantor, a certificate signed by two Officers or by an Officer and an
Assistant Secretary of the Company
10
or such Guarantor and otherwise complying with the requirements of Sections 13.4
and 13.5 of this Indenture.
"Opinion of Counsel" means a written opinion from legal counsel
who is reasonably acceptable to the Trustee complying with the requirements of
Sections 13.4 and 13.5 of this Indenture.
"Paying Agent" shall have the meaning specified in Section 2.3 of
this Indenture.
"Permitted Indebtedness" means, without duplication, any of the
following: (a) the Company and the Guarantors may incur Indebtedness in respect
of Capitalized Lease Obligations and Non-recourse Purchase Money Indebtedness in
the ordinary course of business, in amounts and for the purposes customary in
the Company's industry; provided, however, that the aggregate principal amount
outstanding of such Indebtedness (including any Indebtedness issued to
Refinance, refund or replace such Indebtedness) shall at no time exceed
$10,000,000; (b) the Company may incur Indebtedness to any wholly owned
Subsidiary Guarantor, and any Subsidiary Guarantor may incur Indebtedness to any
wholly owned Subsidiary Guarantor or to the Company; provided, that such
obligations shall be subordinated in all respects to the Company's obligations,
or such Guarantor's obligations pursuant to its Guarantee of the Company's
obliga tions pursuant to this Indenture and the Securities; and (c) Indebtedness
of the Company and the Guarantors outstanding on the Issue Date after giving
effect to the implementation of the New Credit Facility.
"Permitted Liens" means any of the following: (a) Liens existing
on the Issue Date (including Liens in favor of the Trustee arising under the
Indenture and Liens securing Indebtedness permitted to be incurred pursuant to
the New Credit Facility in compliance with Section 4.11(5) of this Indenture),
after giving effect to the implementation of the New Credit Facility, and any
extension, renewal, replacement or refinancing, in whole or in part, of any such
Lien so long as (1) the amount of security is not increased thereby, (2) the
aggregate amount secured by such Lien after such extension, renewal, replacement
or refinancing does not exceed (after deduction of reasonable and customary fees
and expenses incurred in connection therewith) the aggregate amount secured
thereby prior thereto and (3) the Indebtedness secured by such Lien, if any, is
permitted under Section 4.11 of this Indenture; (b) Liens for taxes, assessments
or other governmental charges or claims not yet due or which are being contested
in good faith and by appropriate proceedings by a person if adequate reserves or
other appropriate provisions with respect thereto are maintained on the books of
such person to the extent required in accordance with GAAP; (c) statutory Liens
of carriers, warehousemen, mechanics, landlords, materialmen, repairmen or other
like Liens arising by operation of law and Liens on deposits made to obtain the
release of such Liens if (1) the underlying obligations are not overdue for a
period of more than sixty days or (2) such Liens are being contested in good
faith and by appropriate proceedings by such person and adequate reserves with
respect thereto are maintained on the books of such person in accordance with
GAAP; (d) Liens securing the performance of bids, trade contracts (other than in
connection with any borrowing of money or any commitment to loan any money or to
extend any credit), leases, statutory obligations, surety
11
and appeal bonds and other obligations of a like nature, and pledges or deposits
in connection with workers' compensation, unemployment insurance and other types
of social security legislation, in each case made or incurred in the ordinary
course of business consistent with industry practices; (e) easements, rights-of-
ways, zoning and similar restrictions and other similar encumbrances or title
defects which, in the aggregate, are not substantial in amount, and which do not
in any case materially detract from the value of the property subject thereto
(as such property is used by such person) or interfere with the ordinary conduct
of the business of such person; provided, that any such Liens are not incurred
for the benefit of any borrowing of money or any commitment to loan any money or
to extend any credit; (f) Liens arising by operation of law in connection with
judgments to the extent, for an amount and for a period not resulting in an
Event of Default with respect thereto; (g) Liens securing Non-recourse Purchase
Money Indebtedness permitted to be incurred under the Indenture, provided, that
each such Lien relates only to the property which is subject to such Non-
recourse Purchase Money Indebtedness; (h) any customary retention of title by
the lessor under a Capitalized Lease Obligation incurred in compliance with
Section 4.11 of this Indenture; (i) Liens that secure Acquired Indebtedness,
provided, in each case, that such Liens do not secure any other property or
assets and were not put in place in connection with or in anticipation of such
acquisition, merger or consolidation, and any extension, renewal, replacement or
refinancing, in whole or in part, of any such Lien so long as (1) the amount of
security is not increased thereby, (2) the aggregate amount secured by such Lien
after such extension, renewal, replacement or refinancing does not exceed (after
deduction of reasonable and customary fees and expenses incurred in connection
therewith) the aggregate amount secured thereby prior thereto and (3) the
Indebtedness secured by such Lien, if any, is permitted under Section 4.11 of
this Indenture; (j) Liens that secure Indebtedness incurred pursuant to clause
(1) of Section 4.11 of this Indenture, provided, that (i) after giving effect on
a pro forma basis to such Incurrence and the use of proceeds therefrom, the Debt
Incurrence Ratio is no greater than 5 to 1 and (ii) the aggregate amount secured
by any such Lien does not exceed the aggregate amount of such Indebtedness; and
(k) Liens that secure Indebtedness under the New Credit Facility Incurred either
(i) pursuant to clause (5) of Section 4.11 of this Indenture or (2) pursuant to
clause (1) of Section 4.11 of this Indenture, provided, that after giving effect
on a pro forma basis to such Incurrence and the use of proceeds therefrom, the
Debt Incurrence Ratio is no greater than 5 to 1.
"Person" or "person" means any corporation, individual, limited
liability company, joint stock company, joint venture, partnership, limited
liability company, unincorporated association, governmental regulatory entity,
country, state or political subdivision thereof, trust, municipality or other
entity.
"principal" of any Indebtedness means the principal of such
Indebtedness plus, without duplication, any applicable premium, if any, on such
Indebtedness.
"property" means any right or interest in or to property or
assets of any kind whatsoever, whether real, personal or mixed and whether
tangible or intangible.
12
"Public Equity Offering" means an underwritten offering of common
stock of the Company or Holdings pursuant to an effective registration statement
under the Securities Act after which the common stock of the Company or
Holdings, as applicable, is listed on a national securities exchange or quoted
on the Nasdaq National Market.
"Purchase Agreement" means that certain Purchase Agreement dated
May 29, 1996 by and among the Company, the Guarantors and the Initial
Purchasers, as such agreement may be amended, modified or supplemented from time
to time in accordance with the terms thereof.
"Qualified Capital Stock" means any Capital Stock of the Company
that is not Disqualified Capital Stock.
"Qualified Exchange" means any defeasance, redemption,
retirement, repurchase or other acquisition of Capital Stock or Indebtedness of
the Company issued on or after the Issue Date with the Net Cash Proceeds
received by the Company from the substantially concurrent sale of Qualified
Capital Stock.
"Record Date" means a Record Date specified in the Securities
whether or not such Record Date is a Business Day.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to Article III of
this Indenture and Paragraph 5 in the form of Security attached hereto as
Exhibit A.
"Redemption Price," when used with respect to any Security to be
redeemed, means the redemption price for such redemption pursuant to Paragraph 5
in the form of Security attached hereto as Exhibit A, which shall include,
without duplication, in each case, accrued and unpaid interest to the Redemption
Date.
"Reference Period" with regard to any person means the four full
fiscal quarters (or such lesser period during which such person has been in
existence) ended immediately preceding any date upon which any determination is
to be made pursuant to the terms of the Securities or this Indenture; provided,
however, that the Consolidated Fixed Charges of such person, to the extent such
person has been in existence for a shorter period than four full fiscal
quarters, shall be computed on an annualized basis.
"Refinancing Indebtedness" means Indebtedness or Disqualified
Capital Stock (a) issued in exchange for, or the proceeds from the issuance and
sale of which are used substantially concurrently to repay, redeem, defease,
refund, refinance, discharge or otherwise retire for value, in whole or in part,
or (b) constituting an amendment, modification or supplement to, or a deferral
or renewal of ((a) and (b) above are, collectively, a "Refinancing"), any
Indebtedness or Disqualified Capital Stock in a principal amount or, in the case
of Disquali-
13
fied Capital Stock, liquidation preference, not to exceed (after deduction of
reasonable and customary fees and expenses incurred in connection with the
Refinancing) the lesser of (i) the principal amount or, in the case of
Disqualified Capital Stock, liquidation preference, of the Indebtedness or
Disqualified Capital Stock so Refinanced and (ii) if such Indebtedness being
Refinanced was issued with an original issue discount, the accreted value
thereof (as determined in accordance with GAAP) at the time of such Refinancing;
provided, however, that (A) such Refinancing Indebtedness of any Subsidiary of
the Company shall only be used to Refinance outstanding Indebtedness or
Disqualified Capital Stock of such Subsidiary, (B) Refinancing Indebtedness
shall (x) not have an Average Life shorter than the Indebtedness or Disqualified
Capital Stock to be so refinanced at the time of such Refinancing and (y) in all
respects, be no less subordinated, if applicable, to the rights of Holders of
the Securities than was the Indebtedness or Disqualified Capital Stock to be
refinanced and (C) such Refinancing Indebtedness shall have no installment of
principal (or redemption payment) scheduled to come due earlier than the
scheduled maturity of any installment of principal of the Indebtedness or
Disqualified Capital Stock to be so refinanced which was scheduled to come due
prior to the Stated Maturity.
"Registrar" shall have the meaning specified in Section 2.3 of
this Indenture.
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of June 4, 1996 by and among the Initial Purchasers, the
Company and the Guarantors, as such agreement may be amended, modified or
supplemented from time to time in accordance with the terms thereof.
"Related Business" means the business conducted by the Company
and its Subsidiaries as of the Issue Date and any and all businesses that in the
good faith judgment of the Board of Directors of the Company are materially
related businesses.
"Restricted Investment" means, in one or a series of related
transactions, any Investment, other than (a) in Cash Equivalents, (b)
intercompany notes to the extent permitted under "Permitted Indebtedness," (c)
Investments in existence on the Issue Date and (d) Investments in wholly owned
Subsidiary Guarantors (including Investments as a direct result of which the
surviving entity is or becomes the Company or a direct wholly owned Subsidiary
Guarantor).
"Restricted Payment" means, with respect to any person, (a) the
declaration or payment of any dividend or other distribution in respect of
Capital Stock of such person or any Subsidiary of such person, (b) any payment
on account of the purchase, redemption or other acquisition or retirement for
value of Capital Stock of such person or any Subsidiary of such person, (c) any
purchase, redemption, or other acquisition or retirement for value of, any
payment in respect of any amendment of the terms of or any defeasance of, any
Subordinated Indebtedness, directly or indirectly, by such person or a
Subsidiary of such person prior to the scheduled maturity, any scheduled
repayment of principal, or scheduled sinking fund payment, as the case may be,
of such Indebtedness and (d) any Restricted Investment by such person;
14
provided, however, that the term "Restricted Payment" does not include (i) any
dividend, distribution or other payment on or with respect to Capital Stock of
an issuer to the extent payable solely in shares of Qualified Capital Stock of
such issuer; (ii) any dividend, distribution or other payment to the Company or
to any of its Subsidiaries by the Company or any of its Subsidiaries, provided,
however, that such payment by a Subsidiary which is not wholly owned by the
Company and/or its wholly owned Subsidiaries shall constitute a "Restricted
Payment" to the extent not paid on a pro rata basis in accordance with its
organizational documents as in effect on the later of the Issue Date and the
time such person first became a Subsidiary of the Company; or (iii) loans or
advances to any Subsidiary Guarantor the proceeds of which are used by such
Subsidiary Guarantor in a Related Business activity of such Subsidiary
Guarantor.
"Restricted Security" means a Security, unless or until it has
been (i) effectively registered under the Securities Act and disposed of in
accordance with the registration statement covering it or (ii) distributed to
the public pursuant to Rule 144 (or any similar provision then in force) under
the Securities Act; provided, that in no case shall an Exchange Security issued
in accordance with this Indenture and the terms and provisions of the
Registration Rights Agreement be a Restricted Security.
"SEC" means the Securities and Exchange Commission.
"Securities" means, collectively, the Initial Securities and,
when and if issued as provided in the Registration Rights Agreement, the
Exchange Securities.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the SEC promulgated thereunder.
"Securities Custodian" means the Trustee, as custodian with
respect to the Securities in global form, or any successor entity thereto.
"Securityholder" or "Holder" means the Person in whose name a
Security is registered on the Registrar's books.
"Significant Subsidiary," with respect to any person, means a
Subsidiary of such person which, as of the end of such person's most recent
fiscal quarter, had a Consolidated Tangible Net Worth equal to at least 5% of
the Consolidated Tangible Net Worth of such person as of such date.
"Special Record Date" for payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 2.12 of this Indenture.
"Stated Maturity," when used with respect to any Security, means
June 1, 2003.
"Strategic Investors" means any person whose principal line of
business activity is a Related Business and (a) whose total market
capitalization is in excess of $500,000,000 as
15
measured by the sum of the aggregate principal dollar amount of its Indebtedness
plus the aggregate dollar value of its Capital Stock (as measured by the per
share price of its Capital Stock multiplied by the number of outstanding shares
of such Capital Stock) or (b) in the case of a person without publicly traded
Capital Stock, whose private market value, as determined by the Board of
Directors of the Company consistent with advice obtained from an independent,
nationally recognized investment banking firm, is in excess of $500,000,000.
"Subordinated Indebtedness" means Indebtedness of the Company or
a Subsidiary that is subordinated in right of payment to the Securities or, if
applicable, a Guarantee in respect thereof in any respect, or has a stated
maturity on or after the Stated Maturity.
"Subsidiary," with respect to any person, means (i) a corporation
a majority of whose Capital Stock with voting power, under ordinary
circumstances, to elect directors is at the time, directly or indirectly, owned
by such person, by such person and one or more Subsidiaries of such person or by
one or more Subsidiaries of such person, (ii) a partnership in which a person or
a subsidiary of such person is, at the date of determination, a general partner
of such partnership and in which such person or a subsidiary of such person has
a majority of the economic interests or (iii) any other person (other than a
corporation) in which such person, one or more Subsidiaries of such person, or
such person and one or more Subsidiaries of such person, directly or indirectly,
at the date of determination thereof has at least majority ownership interest.
Notwithstanding the foregoing, an Unrestricted Subsidiary shall not be a
Subsidiary of the Company or of any Subsidiary of the Company.
"Subsidiary Guarantor" means a Guarantor that is also a
Subsidiary of the Company.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code (S)(S)
77aaa-77bbbb) as in effect on the date of the execution of this Indenture.
"Tax Sharing Agreement" means any agreements between the Company
and Holdings pursuant to which the Company may make payments to Holdings with
respect to the Company's Federal, state, or local income or franchise tax
liabilities where the Company is included in a consolidated, unitary or combined
return filed by Holdings; provided, that the payment by the Company under such
agreement shall not exceed the liability of the Company for such taxes if it had
filed income tax returns as a separate company.
"Transfer Restricted Securities" means Securities that bear or
are required to bear the legend set forth in Section 2.6 of this Indenture.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
16
"Trust Officer" means any officer within the corporate trust
division (or any successor group) of the Trustee or any other officer of the
Trustee customarily performing functions similar to those performed by the
Persons who at that time shall be such officers, and also means, with respect to
a particular corporate trust matter, any other officer of the Trustee to whom
such trust matter is referred because of his knowledge of and familiarity with
the particular subject.
"Unrestricted Subsidiary" means any subsidiary of the Company
that does not own any Capital Stock of, or own or hold any Lien on any property
of, the Company or any Subsidiary of the Company and that, at the time of
determination, shall be an Unrestricted Subsidiary (as designated by the Board
of Directors of the Company); provided, however, that such subsidiary shall not
engage, to any substantial extent, in any line or lines of business activity
other than a Related Business, and immediately prior thereto and after giving
pro forma effect to such designation (i) either (a) the Company could incur at
least $1.00 of Indebtedness pursuant to the Debt Incurrence Ratio, (b) such
subsidiary, at the time of designation, has no assets or (c) such subsidiary is
designated an "Unrestricted Subsidiary" at the time of Acquisition by the
Company or its Subsidiaries and (ii) there would not exist a Default or Event of
Default. The Board of Directors of the Company may designate any Unrestricted
Subsidiary to be a Subsidiary, provided, that (i) no Default or Event of Default
is existing or will occur as a consequence thereof and (ii) immediately after
giving effect to such designation, on a pro forma basis, the Company could incur
at least $1.00 of Indebtedness pursuant to the Debt Incurrence Ratio. Each such
designation shall be evidenced by filing with the Trustee a certified copy of
the resolution giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing conditions.
"U.S. Government Obligations" means direct non-callable
obligations of, or noncallable obligations guaranteed by, the United States of
America for the payment of which obligation or guarantee the full faith and
credit of the United States of America is pledged.
"Warrant" means the Warrant dated January 31, 1994 issued by
Holdings to Continental Bank, N.A.
"Wholly Owned" or "wholly owned" with respect to a Subsidiary of
any person means (i) with respect to a Subsidiary that is a limited liability
company or similar entity, a Subsidiary whose capital stock is 99% or greater
beneficially owned by such person and (ii) with respect to a Subsidiary that is
other than a limited liability company or similar entity, a Subsidiary whose
capital stock or other equity interest is 100% beneficially owned by such
person.
"Zero-Coupon Notes" means the $86,000,000 million aggregate
principal amount of 13 1/2% Senior Zero Coupon Notes due 2004 issued by Holdings
on the Issue Date.
17
SECTION 1.2. Incorporation by Reference of TIA.
---------------------------------
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture securityholder" means a Holder or a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any
other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule and
not otherwise defined herein have the meanings assigned to them thereby.
SECTION 1.3. Rules of Construction.
---------------------
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in
the plural include the singular;
(5) provisions apply to successive events and transactions;
(6) "herein," "hereof" and other words of similar import
refer to this Indenture as a whole and not to any particular Article, Section or
other subdivision; and
(7) references to Sections or Articles means reference to
such Section or Article in this Indenture, unless stated otherwise.
18
ARTICLE II
THE SECURITIES
SECTION 2.1. Form and Dating.
---------------
The Securities and the Trustee's certificate of authentication,
in respect thereof, shall be substantially in the form of Exhibit A hereto,
which Exhibit is part of this Indenture. The Securities may have notations,
legends or endorsements required by law, stock exchange rule or usage. The
Company shall approve the form of the Securities and any notation, legend or
endorsement on them. Any such notations, legends or endorsements not contained
in the form of Security attached as Exhibit A hereto shall be delivered in
writing to the Trustee. Each Security shall be dated the date of its
authentication.
The terms and provisions contained in the forms of Securities
shall constitute, and are hereby expressly made, a part of this Indenture and,
to the extent applicable, the Company and the Trustee, by their execution and
delivery of this Indenture, expressly agree to such terms and provisions and to
be bound thereby.
SECTION 2.2. Execution and Authentication.
----------------------------
Two Officers shall sign, or one Officer shall sign and one
Officer shall attest to, the Security for the Company by manual or facsimile
signature. The Company's seal shall be impressed, affixed, imprinted or
reproduced on the Securities and may be in facsimile form.
If an Officer whose signature is on a Security was an Officer at
the time of such execution but no longer holds that office at the time the
Trustee authenticates the Security, the Security shall be valid nevertheless and
the Company shall nevertheless be bound by the terms of the Securities and this
Indenture.
A Security shall not be valid until an authorized signatory of
the Trustee manually signs the certificate of authentication on the Security but
such signature shall be conclusive evidence that the Security has been
authenticated pursuant to the terms of this Indenture.
The Trustee shall authenticate Initial Securities for original
issue in the aggregate principal amount of up to $70,000,000 and shall
authenticate Exchange Securities for original issue in the aggregate principal
amount of up to $70,000,000, in each case upon a written order of the Company in
the form of an Officers' Certificate; provided that such Exchange Securities
shall be issuable only upon the valid surrender for cancellation of Initial
Securities of a like aggregate principal amount in accordance with the
Registration Rights Agreement. The Officers' Certificate shall specify the
amount of Securities to be authenticated and the date on which the Securities
are to be authenticated. The aggregate principal amount of Securities
outstanding at any time may not exceed $70,000,000, except as provided in
Section 2.7. Upon the written
19
order of the Company in the form of an Officers' Certificate, the Trustee shall
authenticate Securities in substitution of Securities originally issued to
reflect any name change of the Company.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. Unless otherwise provided in the
appointment, an authenticating agent may authenticate Securities 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 the Company, any Affiliate of the Company,
or any of their respective Subsidiaries.
Securities shall be issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof.
SECTION 2.3. Registrar and Paying Agent.
--------------------------
The Company shall maintain an office or agency in the Borough of
Manhattan, The City of New York, where Securities may be presented for
registration of transfer or for exchange ("Registrar"), and an office or agency
where Securities may be presented for payment ("Paying Agent"), and where
notices and demands to or upon the Company in respect of the Securities may be
served. The Company may act as Registrar or Paying Agent, except that, for the
purposes of Articles III, VIII, XI, and Section 4.14 and as otherwise specified
in this Indenture, neither the Company nor any Affiliate of the Company shall
act as Paying Agent. The Registrar shall keep a register of the Securities and
of their transfer and exchange. The Company may have one or more co-Registrars
and one or more additional Paying Agents. The term "Paying Agent" includes any
additional Paying Agent. The Company hereby initially appoints the Trustee as
Registrar and Paying Agent, and the Trustee hereby initially agrees so to act.
The Company shall enter into an appropriate written agency
agreement with any Agent not a party to this Indenture, which agreement shall
implement the provisions of this Indenture that relate to such Agent. The
Company shall promptly notify the Trustee in writing of the name and address of
any such Agent. If the Company fails to maintain a Registrar or Paying Agent,
the Trustee shall act as such.
The Company initially appoints The Depository Trust Company
("DTC"), to act as Depository with respect to the Global Securities.
The Company initially appoints the Trustee to act as Securities
Custodian with respect to the Global Securities.
SECTION 2.4. Paying Agent to Hold Assets in Trust.
------------------------------------
The Company shall require each Paying Agent other than the
Trustee to agree in writing that each Paying Agent shall hold in trust for the
benefit of Holders or the Trustee all
20
assets held by the Paying Agent for the payment of principal of, premium, if
any, or interest on, the Securities (whether such assets have been distributed
to it by the Company or any other obligor on the Securities), and shall notify
the Trustee in writing of any Default in making any such payment. If either of
the Company or a Subsidiary of the Company acts as Paying Agent, it shall
segregate such assets and hold them as a separate trust fund for the benefit of
the Holders or the Trustee. The Company at any time may require a Paying Agent
to distribute all assets held by it to the Trustee and account for any assets
disbursed and the Trustee may at any time during the continuance of any payment
Default, upon written request to a Paying Agent, require such Paying Agent to
distribute all assets held by it to the Trustee and to account for any assets
distributed. Upon distribution to the Trustee of all assets that shall have been
delivered by the Company to the Paying Agent, the Paying Agent (if other than
the Company) shall have no further liability for such assets.
SECTION 2.5. Securityholder Lists.
--------------------
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders. If the Trustee is not the Registrar, the Company shall furnish to the
Trustee on or before the third Business Day preceding 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 reasonably may require of the names and
addresses of Holders.
SECTION 2.6. Transfer and Exchange.
---------------------
(a) Transfer and Exchange of Definitive Securities. When
----------------------------------------------
Definitive Securities are presented to the Registrar or a co-Registrar with a
request:
(x) to register the transfer of such Definitive
Securities; or
(y) to exchange such Definitive Securities for an equal
principal amount of Definitive Securities of other authorized denominations,
the Registrar or co-Registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Securities surrendered for transfer or
exchange:
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Company and
the Registrar or co-Registrar, duly executed by the Holder thereof or his
attorney duly authorized in writing; and
(ii) in the case of Transfer Restricted Securities that
are Definitive Securities, shall be accompanied by the following additional
information and documents, as applicable:
21
(A) if such Transfer Restricted Securities are being
delivered to the Registrar by a Holder for registration in the name of
such Holder, without transfer, a certification from such Holder to
that effect (in substantially the form set forth on the reverse of the
Security); or
(B) if such Transfer Restricted Security is being
transferred to a "qualified institutional buyer" (as defined in Rule
144A under the Securities Act) in accordance with Rule 144A under the
Securities Act, or pursuant to an exemption from registration in
accordance with Rule 144, or Regulation S under the Securities Act, or
pursuant to an effective registration statement under the Securities
Act, or to an institutional "accredited investor" within the meaning
of Rule 501 (A)(1), (2), (3) or (7) under the Securities Act that is
acquiring such Transfer Restricted Security for its own account, or
for the account of such an institutional accredited investor, not with
a view to or for offer or sale in connection with any distribution in
violation of the Securities Act, a certification to that effect (in
substantially the form set forth on the reverse of the Security); or
(C) if such Transfer Restricted Security is being
transferred in reliance on another exemption from the registration
requirements of the Securities Act, a certification to that effect (in
substantially the form set forth on the reverse of the Security) and
an Opinion of Counsel reasonably acceptable to the Company and to the
Registrar to the effect that such transfer is in compliance with the
Securities Act.
(b) Restrictions on Transfer of a Definitive Security for a
-------------------------------------------------------
Beneficial Interest in a Global Security. A Definitive Security may not be
- ----------------------------------------
exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below. Upon receipt by the Trustee of
a Definitive Security, duly endorsed or accompanied by appropriate instruments
of transfer, in form satisfactory to the Trustee, together with:
(i) if such Definitive Security is a Transfer Restricted
Security, certification, substantially in the form set forth on the reverse
of the Security, that such Definitive Security is being transferred to a
"qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A under the Securities Act; and
(ii) whether or not such Definitive Security is a Transfer
Restricted Security, written instructions directing the Trustee to make, or
to direct the Securities Custodian to make, an endorsement on the Global
Security to reflect an increase in the aggregate principal amount of the
Securities represented by the Global Security,
then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between
22
the Depository and the Securities Custodian, the aggregate principal amount of
Securities represented by the Global Security to be increased accordingly. If no
Global Securities are then outstanding, the Company shall issue and the Trustee
shall authenticate a new Global Security in the appropriate principal amount.
(c) Transfer and Exchange of Global Securities. The transfer
------------------------------------------
and exchange of Global Securities or beneficial interests therein shall be
effected through the Depository, in accordance with this Indenture (including
applicable restrictions on transfer set forth herein, if any) and the procedures
of the Depository therefor.
(d) Transfer of a Beneficial Interest in a Global Security for a
------------------------------------------------------------
Definitive Security.
- -------------------
(i) Any Person having a beneficial interest in a Global
Security may upon request exchange such beneficial interest for a
Definitive Security. Upon receipt by the Trustee of written instructions or
such other form of instructions as is customary for the Depository, from
the Depository or its nominee on behalf of any Person having a beneficial
interest in a Global Security, and upon receipt by the Trustee of a written
instruction or such other form of instructions as is customary for the
Depository or the Person designated by the Depository as having such a
beneficial interest in a Transfer Restricted Security only, the following
additional information and documents (all of which may be submitted by
facsimile):
(A) if such beneficial interest is being transferred to the
Person designated by the Depository as being the beneficial owner, a
certification from such person to that effect (in substantially the
form set forth on the reverse of the Security); or
(B) if such beneficial interest is being transferred to a
"qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A under the Securities Act,
or pursuant to an exemption from registration in accordance with Rule
144, or Regulation S under the Securities Act, or pursuant to an
effective registration statement under the Securities Act, or to an
institutional "accredited investor" within the meaning of Rule 501
(A)(1), (2), (3) or (7) under the Securities Act that is acquiring
such beneficial interest in such Global Security for its own account,
or for the account of such an institutional accredited investor, not
with a view to or for offer or sale in connection with any
distribution in violation of the Securities Act, a certification to
that effect from the transferor (in substantially the form set forth
on the reverse of the Security); or
(C) if such beneficial interest is being transferred in
reliance on another exemption from the registration requirements of
the Securities Act, a certification to that effect from the transferee
or transferor (in substantially the
23
form set forth on the reverse of the Security) or an Opinion of
Counsel from the transferee or transferor reasonably acceptable to the
Company and to the Registrar to the effect that such transfer is in
compliance with the Securities Act,
then the Trustee or the Securities Custodian, at the direction of the
Trustee, will cause, in accordance with the standing instructions and
procedures existing between the Depository and the Securities Custodian,
the aggregate principal amount of the Global Security to be reduced and,
following such reduction, the Company will execute and, upon receipt of an
authentication order in the form of an Officers' Certificate, the Trustee
will authenticate and deliver to the transferee a Definitive Security.
(ii) Definitive Securities issued in exchange for a
beneficial interest in a Global Security pursuant to this Section 2.6(d)
shall be registered in such names and in such authorized denominations as
the Depository, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall
deliver such Definitive Securities to the persons in whose names such
Securities are so registered.
(e) Restrictions on Transfer and Exchange of Global Securities.
----------------------------------------------------------
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in subsection (f) of this Section 2.6), a Global Security
may not be transferred as a whole except by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
(f) Authentication of Definitive Securities in Absence of
-----------------------------------------------------
Depository. If at any time:
- ----------
(i) the Depository for the Securities notifies the Company
that the Depository is unwilling or unable to continue as Depository for
the Global Securities and a successor Depository for the Global Securities
is not appointed by the Company within ninety days after delivery of such
notice; or
(ii) the Company, in its sole discretion, notifies the
Trustee in writing that they elect to cause the issuance of Definitive
Securities under this Indenture,
then the Company will execute, and the Trustee, upon receipt of an Officers'
Certificate requesting the authentication and delivery of Definitive Securities,
will authenticate and deliver Definitive Securities, in an aggregate principal
amount equal to the principal amount of the Global Securities, in exchange for
such Global Securities.
(g) Legends.
-------
24
(i) Except as permitted by the following paragraph (ii),
each Security certificate evidencing the Global Securities and the
Definitive Securities (and all Securities issued in exchange therefor or
substitution thereof) shall bear a legend in substantially the following
form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR ANY
APPLICABLE EXEMPTION THEREFROM.
EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED
THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE
HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (b) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR
FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN
CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT,
(c) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (d) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES
ACT OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL IF THE COMPANY SO REQUESTS) (2) TO THE COMPANY OR (3) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNTIED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO NOTIFY ANY PURCHASER
FROM IT OF THE SECURITY
25
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by a
Global Security) pursuant to Rule 144 under the Act or an effective
registration statement under the Act:
(A) in the case of any Transfer Restricted Security that is
a Definitive Security, the Registrar shall permit the Holder thereof
to exchange such Transfer Restricted Security for a Definitive
Security that does not bear the legend set forth above and rescind any
restriction on the transfer of such Transfer Restricted Security; and
(B) any such Transfer Restricted Security represented by a
Global Security shall not be subject to the provisions set forth in
(i) above (such sales or transfers being subject only to the
provisions of Section 2.6(c) of this Indenture); provided, however,
that with respect to any request for an exchange of a Transfer
Restricted Security that is represented by a Global Security for a
Definitive Security that does not bear a legend, which request is made
in reliance upon Rule 144, the Holder thereof shall certify in writing
to the Registrar that such request is being made pursuant to Rule 144
(such certification to be substantially in the form set forth on the
reverse of the Security).
(h) Cancellation and/or Adjustment of Global Security. At such
-------------------------------------------------
time as all beneficial interests in a Global Security have either been exchanged
for Definitive Securities, redeemed, repurchased or cancelled, such Global
Security shall be returned to or retained and cancelled by the Trustee. At any
time prior to such cancellation, if any beneficial interest in a Global Security
is exchanged for Definitive Securities, redeemed, repurchased or cancelled, the
principal amount of Securities represented by such Global Security shall be
reduced and an endorsement shall be made on such Global Security, by the Trustee
or the Securities Custodian, at the direction of the Trustee, to reflect such
reduction.
(i) Obligations with respect to Transfers and Exchanges of
------------------------------------------------------
Definitive Securities.
- ---------------------
(i) To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee shall authenticate Definitive
Securities and Global Securities at the Registrar's or co-Registrar's
request.
(ii) No service charge shall be made for any registration
of transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax, assessments, or similar governmental
charge payable in connection therewith (other than any such transfer taxes,
assessments, or similar governmental charge payable
26
upon exchanges or transfers pursuant to Section 2.2 (fourth paragraph),
2.10, 3.7, 4.14(8), 9.5, or 11.1 (final paragraph) of this Indenture).
(iii) The Registrar or co-Registrar shall not be required to
register the transfer of or exchange of (a) any Definitive Security
selected for redemption in whole or in part pursuant to Article III, except
the unredeemed portion of any Definitive Security being redeemed in part,
or (b) any Security for a period beginning fifteen Business Days before the
mailing of a notice of an offer to repurchase pursuant to Article XI or
Section 4.14 of this Indenture or redeem Securities pursuant to Article III
hereof and ending at the close of business on the day of such mailing.
SECTION 2.7. Replacement Securities.
----------------------
If a mutilated Security is surrendered to the Trustee or if the Holder
of a Security claims and submits an affidavit or other evidence, satisfactory to
the Trustee, to the Trustee to the effect that the Security has been lost,
destroyed or wrongfully taken, the Company shall issue and the Trustee shall
authenticate a replacement Security if the Trustee's requirements are met. If
required by the Trustee or the Company, such Holder must provide an indemnity
bond or other indemnity, sufficient in the judgment of both the Company and the
Trustee, to protect the Company, the Trustee or any Agent from any loss which
any of them may suffer if a Security is replaced. The Company may charge such
Holder for its reasonable, out-of-pocket expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company.
SECTION 2.8. Outstanding Securities.
----------------------
Securities outstanding at any time are all the Securities that have
been authenticated by the Trustee (including any Security represented by a
Global Security) except those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Security effected by
the Trustee hereunder and those described in this Section 2.8 of this Indenture
as not outstanding. A Security does not cease to be outstanding because the
Company or an Affiliate of the Company holds the Security, except as provided in
Section 2.9 of this Indenture.
If a Security is replaced pursuant to Section 2.7 of this Indenture
(other than a mutilated Security surrendered for replacement), it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser. A mutilated Security ceases
to be outstanding upon surrender of such Security and replacement thereof
pursuant to Section 2.7 of this Indenture.
If on a Redemption Date or the Maturity Date the Paying Agent (other
than an Company or an Affiliate of an Company) holds Cash or U.S. Government
Obligations sufficient to pay all of the principal and interest due on the
Securities payable on that date and payment
27
of the Securities called for redemption is not otherwise prohibited, then on and
after that date such Securities cease to be outstanding and interest on them
ceases to accrue.
SECTION 2.9. Treasury Securities.
-------------------
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, amendment, supplement, waiver or
consent, Securities owned by the Company or Affiliates of the Company shall be
disregarded, except that, for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, amendment, supplement,
waiver or consent, only Securities that the Trustee knows are so owned shall be
disregarded.
SECTION 2.10. Temporary Securities.
--------------------
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of definitive Securities but may
have variations that the Company reasonably and in good faith consider
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities in
exchange for temporary Securities. Until so exchanged, the temporary Securities
shall in all respects be entitled to the same benefits under this Indenture as
permanent Securities authenticated and delivered hereunder.
SECTION 2.11. Cancellation.
------------
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for transfer, exchange or payment. The
Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent
(other than the Company or an Affiliate of the Company), and no one else, shall
cancel and, at the written direction of the Company, shall dispose of all
Securities surrendered for transfer, exchange, payment or cancellation. Subject
to Section 2.7 of this Indenture, the Company may not issue new Securities to
replace Securities that have been paid or delivered to the Trustee for
cancellation. No Securities shall be authenticated in lieu of or in exchange for
any Securities cancelled as provided in this Section 2.11 of this Indenture,
except as expressly permitted in the form of Securities and as permitted by this
Indenture.
SECTION 2.12. Defaulted Interest.
------------------
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the person in
whose name that Security (or one or more predecessor Securities) is registered
at the close of business on the Record Date for such interest.
28
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date plus, to the extent
lawful, any interest payable on the defaulted interest ("Defaulted Interest"),
shall forthwith cease to be payable to the registered holder on the relevant
Record Date, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the persons in whose names the Securities (or their respective
predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which shall
be fixed in the following manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
Security and the date of the proposed payment, and at the same time the
Company shall deposit with the Trustee an amount of Cash equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest
or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such Cash when deposited to be
held in trust for the benefit of the persons entitled to such Defaulted
Interest as provided in this clause (1). Thereupon the Trustee shall fix a
record date for the payment of such Defaulted Interest (a "Special Record
Date"), which shall be not more than fifteen days, and not less than ten
days prior to the date of the proposed payment and not less than ten days
after the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record Date and,
in the name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder at his
address as it appears in the Security register not less than ten days prior
to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been mailed
as aforesaid, such Defaulted Interest shall be paid to the persons in whose
names the Securities (or their respective predecessor Securities) are
registered on such Special Record Date and shall no longer be payable
pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this clause,
such manner shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Security shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Security.
29
ARTICLE III
REDEMPTION
SECTION 3.1. Right of Redemption.
-------------------
Redemption of Securities, as permitted by any provision of this
Indenture, shall be made in accordance with such provision and this Article III.
The Company will not have the right to redeem any Securities prior to June 1,
1999 (other than out of the Net Cash Proceeds of certain issuances of Capital
Stock of the Company or Holdings described under "Redemption" in Section 5 of
the form of the Securities attached as Exhibit A hereto). On or after June 1,
1999, the Company will have the right to redeem all or any part of the
Securities at the Redemption Prices specified in the form of Security attached
as Exhibit A set forth therein under the caption "Redemption," in each case,
including accrued and unpaid interest to the Redemption Date.
SECTION 3.2. Notices to Trustee.
------------------
If the Company elects to redeem Securities pursuant to Paragraph 5 of
the Securities, it shall notify the Trustee in writing of the Redemption Date
and the principal amount of Securities to be redeemed and whether it wants the
Trustee to give notice of redemption to the Holders.
If the Company elects to reduce the principal amount of Securities to
be redeemed pursuant to Paragraph 5 of the Securities by crediting against any
such redemption Securities it has not previously delivered to the Trustee for
cancellation, it shall so notify the Trustee of the amount of the reduction and
deliver such Securities with such notice.
The Company shall give each notice to the Trustee provided for in this
Section 3.2 at least forty-five days before the Redemption Date (unless a
shorter notice shall be satisfactory to the Trustee). Any such notice may be
cancelled at any time prior to notice of such redemption being mailed to any
Holder and shall thereby be void and of no effect.
SECTION 3.3. Selection of Securities to Be Redeemed.
--------------------------------------
If less than all of the Securities are to be redeemed pursuant to
Paragraph 5 thereof, the Trustee shall select the Securities to be redeemed by
lot or by such other method as the Trustee shall determine to be fair and
appropriate and in such manner as complies with any applicable Depositary, legal
and stock exchange requirements.
The Trustee shall make the selection from the Securities outstanding
and not previously called for redemption and shall promptly notify the Company
in writing of the Securities selected for redemption and, in the case of any
Security selected for partial redemption, the principal amount thereof to be
redeemed. Securities in denominations of $1,000 may be
30
redeemed only in whole. The Trustee may select for redemption portions (equal to
$1,000 or any integral multiple thereof) of the principal of Securities that
have denominations larger than $1,000. Provisions of this Indenture that apply
to Securities called for redemption also apply to portions of Securities called
for redemption.
SECTION 3.4. Notice of Redemption.
--------------------
At least thirty days, but not more than sixty days before a Redemption
Date, the Company shall mail a notice of redemption by first class mail, postage
prepaid, to the Trustee and each Holder whose Securities are to be redeemed. At
the Company's request, the Trustee shall give the notice of redemption in the
Company's name and at the Company's expense. Each notice for redemption shall
identify the Securities to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price, including the amount of accrued
and unpaid interest to be paid upon such redemption;
(3) the name, address and telephone number of the Paying
Agent;
(4) that Securities called for redemption must be
surrendered to the Paying Agent at the address specified in such notice to
collect the Redemption Price;
(5) that, unless (a) the Company defaults in its obligation
to deposit Cash with the Paying Agent in accordance with Section 3.6 of
this Indenture or (b) such redemption payment is prohibited for any reason,
interest on Securities called for redemption ceases to accrue on and after
the Redemption Date and the only remaining right of the Holders of such
Securities is to receive payment of the Redemption Price, including accrued
and unpaid interest to the Redemption Date, upon surrender to the Paying
Agent of the Securities called for redemption and to be redeemed;
(6) if any Security is being redeemed in part, the portion
of the principal amount, equal to $1,000 or any integral multiple thereof,
of such Security to be redeemed and that, after the Redemption Date, and
upon surrender of such Security, a new Security or Securities in aggregate
principal amount equal to the unredeemed portion thereof will be issued;
(7) if less than all the Securities are to be redeemed, the
identification of the particular Securities (or portion thereof) to be
redeemed, as well as the aggregate principal amount of such Securities to
be redeemed and the aggregate principal amount of Securities to be
outstanding after such partial redemption;
(8) the CUSIP number of the Securities to be redeemed; and
31
(9) that the notice is being sent pursuant to this Section
3.4 and pursuant to the optional redemption provisions of Paragraph 5 of
the Securities.
SECTION 3.5. Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed in accordance with Section 3.4 of
this Indenture, Securities called for redemption become due and payable on the
Redemption Date and at the Redemption Price, including accrued and unpaid
interest to the Redemption Date. Upon surrender to the Trustee or Paying Agent,
such Securities called for redemption shall be paid at the Redemption Price,
including interest, if any, accrued and unpaid to the Redemption Date; provided
that if the Redemption Date is after a regular Record Date and on or prior to
the Interest Payment Date, the accrued interest shall be payable to the Holder
of the redeemed Securities registered on the relevant Record Date; and provided,
further, that if a Redemption Date is a Legal Holiday, payment shall be made on
the next succeeding Business Day and no interest shall accrue for the period
from such Redemption Date to such succeeding Business Day.
SECTION 3.6. Deposit of Redemption Price.
---------------------------
On or prior to the Redemption Date, the Company shall deposit with the
Paying Agent (other than the Company or an Affiliate of the Company) Cash
sufficient to pay the Redemption Price of, including accrued and unpaid interest
on, all Securities to be redeemed on such Redemption Date (other than Securities
or portions thereof called for redemption on that date that have been delivered
by the Company to the Trustee for cancellation). The Paying Agent shall promptly
return to the Company any Cash so deposited which is not required for that
purpose upon the written request of the Company.
If the Company complies with the preceding paragraph and the other
provisions of this Article III and payment of the Securities called for
redemption is not prohibited for any reason, interest on the Securities to be
redeemed will cease to accrue on the applicable Redemption Date, whether or not
such Securities are presented for payment. Notwithstanding anything herein to
the contrary, if any Security surrendered for redemption in the manner provided
in the Securities shall not be so paid upon surrender for redemption because of
the failure of the Company to comply with the preceding paragraph, interest
shall continue to accrue and be paid from the Redemption Date until such payment
is made on the unpaid principal, and, to the extent lawful, on any interest not
paid on such unpaid principal, in each case at the rate and in the manner
provided in Section 4.1 of this Indenture and the Security.
SECTION 3.7. Securities Redeemed in Part.
---------------------------
Upon surrender of a Security that is to be redeemed in part, the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder, without service charge to the Holder, a new Security or Securities equal
in principal amount to the unredeemed portion of the Security surrendered.
32
ARTICLE IV
COVENANTS
SECTION 4.1. Payment of Securities.
---------------------
The Company shall pay the principal of and interest on the Securities
on the dates and in the manner provided herein and in the Securities. An
installment of principal of or interest on the Securities shall be considered
paid on the date it is due if the Trustee or Paying Agent (other than the
Company, a Subsidiary of the Company or an Affiliate of the Company) holds for
the benefit of the Holders, on or before 10:00 a.m. New York City time on that
date, Cash deposited and designated for and sufficient to pay the installment.
The Company shall pay interest on overdue principal and on overdue
installments of interest at the rate specified in the Securities compounded
semi-annually, to the extent lawful.
SECTION 4.2. Maintenance of Office or Agency.
-------------------------------
The Company and the Guarantors shall maintain in the Borough of
Manhattan, The City of New York, an office or agency where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company and the Guarantors in respect of the Securities and this Indenture
may be served. The Company and the Guarantors shall give prompt written notice
to the Trustee of the location, and any change in the location, of such office
or agency. If at any time the Company and the Guarantors shall fail to maintain
any such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the address of the Trustee set forth in Section 13.2 of this
Indenture.
The Company and the Guarantors may also from time to time designate
one or more other offices or agencies where the Securities may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company and the Guarantors of their obligation to
maintain an office or agency in the Borough of Manhattan, The City of New York,
for such purposes. The Company and the Guarantors shall give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency. The Company and the Guarantors
hereby initially designate the Corporate Trust Office of the Trustee as such
office.
SECTION 4.3. Limitation on Restricted Payments.
---------------------------------
The Company and the Guarantors shall not, and shall not permit any of
their Subsidiaries to, directly or indirectly, make any Restricted Payment, if,
immediately prior to or after giving effect to such Restricted Payment on a pro
forma basis, (1) a Default or an Event
33
of Default shall have occurred and be continuing, (2) the Company is not
permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Debt Incurrence Ratio, or (3) the aggregate amount of all Restricted Payments
made by the Company, the Guarantors and their Subsidiaries, including after
giving effect to such proposed Restricted Payment, from and after the Issue
Date, would exceed the sum of (a) the amount determined by subtracting (i) 2.0
times the aggregate Consolidated Fixed Charges of the Company and its
Consolidated Subsidiaries for the period (taken as one accounting period),
commencing on the first day of the first full fiscal quarter commencing after
the Issue Date, to and including the last day of the fiscal quarter ended
immediately prior to the date of each such calculation (the "Computation
Period"), from (ii) Consolidated EBITDA of the Company and its Consolidated
Subsidiaries for the Computation Period, plus (b) 100% of the aggregate Net Cash
Proceeds received by the Company from the sale of its Qualified Capital Stock
(other than (i) to a Subsidiary or Unrestricted Subsidiary of the Company and
(ii) to the extent applied in connection with a Qualified Exchange, but
including the Net Cash Proceeds received by the Company upon the exercise,
exchange or conversion of securities into Qualified Capital Stock other than in
connection with a Qualified Exchange) after the Issue Date and on or prior to
the date of such Restricted Payment. The full amount of any Restricted Payment
made pursuant to the immediately following paragraph (other than clause (w), (x)
or (y) thereof), however, will be deducted in the calculation of the aggregate
amount of Restricted Payments available to be made referred to in clause (3) of
the immediately preceding sentence.
Notwithstanding the foregoing, the provisions in the immediately
preceding paragraph will not prohibit (r) dividends by the Company to Holdings
to the extent promptly applied by Holdings to pay (i) liquidated damages due on
the Zero-Coupon Notes, (ii) amounts due in respect of Capital Stock of Holdings
required to be repurchased upon the exercise of "put" rights held prior to the
Issue Date by the holders of the Capital Stock issued upon exercise of the
Warrant and (iii) reasonable general and administrative expenses of Holdings not
to exceed $250,000 in any consecutive four-quarter period, (s) Investments by
the Company or any Guarantor in Unrestricted Subsidiaries in an aggregate amount
not to exceed the sum of (i) $5,000,000 plus (ii) to the extent not otherwise
applied to a Restricted Payment, 100% of the aggregate Net Cash Proceeds
received by the Company from the sale of its Qualified Capital Stock after the
Issue Date (other than (i) to a Subsidiary or Unrestricted Subsidiary of the
Company and (ii) to the extent applied in connection with a Qualified Exchange,
but including the Net Cash Proceeds received by the Company upon the exercise,
exchange or conversion of securities into Qualified Capital Stock other than in
connection with a Qualified Exchange), (t) repurchases of Capital Stock from
employees and directors of the Company or its Subsidiaries (or payments to
Holdings for such a purpose) upon the death, disability or termination of
employment or such person's position as a director in an aggregate amount to all
employees and directors not to exceed $300,000 per year or $2,100,000 in the
aggregate on and after the Issue Date, (u) payments by OVLC of dividends on its
preferred stock outstanding prior to the Issue Date, in accordance with the
terms thereof, (v) Investments in non-wholly owned Subsidiaries not to exceed
$5,000,000 in the aggregate, (w) payments to Holdings for taxes calculated and
paid in accordance with the Tax Sharing Agreement, (x) payments of up to
$1,250,000 in the aggregate to repurchase Capital Stock of Subsidiaries are
outstanding prior to the Issue Date,
34
held by minority stockholders, and not beneficially owned by the Company or any
of its Affiliates, (y) a Qualified Exchange, or (z) the payment of any dividend
on Qualified Capital Stock within sixty days after the date of its declaration
if such dividend could have been made on the date of such declaration in
compliance with the foregoing provisions. Notwithstanding any other provision
hereof, the foregoing clauses (r)(iii), (s), (x) and (z) will not be deemed to
permit the respective Restricted Payments otherwise contemplated to be made
pursuant thereto if, immediately prior thereto or after giving effect to such
Restricted Payment on a pro forma basis, a Default or an Event of Default shall
have occurred or be continuing.
Not later than the date of making any Restricted Payment, the Company
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this Section 4.3 were computed, which calculations may
be based upon the Company's latest available internal financial statements;
provided, however, that a failure to so deliver such Officers' Certificate shall
not constitute a Default if the Company provides the Officers' Certificate
within thirty days of the date of making such Restricted Payment and
conclusively demonstrates therein that the Restricted Payment was permitted to
be made on the date made. The Trustee may rely on such Officers' Certificate
without further inquiry.
SECTION 4.4. Corporate and Partnership Existence.
-----------------------------------
Subject to Article V, the Company and the Guarantors shall do or cause
to be done all things necessary to preserve and keep in full force and effect
their respective corporate or partnership existence, as the case may be, and the
corporate or partnership existence, as the case may be, of each of their
Subsidiaries in accordance with the respective organizational documents of each
of them and the rights (charter and statutory) and corporate franchises of the
Company, the Guarantors and each of their respective Subsidiaries; provided,
however, that neither the Company nor any Guarantor shall be required to
preserve, with respect to themselves, any right or franchise, and with respect
to any of their respective Subsidiaries, any such existence, right or franchise,
if (a) the Board of Directors of the Company shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
such entity and (b) the loss thereof is not disadvantageous in any material
respect to the Holders.
SECTION 4.5. Payment of Taxes and Other Claims.
---------------------------------
Except with respect to immaterial items, the Company and the
Guarantors shall, and shall cause each of their Subsidiaries to, pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges (including
withholding taxes and any penalties, interest and additions to taxes) levied or
imposed upon the Company, any Guarantor or any of their Subsidiaries or any of
their respective properties and assets and (ii) all lawful claims, whether for
labor, materials, supplies, services or anything else, which have become due and
payable and which by law have or may become a Lien upon the property and assets
of the Company, any Guarantor or any of their Subsidiaries; provided, however,
that neither the Company nor any Guarantor shall be required to pay or dis-
35
charge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings and for which disputed amounts adequate reserves have
been established in accordance with GAAP.
SECTION 4.6. Maintenance of Properties and Insurance.
---------------------------------------
The Company and the Guarantors shall cause all material properties
used or useful to the conduct of their business and the business of each of
their Subsidiaries to be maintained and kept in good condition, repair and
working order (reasonable wear and tear excepted) and supplied with all
necessary equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in their reasonable
judgment may be necessary, so that the business carried on in connection
therewith may be properly conducted at all times; provided, however, that
nothing in this Section 4.6 shall prevent the Company or any Guarantor from
discontinuing any operation or maintenance of any of such properties, or
disposing of any of them, if such discontinuance or disposal is (a), in the
judgment of the Board of Directors of the Company, desirable in the conduct of
the business of such entity and (b) not disadvantageous in any material respect
to the Holders.
The Company and the Guarantors shall provide, or cause to be provided,
for themselves and each of their Subsidiaries, insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the reasonable,
good faith opinion of the Company is adequate and appropriate for the conduct of
the business of the Company, the Guarantors and such Subsidiaries in a prudent
manner, with (except for self-insurance) reputable insurers or with the
government of the United States of America or an agency or instrumentality
thereof, in such amounts, with such deductibles, and by such methods as shall be
customary, in the reasonable, good faith opinion of the Company and adequate and
appropriate for the conduct of the business of the Company, the Guarantors and
such Subsidiaries in a prudent manner for entities similarly situated in the
industry, unless failure to provide such insurance (together with all other such
failures) would not have a material adverse effect on the financial condition or
results of operations of the Company, the Guarantors and such Subsidiaries taken
as a whole .
SECTION 4.7. Compliance Certificate; Notice of Default.
-----------------------------------------
(a) The Company shall deliver to the Trustee within 120 days
after the end of its fiscal year an Officers' Certificate complying with Section
314(a)(4) of the TIA and stating that a review of its activities and the
activities of its Subsidiaries during the preceding fiscal year has been made
under the supervision of the signing Officers with a view to determining whether
the Company has kept, observed, performed and fulfilled its obligations under
this Indenture and further stating, as to each such Officer signing such
certificate, whether or not the signer knows of any failure by the Company, any
Guarantor or any Subsidiary of the Company to comply with any conditions or
covenants in this Indenture and, if such signer does know of such a failure to
comply, the certificate shall describe such failure with particularity. The
Officers' Certificate shall also notify the Trustee should the relevant fiscal
year end on any date other than the current fiscal year end date.
36
(b) The Company shall, so long as any of the Securities are
outstanding, deliver to the Trustee, promptly upon 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. The Trustee shall not be deemed to have knowledge of any
Default, any Event of Default or any such fact unless one of its Trust Officers
receives notice thereof from the Company or any of the Holders.
SECTION 4.8. Reports.
-------
Whether or not the Company or Holdings is subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, each of the Company and
Holdings shall deliver to the Trustee and to each Holder and to prospective
purchasers of the Securities identified to the Company by an Initial Purchaser
within fifteen days after it is or would have been required to file such with
the SEC, (i) annual and quarterly financial statements substantially equivalent
to financial statements that would have been included in reports filed with the
SEC, if the Company and Holdings were subject to Section 13 or 15(d) of the
Exchange Act, including, with respect to annual information only, a report
thereon by the Company's certified independent public accountants as such would
be required in such reports to the SEC, and, in each case, together with a
management's discussion and analysis of financial condition and results of
operations which would be so required; and (ii) all reports that would be
required to be filed with the SEC on Form 8-K. In addition, whether or not
required by the rules and regulations of the SEC, the Company will file a copy
of all such information and reports with the SEC for public availability (unless
the SEC will not accept such a filing) and make such information available to
securities analysts and prospective investors upon request for so long as any
Securities remain outstanding.
SECTION 4.9. Limitation on Status as Investment Company.
------------------------------------------
The Company shall not and it shall not permit any of its Subsidiaries
to become an "investment company" (as that term is defined in the Investment
Company Act of 1940, as amended), or otherwise become subject to regulation
under the Investment Company Act.
SECTION 4.10. Limitation on Transactions with Affiliates.
------------------------------------------
The Company shall not, and shall not permit any of its Subsidiaries or
Unrestricted Subsidiaries to, enter into any contract, agreement, arrangement or
transaction with any Affiliate (an "Affiliate Transaction"), or any series of
related Affiliate Transactions unless (1) the terms of such Affiliate
Transaction are fair and reasonable to the Company, such Subsidiary or such
Unrestricted Subsidiary, as the case may be, and no less favorable to the
Company, such Subsidiary or such Unrestricted Subsidiary, as the case may be,
than could have been obtained in comparable arm's length transaction with a non-
Affiliate, (2) involving consideration to either party in excess of $1,000,000,
unless such transaction is evidenced by an Officers' Certificate addressed and
delivered to the Trustee stating that the terms of such Affiliate Transaction
are fair and reasonable to the Company, such Subsidiary or such
37
Unrestricted Subsidiary, as the case may be, and no less favorable to the
Company, such Subsidiary or such Unrestricted Subsidiary, as the case may be,
than could have been obtained in comparable arm's length transaction with a non-
Affiliate, and (3) involving consideration to either party in excess of
$5,000,000, unless the Company, prior to the consummation thereof, obtains a
written favorable opinion as to the fairness of such transaction to the Company
from a financial point of view from an independent investment banking firm of
national reputation. The foregoing restriction will not apply to (u) pro rata
dividends or distributions paid in Cash on any class of Capital Stock and not
prohibited under Section 4.3 of this Indenture, (v) payments to Holdings made in
accordance with the Tax Sharing Agreement, (w) indemnification payments on
behalf of directors or employees of the Company or a Guarantor made or incurred
by such persons in such capacities, (x) payments made in accordance with the
Brentwood Agreement as in effect on the Issue Date, so long as no Event of
Default shall have occurred or be continuing, (y) repurchases of Capital Stock
not prohibited under clause (t) of Section 4.3 of this Indenture and (z)
transactions between the Company and any Wholly Owned Subsidiary Guarantor of
the Company or between Wholly Owned Subsidiary Guarantors of the Company.
SECTION 4.11. Limitation on Incurrence of Additional Indebtedness and
-------------------------------------------------------
Disqualified Capital Stock.
- --------------------------
The Company and the Guarantors shall not, and shall not permit any of
their Subsidiaries to, directly or indirectly, issue, assume, guaranty, incur,
become directly or indirectly liable with respect to (including as a result of
an Acquisition), extend the maturity of, or otherwise become responsible for,
contingently or otherwise (individually and collectively, to "incur" or "Incur"
or, as appropriate, an "incurrence" or "Incurrence"), any Indebtedness or any
Disqualified Capital Stock from and after the Issue Date. Notwithstanding the
foregoing:
(1) if (i) no Default or Event of Default shall have
occurred and be continuing at the time of, or would occur after giving
effect on a pro forma basis to, such incurrence of Indebtedness or
Disqualified Capital Stock and (ii) on the date of such incurrence
(the "Incurrence Date"), the Consolidated Cash Flow Ratio of the
Company for the Reference Period immediately preceding the Incurrence
Date, after giving effect on a pro forma basis to such incurrence of
such Indebtedness or Disqualified Capital Stock and, to the extent set
forth in the definition of Consolidated Cash Flow Ratio, the use of
proceeds thereof, would be no greater than 6 to 1 for Incurrence Dates
prior to June 1, 1998 and no greater than 5 to 1 thereafter (the "Debt
Incurrence Ratio"), then the Company and the Guarantors may incur such
Indebtedness or Disqualified Capital Stock, provided, however, that
Indebtedness incurred by a Guarantor shall be subordinated in right of
payment to such Guarantor's Guarantee of the Securities, except for
Non-recourse Purchase Money Indebtedness of such Guarantor and
Indebtedness of such Guarantor in the form of a guarantee which is in
respect of Indebtedness of the Company that is pari passu in right of
payment with the Securities,
38
in which case that guarantee may be pari passu in right of payment
with such Guarantor's Guarantee of the Securities;
(2) the Company and the Guarantors may incur Indebtedness
evidenced by the Securities and the Guarantees and represented by the
Indenture up to the amounts specified herein as of the Issue Date;
(3) the Company and the Guarantors may incur Refinancing
Indebtedness with respect to any Indebtedness or Disqualified Capital
Stock, as applicable, described in clauses (1) and (2) of this Section
4.11 or which is, after giving effect to the implementation of the New
Credit Facility, outstanding on the Issue Date;
(4) the Company and the Guarantors may incur Permitted
Indebtedness;
(5) the Company and the Guarantors may incur Indebtedness
pursuant to the New Credit Facility on or after the Issue Date up to
an aggregate amount outstanding (including any Indebtedness issued to
Refinance, refund or replace such Indebtedness) at any time of
$50,000,000, plus accrued interest, fees incurred in connection with
the New Credit Facility and such additional amounts as may be deemed
to be outstanding in the form of Interest Swap and Hedging Obligations
with lenders party to the New Credit Facility, reduced by the amount
of any such Indebtedness permanently retired with Net Cash Proceeds
from any Asset Sale (other than a sale of Assets to Be Disposed of) or
assumed by a transferee in an Asset Sale; and
(6) the Company and the Guarantors may incur Indebtedness
on or after the Issue Date up to an aggregate amount outstanding
(including any Indebtedness issued to Refinance, refund or replace
such Indebtedness) at any time of $7,500,000.
SECTION 4.12. Limitations on Dividends and Other Payment Restrictions
-------------------------------------------------------
Affecting Subsidiaries.
- ----------------------
The Company and the Guarantors shall not, and shall not permit any of
their Subsidiaries to, directly or indirectly, create, assume or suffer to exist
any consensual restriction on the ability of any Subsidiary of the Company to
pay dividends or make other distributions to, or to pay any obligation to, or
otherwise to transfer assets or property to, or make or pay loans or advances
to, the Company or any Subsidiary of the Company, except (a) restrictions
imposed by the Securities, this Indenture, the Zero-Coupon Notes or the
indenture pursuant to which the Zero-Coupon Notes are issued, (b) customary
provisions restricting subletting or assignment of any lease (including a
Capitalized Lease Obligation), (c) restrictions imposed by applicable law, (d)
existing restrictions under Indebtedness outstanding, after giving effect to the
39
implementation of the New Credit Facility, on the Issue Date, (e) restrictions
under any Acquired Indebtedness not incurred in violation of the Indenture or
under any agreement relating to any property, asset, or business acquired by the
Company or any of its Subsidiaries, which restrictions existed at the time of
acquisition, were not put in place in connection with or in anticipation of such
acquisition and are not applicable to any person, other than the person
acquired, or to any property, asset or business, other than the property, assets
and business so acquired, (f) restrictions with respect solely to a Subsidiary
of the Company imposed pursuant to a binding agreement which has been entered
into for the sale or disposition of all or substantially all of the Capital
Stock or assets of such Subsidiary, provided, such restrictions apply solely to
the Capital Stock or assets of such Subsidiary, (g) restrictions pursuant to the
New Credit Facility, (h) restrictions pursuant to Indebtedness, other than
Subordinated Indebtedness, incurred in compliance with clause (1) of Section
4.11 of this Indenture (including Refinancings permitted to be incurred under
clause (3) thereof), (i) Liens specified under "Permitted Liens," other than
clauses (b), (c) and (e) thereof, and (j) in connection with and pursuant to
permitted Refinancings, replacements of restrictions that are not more
restrictive than those being replaced and do not apply to any other person or
assets than those that would have been covered by the restrictions in the
Indebtedness so refinanced.
SECTION 4.13. Limitations on Liens.
--------------------
The Company and the Guarantors shall not, and shall not permit any of
their Subsidiaries to, directly or indirectly, create, incur, suffer to exist or
become effective any Lien upon any of its property or assets, whether now owned
or hereafter acquired, or any income or profits therefrom, or assign or convey
any right to receive income therefrom, unless all payments due under the
Indenture and the Securities or the Guarantees, as the case may be, are secured
on an equal and ratable basis with the obligations so secured until such time as
such obligation is no longer secured by a Lien, provided, however, that
Permitted Liens may be created or incurred or may exist or become effective
without any requirement that all payments due under this Indenture, the
Securities or the Guarantees, as the case may be, be equally and ratably
secured.
SECTION 4.14. Limitation on Sales of Assets and Subsidiary Stock.
--------------------------------------------------
The Company and the Guarantors shall not, and shall not permit any of
their Subsidiaries to, in one or a series of related transactions, convey, sell,
transfer, assign or otherwise dispose of, directly or indirectly, any of its
property, business or assets, including by merger or consolidation and including
upon any sale or other transfer or issuance of any Capital Stock of any
Subsidiary of the Company or any sale and leaseback transaction, whether by the
Company or a Subsidiary or through the issuance, sale or transfer of Capital
Stock by a Subsidiary of the Company (an "Asset Sale"), unless (1)(a) within 405
days after the date of such Asset Sale, the Net Cash Proceeds therefrom (the
"Asset Sale Offer Amount"), are applied to the optional redemption of the
Securities in accordance with the terms of this Indenture or to the repurchase
of the Securities pursuant to an irrevocable, unconditional offer by the Company
(the "Asset Sale Offer"), to repurchase Securities at a purchase price (the
"Asset Sale Offer Price"),
40
of 100% of principal amount, plus accrued interest to the date of payment, made
within 360 days of such Asset Sale or (b) within 360 days of such Asset Sale,
the Asset Sale Offer Amount is (i) invested (or committed, pursuant to a binding
commitment subject only to reasonable, customary closing conditions, to be
invested, and in fact is so invested, within an additional ninety days) in fixed
assets and real property which in the good faith judgment of the Board of
Directors constitute or are a part of a Related Business of the Company, or in
100% of the issued and outstanding Capital Stock of a person the assets of which
are principally comprised of such fixed assets and real properties, or (ii) used
to retire Indebtedness outstanding under the New Credit Facility, except with
respect to the use of proceeds from the sale of Assets to Be Disposed of, and to
permanently reduce the amount of such Indebtedness permitted to be incurred in
compliance with paragraph (5) of Section 4.11 of this Indenture (including that
in the case of a revolver or similar arrangement that makes credit available,
such commitment is so reduced by such amount), (2) with respect to any
transaction or related series of transactions in respect of securities, property
or assets with an aggregate fair market value in excess of $1,000,000, at least
85% of the consideration for such Asset Sale (excluding the amount of (A) any
Indebtedness (other than the Securities) that is required to be repaid or
assumed (and is either repaid or assumed by the transferee of the related
assets) by virtue of such Asset Sale and which is secured by a Lien on the
property or assets sold and (B) property received by the Company or any such
Subsidiary from the transferee that within thirty days of such Asset Sale is
converted into Cash or Cash Equivalents) consists of Cash or Cash Equivalents,
(3) no Default or Event of Default shall have occurred and be continuing at the
time of, or would occur after giving effect, on a pro forma basis, to, such
Asset Sale, and (4) the Board of Directors of the Company determines in good
faith that the Company or such Subsidiary, as applicable, receives fair market
value for such Asset Sale. Notwithstanding clause (1)(a) above, if an Asset Sale
Offer is commenced and securities of the Company ranking pari passu in right of
payment with the Securities are outstanding at the date of commencement thereof,
the terms of which provide that a substantially similar offer must be made with
respect thereto, then the Asset Sale Offer shall be made concurrently with such
other offer, and securities of each issue which the holders of securities of
such issue elect to have purchased will be accepted pro rata in proportion to
the aggregate principal amount thereof; provided, that in so repurchasing such
other securities, the Company is in compliance with Section 4.3 of this
Indenture.
In addition, notwithstanding the provisions of the prior paragraph:
(i) the Company and its Subsidiaries may (A) convey, sell,
lease, transfer, assign or otherwise dispose of assets in the ordinary
course of business or (B) exchange assets for assets in a Related Business,
provided, however, in the case of this clause (B) that (1) the Company,
prior to the consummation of any such proposed exchange or series of
related exchanges having a fair market value in excess of $2,500,000,
obtains a written favorable opinion as to the fairness of such transaction
to the Company from a financial point of view from an independent
investment banking firm of national reputation, (2) no Default or Event of
Default shall have occurred and be continuing and (3) after giving effect
to such proposed exchange on a pro forma basis, either (x) the Company is
permitted to incur at least $1.00 of additional Indebtedness
41
pursuant to the Debt Incurrence Ratio or (y) the Company's Debt Incurrence
Ratio is no greater than it was immediately prior to such proposed
exchange;
(ii) the Company and its Subsidiaries may convey, sell,
lease, transfer, assign or otherwise dispose of assets pursuant to and in
accordance with the provisions of Article V of this Indenture;
(iii) the Company and its Subsidiaries may (A) sell or
dispose of damaged, worn out or other obsolete property in the ordinary
course of business so long as such property is no longer necessary for the
proper conduct of the business of the Company or such Subsidiary, as
applicable, or (B) abandon such property if it cannot, through reasonable
efforts, be sold; and
(iv) the Company and its Subsidiaries may convey, sell,
transfer, assign or otherwise dispose of assets to the Company or any of
its Wholly Owned Subsidiaries.
The Company shall accumulate all Net Cash Proceeds (including any cash
as and when received from the proceeds of any property which itself was acquired
in consideration of an Asset Sale), and the aggregate amount of such accumulated
Net Cash Proceeds not used for the purposes permitted and within the time
provided by this Section 4.14 is referred to as the "Accumulated Amount."
For purposes of this Section 4.14, "Minimum Accumulation Date" means
each date on which the Accumulated Amount exceeds $10,000,000. Not later than
ten Business Days after each Minimum Accumulation Date, the Company will
commence an irrevocable unconditional offer (an "Offer to Purchase"), to the
Holders to purchase, on a pro rata basis, for Cash, Securities having a
principal amount (the "Offer Amount"), equal to the Accumulated Amount, at a
purchase price (the "Offer Price"), equal to 100% of principal amount, plus
accrued but unpaid interest to, and including, the date (the "Purchase Date"),
the Securities tendered are purchased and paid for in accordance with this
Section 4.14. The Offer to Purchase shall remain open for twenty Business Days,
except to the extent that a longer period is required by applicable law, but in
any case not more than ninety Business Days after such Minimum Accumulation Date
(or within 120 days of the commencement of the Offer to Purchase if, during any
such extension beyond ninety days following the commencement, the Company is
diligently pursuing all commercially reasonable steps to consummate the Offer to
Purchase or purchase properly tendered Securities pursuant thereto as promptly
as practicable). Notice of an Offer to Purchase will be sent on or before the
commencement of any Offer to Purchase, by first-class mail, by the Company to
each Holder at its registered address, with a copy to the Trustee. The notice to
the Holders will contain all information, instructions and materials required by
applicable law or otherwise material to such Holders' decision to tender
Securities pursuant to the Offer to Purchase. The notice, which (to the extent
consistent with the Indenture) shall govern the terms of the Offer to Purchase,
shall state:
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(1) that the Offer to Purchase is being made pursuant to
such notice and this Section 4.14;
(2) the Offer Amount, the Offer Price, the amount of
accrued and unpaid interest as of the then applicable Purchase Date, the
Final Put Date (as defined below), and the then applicable Purchase Date;
(3) that any Security, or portion thereof, not tendered or
accepted for payment will continue to accrue interest;
(4) that, unless the Company defaults in depositing Cash
with the Paying Agent in accordance with the penultimate paragraph of this
Section 4.14 or such payment is otherwise prevented, any Security, or
portion thereof, accepted for payment pursuant to the Offer to Purchase
shall cease to accrue interest after the Purchase Date;
(5) that Holders electing to have a Security, or portion
thereof, purchased pursuant to an Offer to Purchase will be required to
surrender the Security, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Security completed, to the Paying Agent
(which may not for purposes of this Section 4.14, notwithstanding anything
in this Indenture to the contrary, be the Company or any Affiliate of the
Company) at the address specified in the notice prior to the close of
business on the earlier of (a) the third Business Day prior to the Purchase
Date and (b) the third Business Day following the expiration of the Offer
to Purchase (such earlier date being the "Final Put Date");
(6) that Holders will be entitled to withdraw their
elections, in whole or in part, if the Paying Agent (which may not for
purposes of this Section 4.14, notwithstanding any other provision of this
Indenture, be the Company or any Affiliate of the Company) receives, up to
the close of business on the Purchase Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Securities the Holder is withdrawing and a statement that
such Holder is withdrawing his election to have such principal amount of
Securities purchased;
(7) that if Securities in a principal amount in excess of
the principal amount of Securities to be acquired pursuant to the Offer to
Purchase are tendered on or prior to the Final Put Date and not withdrawn,
the Company shall purchase such Securities on a pro rata basis (with such
adjustments as may be deemed appropriate by the Company so that only
Securities in denominations of $1,000 or integral multiples of $1,000 shall
be acquired);
43
(8) that Holders whose Securities were purchased only in
part will be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered; and
(9) a brief description of the circumstances and relevant
facts regarding such Asset Sales.
Any such Offer to Purchase shall comply with all applicable provisions
of Federal and state laws, including those regulating tender offers, if
applicable, and any provisions of this Indenture that conflict with such laws
shall be deemed to be superseded by the provisions of such laws.
On or before a Purchase Date, the Company shall (i) accept for payment
Securities or portions thereof properly tendered pursuant to the Offer to
Purchase on or before the Final Put Date (on a pro rata basis if required
pursuant to paragraph (7) of this Section 4.14), (ii) deposit with the Paying
Agent Cash sufficient to pay the Offer Price for all Securities or portions
thereof so tendered and accepted and (iii) deliver to the Trustee Securities so
accepted together with an Officers' Certificate stating the Securities or
portions thereof being purchased by the Company. The Paying Agent shall on
each Purchase Date mail or deliver to Holders of Securities so accepted payment
in an amount equal to the Offer Price for such Securities, and the Trustee
shall promptly authenticate and mail or deliver to such Holders a new Security
equal in principal amount to any unpurchased portion of the Security
surrendered. The Company shall not have any obligation to accept for payment or
pay for any Securities tendered by a Holder after the Final Put Date. Any
Security not so accepted shall be promptly mailed or delivered by the Company to
the Holder thereof.
If the amount required to be paid by the Company in order to acquire
all Securities duly tendered by Holders (and not withdrawn) pursuant to an
Offer to Purchase (the "Acceptance Amount"), made pursuant to the third
paragraph of this Section 4.14 is less than the Offer Amount, the excess of the
Offer Amount over the Acceptance Amount may be used by the Company for general
corporate purposes without restriction, unless otherwise restricted by the other
provisions of this Indenture. Upon consummation of any Offer to Purchase made
in accordance with the terms of this Indenture, the Accumulated Amount will be
reduced to zero irrespective of the amount of Securities tendered pursuant to
the Offer to Purchase.
SECTION 4.15. Waiver of Stay, Extension or Usury Laws.
---------------------------------------
Each of the Company and 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 or
extension law or any usury law or other law which would prohibit or forgive the
Company or any Guarantor from paying all or any portion of the principal of,
premium of, or interest on the Securities as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) each of the
44
Company and the Guarantors hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
SECTION 4.16. Rule 144A Information Requirement.
---------------------------------
The Company shall furnish to the Holders of the Securities, securities
analysts, and prospective purchasers of Securities designated by the Holders of
Transfer Restricted Securities, upon their request, the information required to
be delivered pursuant to Rule 144A(d)(4) under the Securities Act until such
time as either the Company has concluded an offer to exchange the Exchange
Securities for the Initial Securities or a registration statement relating to
resales of the Securities has become effective under the Securities Act. The
Company shall also furnish such information during the pendency of any
suspension of effectiveness of such resale registration statement.
SECTION 4.17. Restriction on Sale and Issuance of Subsidiary
----------------------------------------------
Stock.
- -----
The Company and the Guarantors shall not sell, and shall not permit
any of their Subsidiaries to issue or sell, any shares of Capital Stock of any
Subsidiary of the Company to any person other than the Company or a wholly owned
Subsidiary of the Company, provided, however, that all of the Capital Stock of a
Subsidiary of the Company may be sold if such Asset Sale complies with the
provisions of Section 4.14 of this Indenture. In such case, the Subsidiary so
sold shall be released from its obligations under its Guarantee in respect of
the Securities and this Indenture.
SECTION 4.18. Future Subsidiary Guarantors.
----------------------------
All present and future Subsidiaries of the Company jointly and
severally shall guarantee irrevocably and unconditionally all principal,
premium, if any, and interest on the Securities on a senior basis, all in
accordance with Article XII hereof.
SECTION 4.19. Limitations on Lines of Business.
--------------------------------
The Company shall not and shall not permit any of its Subsidiaries or
Unrestricted Subsidiaries to directly or indirectly engage to any substantial
extent in any line or lines of business activity other than a Related Business.
45
ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1. Limitation on Merger, Sale or Consolidation.
-------------------------------------------
(a) The Company shall not, directly or indirectly, consolidate
with or merge with or into another Person or sell, lease, convey or transfer all
or substantially all of its assets (computed on a consolidated basis), whether
in a single transaction or a series of related transactions, to another Person
or group of affiliated Persons, unless (i) either (a) the Company is the
continuing entity or (b) the resulting, surviving or transferee entity is a
corporation organized under the laws of the United States, any state thereof or
the District of Columbia and expressly assumes by supplemental indenture all of
the obligations of the Company in connection with the Securities and this
Indenture; (ii) no Default or Event of Default shall exist or shall occur
immediately before or after giving effect on a pro forma basis to such
transaction; (iii) other than in the case of a transaction solely between the
Company and any wholly owned Guarantor, immediately after giving effect to such
transaction on a pro forma basis, the consolidated surviving or transferee
entity would immediately thereafter be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Debt Incurrence Ratio; and (iv) the
Company has delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that such consolidation, merger or transfer and, if a
supplemental indenture is required, such supplemental indenture comply with
this Indenture and that all conditions precedent herein relating to such
transactions have been satisfied.
(b) For purposes of clause (a), the sale, lease, conveyance,
assignment, transfer or other disposition of all or substantially all of the
properties and assets of one or more Subsidiaries of the Company, which
properties and assets, if held by the Company instead of such Subsidiaries,
would constitute all or substantially all of the properties and assets of the
Company on a consolidated basis, shall be deemed to be the transfer of all or
substantially all of the properties and assets of the Company.
SECTION 5.2. Successor Corporation Substituted.
---------------------------------
Upon any consolidation or merger or any transfer of all or
substantially all of the assets of the Company in accordance with Section 5.1 of
this Indenture, the successor corporation formed by such consolidation or into
which the Company is merged or to which such transfer is made, shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
under this Indenture with the same effect as if such successor corporation had
been named herein as the Company, and when a successor corporation duly assumes
all of the obligations of the Company pursuant hereto and pursuant to the
Securities, the Company shall be released from such obligations (except with
respect to any obligations that arise from, or are related to, such
transaction).
46
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1. Events of Default.
-----------------
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be caused voluntarily or involuntarily or effected, without limitation, by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) failure to pay any installment of interest upon the
Securities as and when the same becomes due and payable, and the
continuance of such default for a period of thirty days;
(2) failure to pay all or any part of the principal of or
premium, if any, on the Securities when and as the same becomes due and
payable at maturity, upon redemption, by acceleration or otherwise,
including, without limitation, default in the payment of the Change of
Control Payment in accordance with Article XI or the Offer Price in
accordance with Section 4.14 or otherwise;
(3) the making by the Company or any of its Subsidiaries of a
Restricted Payment not permitted by Section 4.3 of this Indenture;
(4) failure by the Company or any Guarantor to observe or
perform any covenant or agreement contained in the Securities or this
Indenture (other than a default in the performance of any covenant or
agreement which is specifically dealt with elsewhere in this Section 6.1),
and continuance of such failure for a period of sixty days after there has
been given, by registered or certified mail, to the Company by the Trustee,
or to the Company and the Trustee by Holders of at least 25% in aggregate
principal amount of the outstanding Securities, a written notice specifying
such default or breach, requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder;
(5) a decree, judgment or order by a court of competent
jurisdiction shall have been entered adjudicating the Company or any of its
Significant Subsidiaries as bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization of the Company or any of its
Significant Subsidiaries under any Bankruptcy Law, and such decree or order
shall have continued undischarged and unstayed for a period of sixty days;
or a decree or order of a court of competent jurisdiction over the
appointment of a receiver, liquidator, trustee or assignee in bankruptcy or
insolvency of the Company or any of its Significant Subsidiaries, or of the
property of any such Person, or for the winding up or liquidation of the
affairs of any such Person, shall have been entered, and
47
such decree, judgment or order shall have remained in force undischarged
and unstayed for a period of sixty days;
(6) the Company or any of its Significant Subsidiaries shall
institute proceedings to be adjudicated a voluntary bankrupt, or shall
consent to the filing of a bankruptcy proceeding against it, or shall file
a petition or answer or consent seeking reorganization under any bankruptcy
or similar law or similar statute, or shall consent to the filing of any
such petition, or shall consent to the appointment of a Custodian,
receiver, liquidator, trustee or assignee in bankruptcy or insolvency of it
or any of its assets or property, or shall make a general assignment for
the benefit of creditors, or shall admit in writing its inability to pay
its debts generally as they become due, or shall, within the meaning of any
Bankruptcy Law, become insolvent, fail generally to pay its debts as they
become due, or take any corporate action in furtherance of or to
facilitate, conditionally or otherwise, any of the foregoing;
(7) a default under Indebtedness of the Company or any of its
Subsidiaries with an aggregate principal amount in excess of $5,000,000
(a) resulting from the failure to pay principal at maturity or (b) as a
result of which the maturity of such Indebtedness has been accelerated
prior to its stated maturity;
(8) final unsatisfied judgments not covered by insurance for the
payment of money, or the issuance of any warrant of attachment against any
portion of the property or assets of the Company or any of its
Subsidiaries, aggregating in excess of $5,000,000 at any one time rendered
against the Company or any of its Subsidiaries and not be stayed, bonded or
discharged within a period (during which execution shall not be effectively
stayed) of ninety days (or, in the case of any such final judgment which
provides for payment over time, which shall so remain unstayed, unbonded or
undischarged beyond any applicable payment date provided therein); or
(9) except as otherwise permitted under this Indenture and the
Securities, the cessation of effectiveness of any Guarantee in any material
respect or the finding by any judicial proceeding that any Guarantee is
unenforceable or invalid in any material respect or the denial or
disaffirmation by any Guarantor in writing of its obligations under its
Guarantee.
Notwithstanding the sixty-day period and notice requirement contained
in Section 6.1(4) above, (i) with respect to a default under Article XI the
sixty-day period referred to in Section 6.1(4) shall be deemed to have begun as
of the date the Change of Control notice is required to be sent in the event
that the Company has not complied with the provisions of Section 11.1 of this
Indenture, and the Trustee or Holders of at least 25% in principal amount of the
outstanding Securities thereafter give the Notice of Default referred to in
Section 6.1(4) to the Company and, if applicable, the Trustee; provided,
however, that if the breach or default is a result of a default in the payment
when due of the Change of Control Payment, such default shall be deemed, for
purposes of this Section 6.1, to arise no later than on such due date; and
48
(ii) with respect to a default under Section 4.14 of this Indenture, the sixty-
day period referred to in Section 6.1(4) shall be deemed to have begun as of the
date the notice of an Offer to Purchase is required to be sent in the event that
the Company has not complied with the provisions of Section 4.14 of this
Indenture requiring the giving of such notice, and the Trustee or Holders of at
least 25% in principal amount of the outstanding Securities thereafter give the
Notice of Default referred to in Section 6.1(4) to the Company and, if
applicable, the Trustee; provided, however, that if the breach or default is a
result of a default in the payment when due of the Offer Price, such default
shall be deemed, for purposes of this Section 6.1, to arise no later than on
such due date.
If a Default occurs and is continuing, the Trustee must, within ninety
days after the occurrence of such default, give to the Holders notice of such
default.
SECTION 6.2. Acceleration of Maturity Date; Rescission and
---------------------------------------------
Annulment.
- ---------
If an Event of Default (other than an Event of Default specified in
Section 6.1(5) or (6) above relating to the Company or any of its Significant
Subsidiaries) occurs and is continuing, then, and in every such case, unless
the principal of all of the Securities shall have already become due and
payable, either the Trustee or the Holders of not less than 25% in aggregate
principal amount of then outstanding Securities, by a notice in writing to the
Company (and to the Trustee if given by Holders) (an "Acceleration Notice"), may
declare all of the principal of the Securities, determined as set forth below,
including in each case accrued interest thereon, to be due and payable
immediately. In the event a declaration of acceleration resulting from an Event
of Default described in Section 6.1(7) above has occurred and is continuing,
such declaration of acceleration shall be automatically annulled if such default
is cured or waived or the holders of the Indebtedness which is the subject of
such default have rescinded their declaration of acceleration in respect of
such Indebtedness within sixty days thereof and the Trustee has received written
notice of such cure, waiver or rescission and no other Event of Default
described in Section 6.1(7) above has occurred that has not been cured or
waived, or as to which the declaration has not been rescinded, within sixty days
of the declaration of such acceleration in respect of such Indebtedness. If an
Event of Default specified in Section 6.1(5) or (6) above relating to the
Company or any Significant Subsidiary occurs, all principal and accrued interest
thereon will be immediately due and payable on all outstanding Securities
without any declaration or other act on the part of Trustee or the Holders.
At any time after such a declaration of acceleration being made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter provided in this Article VI, the Holders of a
majority in aggregate principal amount of then outstanding Securities, by
written notice to the Company and the Trustee, may rescind, on behalf of all
Holders, any such declaration of acceleration if:
(1) the Company has paid or deposited with the Trustee Cash
sufficient to pay:
49
(A) all overdue interest on all Securities,
(B) the principal of (and premium, if any, applicable to)
any Securities which would become due other than by reason of such
declaration of acceleration, and interest thereon at the rate borne by
the Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate borne by the Securities,
(D) all sums paid or advanced by the Trustee hereunder and
the compensation, expenses, disbursements and advances of the Trustee
and its agents and counsel, and
(2) all Events of Default, other than the non-payment of the
principal of, premium, if any, and interest on Securities which have become
due solely by such declaration of acceleration, have been cured or waived
as provided in Section 6.12 of this Indenture.
Notwithstanding the previous sentence of this Section 6.2, no waiver shall be
effective against any Holder for any Event of Default or event which with notice
or lapse of time or both would be an Event of Default with respect to any
covenant or provision which cannot be modified or amended without the consent of
the Holder of each outstanding Security affected thereby, unless all such
affected Holders agree, in writing, to waive such Event of Default or other
event. No such waiver shall cure or waive any subsequent default or impair any
right consequent thereon.
SECTION 6.3. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee.
- -------
The Company covenants that if an Event of Default in payment of
principal, premium or interest specified in clause (1) or (2) of Section 6.1 of
this Indenture occurs and is continuing, the Company shall, upon demand of the
Trustee, pay to it, for the benefit of the Holders of such Securities, the whole
amount then due and payable on such Securities for principal, premium (if any),
and interest, and, to the extent that payment of such interest shall be legally
enforceable, interest on any overdue principal (and premium, if any), and on any
overdue interest, at the rate borne by the Securities, and, in addition thereto,
such further amount as shall be sufficient to cover the costs and expenses of
collection, including compensation to, and expenses, disbursements and advances
of the Trustee and its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust in favor of the
Holders, may institute a judicial proceeding for the collection of the sums so
due and unpaid, may prosecute such proceeding to judgment or final decree and
may enforce the same against the Company or any other obligor upon the
Securities and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any other obligor
upon the Securities, wherever situated.
50
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 6.4. Trustee May File Proofs of Claim.
--------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise to take any and
all actions under the TIA, including
(1) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest owing and unpaid in respect of the Securities
and to file such 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 and its agent and counsel) and of the Holders allowed in such
judicial proceeding, and
(2) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official 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 it for the reasonable compensation, expenses,
disbursements and advances of the Trustee and its agents and counsel, and any
other amounts due the Trustee under Section 7.7 of this Indenture.
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 Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 6.5. Trustee May Enforce Claims Without Possession of
------------------------------------------------
Securities.
- ----------
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the
51
Trustee shall be brought in its own name as trustee of an express trust in favor
of the Holders, and any recovery of judgment shall, after provision for the
payment of compensation to, and expenses, disbursements and advances of the
Trustee and its agents and counsel, be for the ratable benefit of the Holders
of the Securities in respect of which such judgment has been recovered.
SECTION 6.6. Priorities.
----------
Any money collected by the Trustee pursuant to this Article VI shall
be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal, premium
(if any), or interest, upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the Trustee in payment of all amounts due pursuant to
Section 7.7 of this Indenture;
SECOND: To the Holders in payment of the amounts then due and unpaid
for principal of, premium (if any), and interest on, the Securities in respect
of which or for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the amounts due and
payable on such Securities for principal, premium (if any), and interest,
respectively; and
THIRD: To the Company or such other Person as may be lawfully
entitled thereto, the remainder, if any.
The Trustee may, but shall not be obligated to, fix a record date and
payment date for any payment to the Holders under this Section 6.6.
SECTION 6.7. Limitation on Suits.
-------------------
No Holder of any Security shall have any right to order or direct the
Trustee to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(A) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(B) the Holders of not less than 25% in principal amount of then
outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;
52
(C) such Holder or Holders have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities to be incurred or reasonably probable to be incurred in
compliance with such request;
(D) the Trustee for sixty days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding;
and
(E) no direction inconsistent with such written request has been
given to the Trustee during such sixty-day period by the Holders of a
majority in principal amount of the outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatsoever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 6.8. Unconditional Right of Holders to Receive Principal,
----------------------------------------------------
Premium and Interest.
- --------------------
Notwithstanding any other provision of this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of, and premium (if any), and interest on, such
Security on the Maturity Dates of such payments as expressed in such Security
(in the case of redemption, the Redemption Price on the applicable Redemption
Date, in the case of the Change of Control Payment, on the applicable Change of
Control Payment Date, and in the case of the Offer Price, on the Purchase Date)
and to institute suit for the enforcement of any such payment after such
respective dates, and such rights shall not be impaired without the consent of
such Holder.
SECTION 6.9. Rights and Remedies Cumulative.
------------------------------
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in Section 2.7 of
this Indenture, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 6.10. Delay or Omission Not Waiver.
----------------------------
No delay or omission by the Trustee or by any Holder of any Security
to exercise any right or remedy arising upon any Event of Default shall impair
the exercise of any such
53
right or remedy or constitute a waiver of any such Event of Default. Every
right and remedy given by this Article VI or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
SECTION 6.11. Control by Holders.
------------------
The Holder or Holders of a majority in aggregate principal amount of
then outstanding Securities shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred upon the Trustee, provided, that
(1) such direction shall not be in conflict with any rule of law
or with this Indenture,
(2) the Trustee shall not determine that the action so directed
would be unjustly prejudicial to the Holders not taking part in such
direction, and
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 6.12. Waiver of Past Default.
----------------------
Subject to Section 6.8 of this Indenture, the Holder or Holders of not
less than a majority in aggregate principal amount of the outstanding Securities
may, on behalf of all Holders, prior to the declaration of acceleration of the
maturity of the Securities, waive any past default hereunder and its
consequences, except a default
(A) in the payment of the principal of, premium, if any, or
interest on, any Security as specified in clauses (1) and (2) of Section
6.1 of this Indenture and not yet cured, or
(B) in respect of a covenant or provision hereof which, under
Article IX, cannot be modified or amended without the consent of the Holder
of each outstanding Security affected.
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 the exercise of any right arising therefrom.
54
SECTION 6.13. Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that 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, suffered or omitted to be taken by it
as Trustee, any court may in its discretion require the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 6.13 shall not apply to any suit instituted
by the Company, to any suit instituted by the Trustee, to any suit instituted by
any Holder, or group of Holders, holding in the aggregate more than 10% in
aggregate principal amount of the outstanding Securities, or to any suit
instituted by any Holder for enforcement of the payment of principal of, or
premium (if any), or interest on, any Security on or after the respective
Maturity Date expressed in such Security (including, in the case of redemption,
on or after the Redemption Date).
SECTION 6.14. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every case, subject to any
determination in such proceeding, the Company, the Guarantors, the Trustee and
the Holders shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Trustee and
the Holders shall continue as though no such proceeding had been instituted.
ARTICLE VII
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this Indenture
and covenants and agrees to perform the same, as herein expressed.
SECTION 7.1. Duties of Trustee.
-----------------
(a) If a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in their exercise
as a prudent Person would exercise or use under the circumstances in the conduct
of his or her own affairs.
(b) Except during the continuance of a Default or an Event of
Default:
55
(1) The Trustee need perform only those duties as are
specifically set forth in this Indenture and no others, and no covenants or
obligations shall be implied in or read into this Indenture which are
adverse to the Trustee, and
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section 7.1,
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts, and
(3) The Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.11 of this Indenture.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or to take or omit to take any action
under this Indenture or at the request, order or direction of the Holders or in
the exercise of any of its rights or powers if it shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(e) Every provision of this Indenture that in any way relates to
the Trustee is subject to paragraphs (a), (b), (c), (d) and (f) of this Section
7.1.
(f) The Trustee shall not be liable for interest on any assets
received by it except as the Trustee may agree in writing with the Company.
Assets held in trust by the Trustee need not be segregated from other assets
except to the extent required by law.
56
SECTION 7.2. Rights of Trustee.
-----------------
Subject to Section 7.1 of the Indenture:
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper Person. The Trustee
need not investigate any fact or matter stated in such document.
(b) Before the Trustee acts or refrains from acting, it may
consult with counsel and may require an Officers' Certificate or an Opinion of
Counsel, which shall conform to Sections 13.4 and 13.5 of this Indenture. The
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such certificate or advice of counsel.
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers conferred upon it by this Indenture.
(e) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond, debenture
or other paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit.
(f) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders, pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby.
(g) Unless otherwise specifically provided for in this
Indenture, any demand, request, direction or notice from the Company or any
Guarantor shall be sufficient if signed by an Officer of the Company or such
Guarantor, as applicable.
(h) The Trustee shall have no duty to inquire as to the
performance of the Company's or any Guarantor's covenants in Article IV hereof.
In addition, the Trustee shall not be deemed to have knowledge of any Default or
Event of Default except (i) any Event of Default occurring pursuant to Sections
6.1(1), 6.1(2) and 5.1 of this Indenture, or (ii) any Default or Event of
Default of which the Trustee shall have received written notification or
obtained actual knowledge.
57
SECTION 7.3. Individual Rights of Trustee.
----------------------------
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company, any
Guarantor, any of their Subsidiaries, or their respective Affiliates with the
same rights it would have if it were not Trustee. Any Agent may do the same
with like rights. However, the Trustee must comply with Sections 7.10 and 7.11
of this Indenture.
SECTION 7.4. Trustee's Disclaimer.
--------------------
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities and it shall not be accountable for the
Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement in the Securities, other than the Trustee's
certificate of authentication, or the use or application of any funds received
by a Paying Agent other than the Trustee.
SECTION 7.5. Notice of Default.
-----------------
If a Default or an Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to each Securityholder notice of
the uncured Default or Event of Default within ninety days after such Default or
Event of Default occurs. Except in the case of a Default or an Event of Default
in payment of principal (or premium, if any), of, or interest on, any Security
(including the payment of the Change of Control Purchase Price on the Change of
Control Payment Date, the payment of the Redemption Price on the Redemption Date
and the payment of the Offer Price on the Purchase Date), the Trustee may
withhold the notice if and so long as a Trust Officer in good faith determines
that withholding the notice is in the interest of the Securityholders.
SECTION 7.6. Reports by Trustee to Holders.
-----------------------------
Within sixty days after each May 15 beginning with the May 15
following the date of this Indenture, the Trustee shall, if required by law,
mail to each Securityholder a brief report dated as of such May 15 that complies
with TIA (S) 313(a). The Trustee also shall comply with TIA (S)(S) 313(b) and
313(c).
The Company shall promptly notify the Trustee in writing if the
Securities become listed on any stock exchange or automatic quotation system.
A copy of each report at the time of its mailing to Securityholders
shall be mailed to the Company and filed with the SEC and each stock exchange,
if any, on which the Securities are listed.
58
SECTION 7.7. Compensation and Indemnity.
--------------------------
The Company and the Guarantors jointly and severally agree to pay to
the Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company and the Guarantors shall reimburse the
Trustee upon request for all reasonable disbursements, expenses and advances
incurred or made by it in accordance with this Indenture. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee's
agents, accountants, experts and counsel.
The Company and the Guarantors jointly and severally agree to
indemnify the Trustee (in its capacity as Trustee) and each of its officers,
directors, attorneys-in-fact and agents for, and hold it harmless against, any
claim, demand, expense (including but not limited to reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel), loss or
liability incurred by it without negligence or bad faith on the part of the
Trustee, arising out of or in connection with the administration of this trust
and its rights or duties hereunder, including the reasonable costs and expenses
of defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The Trustee
shall notify the Company promptly of any claim asserted against the Trustee for
which it may seek indemnity. The Company and the Guarantors shall defend the
claim and the Trustee shall provide reasonable cooperation at the Company's and
the Guarantors' expense in the defense. The Trustee may have separate counsel
and the Company and the Guarantors shall pay the reasonable fees and expenses of
such counsel; provided, that the Company and the Guarantors will not be required
to pay such fees and expenses if they assume the Trustee's defense and there is
no conflict of interest between the Company and the Guarantors and the Trustee
in connection with such defense. The Company and the Guarantors need not pay
for any settlement made without their written consent. The Company and the
Guarantors need not reimburse any expense or indemnify against any loss or
liability to the extent incurred by the Trustee through its negligence, bad
faith or willful misconduct.
To secure the Company's and the Guarantors' payment obligations in
this Section 7.7, the Trustee shall have a lien prior to the Securities on all
assets held or collected by the Trustee, in its capacity as Trustee, except
assets held in trust to pay principal and premium, if any, of or interest on
particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(5) or (6) of this Indenture occurs, the
expenses and the compensation for the services are intended to constitute
expenses of administration under any Bankruptcy Law.
The Company's and the Guarantors' obligations under this Section 7.7
and any lien arising hereunder shall survive the resignation or removal of the
Trustee, the discharge of the Company's and the Guarantors' obligations pursuant
to Article VIII of this Indenture and any rejection or termination of this
Indenture under any Bankruptcy Law.
59
SECTION 7.8. Replacement of Trustee.
----------------------
The Trustee may resign by so notifying the Company in writing. The
Holder or Holders of a majority in principal amount of the outstanding
Securities may remove the Trustee by so notifying the Company and the Trustee in
writing and may appoint a successor trustee with the Company's consent. The
Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 of this
Indenture;
(b) the Trustee is adjudged bankrupt or insolvent;
(c) a receiver, Custodian or other 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 shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holder
or Holders of a majority in principal amount of the Securities may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that
and provided that all sums owing to the retiring Trustee provided for in Section
7.7 of this Indenture have been paid, the retiring Trustee shall transfer all
property held by it as trustee to the successor Trustee, subject to the lien
provided in Section 7.7 of this Indenture, the resignation or removal of the
retiring Trustee shall become effective, and the successor Trustee shall have
all the rights, powers and duties of the Trustee under this Indenture. A
successor Trustee shall mail notice of its succession to each Holder.
If a successor Trustee does not take office within sixty days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holder or Holders of at least 10% in principal amount of the outstanding
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with Section 7.10 of this Indenture,
any Securityholder may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.8, the Company's and the Guarantors' obligations under Section 7.7 of this
Indenture shall continue for the benefit of the retiring Trustee.
60
SECTION 7.9. Successor Trustee by Merger, Etc.
---------------------------------
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee.
SECTION 7.10. Eligibility; Disqualification.
-----------------------------
The Trustee shall at all times satisfy the requirements of TIA (S)
310(a)(1), (2) and (5). The Trustee shall have a combined capital and surplus
of at least $25,000,000 as set forth in its most recent published annual report
of condition. The Trustee shall comply with TIA (S) 310(b).
SECTION 7.11. Preferential Collection of Claims Against Company.
-------------------------------------------------
The Trustee shall comply with 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.
ARTICLE VIII
DISCHARGE; LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.1. Discharge; Option to Effect Legal Defeasance or
-----------------------------------------------
Covenant Defeasance.
- -------------------
This Indenture shall cease to be of further effect (except that the
Company's and the Guarantors' obligations under Section 7.7 and the Trustee's
and the Paying Agent's obligations under Sections 8.6 and 8.7 shall survive)
when all outstanding Securities theretofore authenticated and issued have been
delivered (other than destroyed, lost or stolen Securities that have been
replaced or paid) to the Trustee for cancellation and the Company or the
Guarantors have paid all sums payable hereunder. In addition, the Company may,
at its option at any time, elect to have Section 8.2 or 8.3 of this Indenture
applied to all outstanding Securities upon compliance with the conditions set
forth below in this Article VIII.
SECTION 8.2. Legal Defeasance and Discharge.
------------------------------
Upon the Company's exercise under Section 8.1 of this Indenture of the
option applicable to this Section 8.2, the Company and the Guarantors shall be
deemed to have been discharged from their respective obligations with respect to
all outstanding Securities on the date the conditions set forth below are
satisfied (hereinafter, "Legal Defeasance"). For this purpose, such Legal
Defeasance means that the Company shall be deemed to have paid and discharged
the entire Indebtedness represented by the outstanding Securities, which shall
thereafter be
61
deemed to be "outstanding" only for the purposes of Section 8.5 of this
Indenture and the other Sections of this Indenture referred to in (a) and (b)
below, and the Company and the Guarantors shall be deemed to have satisfied all
other of their respective obligations under such Securities 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 which shall
survive until otherwise terminated or discharged hereunder: (a) the rights of
Holders of outstanding Securities to receive solely from the trust fund
described in Section 8.4 of this Indenture, and as more fully set forth in such
section, payments in respect of the principal of, premium, if any, and interest
on such Securities when such payments are due, (b) the Company's obligations
with respect to such Securities under Sections 2.4, 2.6, 2.7, 2.10 and 5.2 of
this Indenture, (c) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and the Company's and the Guarantors' obligations in
connection therewith and (d) this Article VIII. Subject to compliance with
this Article VIII, the Company may exercise its option under this Section 8.2
notwithstanding the prior exercise of its option under Section 8.3 of this
Indenture with respect to the Securities.
SECTION 8.3. Covenant Defeasance.
-------------------
Upon the Company's exercise under Section 8.1 of this Indenture
of the option applicable to this Section 8.3, the Company and the Guarantors
shall be released from their respective obligations under the covenants
contained in Sections 4.3, 4.5, 4.6, 4.7, 4.8, 4.10, 4.11, 4.12, 4.13, 4.14,
4.17 and 4.18 and Article V of this Indenture with respect to the outstanding
Securities on and after the date the conditions set forth below are satisfied
(hereinafter, "Covenant Defeasance"), and the Securities shall thereafter be
deemed not "outstanding" for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder. For this purpose, such Covenant Defeasance
means that, with respect to the outstanding Securities, neither the Company nor
any Guarantor need comply with and shall have any liability in respect of any
term, condition or limitation set forth in any such covenant, whether directly
or indirectly, by reason of any reference elsewhere herein to any such covenant
or by reason of any reference in any such covenant to any other provision herein
or in any other document (and Section 6.1(4) of this Indenture shall not apply
to any such covenant), but, except as specified above, the remainder of this
Indenture and such Securities shall be unaffected thereby. In addition, upon the
Company's exercise under Section 8.1 of this Indenture of the option applicable
to this Section 8.3, Sections 6.1(7) and 6.1(8) of this Indenture shall not
constitute Events of Default.
SECTION 8.4. Conditions to Legal or Covenant Defeasance.
------------------------------------------
The following shall be the conditions to the application of
either Section 8.2 or 8.3 of this Indenture to the outstanding Securities:
(a) (1) The Company shall irrevocably have deposited or
caused to be deposited with the Trustee (or another trustee satisfying the
requirements of Section 7.10 of this
62
Indenture who shall agree to comply with the provisions of this Article VIII
applicable to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of such Securities, (a) Cash, or (b) U.S.
Government Obligations which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide, not
later than one day before the due date of any payment, or (c) a combination
thereof, in such amounts, as in each case will be sufficient, in the opinion of
a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and discharge,
and which shall be applied by the Trustee (or other qualifying trustee) to pay
and discharge, the principal of, premium, if any, and interest on the
outstanding Securities on the stated maturity or on the applicable redemption
date, as the case may be, of such principal or installment of principal,
premium, if any, or interest; provided that the Trustee shall have been
irrevocably instructed to apply such Cash and the proceeds of such U.S.
Government Obligations to said payments with respect to the Securities and (2)
the Holders must have a valid, perfected, exclusive security interest in such
trust;
(b) In the case of an election under Section 8.2 of this
Indenture prior to one year before the Stated Maturity, the Company shall have
delivered to the Trustee an Opinion of Counsel in the United States reasonably
acceptable to the Trustee confirming that (i) the Company has received from, or
there has been published by, the Internal Revenue Service a ruling or (ii) since
the date 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 shall
confirm that, the Holders of the outstanding Securities 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 8.3 of this
Indenture, the Company shall have delivered to the Trustee an Opinion of Counsel
in the United States to the effect that the Holders of the outstanding
Securities 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 in the same amount, 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 with respect to the
Securities shall have occurred and be continuing on the date of such deposit or,
insofar as Section 6.1(5) or 6.1(6) of this Indenture is concerned, at any time
in the period ending on the ninety-first day after the date of such deposit (it
being understood that this condition is a condition subsequent which shall not
be deemed satisfied until the expiration of such period, but in the case of
Covenant Defeasance, the covenants which are defeased under Section 8.3 of this
Indenture will cease to be in effect unless an Event of Default under Section
6.1(5) or 6.1(6) of this Indenture occurs during such period);
63
(e) Such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under, this
Indenture or any other material agreement or instrument to which the Company,
the Guarantors, or any of their Subsidiaries is a party or by which any of them
is bound;
(f) The Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit made by the Company pursuant to
its election under Section 8.2 or 8.3 of this Indenture was not made by the
Company with the intent of preferring the Holders over any other creditors of
the Company or with the intent of defeating, hindering, delaying or defrauding
any other creditors of the Company or others; and
(g) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel in the United States, each
stating that all conditions precedent provided for relating to either the Legal
Defeasance under Section 8.2 of this Indenture or the Covenant Defeasance under
Section 8.3 of this Indenture, as the case may be, have been complied with as
contemplated by this Section 8.4.
SECTION 8.5. Deposited Cash and U.S. Government Obligations to
-------------------------------------------------
be Held in Trust; Other Miscellaneous Provisions.
- ------------------------------------------------
Subject to Section 8.6 of this Indenture, all Cash and U.S.
Government Obligations (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
8.5, the "Trustee") pursuant to Section 8.4 of this Indenture in respect of the
outstanding Securities shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any Paying Agent as the Trustee may
determine, to the Holders of such Securities 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.
SECTION 8.6. Repayment to the Company.
------------------------
(a) The Trustee and the Paying Agent shall promptly pay to
the Company upon written request any Cash and U.S. Government Obligations
(including the proceeds thereof) held by them at any time in excess of amounts
required to pay principal of, premium, if any, and interest on the outstanding
Securities on the applicable date.
(b) Any Cash and U.S. Government Obligations (including the
proceeds thereof) deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium, if any,
or interest on any Security and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable shall be
paid to the Company on its request; and the Holder of such Security shall
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 shall
thereupon cease; provided, however, that
64
the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in the
New York Times and The Wall Street Journal (national edition), notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than thirty days from the date of such notification or publication,
any unclaimed balance of such money then remaining will be repaid to the
Company.
SECTION 8.7. Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any Cash or
U.S. Government Obligations in accordance with Section 8.2 or 8.3 of this
Indenture, as the case may be, of this Indenture 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 Securities shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.2 or 8.3 of
this Indenture until such time as the Trustee or Paying Agent is permitted to
apply such money in accordance with Sections 8.2 and 8.3 of this Indenture, as
the case may be; provided, however, that, if the Company makes any payment of
principal of, premium, if any, or interest on any Security following the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Securities to receive such payment from the Cash or U.S.
Government Obligations held by the Trustee or Paying Agent.
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.1. Supplemental Indentures Without Consent of Holders.
--------------------------------------------------
Without the consent of any Holder, the Company, or any Guarantor
(when authorized by Board Resolutions) and the Trustee, at any time and from
time to time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to cure any ambiguity, defect or inconsistency, or to
make any other provisions with respect to matters or questions arising under
this Indenture which shall not be inconsistent with the provisions of this
Indenture, provided such action pursuant to this clause (1) shall not adversely
affect the interests of any Holder in any respect;
(2) to provide for uncertificated Securities in addition to
or in place of certificated Securities;
(3) to add to the covenants of the Company or the
Guarantors for the benefit of the Holders, or to surrender any right or power
herein conferred upon the Company or the Guarantors or to make any other change
that does not adversely affect the legal rights of
65
any Holder under the Indenture, provided, that the Company or the Guarantors
have delivered to the Trustee an Opinion of Counsel stating that such change
does not adversely affect the rights of any Holder;
(4) to provide for collateral for or additional Guarantors
of the Securities;
(5) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the obligations of the
Company, herein and in the Securities in accordance with Article V;
(6) to comply with requirements of the Commission in order
to effect or maintain the qualification of the Indenture under the TIA; or
(7) to provide for the issuance and authorization of the
Exchange Securities.
SECTION 9.2. Amendments, Supplemental Indentures and Waivers
-----------------------------------------------
with Consent of Holders.
- -----------------------
Subject to Section 6.8 of this Indenture, with the consent of the
Holders of not less than a majority in aggregate principal amount of then
outstanding Securities (including consents obtained in connection with a tender
offer or exchange offer for Securities), by written act of said Holders
delivered to the Company and the Trustee, the Company or any Guarantor, when
authorized by Board Resolutions, and the Trustee may amend or supplement this
Indenture or the Securities or enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or the
Securities or of modifying in any manner the rights of the Holders under this
Indenture or the Securities. Subject to Section 6.8 of this Indenture, the
Holder or Holders of not less than a majority, in principal amount of then
outstanding Securities may waive compliance by the Company or any Guarantor
with any provision of this Indenture or the Securities. Notwithstanding any of
the above, however, no such amendment, supplemental indenture or waiver shall
without the consent of the Holder of each outstanding Security affected thereby:
(1) change the Change of Control Purchase Date pursuant to
Section 11.1 hereof or the Asset Sale Offer Period pursuant to Section 4.14
hereof;
(2) reduce the principal amount of any Security, or reduce
the Change of Control Payment, the Offer Price or the Redemption Price;
(3) reduce the rate or extend the time for payment of
interest on any Security;
66
(4) reduce the percentage of principal amount of Securities
whose Holders must consent to an amendment, supplement or waiver of any
provision of this Indenture or the Securities;
(5) change the ranking of the Securities or the Guarantees
to anything other than pari passu in right of payment to all unsubordinated
Indebtedness of the Company or the applicable Guarantor;
(6) change the Stated Maturity of any Security;
(7) alter the redemption provisions of Article III or the
change of control provisions in Article XI in a manner adverse to any Holder;
(8) make any changes in the provisions concerning waivers
of Defaults or Events of Default by Holders of the Securities or the rights of
Holders to recover the principal or premium of, interest on, or redemption
payment with respect to, any Security, including without limitation any changes
that impair the right to institute suit for enforcement of such payments or any
changes in Section 6.8 or 6.12 of this Indenture or the third sentence of this
Section 9.2, except to increase any required percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived without
the consent of the Holder of each outstanding Security affected thereby; or
(9) make the principal of, or the interest on, or any
premium payable upon redemption of, any Security payable with anything or in any
manner other than as provided for in this Indenture (including changing the
place of payment where, or the coin or currency in which, any Security is
payable) and the Securities as in effect on the date hereof.
It shall not be necessary for the consent of the Holders under
this Section 9.2 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture or
waiver.
After an amendment, supplement or waiver under this Section 9.2
or under Section 9.4 of this Indenture becomes effective, it shall bind each
Holder.
In connection with any amendment, supplement or waiver under this
Article IX, the Company may, but shall not be obligated to, offer to any Holder
who consents to such
67
amendment, supplement or waiver, or to all Holders, consideration for such
Holder's consent to such amendment, supplement or waiver.
SECTION 9.3. Compliance with TIA.
-------------------
Every amendment, waiver or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.
SECTION 9.4. Revocation and Effect of Consents.
---------------------------------
Until an amendment, waiver or supplement becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security, even if notation of the consent is not
made on any Security. However, any such Holder or subsequent Holder may revoke
the consent as to his Security or portion of his Security by written notice to
the Company or the Person designated by the Company as the Person to whom
consents should be sent if such revocation is received by the Company or such
Person before the date on which the Trustee receives an Officers' Certificate
certifying that the Holders of the requisite principal amount of Securities have
consented (and not theretofore revoked such consent) to the amendment,
supplement or waiver.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be the date so fixed by the
Company notwithstanding the provisions of the TIA. If a record date is fixed,
then notwithstanding the last sentence of the immediately preceding paragraph,
those Persons who were Holders at such record date, and only those Persons (or
their duly designated proxies), shall be entitled to revoke any consent
previously given, whether or not such Persons continue to be Holders after such
record date. No such consent shall be valid or effective for more than ninety
days after such record date.
After an amendment, supplement or waiver becomes effective, it
shall bind every Securityholder, unless it makes a change described in any of
clauses (1) through (9) of Section 9.2 of this Indenture, in which case, the
amendment, supplement or waiver shall bind only each Holder of a Security who
has consented to it and every subsequent Holder of a Security or portion of a
Security that evidences the same debt as the consenting Holder's Security;
provided, that any such waiver shall not impair or affect the right of any
Holder to receive payment of principal and premium of and interest on a
Security, on or after the respective dates set for such amounts to become due
and payable expressed in such Security, or to bring suit for the enforcement of
any such payment on or after such respective dates.
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SECTION 9.5. Notation on or Exchange of Securities.
-------------------------------------
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Trustee or require the Holder to put an appropriate notation on the
Security. The Trustee may place an appropriate notation on the Security about
the changed terms and return it to the Holder. Alternatively, if the Company or
the Trustee so determines, the Company in exchange for the Security shall issue
and the Trustee shall authenticate a new Security that reflects the changed
terms. Any failure to make the appropriate notation or to issue a new Security
shall not affect the validity of such amendment, supplement or waiver.
SECTION 9.6. Trustee to Sign Amendments, Etc.
--------------------------------
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article IX; provided, that the Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
any amendment, supplement or waiver authorized pursuant to this Article IX is
authorized or permitted by this Indenture.
ARTICLE X
MEETINGS OF SECURITYHOLDERS
SECTION 10.1. Purposes for Which Meetings May Be Called.
-----------------------------------------
A meeting of Securityholders may be called at any time and from
time to time pursuant to the provisions of this Article X for any of the
following purposes:
(a) to give any notice to the Company, any Guarantor or the
Trustee, or to give any directions to the Trustee, or to waive or to consent to
the waiving of any Default or Event of Default hereunder and its consequences,
or to take any other action authorized to be taken by Securityholders pursuant
to any of the provisions of Article VI;
(b) to remove the Trustee or appoint a successor Trustee
pursuant to the provisions of Article VII;
(c) to consent to an amendment, supplement or waiver and
the execution of an indenture or indentures supplemental hereto pursuant to the
provisions of Section 9.2 of this Indenture; or
(d) to take any other action (i) authorized to be taken by
or on behalf of the Holder or Holders of any specified aggregate principal
amount of the Securities under any
69
other provision of this Indenture, or authorized or permitted by law or (ii)
which the Trustee deems necessary or appropriate in connection with the
administration of this Indenture.
SECTION 10.2. Manner of Calling Meetings.
--------------------------
The Trustee may at any time call a meeting of Securityholders to
take any action specified in Section 10.1 of this Indenture, to be held at such
time and at such place in the City of New York, New York or elsewhere as the
Trustee shall determine. Notice of each meeting of Securityholders, setting
forth the time and place of such meeting and in general terms the action
proposed to be taken at such meeting, shall be mailed by the Trustee, first-
class postage prepaid, to the Company, the Guarantors and the Holders at their
last addresses as they shall appear on the registration books of the Registrar,
not less than ten nor more than sixty days prior to the date fixed for such
meeting.
Any meeting of Securityholders shall be valid without notice if
the Holders of all Securities then outstanding are present in Person or by
proxy, or if notice is waived before or after the meeting by the Holders of all
Securities outstanding, and if the Company and the Trustee are either present by
duly authorized representatives or have, before or after the meeting, waived
notice.
SECTION 10.3. Call of Meetings by the Company or Holders.
------------------------------------------
In case at any time the Company or the Holders of not less than
20% in aggregate principal amount of the Securities then outstanding, shall have
requested the Trustee to call a meeting of Securityholders to take any action
specified in Section 10.1 of this Indenture, by written request setting forth in
reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have mailed the notice of such meeting within twenty days
after receipt of such request, then the Company or the Holders of Securities in
the amount above specified may determine the time and place in The City of New
York, New York or elsewhere for such meeting and may call such meeting for the
purpose of taking such action, by mailing or causing to be mailed notice thereof
as provided in Section 10.2 of this Indenture, or by causing notice thereof to
be published at least once in each of two successive calendar weeks (on any
Business Day during such week) in a newspaper or newspapers printed in the
English language, customarily published at least five days a week of a general
circulation in The City of New York, State of New York, the first such
publication to be not less than ten nor more than sixty days prior to the date
fixed for the meeting.
SECTION 10.4. Who May Attend and Vote at Meetings.
-----------------------------------
To be entitled to vote at any meeting of Securityholders, a
Person shall (a) be a registered Holder of one or more Securities, or (b) be a
Person appointed by an instrument in writing as proxy for the registered Holder
or Holders of Securities. The only Persons who shall be entitled to be present
or to speak at any meeting of Securityholders shall be the Persons
70
entitled to vote at such meeting and their counsel and any representatives of
the Trustee and its counsel and any representatives of the Company and the
Guarantors and their counsel.
SECTION 10.5. Regulations May Be Made by Trustee; Conduct of the
--------------------------------------------------
Meeting; Voting Rights; Adjournment.
- -----------------------------------
Notwithstanding any other provision of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any
action by or any meeting of Securityholders, in regard to proof of the holding
of Securities and of the appointment of proxies, and in regard to the
appointment and duties of inspectors of votes, and submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall think appropriate.
Such regulations may fix a record date and time for determining the Holders of
record of Securities entitled to vote at such meeting, in which case those and
only those Persons who are Holders of Securities at the record date and time so
fixed, or their proxies, shall be entitled to vote at such meeting whether or
not they shall be such Holders at the time of the meeting.
The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Securityholders as provided in Section 10.3 of this Indenture,
in which case the Company or the Securityholders calling the meeting, as the
case may be, shall in like manner appoint a temporary chairman. A permanent
chairman and a permanent secretary of the meeting shall be elected by vote of
the Holders of a majority in principal amount of the Securities represented at
the meeting and entitled to vote.
At any meeting each Securityholder or proxy shall be entitled to
one vote for each $1,000 principal amount of Securities held or represented by
him; provided, however, that no vote shall be cast or counted at any meeting in
respect of any Securities challenged as not outstanding and ruled by the
chairman of the meeting to be not then outstanding. The chairman of the meeting
shall have no right to vote other than by virtue of Securities held by him or
instruments in writing as aforesaid duly designating him as the proxy to vote on
behalf of other Securityholders. Any meeting of Securityholders duly called
pursuant to the provisions of Section 10.2 or 10.3 of this Indenture may be
adjourned from time to time by vote of the Holder or Holders of a majority in
aggregate principal amount of the Securities represented at the meeting and
entitled to vote, and the meeting may be held as so adjourned without further
notice.
SECTION 10.6. Voting at the Meeting and Record to Be Kept.
-------------------------------------------
The vote upon any resolution submitted to any meeting of
Securityholders shall be by written ballots on which shall be subscribed the
signatures of the Holders of Securities or of their representatives by proxy and
the principal amount of the Securities voted by the ballot. Subject to the
Trustee's regulations adopted under Section 10.5 of this Indenture, the
permanent chairman of the meeting shall appoint two inspectors of votes, who
shall count all votes cast at
71
the meeting for or against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in duplicate of all
votes cast at the meeting. A record in duplicate of the proceedings of each
meeting of Securityholders shall be prepared by the secretary of the meeting
and there shall be attached to such record the original reports of the
inspectors of votes on any vote by ballot taken thereat and affidavits by one or
more Persons having knowledge of the facts, setting forth a copy of the notice
of the meeting and showing that such notice was mailed as provided in Section
10.2 of this Indenture or published as provided in Section 10.3 of this
Indenture. The record shall be signed and verified by the affidavits of the
permanent chairman and the secretary of the meeting and one of the duplicates
shall be delivered to the Company and the other to the Trustee to be preserved
by the Trustee, the latter to have attached thereto the ballots voted at the
meeting.
Any record so signed and verified shall be conclusive evidence of
the matters therein stated.
SECTION 10.7. Exercise of Rights of Trustee or Securityholders
------------------------------------------------
May Not Be Hindered or Delayed by Call of Meeting.
- -------------------------------------------------
Nothing contained in this Article X shall be deemed or construed
to authorize or permit, by reason of any call of a meeting of Securityholders or
any rights expressly or impliedly conferred hereunder to make such call, any
hindrance or delay in the exercise of any right or rights conferred upon or
reserved to the Trustee or to the Securityholders under any of the provisions of
this Indenture or of the Securities.
ARTICLE XI
RIGHT TO REQUIRE REPURCHASE
SECTION 11.1. Repurchase of Securities at Option of the Holder
------------------------------------------------
Upon a Change of Control.
- ------------------------
(a) In the event that a Change of Control occurs, each
Holder shall have the right, at such Holder's option, subject to the terms and
conditions of this Indenture, to require the Company to repurchase all or any
part of such Holder's Securities (provided, that the principal amount of such
Securities at maturity must be $1,000 or an integral multiple thereof) at a cash
price (the "Change of Control Payment"), equal to 101% of the principal amount
thereof, plus accrued and unpaid interest, if any, to and including the date
(the "Change of Control Payment Date"), the Securities tendered are purchased
and paid for in accordance with this Article XI.
(b) In the event of a Change of Control, the Company shall
be required to commence an offer to purchase Securities (a "Change of Control
Offer"), as follows:
72
(1) the Change of Control Offer shall commence within thirty
Business Days following the Change of Control date;
(2) the Change of Control Offer shall remain open for twenty
Business Days, except to the extent that a longer period is required by
applicable law, but in any case not more than ninety Business Days after
the occurrence of the Change of Control (or not more than 120 days of the
Change of Control if, during any such extension beyond ninety days
following the Change of Control, the Company is diligently pursuing all
commercially reasonable steps to consummate the Change of Control Offer as
promptly as practicable);
(3) the Company shall provide the Trustee with notice of the
Change of Control Offer at least five Business Days before the commencement
of any Change of Control Offer; and
(4) on or before the commencement of any Change of Control
Offer, the Company or the Trustee (upon the request and at the expense of
the Company) shall send, by first-class mail, a notice to each of the
Securityholders, which (to the extent consistent with this Indenture) shall
govern the terms of the Change of Control Offer and shall state:
(i) that the Change of Control Offer is being made pursuant
to such notice and this Section 11.1 and that all Securities, or portions
thereof, tendered will be accepted for payment;
(ii) the Change of Control Payment, including the amount of
accrued and unpaid interest as of the then applicable Change of Control
Payment Date, the then applicable Change of Control Payment Date and the
Change of Control Put Date (as defined below);
(iii) that any Security, or portion thereof, not tendered
or accepted for payment will continue to accrue interest;
(iv) that, unless the Company defaults in depositing Cash
with the Paying Agent in accordance with the last paragraph of this Article
XI or such payment is prevented, any Security, or portion thereof, accepted
for payment pursuant to the Change of Control Offer shall cease to accrue
interest after the Change of Control Payment Date;
(v) that Holders electing to have a Security, or portion
thereof, purchased pursuant to a Change of Control Offer will be required
to surrender the Security, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Security completed, to the Paying
Agent (which may not for purposes of this Section 11.1, notwithstanding
anything in this Indenture to the contrary, be the Company or any
73
Affiliate of the Company) at the address specified in the notice prior to
the close of business on the earlier of (a) the third Business Day prior to
the Change of Control Payment Date and (b) the third Business Day
following the expiration of the Change of Control Offer (such earlier date
being the "Change of Control Put Date");
(vi) that Holders will be entitled to withdraw their
election, in whole or in part, if the Paying Agent (which may not for
purposes of this Section 11.1, notwithstanding anything in this Indenture
to the contrary, be the Company or any Affiliate of the Company) receives,
up to the close of business on the Change of Control Payment Date, a
telegram, telex, facsimile transmission or letter setting forth the name of
the Holder, the principal amount of the Securities such Holder is
withdrawing and a statement that such Holder is withdrawing his election to
have such principal amount of Securities purchased;
(vii) that Holders whose Securities are purchased only in
part will be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered; and
(viii) a brief description of the events resulting in such
Change of Control.
Any such Change of Control Offer shall comply with all applicable
provisions of Federal and state laws, including those regulating tender offers,
if applicable, and any provisions of this Indenture which conflict with such
laws shall be deemed to be superseded by the provisions of such laws.
On or before the Change of Control Payment Date, the Company shall (i)
accept for payment Securities or portions thereof properly tendered pursuant to
the Change of Control Offer on or before the Change of Control Put Date, (ii)
deposit with the Paying Agent Cash sufficient to pay the Change of Control
Payment (including accrued and unpaid interest) for all Securities or portions
thereof so tendered and (iii) deliver to the Trustee Securities so accepted
together with an Officers' Certificate listing the Securities or portions
thereof being purchased by the Company. The Paying Agent shall on the Change of
Control Payment Date mail to Holders of Securities so accepted payment in an
amount equal to the Change of Control Payment for such Securities, and the
Trustee shall promptly authenticate and mail or deliver to such Holders a new
Security equal in principal amount to any unpurchased portion of the Security
surrendered. The Company shall not have any obligation to accept for payment or
pay for any Securities tendered by a Holder after the Change of Control Put
Date. Any Security not so accepted shall be promptly mailed or delivered by
the Company to the Holder thereof.
74
ARTICLE XII
GUARANTEE
SECTION 12.1. Guarantee.
---------
(a) In consideration of good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, to the fullest
extent permitted by applicable law, each of the Guarantors hereby irrevocably
and unconditionally guarantees on a senior basis (collectively, the "Guarantee")
to each Holder of a Security 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 Securities or the obligations of the
Company under this Indenture or the Securities, that: (x) the principal of and
premium (if any), and interest on the Securities will be paid in full when due,
whether at the maturity or interest payment date, by acceleration, call for
redemption, upon a Change of Control, an Offer to Purchase or otherwise; (y) all
other obligations of the Company to the Holders or the Trustee under this
Indenture or the Securities will be promptly paid in full or performed, all in
accordance with the terms of this Indenture and the Securities; and (z) in case
of any extension of time of payment or renewal of any Securities or any of such
other obligations, they will be paid in full when due or performed in accordance
with the terms of the extension or renewal, whether at maturity, by
acceleration, call for redemption, upon a Change of Control, an Offer to
Purchase or otherwise. Failing payment when due of any amount so guaranteed for
whatever reason, each Guarantor shall be obligated to pay the same before
failure so to pay becomes an Event of Default.
(b) Each Guarantor hereby agrees to the fullest extent
permitted by applicable law, that its obligations with regard to this Guarantee
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Securities or this Indenture, the absence of any action
to enforce the same, any delays in obtaining or realizing upon or failures to
obtain or realize upon collateral, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstances that 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 or right to require
the prior disposition of the assets of the Company to meet its obligations,
protest, notice and all demands whatsoever and covenants that this Guarantee
will not be discharged except by complete performance of the obligations
contained in the Securities and this Indenture.
(c) If any Holder or the Trustee is required by any court
or otherwise to return to either the Company or any Guarantor, or any Custodian
or similar official acting in relation to either the Company or such Guarantor,
any amount paid by either the Company or such Guarantor to the Trustee or such
Holder, this Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. Each Guarantor 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
75
further agrees that, as between such Guarantor, on the one hand, and the Holders
and the Trustee, on the other hand, (i) the maturity of the obligations
guaranteed hereby may be accelerated as provided in Section 6.2 of this
Indenture for the purposes of this Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration as to the Company
of the obligations guaranteed hereby, and (ii) in the event of any declaration
of acceleration of those obligations as provided in Section 6.2 of this
Indenture, those obligations (whether or not due and payable) will forthwith
become due and payable by each of the Guarantors for the purpose of this
Guarantee.
(d) It is the intention of each Guarantor and the Company
that the obligations of each Guarantor hereunder shall be in, but not in excess
of, the maximum amount permitted by applicable law. Accordingly, if the
obligations in respect of the Guarantee would be annulled, avoided or
subordinated to the creditors of any Guarantor by a court of competent
jurisdiction in a proceeding actually pending before such court as a result of a
determination both that such Guarantee was made by such Guarantor without fair
consideration and, immediately after giving effect thereto, such Guarantor was
insolvent or unable to pay its debts as they mature or left with an unreasonably
small capital, then the obligations of such Guarantor under such Guarantee shall
be reduced by such court if and to the extent such reduction would result in the
avoidance of such annulment, avoidance or subordination; provided, however, that
any reduction pursuant to this paragraph shall be made in the smallest amount as
is strictly necessary to reach such result. For purposes of this paragraph,
"fair consideration", "insolvency", "unable to pay its debts as they mature",
"unreasonably small capital" and the effective times of reductions, if any,
required by this paragraph shall be determined in accordance with applicable
law.
SECTION 12.2. Execution and Delivery of Guarantee.
-----------------------------------
To evidence its Guarantee set forth in Section 12.1 of this
Indenture, each Guarantor agrees to execute a Guarantee substantially in the
form annexed hereto as Exhibit B and that this Indenture shall be executed on
behalf of such Guarantor by two Officers or an Officer and an Assistant
Secretary by manual or facsimile signature, other than in the case of any
Guarantor which has only one officer, in which case, by such sole officer.
Each Guarantor agrees that its Guarantee set forth in Section
12.1 of this Indenture shall remain in full force and effect and apply to all
the Securities notwithstanding any failure to endorse on each Security a
notation of such Guarantee.
If an Officer whose signature is on a Guarantee no longer holds
that office at the time the Trustee authenticates the Security to which a
Guarantee relates, the Guarantee shall be valid nevertheless.
The delivery of any Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the Guarantee
set forth in this Indenture on behalf of each Guarantor.
76
SECTION 12.3. Future Guarantors.
-----------------
The Company and the Guarantors covenant and agree that they shall
cause each person that is or becomes a Subsidiary of the Company or of any
Guarantor to execute a Guarantee in the form of Exhibit B hereto and will cause
such Subsidiary to execute an Indenture supplemental hereto for the purpose of
adding such Subsidiary as a Guarantor hereunder.
SECTION 12.4. Certain Bankruptcy Events.
-------------------------
Each Guarantor hereby covenants and agrees, to the fullest extent
that it may do so under applicable law, that in the event of the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Company, such
Guarantor shall not file (or join in any filing of), or otherwise seek to
participate in the filing of, any motion or request seeking to stay or to
prohibit (even temporarily) execution on the Guarantee and hereby waives and
agrees not to take the benefit of any such stay of execution, whether under
Section 362 or 105 of the United States Bankruptcy Code or otherwise.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1. TIA Controls.
------------
If any provision of this Indenture limits, qualifies, or
conflicts with the duties imposed by operation of the TIA, the imposed duties,
upon qualification of this Indenture under the TIA, shall control.
SECTION 13.2. Notices.
-------
Any notices or other communications to the Company or any
Guarantor or the Trustee required or permitted hereunder shall be in writing,
and shall be sufficiently given if made by hand delivery, by telex, by
telecopier or registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
if to the Company or any Guarantor:
Cobblestone Golf Group, Inc.
3702 Villa de la Valle, Suite 202
Del Mar, California 92014
Attention: Chief Financial Officer
Telecopy: (619) 794-7806
77
if to the Trustee:
Norwest Bank Minnesota, National Association
Norwest Center
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55472
Attention: Corporate Trust Division
Telecopy: (612) 667-9825
Any party by notice to each other party may designate additional
or different addresses as shall be furnished in writing by such party. Any
notice or communication to any party shall be deemed to have been given or made
as of the date so delivered, if personally delivered; when answered back, if
telexed; when receipt is acknowledged, if telecopied; and five Business Days
after mailing if sent by registered or certified mail, postage prepaid (except
that a notice of change of address shall not be deemed to have been given until
actually received by the addressee).
Any notice or communication mailed to a Securityholder shall be
mailed to him by first class mail or other equivalent means at his address as it
appears on the registration books of the Registrar and shall be sufficiently
given to him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or
any defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 13.3. Communications by Holders with Other Holders.
--------------------------------------------
Securityholders may communicate pursuant to TIA (S) 312(b) with
other Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and any other Person shall
have the protection of TIA (S) 312(c).
SECTION 13.4. Certificate and Opinion as to Conditions
----------------------------------------
Precedent.
- ---------
Upon any request or application by the Company or any Guarantor
to the Trustee to take any action under this Indenture, such Person shall
furnish to the Trustee:
(1) an Officers' Certificate (in form and
substance reasonably satisfactory to the Trustee) stating that,
in the opinion of the signers, all conditions precedent, if any,
provided for in this Indenture relating to the proposed action
have been met; and
78
(2) an Opinion of Counsel (in form and
substance reasonably satisfactory to the Trustee) stating that,
in the opinion of such counsel, all such conditions precedent
have been met.
SECTION 13.5. Statements Required in Certificate or Opinion.
---------------------------------------------
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that the Person making such
certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and
scope of the examination or investigation upon which the
statements or opinions contained in such certificate or opinion
are based;
(3) a statement that, in the opinion of such
Person, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to
whether or not such covenant or condition has been met; and
(4) a statement as to whether or not, in the
opinion of each such Person, such condition or covenant has been
met; provided, however, that with respect to matters of fact an
Opinion of Counsel may rely on an Officers' Certificate or
certificates of public officials.
SECTION 13.6. Rules by Trustee, Paying Agent, Registrar.
-----------------------------------------
The Trustee may make reasonable rules for action by or at a
meeting of Securityholders. The Paying Agent or Registrar may make reasonable
rules for its functions.
SECTION 13.7. Legal Holidays.
--------------
A "Legal Holiday" is a Saturday, a Sunday or a day on which
banking institutions in New York, New York are authorized or obligated by law or
executive order to close. If a payment date is a Legal Holiday at such place,
payment may be made at such place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
SECTION 13.8. Governing Law.
-------------
THIS INDENTURE, THE GUARANTEES AND THE SECURITIES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
AS APPLIED TO CONTRACTS MADE AND PERFORMED
79
WITHIN THE STATE OF NEW YORK. EACH OF THE COMPANY AND THE GUARANTORS HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN
THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN
THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE AND THE SECURITIES,
AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. EACH OF THE COMPANY AND
THE GUARANTORS IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO
SO UNDER APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT
THE RIGHT OF THE TRUSTEE OR ANY SECURITYHOLDER TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST THE COMPANY AND THE GUARANTORS IN ANY OTHER JURISDICTION.
SECTION 13.9. No Adverse Interpretation of Other Agreements.
---------------------------------------------
This Indenture may not be used to interpret another indenture,
loan or debt agreement of the Company or any Guarantor or any of their
respective Subsidiaries. Any such indenture, loan or debt agreement may not be
used to interpret this Indenture.
SECTION 13.10. No Recourse Against Others.
--------------------------
No partner, incorporator, direct or indirect stockholder,
director, officer or employee, as such, past, present or future, of the Company
or any Guarantor, or any successor entity, shall have any personal liability in
respect of the obligations of the Company and the Guarantors under the
Securities or this Indenture by reason of his, her or its status as such
partner, incorporator, stockholder, director, officer or employee. Each
Securityholder by accepting a Security waives and releases all such liability.
Such waiver and release are part of the consideration for the issuance of the
Securities.
SECTION 13.11. Successors.
----------
All agreements of the Company and the Guarantors in this
Indenture and the Securities shall bind its successor. All agreements of the
Trustee in this Indenture shall bind its successor.
80
SECTION 13.12. Duplicate Originals.
-------------------
All parties may sign any number of copies or counterparts of this
Indenture. Each signed copy or counterpart shall be an original, but all of
them together shall represent the same agreement.
SECTION 13.13. Severability.
------------
In case any one or more of the provisions in this Indenture or in
the Securities or in the Guarantees shall be held invalid, illegal or
unenforceable, in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions shall not in any way be affected or impaired thereby, it being
intended that all of the provisions hereof shall be enforceable to the full
extent permitted by law.
SECTION 13.14. Table of Contents, Headings, Etc.
---------------------------------
The Table of Contents, Cross-Reference Table and headings of the
Articles and the Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
SECTION 13.15. Qualification of Indenture.
--------------------------
The Company shall qualify this Indenture under the TIA in
accordance with the terms and conditions of the Registration Rights Agreement
and shall pay all costs and expenses (including attorneys' fees for the Company
and the Trustee) incurred in connection therewith, including, but not limited
to, costs and expenses of qualification of the Indenture and the Securities and
printing this Indenture and the Securities. The Trustee shall be entitled to
receive from the Company any such Officers' Certificates, Opinions of Counsel or
other documentation as it may reasonably request in connection with any such
qualification of this Indenture under the TIA.
SECTION 13.16. Registration Rights.
-------------------
Certain Holders of the Securities may be entitled to certain
registration rights with respect to such Securities pursuant to, and subject to
the terms of, the Registration Rights Agreement.
81
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the date first written above.
COBBLESTONE GOLF GROUP, INC.,
a Delaware corporation
By: /s/ James A. Husband
--------------------
Name: James A. Husband
Title: President and Chief
Executive Officer
Attest: /s/ Stefan C. Karnavas
----------------------
Secretary
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION, as Trustee
By: /s/ Raymond S. Haverstock
-------------------------
Name: Raymond S. Haverstock
Title: Vice President
GUARANTORS: ESCONDIDO CONSULTING, INC.
By: /s/ James A. Husband
--------------------
Name: James A. Husband
Title: President
By: /s/ Stefan C. Karnavas
----------------------
Name: Stefan C. Karnavas
Title: Secretary
COBBLESTONE TEXAS, PECAN GROVE GOLF CLUB, INC.
INC.
By: /s/ James A. Husband By: /s/ James A. Husband
-------------------- --------------------
Name: James A. Husband Name: James A. Husband
Title: President Title: President
By: /s/ Stefan C. Karnavas By: /s/ Stefan C. Karnavas
---------------------- ----------------------
Name: Stefan C. Karnavas Name: Stefan C. Karnavas
Title: Secretary Title: Secretary
FOOTHILLS HOLDING BELLOWS GOLF GROUP, INC.
COMPANY, INC.
By: /s/ James A. Husband By: /s/ James A. Husband
-------------------- --------------------
Name: James A. Husband Name: James A. Husband
Title: President Title: President
By: /s/ Stefan C. Karnavas By: /s/ Stefan C. Karnavas
---------------------- ----------------------
Name: Stefan C. Karnavas Name: Stefan C. Karnavas
Title: Secretary Title: Secretary
CARMEL MOUNTAIN OVLC MANAGEMENT CORP.
RANCH GOLF CLUB, INC.
By: /s/ James A. Husband By: /s/ James A. Husband
-------------------- --------------------
Name: James A. Husband Name: James A. Husband
Title: President Title: President
By: /s/ Stefan C. Karnavas By: /s/ Stefan C. Karnavas
---------------------- ----------------------
Name: Stefan C. Karnavas Name: Stefan C. Karnavas
Title: Secretary Title: Secretary
OVLC FINANCIAL CORP. CSR GOLF GROUP, INC.
By: /s/ James A. Husband By: /s/ James A. Husband
-------------------- --------------------
Name: James A. Husband Name: James A. Husband
Title: President Title: President
By: /s/ Stefan C. Karnavas By: /s/ Stefan C. Karnavas
---------------------- ----------------------
Name: Stefan C. Karnavas Name: Stefan C. Karnavas
Title: Secretary Title: Secretary
LAKEWAY GOLF CLUBS, WOODCREST GOLF CLUB, INC.
INC.
By: /s/ James A. Husband By: /s/ James A. Husband
-------------------- --------------------
Name: James A. Husband Name: James A. Husband
Title: President Title: President
By: /s/ Stefan C. Karnavas By: /s/ Stefan C. Karnavas
---------------------- ----------------------
Name: Stefan C. Karnavas Name: Stefan C. Karnavas
Title: Secretary Title: Secretary
VIRGINIA GOLF COUNTRY OCEAN VISTA LAND COMPANY
CLUB, INC.
By: /s/ James A. Husband By: /s/ James A. Husband
-------------------- --------------------
Name: James A. Husband Name: James A. Husband
Title: President Title: President
By: /s/ Stefan C. Karnavas By: /s/ Stefan C. Karnavas
---------------------- ----------------------
Name: Stefan C. Karnavas Name: Stefan C. Karnavas
Title: Secretary Title: Secretary
GOLF COURSE INNS OF OCEANSIDE GOLF MANAGEMENT
AMERICA, INC. CORP.
By: /s/ James A. Husband By: /s/ James A. Husband
-------------------- --------------------
Name: James A. Husband Name: James A. Husband
Title: President Title: President
By: /s/ Stefan C. Karnavas By: /s/ Stefan C. Karnavas
---------------------- ----------------------
Name: Stefan C. Karnavas Name: Stefan C. Karnavas
Title: Secretary Title: Secretary
WHISPERING PALMS C-RHK, INC.
COUNTRY CLUB JOINT VENTURE
By: /s/ James A. Husband By: /s/ James A. Husband
-------------------- --------------------
Name: James A. Husband Name: James A. Husband
Title: Managing Committee Member Title: President
By: /s/ Stefan C. Karnavas By: /s/ Stefan C. Karnavas
---------------------- ----------------------
Name: Stefan C. Karnavas Name: Stefan C. Karnavas
Title: Managing Committee Member Title: Secretary
LIQUOR CLUB AT PECAN GROVE, INC. TGFC CORP.
By: /s/ Timothy S. O'Hern By: /s/ James A. Husband
--------------------- --------------------
Name: Timothy S. O'Hern Name: James A. Husband
Title: President Title: President
By: /s/ Stefan C. Karnavas
----------------------
Name: Stefan C. Karnavas
Title: Secretary
LAKEWAY CLUBS, INC. CEL GOLF GROUP, INC.
By: /s/ Laurie Ann Wright By: /s/ James A. Husband
--------------------- --------------------
Name: Laurie Ann Wright Name: James A. Husband
Title: President, Treasurer and Title: President
Secretary
By: /s/ Stefan C. Karnavas
----------------------
Name: Stefan C. Karnavas
Title: Secretary
EXHIBIT A
FORM OF SECURITY
COBBLESTONE GOLF GROUP, INC.
11 1/2% SERIES A/1/ SENIOR NOTE DUE 2003
CUSIP No. 190885AA1
No. $
Cobblestone Golf Group, Inc., a Delaware corporation (hereinafter
called the "Company", which term includes any successors under the Indenture
hereinafter referred to), for value received, hereby promises to pay to _____,
or registered assigns, the principal sum of _____ Dollars, on June 1, 2003.
Interest Payment Dates: June 1 and December 1, commencing December 1,
1996.
Record Dates: May 15 and November 15.
Reference is made to the further provisions of this Security on the
reverse side, which will, for all purposes, have the same effect as if set forth
at this place.
IN WITNESS WHEREOF, the Company has caused this Instrument to be duly
executed under its corporate seal.
Dated:
COBBLESTONE GOLF GROUP, INC.,
a Delaware corporation
By: ______________________________
Name:
Title:
Attest: ____________________
Secretary
____________________
/1/ Series A should be replaced with Series B in the Exchange
Securities.
A-1
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities described in the within-mentioned
Indenture.
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By _____________________________
Authorized Signatory
Dated: ___________ ___, _____.
A-2
COBBLESTONE GOLF GROUP, INC.
11 1/2% SERIES A/2/ Senior Note due 2003
Unless and until it is exchanged in whole or in part for
Securities in definitive form, this Security may not be transferred except as a
whole by the Depository to a nominee of the Depository or by a nominee of the
Depository to the Depository or another nominee of the Depository or by the
Depository or any such nominee to a successor Depository or a nominee of such
successor Depository. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (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 requested by an authorized representative of
DTC (and any payment is made to Cede & Co. or such other entity as is requested
by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein./3/
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5
OF THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR ANY APPLICABLE EXEMPTION THEREFROM.
EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH NOTE MAY BE
RESOLD OR OTHERWISE TRANSFERRED, ONLY (1)(a) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIRE-
___________________________
/2/ Series A should be replaced with Series B in the Exchange Security.
/3/ This paragraph should only be added if the Security is issued in global
form.
A-3
MENTS OF RULE 144A, (b) TO AN INSTITUTIONAL "ACCREDITED INVESTOR"
WITHIN THE MEANING OF SUBPARAGRAPH (A)(1),(2),(3) OR (7) OF RULE
501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR
ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
"ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A
VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (c) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (d) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE
SECURITIES ACT OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED
UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS) (2) TO THE
COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNTIED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER
IS REQUIRED TO NOTIFY ANY PURCHASER FROM IT OF THE SECURITY
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE./4/
1. Interest.
--------
Cobblestone Golf Group, Inc., a Delaware corporation (hereinafter
called the "Company," which term includes any successors under the Indenture
hereinafter referred to), promises to pay interest on the principal amount of
this Security at the rate of 11 1/2% per annum. To the extent it is lawful, the
Company promises to pay interest on any interest payment due but unpaid on such
principal amount at a rate of 11 1/2% per annum compounded semi-annually.
The Company will pay interest semi-annually on June 1 and
December 1 of each year (each, an "Interest Payment Date"), commencing December
1, 1996. Interest on the Securities will accrue from the most recent date to
which interest has been paid or, if no interest has been paid on the Securities,
from June 4, 1996. Interest will be computed on the basis of a 360-day year
consisting of twelve 30-day months.
___________________
/4/ This paragraph should be included only for the Initial Securities.
A-4
2. Method of Payment.
-----------------
The Company shall pay interest on the Securities (except defaulted
interest) to the Persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date. Holders must
surrender Securities to a Paying Agent to collect principal payments. Except as
provided below, the Company shall pay principal and interest in Cash. However,
the Company may pay principal and interest by wire transfer of Federal funds, or
interest by its check denominated in United States Dollars. The Company may
deliver any such interest payment to the Paying Agent or the Company may mail
any such interest payment to a Holder at the Holder's registered address.
3. Paying Agent and Registrar.
--------------------------
Initially, Norwest Bank Minnesota, National Association (the
"Trustee"), will act as Paying Agent and Registrar. The Company may change any
Paying Agent, Registrar or co-Registrar without notice to the Holders. The
Company or any of its Subsidiaries may, subject to certain exceptions, act as
Paying Agent, Registrar or co-Registrar.
4. Indenture.
---------
The Company issued the Securities under an Indenture, dated as of June
4, 1996 (the "Indenture"), among the Company, the Guarantors named therein and
the Trustee. Capitalized terms herein are used as defined in the Indenture
unless otherwise defined herein. The terms of the Securities include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act, as in effect on the date of the Indenture. The Securities
are subject to all such terms, and Holders of Securities are referred to the
Indenture and said Act for a statement of them. The Securities are general
unsecured obligations of the Company limited in aggregate principal amount to
$70,000,000.
5. Redemption.
----------
The Securities may be redeemed in whole or from time to time in part
at any time on and after June 1, 1999, at the option of the Company, at the
Redemption Price (expressed as a percentage of principal amount) set forth below
with respect to the indicated Redemption Date, in each case, plus any accrued
but unpaid interest to the Redemption Date. The Securities may not be so
redeemed prior to June 1, 1999 (other than out of the Net Cash Proceeds of
certain issuances of Qualified Capital Stock of the Company described below).
A-5
If redeemed during
the 12-month period
beginning June 1, Redemption Price
------------------- ----------------
1999 . . . . . . . . . 105.750%
2000 . . . . . . . . . 103.833%
2001 . . . . . . . . . 101.917%
2002 and thereafter. . 100.000%
Notwithstanding the foregoing, until June 1, 1999, upon one or more
Public Equity Offerings or issuances of Qualified Capital Stock to Strategic
Investors, up to $17,500,000 aggregate principal amount of Securities may be
redeemed at the option of the Company within 120 days of such Public Equity
Offering or issuance to Strategic Investors, with the Net Cash Proceeds thereof
in the case of such an offering by the Company, or from such proceeds invested
by Holdings in the Company's Qualified Capital Stock in the case of such an
offering by Holdings, at 110.5% of the principal amount, together with accrued
and unpaid interest, if any, to the date of redemption; provided, however, that
immediately following each such redemption not less than $52,500,000 aggregate
principal amount of Securities is outstanding.
Any such redemption will comply with Article III of the Indenture.
6. Notice of Redemption.
--------------------
Notice of redemption will be sent by first class mail, at least
30 days and not more than 60 days prior to the Redemption Date to the Holder of
each Security to be redeemed at such Holder's last address as then shown upon
the registry books of the Registrar. Securities may be redeemed in part in
multiples of $1,000 only.
Except as set forth in the Indenture, from and after any Redemption
Date, if monies for the redemption of the Securities called for redemption shall
have been deposited with the Paying Agent on such Redemption Date, the
Securities called for redemption will cease to bear interest and the only right
of the Holders of such Securities will be to receive payment of the Redemption
Price, plus any accrued and unpaid interest to the Redemption Date.
7. Denominations; Transfer; Exchange.
---------------------------------
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder may register
the transfer of, or exchange Securities in accordance with, the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not register the transfer
of or exchange any Securities selected for redemption.
A-6
8. Persons Deemed Owners.
---------------------
The registered Holder of a Security may be treated as the owner of it
for all purposes.
9. Unclaimed Money.
---------------
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee and the Paying Agent(s) will pay the money back to
the Company at its written request. After that, all liability of the Trustee and
such Paying Agent(s) with respect to such money shall cease.
10. Discharge Prior to Redemption or Maturity.
-----------------------------------------
Except as set forth in the Indenture, if the Company irrevocably
deposits with the Trustee, in trust, for the benefit of the Holders, Cash, U.S.
Government Obligations or a combination thereof, in such amounts as will be
sufficient in the opinion of a nationally recognized firm of independent public
accountants selected by the Trustee, to pay the principal of, premium, if any,
and interest on the Securities to redemption or maturity and complies with the
other provisions of the Indenture relating thereto, the Company and the
Guarantors will be discharged from certain provisions of the Indenture and the
Securities (including the financial covenants, but excluding their obligation to
pay the principal of, premium, if any, and interest on the Securities). Upon
satisfaction of certain additional conditions set forth in the Indenture, the
Company may elect to have its and the Guarantors' obligations discharged with
respect to outstanding Securities.
11. Amendment; Supplement; Waiver.
-----------------------------
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the written consent of the Holders of at least a
majority in aggregate principal amount of the Securities then outstanding, and
any existing Default or Event of Default or compliance with any provision of the
Indenture or the Securities may be waived with the consent of the Holders of a
majority in aggregate principal amount of the Securities then outstanding.
Without notice to or consent of any Holder, the parties thereto may under
certain circumstances amend or supplement the Indenture or the Securities to,
among other things, cure any ambiguity, defect or inconsistency, or make any
other change that does not adversely affect the rights of any Holder of a
Security.
12. Restrictive Covenants.
---------------------
The Indenture imposes certain limitations on the ability of the
Company and the Guarantors to, among other things, Incur additional Indebtedness
and Disqualified Capital Stock, pay dividends or make certain other Restricted
Payments, enter into certain
A-7
transactions with Affiliates, incur Liens, sell assets and subsidiary stock,
merge or consolidate with any other Person or transfer (by lease, assignment or
otherwise) substantially all of the properties and assets of the Company. The
limitations are subject to a number of important qualifications and exceptions.
The Company must periodically report to the Trustee on compliance with such
limitations.
13. Repurchase at Option of Holder.
------------------------------
(a) If there is a Change of Control, the Company shall be required to
offer to purchase on the Change of Control Payment Date all outstanding
Securities at a purchase price equal to 101% of the principal amount thereof,
plus accrued and unpaid interest, if any, to the Change of Control Payment Date.
Holders of Securities will receive a Change of Control Offer from the Company
prior to any related Change of Control Payment Date and may elect to have such
Securities purchased by completing the form entitled "Option of Holder to Elect
Purchase" appearing below.
(b) The Indenture imposes certain limitations on the ability of the
Company, the Guarantors or any of their respective Subsidiaries to sell assets
and subsidiary stock. In the event the proceeds from a permitted Asset Sale
exceed certain amounts, as specified in the Indenture, the Company will be
required either to reinvest the proceeds of such Asset Sale in a Related
Business or to make an offer to purchase each Holder's Securities at 100% of the
principal amount thereof, plus accrued interest, if any, to the purchase date.
14. Successors.
----------
When a successor assumes all the obligations of its predecessor under
the Securities and the Indenture, the predecessor will be released from those
obligations.
15. Defaults and Remedies.
---------------------
If an Event of Default occurs and is continuing (other than as Event
of Default relating to certain events of bankruptcy, insolvency or
reorganization), then in every such case, unless the principal of all of the
securities shall have already become due and payable, either the Trustee or the
Holders of 25% in aggregate principal amount of Securities then outstanding may
declare all the Securities to be due and payable immediately in the manner and
with the effect provided in the Indenture. Holders of Securities may not enforce
the Indenture or the Securities except as provided in the Indenture. The Trustee
may require indemnity satisfactory to it before it enforces the Indenture or the
Securities. Subject to certain limitations, Holders of a majority in aggregate
principal amount of the Securities then outstanding may direct the Trustee in
its exercise of any trust or power. The Trustee may withhold from
Securityholders notice of any continuing Default or Event of Default (except a
Default in payment of principal or interest), if it determines that withholding
notice is in their interest.
A-8
16. Trustee Dealings with Company.
-----------------------------
The Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Company any Guarantor, any of their Subsidiaries or any of their respective
Affiliates, and may otherwise deal with such Persons as if it were not the
Trustee.
17. No Recourse Against Others.
--------------------------
No partner, incorporator, direct or indirect stockholder, partner,
director, officer or employee, as such, past, present or future, of the Company
or any Guarantor, or any successor entity, shall have any personal liability in
respect of the obligations of the Company and the Guarantors under the
Securities or the Indenture by reason of his, her or its status as such partner,
incorporator, stockholder, director, officer or employee. Each Holder of a
Security by accepting a Security waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the
Securities.
18. Authentication.
--------------
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on the other side of this
Security.
19. Abbreviations and Defined Terms.
-------------------------------
Customary abbreviations may be used in the name of a Holder of a
Security 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).
20. CUSIP Numbers.
-------------
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company will cause CUSIP numbers to be
printed on the Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
A-9
21. Additional Rights of Holders of Transfer Restricted Securities./5/
--------------------------------------------------------------
In addition to the rights provided to Holders of Securities under the
Indenture, Holders of Securities shall have all the rights set forth in the
Registration Rights Agreement.
22. Guarantees
----------
This security is entitled to the benefit of certain Guarantees
pursuant to Article XII of the Indenture.
________________
/5/ This paragraph should be included only for the Initial Securities.
A-10
ASSIGNMENT
I or we assign this Security to
__________________________________________________________
__________________________________________________________
__________________________________________________________
(Print or type name, address and zip code of assignee)
Please insert Social Security or other identifying number of assignee
_________________________
and irrevocably appoint __________ agent to transfer this Security on the
books of the Company. The agent may substitute another to act for him.
Dated: __________ Signed: ________________________________
___________________________________________________________
(Sign exactly as name appears on
the other side of this Security)
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.14 or Article XI of the Indenture, check the appropriate
box: [_] Section 4.14 [_] Article XI.
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.14 or Article XI of the Indenture, as the case
may be, state the amount you want to be purchased: $________
Date: ________________ Signature:__________________________________
(Sign exactly as your name
appears on the other side of this
Security)
A-12
SCHEDULE OF EXCHANGES OF DEFINITIVE SECURITIES/6/
The following exchanges of a part of this Global Security for
Definitive Securities have been made:
Amount of Amount of Principal Amount Signature of
decrease in increase in of this Global authorized officer of
Principal Amount Principal Amount Security following Trustee or
Date of of this Global of this Global such decrease (or Securities
Exchange Security Secrurity increase) Custodian
- ------------------------------------------------------------------------------------------
____________________________
/6/ This schedule should only be added if the Security is issued in global
form.
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF
TRANSFER RESTRICTED SECURITIES/7/
Re: 11 1/2% SERIES A SENIOR NOTES DUE 2003 OF COBBLESTONE GOLF GROUP, INC.
This Certificate relates to $______ principal amount of Securities held in
(check applicable space) _____ book-entry or ______ definitive form by
_________________ (the "Transferor").
The Transferor (check applicable box):
[_] has requested the Trustee by written order to deliver in exchange
for its beneficial interest in the Global Security held by the Depository a
Security or Securities in definitive, registered form of authorized
denominations and an aggregate principal amount equal to its beneficial interest
in such Global Security (or the portion thereof indicated above); or
[_] has requested the Trustee by written order to exchange or register the
transfer of a Security or Securities.
In connection with such request and in respect of each such Security, the
Transferor does hereby certify that Transferor is familiar with the Indenture
relating to the above-captioned Securities and as provided in Section 2.6 of
such Indenture, the transfer of this Security does not require registration
under the Securities Act (as defined below) because:
[_] Such Security is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 2.6(a)(ii)(A) or Section
2.6(d)(i)(A) of the Indenture).
[_] Such Security is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act")) in reliance on Rule 144A (in satisfaction of Section
2.6(a)(ii)(B), Section 2.6(b)(i) or Section 2.6(d)(i)(B) of the Indenture), to
an institutional "accredited investor" within the meaning of subparagraph
(a)(1),(2),(3) or (7) of Rule 501 under the Securities Act that is acquiring the
security for its own account, or for the account of such an institutional
"accredited investor," for investment purposes and not with a view to, or for
offer or sale in connection with, any distribution in violation of the
Securities Act, or pursuant to an exemption from registration in accordance with
Regulation S under the Securities Act (in satisfaction of Section 2.06(a)(ii)(B)
or Section 2.06 (d)(i)(B) of the Indenture).
__________________
/7/ The following should be included only for Initial Securities.
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[_] Such Security is being transferred in accordance with Rule 144 under
the Securities Act, or pursuant to an effective registration statement under the
Securities Act (in satisfaction of Section 2.6(a)(ii)(B) or Section 2.6(d)(i)(B)
of the Indenture).
[_] Such Security is being transferred in reliance on and in compliance
with an exemption from the registration requirements of the Securities Act,
other than as provided in the immediately preceding paragraph. An Opinion of
Counsel to the effect that such transfer does not require registration under the
Securities Act accompanies this Certificate (in satisfaction of Section
2.6(a)(ii)(C) or Section 2.6(d)(i)(C) of the Indenture).
__________________________________
[INSERT NAME OF TRANSFEROR]
By:_______________________________
Date:__________________________________
A-15
EXHIBIT B
FORM OF GUARANTEE
-----------------
For value received, __________________, a __________________
[corporation/general partnership], hereby irrevocably and unconditionally
guarantees on a senior basis to the Holder of the Security which is entitled to
the benefit of this Guarantee, the due and punctual payment, as set forth in the
Indenture pursuant to which such Security and this Guarantee were issued, of the
principal of, premium (if any) and interest on such Security when and as the
same shall become due and payable for any reason according to the terms of such
Security and Article XII of the Indenture. The Guarantee of the Security to
which this Guarantee relates will not become effective until the Trustee signs
the certificate of authentication on such Security.
_______________________________
By: ___________________________
By: ___________________________