EXHIBIT 4.5
INDENTURE dated as of March 1, 1996, among SHARED TECHNOLOGIES
FAIRCHILD COMMUNICATIONS CORP., a Delaware corporation (the
"Company"), SHARED TECHNOLOGIES INC., to be renamed SHARED
TECHNOLOGIES FAIRCHILD INC. ("STFI"), various subsidiaries of
the Company listed on the signature page hereto (the
"Subsidiary Guarantors" and, with STFI, the "STFC Guarantors")
and UNITED STATES TRUST COMPANY OF NEW YORK, a New York
corporation (the "Trustee").
Each party agrees as follows for the benefit of the other
parties and for the equal and ratable benefit of the Holders of the Company's
12-1/4% Senior Subordinated Discount Notes Due 2006 (the "Initial Notes") and,
if and when issued pursuant to a registered exchange for Initial Notes, the
Company's 12-1/4% Senior Subordinated Discount Notes Due 2006 (the "Exchange
Notes") and, if and when issued pursuant to a private exchange for Initial
Notes, the Company's 12-1/4% Senior Subordinated Discount Notes Due 2006 (the
"Private Exchange Notes" and, together with the Exchange Notes and the Initial
Notes, the "Notes"):
ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions.
"Accreted Value" as of any date (the "Specified Date") means,
with respect to each $1,000 principal amount at maturity of Notes:
(i) if the Specified Date is one of the following dates (each
a "Semi-Annual Accrual Date"), the amount set forth opposite such date
below:
SEMI-ANNUAL ACCRUAL DATE ACCRETED
VALUE
March 13, 1996 $ 702.77
September 1, 1996 742.87
March 1, 1997 788.37
September 1, 1997 836.66
March 1, 1998 887.90
September 1, 1988 942.29
March 1, 1999 1,000.00
(ii) if the Specified Date occurs between two Semi-Annual
Accrual Dates, the sum of (A) the Accreted Value for the Semi-Annual
Accrual Date immediately preceding the Specified Date and (B) an amount
equal to the product of (i) the Accreted Value for the immediately
following Semi-Annual Accrual Date less the Accreted Value for the
immediately preceding Semi-Annual Accrual Date and (ii) a fraction, the
numerator of which is the number of days from the immediately preceding
Semi-Annual Accrual Date to the Specified Date, using a 360-day year of
twelve 30-day months, and the denominator of which is 180 (or, if the
Semi-Annual Accrual Date immediately preceding the Specified Date is
March 13, 1996, the denominator of which is 169); and
(iii) if the Specified Date occurs after the last Semi-Annual
Accrual Date, $1,000.
"Acquisition" means the merger of Fairchild Industries Inc.
with and into Shared Technologies Inc.
"Additional Assets" means (i) any property or assets (other
than Indebtedness and Capital Stock) in a Related Business; (ii) the Capital
Stock of a Person that becomes a Restricted Subsidiary as a result of the
acquisition of such Capital Stock by the Company or another Restricted
Subsidiary; or (iii) Capital Stock constituting a minority interest in any
Person that at such time is a Restricted Subsidiary; provided, however, that any
such Restricted Subsidiary described in clause (ii) or (iii) above is primarily
engaged in a Related Business.
"Adjusted Consolidated Net Income" means, for any period, the
Consolidated Net Income for such period plus, to the extent deducted therefrom,
the consolidated amortization of goodwill of the Company and its consolidated
Subsidiaries for such period related to the Acquisition.
"Affiliate" of any specified Person means any other Person,
directly or indirectly, controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of SectionsE4.05, 4.07 and 4.08 only, "Affiliate" shall also mean any
beneficial owner of Capital Stock representing 5% or more of the total voting
power of the Voting Stock (on a fully diluted basis) of the Company or of rights
or warrants to purchase such Capital Stock (whether or not currently
exercisable) and any Person who would be an Affiliate of any such beneficial
owner pursuant to the first sentence hereof.
"Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) by
the Company or any Restricted Subsidiary, including any disposition by means of
a merger,
2
consolidation or similar transaction (each referred to for the purposes of this
definition as a "disposition"), of (i) any shares of Capital Stock of a
Restricted Subsidiary (other than directors' qualifying shares or shares
required by applicable law to be held by a Person other than the Company or a
Restricted Subsidiary), (ii) all or substantially all the assets of any division
or line of business of the Company or any Restricted Subsidiary or (iii) any
other assets of the Company or any Restricted Subsidiary outside of the ordinary
course of business of the Company or such Restricted Subsidiary (other than, in
the case of (i), (ii) and (iii) above, (y) a disposition by a Restricted
Subsidiary to the Company or by the Company or a Restricted Subsidiary to a
Wholly Owned Subsidiary and (z) for purposes of Section 4.07 only, a disposition
that constitutes a Restricted Payment permitted by Section 4.05).
"Attributable Debt" in respect of a Sale/Leaseback Transaction
means, as at the time of determination, the present value (discounted at an
interest rate which would be applicable to Capital Lease Obligations with a like
term in accordance with GAAP) of the total obligations of the lessee for rental
payments during the remaining term of the lease included in such Sale/Leaseback
Transaction (including any period for which such lease has been extended).
"Average Life" means, as of the date of determination, with
respect to any Indebtedness or Preferred Stock, the quotient obtained by
dividing (i) the sum of the products of numbers of years from the date of
determination to the dates of each successive scheduled principal payment of
such Indebtedness or redemption or similar payment with respect to such
Preferred Stock multiplied by the amount of such payment by (ii) the sum of all
such payments.
"Bank Indebtedness" means any and all amounts payable by the
Company or any STFC Guarantor under or in respect of the Credit Facility, or any
facility that refinances or replaces the Credit Facility, in each case as
amended, refinanced or replaced from time to time, including principal, premium
(if any), interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether or
not a claim for post filing interest is allowed in such proceedings), fees,
charges, expenses, reimbursement obligations, Guarantees and all other amounts
payable thereunder or in respect thereof.
"Banks" has the meaning specified in the Credit Facility.
3
"Board of Directors" means the Board of Directors of the
Company or any committee thereof duly authorized to act on behalf of such Board.
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligations" means an obligation that is
required to be classified and accounted for as a capital lease for financial
reporting purposes in accordance with GAAP, and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such
obligation determined in accordance with GAAP; and the Stated Maturity thereof
shall be the date of the last payment of rent or any other amount due under such
lease prior to the first date upon which such lease may be terminated by the
lessee without payment of a penalty.
"Capital Stock" of any Person means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) equity of such Person,
including any Preferred Stock, but excluding any debt securities convertible
into such equity.
"Change of Control" means the occurrence of any of the
following events:
(i) any "person" (as such term is used in SectionsE13(d) and
14(d) of the Exchange Act), other than one or more Permitted Holders or
STFI, is or becomes the beneficial owner (as defined in RulesE13d-3 and
13d-5 under the Exchange Act except that for purposes of this
clauseE(i) such 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), directly or indirectly, of more than 30% of the total voting
power of the Voting Stock of the Company; provided, however, that the
Permitted Holders beneficially own (as defined in RulesE13d-3 and 13d-5
under the Exchange Act), directly or indirectly, in the aggregate a
lesser percentage of the total voting power of the Voting Stock of the
Company than such other person and do not have the right or ability by
voting power, contract or otherwise to elect or designate for election
a majority of the Board of Directors (for the purposes of this
clauseE(i), a person shall be deemed beneficially to own any Voting
Stock of a specific corporation held by a another corporation (the
"parent corporation"), if such other person is the beneficial owner (as
defined in this clauseE(i)), directly or indirectly, of more than 30%
of the voting power of the Voting Stock of such parent corporation and
the Permitted Holders beneficially own (as defined in this clauseE(i)
above), directly or indirectly, in the aggregate a
4
lesser percentage of the voting power of the Voting Stock of such
parent corporation and do not have the right or ability by voting
power, contract or otherwise to elect or designate for election a
majority of the board of directors of such parent corporation);
(ii) one or more Permitted Holders collectively own
beneficially, directly or indirectly, shares representing more than 49%
of the total voting power of the outstanding Voting Stock of the
Company or STFI; provided, however, a Person shall be deemed to
beneficially own any Voting Stock of a specified corporation or other
entity held by another corporation or other entity (the "parent
entity") if such person owns beneficially more than 49% of the total
voting power of the Voting Stock of such parent entity;
(iii) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of Directors
(together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholder of the
Company was approved by a vote of 60% of the directors of the Company
then still in office who were either directors at the beginning of such
period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors then in office; or
(iv) the merger or consolidation of the Company with or into
another Person or the merger of another Person with or into the
Company, or the sale of all or substantially all the assets of the
Company to another Person (other than a Person that is controlled by
the Permitted Holders) and, in the case of any such merger or
consolidation, the securities of the Company that are outstanding
immediately prior to such transaction and which represent 100% of the
aggregate voting power of the Voting Stock of the Company are changed
into or exchanged for cash, securities or property, unless pursuant to
such transaction such securities are changed into or exchanged for, in
addition to any other consideration, securities of the surviving
corporation that represent immediately after such transaction, at least
a majority of the aggregate voting power of the Voting Stock of the
surviving corporation.
"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 and, thereafter, means the successor and, for
purposes of any provision contained herein and required by the TIA, each other
obligor on the indenture securities.
5
"Consolidated Coverage Ratio" as of any date of determination
means the ratio of (i) the aggregate amount of EBITDA for the period of the most
recent four consecutive fiscal quarters ending at least 45 days prior to the
date of such determination to (ii) Consolidated Interest Expense for such four
fiscal quarters; provided, however, that (1) if the Company or any Restricted
Subsidiary has Incurred any Indebtedness since the beginning of such period that
remains outstanding or if the transaction giving rise to the need to calculate
the Consolidated Coverage Ratio is an Incurrence of Indebtedness, or both,
EBITDA and Consolidated Interest Expense for such period shall be calculated
after giving effect on a pro forma basis to such Indebtedness as if such
Indebtedness has been Incurred on the first day of such period and the discharge
of any other Indebtedness repaid, repurchased, defeased or otherwise discharged
with the proceeds of such new Indebtedness as if such discharge had occurred on
the first day of such period, (2) if since the beginning of such period the
Company or any Restricted Subsidiary shall have made any Asset Disposition, the
EBITDA for such period shall be reduced by an amount equal to the EBITDA (if
positive) directly attributable to the assets which are the subject of such
Asset Disposition for such period, or increased by an amount equal to the EBITDA
(if negative), directly attributable thereto for such period and Consolidated
Interest Expense for such period shall be reduced by an amount equal to the
Consolidated Interest Expense directly attributable to any Indebtedness of the
Company or any Restricted Subsidiary repaid, repurchased, defeased or otherwise
discharged with respect to the Company and its continuing Restricted
Subsidiaries in connection with such Asset Disposition for such period (or, if
the Capital Stock of any Restricted Subsidiary is sold, the Consolidated
Interest Expense for such period directly attributable to the Indebtedness of
such Restricted Subsidiary to the extent the Company and its continuing
Restricted Subsidiaries are no longer liable for such Indebtedness after such
sale), (3) if since the beginning of such period the Company or any Restricted
Subsidiary (by merger or otherwise) shall have made an Investment in any
Restricted Subsidiary (or any person which becomes a Restricted Subsidiary) or
an acquisition of assets, including any acquisition of assets occurring in
connection with a transaction causing a calculation to be made hereunder, which
constitutes all or substantially all of an operating unit of a business, EBITDA
and Consolidated Interest Expense for such period shall be calculated after
giving pro forma effect thereto (including the Incurrence of any Indebtedness)
as if such Investment or acquisition occurred on the first day of such period
and (4) if since the beginning of such period any Person (that subsequently
became a Restricted Subsidiary or was merged with or into the Company or any
Restricted Subsidiary since the beginning or such period) shall have made any
Asset Disposition, any Investment or
6
acquisition of assets that would have required an adjustment pursuant to
clauseE(2) or (3) above if made by the Company or a Restricted Subsidiary during
such period, EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving pro forma effect thereto as if such Asset Disposition,
Investment or acquisition occurred on the first day of such period. For purposes
of this definition, whenever pro forma effect is to be given to an acquisition
of assets, the amount of income or earnings relating thereto, and the amount of
Consolidated Interest Expense associated with any Indebtedness Incurred in
connection therewith, the pro forma calculations shall be determined in good
faith by a responsible financial or accounting Officer of the Company. If any
Indebtedness bears a floating rate of interest and is being given pro forma
effect, the interest of such Indebtedness shall be calculated as if the rate in
effect on the date of determination had been the applicable rate for the entire
period (taking into account any Interest Rate Agreement applicable to such
Indebtedness if such Interest Rate Agreement has a remaining term in excess of
12Emonths).
"Consolidated Interest Expense" means, for any period, the
total interest expense of the Company and its consolidated Restricted
Subsidiaries, plus, to the extent not included in such total interest expense,
and to the extent incurred by the Company or its Restricted Subsidiaries,
(i) interest expense attributable to capital leases and one-third of the rental
expense attributable to operating leases, (ii) amortization of debt discount and
debt issuance cost, (iii) capitalized interest, (iv) non-cash interest expenses,
(v) commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing, (vi) net costs associated
with Hedging Obligations (including amortization of fees), (vii) Preferred Stock
dividends in respect of all Preferred Stock held by Persons other than the
Company or a Wholly Owned Subsidiary, (viii) interest incurred in connection
with Investments in discontinued operations, (ix) interest accruing on any
Indebtedness of any other Person to the extent such Indebtedness is Guaranteed
by the Company or any Restricted Subsidiary and (x) the cash contributions to
any employee stock ownership plan or similar trust to the extent such
contributions are used by such plan or trust to pay interest or fees to any
Person (other than the Company) in connection with Indebtedness Incurred by such
plan or trust.
"Consolidated Net Income" means, for any period, the net
income of the Company and its consolidated Subsidiaries; provided, however, that
there shall not be included in such Consolidated Net Income:
(i) any net income of any Person if such Person is not a
Restricted Subsidiary, except that (A) subject to the
7
exclusion contained in clauseE(iv) below, the Company's equity in the
net income of any such Person for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash actually
distributed by such Person during such period to the Company or a
Restricted Subsidiary as a dividend or other distribution (subject, in
the case of a dividend or other distribution paid to a Restricted
Subsidiary, to the limitations contained in clauseE(iii) below) and
(B) the Company's equity in a net loss of any such Person for such
period shall be included in determining such Consolidated Net Income;
(ii) any net income (or loss) of any Person acquired by the
Company or a Subsidiary in a pooling of interests transactions for any
period prior to the date of such acquisition;
(iii) any net income of any Restricted Subsidiary if such
Restricted Subsidiary is subject to restrictions, directly or
indirectly, on the payment of dividends or the making of distributions
by such Restricted Subsidiary, directly or indirectly, to the Company,
except that (A) subject to the exclusion contained in clauseE(iv)
below, the Company's equity in the net income of any such Restricted
Subsidiary for such period shall be included in such Consolidated Net
Income up to the aggregate amount of cash actually distributed by such
Restricted Subsidiary during such period to the Company or another
Restricted Subsidiary as a dividend or other distribution (subject, in
the case of a dividend or other distribution paid to another Restricted
Subsidiary, to the limitation contained in this clause) and (B) the
Company's equity in a net loss of any such Restricted Subsidiary for
such period shall be included in determining such Consolidated Net
Income;
(iv) any gain (but not loss) realized upon the sale or other
disposition of any assets of the Company or its consolidated
Subsidiaries (including pursuant to any sale-and-leaseback arrangement)
which is not sold or otherwise disposed of in the ordinary course of
business and any gain (but not loss) realized upon the sale or other
disposition of any Capital Stock of any Person;
(v) extraordinary gains or losses; and
(vi) the cumulative effect of a change in accounting
principles.
Notwithstanding the foregoing, for the purposes of Section 4.05 only, there
shall be excluded from Consolidated Net Income any dividends, repayments of
loans or advances or other transfers of assets from Unrestricted Subsidiary to
the Company or a Restricted Subsidiary to the extent such
8
dividends, repayments or transfers increase the amount of Restricted Payments
permitted under Section 4.05 pursuant to clauseE(a)(3)(D) thereof.
"Consolidated Net Worth" means the total of the amounts shown
on the balance sheet of the Company and its consolidated Subsidiaries,
determined on a consolidated basis in accordance with GAAP, as of the end of the
most recent fiscal quarter of the Company ending at least 45Edays prior to the
taking of any action for the purpose of which the determination is being made,
as (i) the par or stated value of all outstanding Capital Stock of the Company
plus (ii) paid-in capital or capital surplus relating to such Capital Stock plus
(iii) any retained earnings or earned surplus less (A) any accumulated deficit
and (B) any amounts attributable to Disqualified Stock.
"Currency Agreement" means in respect of a Person any foreign
exchange contract, currency swap agreement or other similar agreement to which
such Person is a party or a beneficiary.
"Credit Facility" means the Credit Agreement dated as of
March 12, 1996, as amended from time to time, among the Company, STFI, the
Lenders referred to therein and the Banks referred to therein, Credit Suisse, as
Administrative Agent and Collateral Agent, Citicorp USA, Inc. and NationsBank,
N.A., as Documentation Agent.
"Default" means any event which is, or after notice or passage
of time or both would be, an Event of Default.
"Designated Preferred Stock" means the 6% Cumulative
Convertible Preferred Stock issued by STFI in connection with the Acquisition.
"Designated Senior Indebtedness" means (i) the Bank
Indebtedness and (ii) any other Senior Indebtedness of the Company which, at the
date of determination, has an aggregate principal amount outstanding of, or
under which, at the date of determination, the holders thereof are committed to
lend up to, at least $10 million and is specifically designated by the Company
in the instrument evidencing or governing such Senior Indebtedness as
"Designated Senior Indebtedness" for purposes of this Indenture.
"Disqualified Stock" means, with respect to any Person, any
Capital Stock which by its terms (or by the terms of any security into which it
is convertible or for which it is exchangeable) or upon the happening of any
event (i) matures or is mandatorily redeemable pursuant to a sinking fund
obligation or otherwise, (ii) is convertible or exchangeable for Indebtedness or
Disqualified Stock or
9
(iii) is redeemable at the option of the holder thereof, in whole or in part, in
each case on or prior to the first anniversary of the Stated Maturity of the
Notes; provided, however, that any Capital Stock that would not constitute
Disqualified Stock but for the provisions thereof giving holders thereof the
right to require such Person to repurchase or redeem such Capital Stock upon the
occurrence of an "asset sale" or "change of control" occurring prior to the
first anniversary of the Stated Maturity of the Notes shall not constitute
Disqualified Stock if the "asset sale" or "change of control" provisions
applicable to such Capital Stock are not more favorable to the holders of such
Capital Stock than the provisions in Section 4.07 and Section 4.12.
"EBITDA" for any period means the sum of Consolidated Net
Income plus the following to the extent deducted in calculating such
Consolidated Net Income: (a) all income tax expense of the Company,
(b) Consolidated Interest Expense, (c) depreciation expense, (d) amortization
expense and (e) all other non-cash items reducing such Consolidated Net Income
(excluding any non-cash item to the extent it represents an accrual of, or
reserve for, cash disbursement for any subsequent period) less all non-cash
items increasing such Consolidated Net Income (such amount calculated pursuant
to this clauseE(e) not to be less than zero), in each case for such period.
Notwithstanding the foregoing, the provision for taxes based on the income or
profits of, and the depreciation and amortization of, and other non-cash items
with respect to, a Subsidiary of the Company shall be added to Consolidated Net
Income to compute EBITDA only to the extent (and in the same proportion) that
the net income of such Subsidiary was included in calculating Consolidated Net
Income and only if a corresponding amount would be permitted at the date of
determination to be dividended to the Company by such Subsidiary without prior
approval (that has not been obtained), pursuant to the terms of its charter and
all agreements, instruments, judgments, decrees, orders, statuses, rules and
governmental regulations applicable to such Subsidiary or its stockholders.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect as of the Issue Date, including those set
forth (i) in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants, (ii) statements and
pronouncements of the Financial Accounting Standards Board, (iii) in such other
statements by such other entity as approved by a significant segment of the
accounting profession and (iv) the rules and regulations of the SEC governing
the inclusion of financial statements (including pro
10
forma financial statements) in periodic reports required to be filed pursuant to
Section 13 of the Exchange Act, including opinions and pronouncements in staff
accounting bulletins and similar written statements from the accounting staff of
the SEC.
"Guarantee" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Indebtedness or other
obligation of any Person and any obligation, direct or indirect, contingent or
otherwise, of such Person (i) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Indebtedness or other obligation of such Person
(whether arising by virtue of partnership arrangements, or by agreements to
keep-well, to purchase assets, goods, securities or services, to take-or-pay or
to maintain financial statement conditions or otherwise) or (ii) entered into
for the purpose of assuring in any other manner the obligee of such Indebtedness
or other obligation of the payment thereof or to protect such obligee against
loss in respect thereof (in whole or in part); provided, however, that the term
"Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning. The term "Guarantor" shall mean any Person Guaranteeing
any obligation.
"Guaranty" means the Guarantee of the Notes by STFI and the
Subsidiary Guarantors pursuant to this Indenture.
"Hedging Obligations" of any Person means the obligations of
such Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Noteholder" means the Person in whose name a Note
is registered on the Registrar's books.
"Incur" means issue, assume, Guarantee, incur or otherwise
become liable for; provided, however, that any Indebtedness or Capital Stock of
a Person existing at the time such Person becomes a Subsidiary (whether by
merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred
by such Subsidiary at the time it becomes Subsidiary. The term "Incurrence" when
used as a noun shall have a correlative meaning. The accretion of principal of a
non-interest bearing or other discount security shall be deemed the Incurrence
of Indebtedness.
"Indebtedness" means, with respect to any Person on any date
of determination (without duplication):
(i) the principal of and premium (if any) in respect of
(A) indebtedness of such Person for money borrowed and (B) indebtedness
evidenced by notes, debentures, bonds or
11
other similar instruments for the payment of which such Person is
responsible or liable;
(ii) all Capital Lease Obligations of such Person and all
Attributable Debt in respect of Sale/Leaseback Transactions entered
into by such Person;
(iii) all obligations of such Person issued or assumed as the
deferred purchase price of property, all conditional sale obligations
of such Person and all obligations of such Person under any title
retention agreement (but excluding trade accounts payable arising in
the ordinary course of business);
(iv) all obligations of such Person for the reimbursement of
any obligor on any letter of credit, banker's acceptance or similar
credit transaction (other than the obligations with respect to letters
of credit securing obligations (other than obligations described in
(i) through (iii) above) entered into in the ordinary course of
business of such Person to the extent such letters of credit are not
drawn upon or, if and to the extent drawn upon, such drawing is
reimbursed no later than the third Business Day following receipt by
such Person of a demand for reimbursement following payment on the
letter of credit);
(v) the amount of all obligations of such Person with respect
to the redemption, repayment or other repurchase of any Disqualified
Stock or, with respect to any Subsidiary of such Person, any Preferred
Stock (but excluding, in each case, any accrued dividends);
(vi) all obligations of the type referred to in clausesE(i)
through (v) of other Persons and all dividends of other Persons for the
payment of which, in either case, such Person is responsible or liable,
directly or indirectly, as obligor, Guarantor or otherwise, including
by means of any Guarantee;
(vii) all obligations of the type referred to in clausesE(i)
through (vi) of other Persons secured by any Lien on any property or
asset of such Person (whether or not such obligation is assumed by such
Person), the amount of such obligation being deemed to be the lesser of
the value of such property or assets or the amount of the obligation so
secured; and
(viii) to the extent not otherwise included in this
definition, Hedging Obligations of such Person.
The amount of Indebtedness of any Person at any date shall be
the outstanding balance at such date of all unconditional obligations as
described above and the maximum
12
liability, upon the occurrence of the contingency giving rise to the obligation,
of any contingent obligations at such date.
"Indenture" means this Indenture as amended or supplemented
from time to time.
"Interest Rate Agreement" means any interest rate swap
agreement, interest rate cap agreement or other financial agreement or
arrangement designed to protect the Company or any Restricted Subsidiary against
fluctuations in interest rates.
"Investment" in any Person means any direct or indirect
advance, loan (other than advances to customers in the ordinary course of
business that are recorded as accounts receivable on the balance sheet of such
Person) or other extensions of credit (including by way of Guarantee or similar
arrangement) or capital contribution to (by means of any transfer of cash or
other property to others or any payment for property or services for the account
or use of others), or any purchase or acquisition of Capital Stock, Indebtedness
or other similar instruments issued by such Person. For purposes of the
definition of "Unrestricted Subsidiary", the definition of "Restricted Payment"
and Section 4.05, (i) "Investment" shall include the portion (proportionate to
the Company's equity interest in such Subsidiary) of the fair market value of
the net assets of any Subsidiary of the Company at the time that such Subsidiary
is designated an Unrestricted Subsidiary; provided, however, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall
be deemed to continue to have a permanent "Investment" in an Unrestricted
Subsidiary equal to an amount (if positive) equal to (x) the Company's
"Investment" in such Subsidiary at the time of such redesignation less (y) the
portion (proportionate to the Company's equity interest in such Subsidiary) of
the fair market value of the net assets of such Subsidiary at the time of such
redesignation; and (ii) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its fair market value at the time of such
transfer, in each case as determined in good faith by the Board of Directors.
"Issue Date" means the date on which the Notes are originally
issued.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any conditional sale or other
title retention agreement or lease in the nature thereof).
"Net Available Cash" from an Asset Disposition means cash
payments received therefrom (including any cash payments received by way of
deferred payment of principal pursuant to a note or installment receivable or
otherwise, but only as and
13
when received, but excluding any other consideration received in the form of
assumption by the acquiring Person of Indebtedness or other obligations relating
to such properties or assets or received in any other noncash form) in each case
net of all legal, title and recording tax expenses, commissions and other fees
and expenses incurred, and all Federal, state, provincial, foreign and local
taxes required to be accrued as a liability under GAAP, as a consequence of such
Asset Disposition, and in each case net of all payments made on any Indebtedness
which is secured by any assets subject to such Asset Disposition, in accordance
with the terms of any Lien upon or other security agreement of any kind with
respect to such assets, or which must by its terms, or in order to obtain a
necessary consent to such Asset Disposition, or by applicable law be, repaid out
of the proceeds from such Asset Disposition, and net of all distributions and
other payments required to be made to minority interest holders in Subsidiaries
or joint ventures as a result of such Asset Disposition.
"Net Cash Proceeds," with respect to any issuance or sale of
Capital Stock, means the cash proceeds of such issuance or sale net of
attorneys' fees, accountants' fees, underwriters' or placement agents' fees,
discounts or commissions and brokerage, consultant and other fees actually
incurred in connection with such issuance or sale and net of taxes paid or
payable as a result thereof.
"Officer" means the Chairman of the Board, the President, any
Vice President, the Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two
Officers.
"Opinion of Counsel" means a written opinion from legal
counsel who is acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Permitted Holders" means JeffreyEJ. Steiner and his
"associates" (as defined in Rule 12b-2 under the Exchange Act as in effect on
the Issue Date, except that a person shall not be an "associate" for purposes of
this Indenture solely because such person comes within the definition of such
term in clauseE(a) of such Rule) and his Affiliates.
"Permitted Investment" means an Investment by the Company or
any Restricted Subsidiary in (i) a Restricted Subsidiary or a Person that will,
upon the making of such Investment, become a Restricted Subsidiary; provided,
however, that the primary business of such Restricted Subsidiary is a Related
Business; (ii) another Person if as a result of such
14
Investment such other Person is merged or consolidated with or into, or
transfers or conveys all or substantially all its assets to, the Company or a
Restricted Subsidiary; provided, however, that such Person's primary business is
a Related Business; (iii) Temporary Cash Investments; (iv) receivables owing to
the Company or any Restricted Subsidiary if created or acquired in the ordinary
course of business and payable or dischargeable in accordance with customary
trade terms; provided, however, that such trade terms may include such
consessionary trade terms as the Company or any such Restricted Subsidiary deems
reasonable under the circumstances; (v) payroll, travel and similar advances to
cover matters that are expected at the time of such advances ultimately to be
treated as expenses for accounting purposes and that are made in the ordinary
course of business; (vi) loans or advances to employees made in the ordinary
course of business consistent with past practices of the Company or such
Restricted Subsidiary; and (vii) stock, obligations or securities received in
settlement of debts created in the ordinary course of business and owing to the
Company or any Restricted Subsidiary or in satisfaction of judgments.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however designated)
which is preferred to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"principal" of a Note means the principal of the Note plus the
premium, if any, payable on the Note which is due or overdue or is to become due
at the relevant time.
"Public Equity Offering" means an underwritten primary public
offering of common stock of STFI pursuant to an effective registration statement
under the Securities Act.
"Public Market" means any time after (x) a Public Equity
Offering has been consummated and (y) at least 15% of the total issued and
outstanding common stock of STFI has been distributed by means of an effective
registration statement under the Securities Act or sales pursuant to Rule 144
under the Securities Act.
"Refinance" means, in respect of any Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem,
15
defease or retire, or to issue other Indebtedness in exchange or replacement
for, such Indebtedness. "Refinanced" and "Refinancing" shall have correlative
meanings.
"Refinancing Indebtedness" means Indebtedness that Refinances
any Indebtedness of the Company or any Restricted Subsidiary existing on the
Issue Date or Incurred in compliance with the Indenture including Indebtedness
that Refinances Refinancing Indebtedness; provided, however, that (i) such
Refinancing Indebtedness has a Stated Maturity no earlier than the Stated
Maturity of the Indebtedness being Refinanced, (ii) such Refinancing
Indebtedness has an Average Life at the time such Refinancing Indebtedness is
Incurred that is equal to or greater than the Average Life of the Indebtedness
being Refinanced and (iii) such Refinancing Indebtedness has an aggregate
principal amount (or if Incurred with original issue discount, an aggregate
issue price) that is equal to or less than the aggregate principal amount (or if
Incurred with original issue discount, the aggregate accreted value) then
outstanding or committed (plus fees and expenses, including any premium and
defeasance costs) under the Indebtedness being Refinanced; provided further,
however, that Refinancing Indebtedness shall not includeE(x) Indebtedness of a
Subsidiary that Refinances Indebtedness of the Company orE(y) Indebtedness of
the Company or a Restricted Subsidiary that refinances Indebtedness of an
Unrestricted Subsidiary.
"Related Business" means any business related, ancillary or
complementary to the business of the Company and the Restricted Subsidiaries on
the Issue Date.
"Representative" means any trustee, agent or representative
(if any) for an issue of Senior Indebtedness of the Company.
"Restricted Payment" with respect to any Person means (i) the
declaration or payment of any dividends or any other distributions of any sort
in respect of its Capital Stock (including any payment in connection with any
merger or consolidation involving such Person) or similar payment to the direct
or indirect holders of its Capital Stock (other than dividends or distributions
payable solely in its Capital Stock (other than Disqualified Stock) and
dividends or distributions payable solely to the Company or a Restricted
Subsidiary, and other than pro rata dividends or other distributions made by a
Subsidiary that is not a Wholly Owned Subsidiary to minority stockholders (or
owners of an equivalent interest in the case of a Subsidiary that is an entity
other than a corporation)), (ii) the purchase, redemption or other acquisition
or retirement for value of any Capital Stock of the Company held by any Person
or of any Capital stock of a Restricted Subsidiary held by any Affiliate of the
Company (other than a Restricted Subsidiary), including the exercise of any
option
16
to exchange any Capital Stock (other than into Capital Stock of the Company that
is not Disqualified Stock), (iii) the purchase, repurchase, redemption,
defeasance or other acquisition or retirement for value, prior to scheduled
maturity, scheduled repayment or scheduled sinking fund payment of any
Subordinated Obligations (other than the purchase, repurchase or other
acquisition of Subordinated Obligations purchased in anticipation of satisfying
a sinking fund obligation, principal installment or final maturity, in each case
due within one year of the date of acquisition) or (iv) the making of any
Investment in any Person (other than a Permitted Investment).
"Restricted Subsidiary" means any Subsidiary of the Company
that is not an Unrestricted Subsidiary.
"Revolving Credit Provisions" means the provisions in the
Credit Facility pursuant to which the lenders have committed to make available
to the Company a revolving credit facility in a maximum principal amount of
$25.0 million.
"Sale/Leaseback Transaction" means an arrangement relating to
property now owned or hereafter acquired whereby the Company or a Restricted
Subsidiary transfers such property to a Person and the Company or a Restricted
Subsidiary leases it from such Person.
"SEC" means the Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness of the Company
secured by a Lien.
"Senior Indebtedness" with respect to any Person means (i) the
Bank Indebtedness, (ii) Indebtedness of such Person, whether outstanding on the
Issue Date or thereafter Incurred and (iii) accrued and unpaid interest
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to such Person whether or not
post-filing interest is allowed in such proceeding) in respect of
(A) indebtedness of such Person for money borrowed and (B) indebtedness
evidenced by notes, debentures, bonds or other similar instruments for the
payment of which such Person is responsible or liable unless, in the instrument
creating or evidencing the same or pursuant to which the same is outstanding, it
is provided that such obligations are subordinate in right of payment to the
Notes or the applicable Guaranty, as the case may be; provided, however, that
Senior Indebtedness shall not include (1) any obligation of such Person to any
Subsidiary of such Person, (2) any liability for Federal, state, local or other
taxes owed or owing by such Person, (3) any accounts payable or other liability
to trade creditors arising in the ordinary course of business (including
guarantees thereof or
17
instruments evidencing such liabilities), (4) any Indebtedness of such Person
(and any accrued and unpaid interest in respect thereof) which by its terms is
subordinate or junior in any respect to any other Indebtedness or other
obligation of such Person or (5) that portion of any Indebtedness which at the
time of Incurrence is Incurred in violation of this Indenture, it being
understood that, for purposes of this clauseE(5), all Bank Indebtedness shall at
all times constitute Senior Indebtedness.
"Senior Subordinated Indebtedness" with respect to any Person
means the Notes (in the case of the Company) or the Guaranty of such Person (in
the case of an STFC Guarantor) and, in each case, any other Indebtedness of such
Person that specifically provides that such Indebtedness is to rank pari passu
with the Notes or such Guaranty, as the case may be, in right of payment and is
not subordinated by its terms in right of payment to any Indebtedness or other
obligation of the Company or such STFC Guarantor, respectively, which is not
Senior Indebtedness of such Person.
"Significant Subsidiary" means any Restricted Subsidiary that
would be a "Significant Subsidiary" of the Company within the meaning of Rule
1-02 under Regulation S-X promulgated by the SEC.
"Stated Maturity" means, with respect to any security, the
date specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency unless such contingency has occurred).
"STFC Guarantors" means each of STFI and the Subsidiary
Guarantors.
"STFI" means Shared Technologies Fairchild Inc., a Delaware
corporation.
"Subordinated Obligation" means any Indebtedness of the
Company (whether outstanding on the Issue Date or thereafter Incurred) which is
subordinate or junior in right of payment to the Notes pursuant to a written
agreement to the effect.
"Subsidiary" means, in respect of any Person, any corporation,
association, partnership or other business entity of which more than 50% of the
total voting power of shares of Capital Stock or other interests (including
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers,
18
or trustees thereof is at the time owned or controlled, directly or indirectly,
by (i) such Person, (ii) such Person and one or more Subsidiaries of such Person
or (iii) one or more Subsidiaries of such Person.
"Subsidiary Guarantor" means each Subsidiary of the Company
that Guarantees any Indebtedness of the Company.
"Subsidiary Guaranty" means the Guaranty by a Subsidiary
Guarantor of the Company's obligations with respect to the Notes.
"Temporary Cash Investments" means any of the following:
(i) any investment in direct obligations of the United States of America or any
agency thereof or obligations guaranteed by the United States of America or any
agency thereof, (ii) investments in time deposit accounts, certificates of
deposit and money market deposits maturing within 180 days of the date of
acquisition thereof issued by a bank or trust company which is organized under
the laws of the United States of America, any state thereof or any foreign
country recognized by the United States, and which bank or trust company has
capital, surplus and undivided profits aggregating in excess of $50,000,000 (or
the foreign currency equivalent thereof) and has outstanding debt which is rated
"A" (or such similar equivalent rating) or higher by at least one nationally
recognized statistical rating organization (as defined in Rule 436 under the
Securities Act) or any money-market fund sponsored by any registered broker
dealer or mutual fund distributor, (iii) repurchase obligations with a term of
not more than 30 days for underlying securities of the types described in clause
(i) above entered into with a bank meeting the qualifications described in
clause (ii) above, (iv) investments in commercial paper, maturing not more than
90 days after the date of acquisition, issued by a corporation (other than an
Affiliate of the Company) organized and in existence under the laws of the
United States of America or any foreign country recognized by the United States
of America with a rating at the time as of which any investment therein is made
of "P-1" (or higher) according to Moody's Investors Service, Inc., or "A-1" (or
higher) according to Standard and Poor's Ratings Group and (v) investments in
securities with maturities of six months or less from the date of acquisition
issued or fully guaranteed by any state, commonwealth or territory of the United
States of America, or by any political subdivision or taxing authority thereof,
and rated at least "A" by Standard & Poor's Ratings Group or "A" by Moody's
Investors Service, Inc.
"Term Loan Provisions" means the provisions in the Credit
Facility pursuant to which the lenders commit to make available to the Company
$120.0 million of credit facilities
19
in the form of either amortizing term loans or letters of credit.
"TIA" means the Trust Indenture Act of 1939 (15EU.S.C.
ss.ss.E77aaa-77bbbb) as in effect on the date of this Indenture.
"Trust Officer" means any officer or assistant officer of the
Trustee assigned by the Trustee to administer its corporate trust matters.
"Trustee" means the party named as such in this Indenture
until a successor replaces it and, thereafter, means the successor.
"Uniform Commercial Code" means the New York Uniform
Commercial Code as in effect from time to time.
"Unrestricted Subsidiary" means (i) any Subsidiary of the
Company that at the time of determination shall be designated an Unrestricted
Subsidiary by the Board of Directors in the manner provided below and (ii) any
Subsidiary of an Unrestricted Subsidiary. The Board of Directors may designate
any Subsidiary of the Company (including any newly acquired or newly formed
Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary or any of
its Subsidiaries owns any Capital Stock or Indebtedness of, or holds any Lien on
any property of, the Company or any other Subsidiary of the Company that is not
a Subsidiary of the Subsidiary to be so designated; provided, however, that
either (A) the Subsidiary to be so designated has total assets of $1,000 or less
or (B) if such Subsidiary has assets greater than $1,000, such designation would
be permitted under Section 4.05. The Board of Directors may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that
immediately after giving effect to such designation (x) the Company could Incur
$1.00 of additional Indebtedness under Section 4.03(a) and (y) no Default shall
have occurred and be continuing. Any such designation by the Board of Directors
shall be by the Company to the Trustee by promptly filing with the Trustee a
copy of the Board resolution giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
provisions.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable at the issuer's option.
20
"Voting Stock" of a Person means all classes of Capital Stock
or other interests (including partnership interests) of such Person then
outstanding and normally entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof.
"Wholly Owned Subsidiary" means a Restricted Subsidiary all
the Capital Stock of which (other than directors' qualifying shares and shares
held by other Persons to the extent such shares are required by applicable law
to be held by a Person other than the Company or a Restricted Subsidiary) is
owned by the Company or one of more Wholly Owned Subsidiaries.
SECTION 1.02. Other Definitions.
Defined in
Term Section
"Affiliate Transaction" ................ 4.08
"Bankruptcy Law" ....................... 6.01
"Blockage Notice" ...................... 10.03
"covenant defeasance option" ........... 8.01(b)
"Custodian" ............................ 6.01
"Default Amount"........................ 6.02
"Event of Default" ..................... 6.01
"legal defeasance option" .............. 8.01(b)
"Legal Holiday" ........................ 12.08
"Offer" ................................ 4.07
"Offer Amount" ......................... 4.07
"Offer Period" ......................... 4.07
"pay the Notes" ........................ 10.03
"Paying Agent" ......................... 2.03
"Payment Blockage Period" .............. 10.03
"Purchase Date" ........................ 4.07
"Registrar"............................. 2.03
"Restricted Payment" ................... 4.05
"Successor Company" .................... 5.01
SECTION 1.03. Incorporation by Reference of Trust Indenture
Act. This Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Notes and the Guaranties.
"indenture security holder" means a Noteholder.
21
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company, STFI,
the Subsidiary Guarantors and any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them by such definitions.
SECTION 1.04. Rules of Construction. Unless the context
otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the
plural include the singular;
(6) unsecured Indebtedness shall not be deemed to be
subordinate or junior to Secured Indebtedness merely by virtue of its
nature as unsecured Indebtedness;
(7) the principal amount of any noninterest bearing or other
discount security at any date shall be the principal amount thereof
that would be shown on a balance sheet of the issuer dated such date
prepared in accordance with GAAP;
(8) the principal amount of any Preferred Stock shall be
(i) the maximum liquidation value of such Preferred Stock or (ii) the
maximum mandatory redemption or mandatory repurchase price with respect
to such Preferred Stock, whichever is greater; and
(9) all references to the date the Notes were originally
issued shall refer to the date the Initial Notes were originally
issued.
22
ARTICLE 2
The Notes
SECTION 2.01. Form and Dating. Provisions relating to the
Initial Notes, the Private Exchange Notes and the Exchange Notes are set forth
in Appendix 1, which is hereby incorporated in and expressly made part of this
Indenture. The Initial Notes and the Trustee's certificate of authentication
shall be substantially in the form of ExhibitEA which is hereby incorporated in
and expressly made a part of this Indenture. The Exchange Notes, the Private
Exchange Notes and the Trustee's certificate of authentication shall be
substantially in the form of ExhibitEB, which is hereby incorporated in and
expressly made a part of this Indenture. The Notes may have notations, legends
or endorsements required by law, stock exchange rule, agreements to which the
Company is subject, if any, or usage (provided that any such notation, legend or
endorsement is in a form acceptable to the Company). Each Note shall be dated
the date of its authentication. The terms of the Notes set forth in Exhibit A
and ExhibitEB are part of the terms of this Indenture.
SECTION 2.02. Execution and Authentication. Two Officers shall
sign the Notes for the Company by manual or facsimile signature. The Company's
seal shall be impressed, affixed, imprinted or reproduced on the Notes and may
be in facsimile form.
If an Officer whose signature is on a Note no longer holds
that office at the time the Trustee authenticates the Note, the Note shall be
valid nevertheless.
A Note shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Note. The
signature shall be conclusive evidence that the Note has been authenticated
under this Indenture.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate the Notes. Unless limited by the terms
of such appointment, an authenticating agent may authenticate Notes whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as any Registrar, Paying Agent or agent for service of notices and
demands.
SECTION 2.03. Registrar and Paying Agent. The Company shall
maintain an office or agency where Notes may be presented for registration of
transfer or for exchange (the
23
"Registrar") and an office or agency where Notes may be presented for payment
(the "Paying Agent"). The Registrar shall keep a register of the Notes 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 shall enter into an appropriate agency agreement
with any Registrar, Paying Agent or co-registrar not a party to this Indenture,
which shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee 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 and shall be
entitled to appropriate compensation therefor pursuant to Section 7.07. The
Company or any of its domestically incorporated Wholly Owned Subsidiaries may
act as Paying Agent, Registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and
Paying Agent in connection with the Notes.
SECTION 2.04. Paying Agent To Hold Money in Trust. Prior to
each due date of the principal and interest on any Note, the Company shall
deposit with the Paying Agent a sum in immediately available funds sufficient to
pay such principal and interest when so becoming due. The Company shall require
each Paying Agent (other than the Trustee) to agree in writing that the Paying
Agent shall hold in trust for the benefit of Noteholders or the Trustee all
money held by the Paying Agent for the payment of principal of or interest on
the Notes and shall notify the Trustee in writing of any default by the Company
in making any such payment. If the Company or a Subsidiary of the Company acts
as Paying Agent, it shall segregate the money held by it as Paying Agent and
hold it as a separate trust fund. The Company at any time may require a Paying
Agent to pay all money held by it to the Trustee and to account for any funds
disbursed by the Paying Agent. Upon complying with this Section, the Paying
Agent shall have no further liability for the money delivered to the Trustee.
SECTION 2.05. Noteholder Lists. The Trustee shall preserve in
as current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Noteholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee, in writing at least five
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Noteholders.
24
SECTION 2.06. Replacement Notes. If a mutilated Note is
surrendered to the Registrar or if the Holder of a Note claims that the Note has
been lost, destroyed or wrongfully taken, the Company shall issue and the
Trustee shall authenticate a replacement Note if the requirements of
Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies
any other reasonable requirements of the Trustee. If required by the Trustee or
the Company, such Holder shall furnish an indemnity bond sufficient in the
judgment of the Company and the Trustee to protect the Company, the Trustee, the
Paying Agent, the Registrar and any co-registrar from any loss which any of them
may suffer if a Note is replaced. The Company and the Trustee may charge the
Holder for their expenses in replacing a Note.
Every replacement Note is an additional obligation of the
Company.
SECTION 2.07. Outstanding Notes. Notes outstanding at any time
are all Notes authenticated by the Trustee except for those canceled by it,
those delivered to it for cancellation and those described in this Section as
not outstanding. A Note does not cease to be outstanding because the Company or
an Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.06, it ceases to
be outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Note is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in
accordance with this Indenture, on a redemption date or maturity date money
sufficient to pay all principal and interest payable on that date with respect
to the Notes (or portions thereof) to be redeemed or maturing, as the case may
be, and the Paying Agent is not prohibited from paying such money to the
Noteholders on that date pursuant to the terms of this Indenture, then on and
after that date such Notes (or portions thereof) cease to be outstanding and
interest on them ceases to accrue.
SECTION 2.08. Temporary Notes. Until definitive Notes are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Notes. Temporary Notes shall be substantially in the form of
definitive Notes but may have variations that the Company considers appropriate
for temporary Notes. Without unreasonable delay, the Company shall prepare and
the Trustee shall authenticate definitive Notes and deliver them in exchange for
temporary Notes.
SECTION 2.09. Cancellation. The Company at any time may
deliver Notes to the Trustee for cancellation. The Registrar and the Paying
Agent shall forward to the Trustee
25
any Notes surrendered to them for registration of transfer, exchange or payment.
The Trustee and no one else shall cancel and destroy (subject to the record
retention requirements of the Exchange Act) all Notes surrendered for
registration of transfer, exchange, payment or cancellation and deliver a
certificate of such destruction to the Company unless the Company directs the
Trustee to deliver canceled Notes to the Company. The Company may not issue new
Notes to replace Notes it has redeemed, paid or delivered to the Trustee for
cancellation.
SECTION 2.10. Defaulted Interest. If the Company defaults in a
payment of interest on the Notes, the Company shall pay defaulted interest (plus
interest on such defaulted interest to the extent lawful) in any lawful manner.
The Company shall pay the defaulted interest to the persons who are Noteholders
on a subsequent special record date. The Company shall fix or cause to be fixed
any such special record date and payment date which special record date shall be
10 days before such payment date and shall promptly mail to each Noteholder a
notice that states the special record date, the payment date and the amount of
defaulted interest to be paid.
SECTION 2.11.EECUSIP Numbers.EEThe Company in issuing the
Notes may use "CUSIP" numbers (if then generally in use) and, if so, the Trustee
shall use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided, however, that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Notes or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Notes, and any such redemption
shall not be affected by any defect in or omission of such numbers.
ARTICLE 3
Redemption
SECTION 3.01. Notices to Trustee. If the Company elects to
redeem Notes pursuant to paragraphE5 of the Notes, it shall notify the Trustee
in writing of the redemption date, the principal amount of Notes to be redeemed
and the paragraph of the Notes pursuant to which the redemption will occur.
The Company shall give each notice to the Trustee provided for
in this Section at least 60 days before the redemption date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the
26
effect that such redemption will comply with the conditions herein.
SECTION 3.02. Selection of Notes To Be Redeemed. If fewer than
all the Notes are to be redeemed, the Trustee shall select the Notes to be
redeemed pro rata or by lot or by a method that complies with applicable legal
and securities exchange requirements, if any, and that the Trustee considers
fair and appropriate and in accordance with methods generally used at the time
of selection by fiduciaries in similar circumstances. The Trustee shall make the
selection from outstanding Notes not previously called for redemption. The
Trustee may select for redemption portions of the principal of Notes that have
denominations larger than $1,000. Notes and portions of them the Trustee selects
shall be in amounts of $1,000 or a whole multiple of $1,000. Provisions of this
Indenture that apply to Notes called for redemption also apply to portions of
Notes called for redemption. The Trustee shall notify the Company promptly of
the Notes or portions of Notes to be redeemed.
SECTION 3.03. Notice of Redemption. At least 30 days but not
more than 60 days before a date for redemption of Notes, the Company shall mail
a notice of redemption by first-class mail to each Holder of Notes to be
redeemed.
The notice shall identify the Notes to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Notes are to be
redeemed, the identification and principal amounts of the particular
Notes to be redeemed;
(6) that, unless the Company defaults in making such
redemption payment or the Paying Agent is prohibited from making such
payment pursuant to the terms of this Indenture, interest on Notes (or
portion thereof) called for redemption ceases to accrue on and after
the redemption date and the Accreted Value of the Notes (or portions)
thereof called for redemption cease to increase on or after the
redemption date; and
27
(7) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed
on the Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section.
SECTION 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed, Notes called for redemption become due and payable on the
redemption date and at the redemption price stated in the notice. On the
redemption date, such Notes shall be paid at the redemption price stated in the
notice, plus accrued interest to the redemption date. Failure to give notice or
any defect in the notice to any Holder shall not affect the validity of the
notice to any other Holder.
SECTION 3.05. Deposit of Redemption Price. Prior to the
redemption date, the Company shall deposit with the Paying Agent (or, if the
Company or a Subsidiary of the Company is the Paying Agent, shall segregate and
hold in trust) money, in immediately available funds, sufficient to pay the
redemption price of and accrued interest on all Notes to be redeemed on that
date other than Notes or portions of Notes called for redemption which have been
delivered by the Company to the Trustee for cancellation.
SECTION 3.06. Notes Redeemed in Part. Upon surrender of a Note
that is redeemed in part, the Company shall execute and the Trustee shall
authenticate for the Holder (at the Company's expense) a new Note equal in
principal amount to the unredeemed portion of the Note surrendered.
ARTICLE 4
Covenants
SECTION 4.01. Payment of Notes. The Company shall promptly pay
the principal of and interest on the Notes on the dates and in the manner
provided in the Notes and in this Indenture. Principal and interest (including
any redemption price in connection with any redemption pursuant to ArticleE3)
shall be considered paid on the date due if on such date the Trustee or the
Paying Agent holds in accordance with this Indenture money sufficient to pay all
principal and interest (or in the case of any such redemption, such redemption
price) then due and the Trustee or the Paying Agent, as the case may be, is not
prohibited from paying such money to the
28
Noteholders on that date pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal (including
any redemption price) at the rate specified therefor in the Notes, and it shall
pay interest on overdue installments of interest at the same rate to the extent
lawful.
SECTION 4.02.EESEC Reports. Notwithstanding that the Company
may not be required to remain subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, the Company shall file with the SEC and
provide the Trustee and Noteholders with such annual reports and such
information, documents and other reports as are specified in SectionsE13 and
15(d) of the Exchange Act and applicable to a U.S. corporation subject to such
Sections, such information, documents and other reports to be so filed and
provided at the times specified for the filing of such information, documents
and reports under such Sections.
SECTION 4.03. Limitation on Indebtedness. (a) The Company
shall not Incur, directly or indirectly, any Indebtedness unless, on the date of
such Incurrence, the Consolidated Coverage Ratio would be equal to or greater
than 2.0 to 1.0 if such Indebtedness is Incurred prior to March 1, 1998 or 2.25
to 1.0 if such Indebtedness is Incurred thereafter.
(b) Notwithstanding Section 4.03(a), the Company may Incur
any or all of the following Indebtedness:
(1) Indebtedness Incurred pursuant to the Revolving Credit
Provisions of the Credit Facility or any other revolving credit
facility in a principal amount which, when taken together with the
principal amount of all other Indebtedness Incurred pursuant to this
Section 4.03(b)(1) and then outstanding, does not exceed $25.0 million;
(2) Indebtedness Incurred pursuant to the Term Loan
Provisions of the Credit Facility or any other credit or loan agreement
or indenture in an aggregate principal amount which, when taken
together with the principal amount of all other Indebtedness Incurred
pursuant to this Section 4.03(b)(2) and then outstanding, does not
exceed (A) $120.0 million less (B) the aggregate amount of all
principal repayments of any such Indebtedness made after the Issue Date
(other than any such principal repayments made as a result of the
Refinancing of any such Indebtedness);
(3) Indebtedness owed to and held by a Wholly Owned
Subsidiary; provided, however, that any subsequent issuance or transfer
of any Capital Stock which results in any such Wholly
29
Owned Subsidiary ceasing to be a Wholly Owned Subsidiary or any
subsequent transfer of such Indebtedness (other than to another Wholly
Owned Subsidiary) shall be deemed, in each case, to constitute the
Incurrence of such Indebtedness by the Company;
(4) the Notes;
(5) Indebtedness outstanding on the Issue Date (other than
Indebtedness described in SectionsE4.03(b)(1), (2), (3) or (4));
(6) Refinancing Indebtedness in respect of Indebtedness
Incurred pursuant to Section 4.03(a) or pursuant to SectionsE4.03(b)(4)
or (5) or this Section 4.03(b)(6);
(7) Hedging Obligations consisting of Interest Rate Agreements
directly related to Indebtedness permitted to be Incurred by the
Company pursuant to this Indenture; and
(8) Indebtedness in an aggregate principal amount which,
together with all other Indebtedness of the Company outstanding on the
date of such Incurrence (other than Indebtedness permitted by
SectionsE4.03(b)(1) through (7) above or Section 4.03(a)), when
aggregated with all Indebtedness then outstanding pursuant to
Section 4.04(a)(v), does not exceed $5.0 million.
(c) Notwithstanding the foregoing, the Company shall not
Incur any Indebtedness pursuant to Section 4.03(b) if the proceeds thereof are
used, directly or indirectly, to Refinance any Subordinated Obligations unless
such Indebtedness shall be subordinated to the Notes to at least the same extent
as such Subordinated Obligations.
(d) Notwithstanding Section 4.03(a) and Section 4.03(b)
above, (i) the Company shall not Incur any Indebtedness if such Indebtedness is
subordinate or junior in ranking in any respect to any Senior Indebtedness
unless such Indebtedness is Senior Subordinated Indebtedness or is expressly
subordinated in right of payment to Senior Subordinated Indebtedness and
(ii) the Company shall not Incur any Secured Indebtedness which is not Senior
Indebtedness unless contemporaneously therewith effective provision is made to
secure the Notes equally and ratably with such Secured Indebtedness for so long
as such Secured Indebtedness is secured by a Lien.
(e) For purposes of determining compliance with this
Section 4.03, (i) in the event that an item of Indebtedness meets the criteria
of more than one of the types of Indebtedness described above, the Company, in
its sole discretion, will classify such item of Indebtedness and only
30
be required to include the amount and type of such Indebtedness in one of the
above clauses and (ii) an item of Indebtedness may be divided and classified in
more than one of the types of Indebtedness described above.
SECTION 4.04. Limitation on Indebtedness and Preferred Stock
of Restricted Subsidiaries. (a) The Company shall not permit any Restricted
Subsidiary to Incur, directly or indirectly, any Indebtedness or Preferred Stock
except:
(i) Indebtedness or Preferred Stock issued to and held by the
Company or a Wholly Owned Subsidiary; provided, however, that any
subsequent issuance or transfer of any Capital Stock which results in
any such Wholly Owned Subsidiary ceasing to be a Wholly Owned
Subsidiary or any subsequent transfer of such Indebtedness or Preferred
Stock (other than to the Company or a Wholly Owned Subsidiary) shall be
deemed, in each case, to constitute the Incurrence of such Indebtedness
or Preferred Stock by the issuer thereof;
(ii) Indebtedness or Preferred Stock of a Subsidiary Incurred and
outstanding on or prior to the date on which such Subsidiary was
acquired by the Company (other than Indebtedness or Preferred Stock
Incurred in connection with, or to provide all or any portion of the
funds or credit support utilized to consummate, the transaction or
series of related transactions pursuant to which such Subsidiary became
a Subsidiary or was acquired by the Company) and Refinancing
Indebtedness Incurred in respect thereof; provided, however, that such
Refinancing Indebtedness shall only be permitted under this
Section 4.04(a)(ii) to the extent Incurred by the Subsidiary that
originally Incurred such Indebtedness;
(iii) in the case of a Subsidiary Guarantor, (A) any Guarantee of
Indebtedness of the Company and (B) any Indebtedness consisting of
Liens securing any Guarantee permitted pursuant to this clauseE(iii);
(iv) Indebtedness or Preferred Stock outstanding on the Issue
Date (other than Indebtedness described in Section 4.04(a)(i)
orESection 4.04(a)(ii));
(v) Indebtedness represented by Capital Lease Obligations
Incurred for the purpose of financing all or any part of the purchase
price of equipment used in a Related Business or Incurred to Refinance
any such purchase price; provided, however, that the amount of
Indebtedness outstanding at any time pursuant to this
Section 4.04(a)(v), when aggregated with all Indebtedness then
outstanding pursuant to Section 4.03(b)(8), shall not exceed
$5.0 million; and
31
(vi) Refinancing Indebtedness Incurred in respect of Indebtedness
or Preferred Stock referred to in Section 4.04(a)(iv) or this
Section 4.04(a)(vi).
(b) Notwithstanding the foregoing, the Company shall not permit
any Subsidiary Guarantor to Incur any Indebtedness pursuant to Section 4.04(a)
if the proceeds thereof are used, directly or indirectly, to Refinance any
Subordinated Obligations of such Subsidiary Guarantor unless such Indebtedness
shall be subordinated to the Subsidiary Guaranty of such Subsidiary Guarantor to
at least the same extent as such Subordinated Obligations.
(c) For purposes of determining compliance with this
Section 4.04, (i) in the event that an item of Indebtedness meets the criteria
of more than one of the types of Indebtedness described above, the Company, in
its sole discretion, will classify such item of Indebtedness and only be
required to include the amount and type of such Indebtedness in one of the above
clauses and (ii) an item of Indebtedness may be divided and classified in more
than one of the types of Indebtedness described above.
(d) Notwithstanding Section 4.04(a) and Section 4.04(b), the
Company shall not permit any Subsidiary Guarantor to Incur (i) any Indebtedness
if such Indebtedness is subordinate or junior in ranking in any respect to any
Senior Indebtedness of such Subsidiary Guarantor, unless such Indebtedness is
Senior Subordinated Indebtedness of such Subsidiary Guarantor or is expressly
subordinated in right of payment to Senior Subordinated Indebtedness of such
Subsidiary Guarantor or (ii) any Secured Indebtedness that is not Senior
Indebtedness of such Subsidiary Guarantor unless contemporaneously therewith
effective provision is made to secure such Subsidiary Guarantor's Guarantee of
the Notes equally and ratably with such Secured Indebtedness for so long as such
Secured Indebtedness is secured by a Lien.
SECTION 4.05. Limitation on Restricted Payments. (a) The Company
shall not, and shall not permit any Restricted Subsidiary, directly or
indirectly, to make a Restricted Payment if at the time the Company or such
Restricted Subsidiary makes such Restricted Payment: (1) a Default shall have
occurred and be continuing (or would result therefrom); or (2) the Company is
not able to Incur an additional $1.00 of Indebtedness pursuant to
Section 4.03(a); or (3) the aggregate amount of such Restricted Payment and all
other Restricted Payments since the Issue Date would exceed the sum of: (A) 50%
of the Adjusted Consolidated Net Income accrued during the period (treated as
one accounting period) from the beginning of the fiscal quarter immediately
following the Issue Date to the end of the most recent fiscal quarter ending at
least 45 days prior to the date of such Restricted Payment (or, in case
32
such Adjusted Consolidated Net Income shall be a deficit, minus 100% of such
deficit); (B) the aggregate Net Cash Proceeds received by the Company from the
issuance or sale of its Capital Stock (other than Disqualified Stock) subsequent
to the Issue Date (other than an issuance or sale to a Subsidiary of the Company
and other than an issuance or sale to an employee stock ownership plan or to a
trust established by the Company or any of its Subsidiaries for the benefit of
their employees) plus the aggregate cash capital contributions received by the
Company subsequent to the Issue Date; (C) the amount by which Indebtedness of
the Company is reduced on the Company's balance sheet upon the conversion or
exchange (other than by a Subsidiary of the Company) subsequent of the Issue
Date, of any Indebtedness of the Company convertible or exchangeable for Capital
Stock (other than Disqualified Stock) of the Company (less the amount of any
cash, or the fair value of any other property, distributed by the Company upon
such conversion or exchange); and (D) an amount equal to the sum of (i) the net
reduction in Investments in Unrestricted Subsidiaries resulting from dividends,
repayments of loans or advances or other transfers of assets, in each case to
the Company or any Restricted Subsidiary from Unrestricted Subsidiaries, and
(ii) the portion (proportionate to the Company's equity interest in such
Subsidiary) of the fair market value of the net assets of an Unrestricted
Subsidiary at the time such Unrestricted Subsidiary is designated a Restricted
Subsidiary; provided, however, that the foregoing sum shall not exceed, in the
case of any Unrestricted Subsidiary, the amount of Investments previously made
(and treated as a Restricted Payment) by the Company or any Restricted
Subsidiary in such Unrestricted Subsidiary.
(b) The provisions of Section 4.05(a) shall not prohibit: (i) any
purchase or redemption of Capital Stock or Subordinated Obligations of the
Company made by exchange for, or out of the proceeds of the substantially
concurrent sale of or cash capital contribution in respect of Capital Stock of
the Company (other than Disqualified Stock and other than Capital Stock issued
or sold to a Subsidiary of the Company or an employee stock ownership plan or to
a trust established by the Company or any of its Subsidiaries for the benefit of
their employees); provided, however, that (A) such purchase or redemption shall
be excluded in the calculation of the amount of Restricted Payments and (B) the
Net Cash Proceeds from such sale and any such cash capital contribution shall be
excluded from the calculation of amounts under Section 4.05(a)(3)(B) above;
(ii) any purchase, repurchase, redemption, defeasance or other acquisition or
retirement for value of Subordinated Obligations of the Company made by exchange
for, or out of the proceeds of the substantially concurrent sale of,
Indebtedness of the Company which is permitted to be Incurred pursuant to
Section 4.03; provided, however, that such purchase, repurchase, redemption,
defeasance or other acquisition or
33
retirement for value shall be excluded in the calculation of the amount of
Restricted Payments; (iii) dividends paid within 60 days after the date of
declaration thereof if at such date of declaration such dividend would have
complied with this covenant; provided, however, that, at the time of payment of
such dividend, no other Default shall have occurred and be continuing (or result
therefrom), provided further, however, that such dividend shall be included in
the calculation of the amount of Restricted Payments; (iv) the declaration and
payment of a dividend or other distribution by the Company to STFI the proceeds
of which are to be used promptly by STFI for (A) the payment of cash dividends
on the Designated Preferred Stock at a rate not in excess of 6% per annum of the
liquidation preference of the Designated Preferred Stock or (B) the payment of
cash dividends on the STFI's SeriesEC Preferred Stock and SeriesED Preferred
Stock; provided, however, that the maximum amount of cash dividends on such
SeriesEC Preferred Stock and SeriesED Preferred Stock in any calendar year shall
not exceed $0.5Emillion; provided further, however, that the payments of all
such dividends and distributions made pursuant to this clauseE(iv) shall be
included in the calculation of the amount of Restricted Payments; or (v) the
declaration and payment of a dividend or other distribution by the Company to
STFI the proceeds of which are to be used for (A) legal, accounting and other
professional fees incurred by STFI and any fees and expenses payable by STFI
that are associated with registration statements and periodic reports filed with
the SEC or (B) the dividends, redemptions and other payments to be made by STFI
on the Issue Date in connection with the Acquisition; provided, however, that
the payments of all such dividends and distributions made pursuant to this
clauseE(v) shall be excluded in the calculation of the amount of Restricted
Payments.
SECTION 4.06. Limitation on Restrictions on Distributions from
Restricted Subsidiaries.EEThe Company shall not, and shall not permit any
Restricted Subsidiary to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary (a) to pay dividends or make any other distributions on
its Capital Stock to the Company or a Restricted Subsidiary or pay any
Indebtedness owed to the Company, (b) to make any loans or advances to the
Company or (c) to transfer any of its property or assets to the Company, except:
(i) any encumbrance or restriction pursuant to an agreement in effect at or
entered into on the Issue Date; (ii) any encumbrance or restriction with respect
to a Restricted Subsidiary pursuant to an agreement relating to any Indebtedness
Incurred by such Restricted Subsidiary on or prior to the date on which such
Restricted Subsidiary was acquired by the Company (other than Indebtedness
Incurred as consideration in, or to provide all or any portion of the
34
funds or credit support utilized to consummate, the transaction or series of
related transactions pursuant to which such Restricted Subsidiary became a
Restricted Subsidiary or was acquired by the Company) and outstanding on such
date; (iii) any encumbrance or restriction pursuant to an agreement effecting a
Refinancing of Indebtedness Incurred pursuant to an agreement referred to in
clause (i) or (ii) of this Section 4.06 or this clause (iii) or contained in any
amendment to an agreement referred to in clause (i) or (ii) of this Section 4.06
or this clause (iii); provided, however, that the encumbrances and restrictions
with respect to such Restricted Subsidiary contained in any such refinancing
agreement or amendment are no less favorable to the Noteholders than
encumbrances and restrictions with respect to such Restricted Subsidiary
contained in such agreements; (iv) any such encumbrance or restriction
consisting of customary nonassignment provisions in leases governing leasehold
interests to the extent such provisions restrict the transfer of the lease or
the property leased thereunder; (v) in the case of clause (c) of this
Section 4.06, restrictions contained in security agreements or mortgages
securing Indebtedness of a Restricted Subsidiary to the extent such restrictions
restrict the transfer of the property subject to such security agreements or
mortgages; and (vi) any restriction with respect to a Restricted Subsidiary
imposed pursuant to an agreement entered into for the sale or disposition of all
or substantially all the Capital Stock or assets of such Restricted Subsidiary
pending the closing of such sale or disposition.
SECTION 4.07. Limitation on Sales of Assets and Subsidiary Stock.
(a) The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, consummate any Asset Disposition unless (i) the Company
or such Restricted Subsidiary receives consideration at the time of such Asset
Disposition at least equal to the fair market value (including as to the value
of all noncash consideration), as determined in good faith by the Board of
Directors, of the shares and assets subject to such Asset Disposition and at
least 85% of the consideration thereof received by the Company or such
Restricted Subsidiary is in the form of cash or cash equivalents and (ii) an
amount equal to 100% of the Net Available Cash from such Asset Disposition is
applied by the Company (or such Restricted Subsidiary, as the case may be)
(A) first, to the extent the Company elects (or is required by the terms of any
Senior Indebtedness of the Company), to prepay, repay, redeem or repurchase
Senior Indebtedness of the Company or Indebtedness (other than any Disqualified
Stock or, in the case of a Subsidiary Guarantor, any Subordinated Obligations)
of a Wholly Owned Subsidiary (in each case other than Indebtedness owed to the
Company or an Affiliate of the Company) within one year from the later of the
date of such Asset Disposition or the receipt of such Net Available Cash;
(B) second, to the extent of the balance of such Net Available Cash after
application in accordance with clause (A), to the extent the Company elects, to
invest in Additional Assets within one year from the later of the date of such
Asset Disposition or the receipt of such Net
35
Available Cash; (C) third, to the extent of the balance of such Net Available
Cash in excess of $250,000 in any fiscal year after application in accordance
with clausesE(A) and (B), to make an offer to the holders of the Notes (and to
holders of other Senior Subordinated Indebtedness of the Company designated by
the Company) to purchase Notes (and such other Senior Subordinated Indebtedness)
pursuant to and subject to Section 4.07(b); and (D) fourth, to the extent of the
balance of such Net Available Cash after application in accordance with clauses
(A), (B) and (C) to (x) the acquisition by the Company or any Wholly Owned
Subsidiary of Additional Assets or (y) the prepayment, repayment or purchase of
Indebtedness (other than any Disqualified Stock) of the Company (other than
Indebtedness owned to an Affiliate of the Company) or Indebtedness of any
Subsidiary (other than Indebtedness owed to the Company or an Affiliate of the
Company), in each case within one year from the later of the receipt of such Net
Available Cash and the date the offer described in Section 4.07(b) is
consummated, provided, however, that, in connection with any prepayment,
repayment or purchase of Indebtedness pursuant to clause (A), (C) or (D) above,
the Company or such Restricted Subsidiary shall retire such Indebtedness and
shall cause the related loan commitment (if any) to be permanently reduced in an
amount equal to the principal amount so prepaid, repaid or purchased.
Notwithstanding the foregoing provisions of this paragraph, the Company and the
Restricted Subsidiaries shall not be required to apply any Net Available Cash in
accordance with this paragraph except to the extent that the aggregate Net
Available Cash from all Asset Dispositions which is not applied in accordance
with this paragraph exceeds $5.0 million. Pending application of Net Available
Cash pursuant to this covenant, such Net Available Cash shall be invested in
Permitted Investments.
For the purposes of this Section 4.07, the following are deemed
to be cash or cash equivalents: (x) the assumption of Indebtedness of the
Company or any Restricted Subsidiary and the release of the Company or such
Restricted Subsidiary from all liability on such Indebtedness in connection with
such Asset Disposition and (y) securities received by the Company or any
Restricted Subsidiary from the transferee that are promptly converted by the
Company or such Restricted Subsidiary into cash.
(b) In the event of an Asset Disposition that requires the
purchase of the Notes (and other Senior Subordinated Indebtedness) pursuant to
clause (ii)(C) of
36
Section 4.07(a), the Company will be required to purchase Notes tendered
pursuant to an offer by the Company for the Notes (and other Senior Subordinated
Indebtedness) (the "Offer") at a purchase price of 100% of their Accreted Value
plus accrued but unpaid interest (or, in respect of such other Senior
Subordinated Indebtedness, such lesser price, if any, as may be provided for by
the terms of such Senior Subordinated Indebtedness) in accordance with the
procedures (including prorating in the event of oversubscription) set forth in
Section 4.07(c). If the aggregate purchase price of Notes (and any other Senior
Subordinated Indebtedness) tendered pursuant to the Offer is less than the Net
Available Cash allotted to the purchase thereof, the Company will be required to
apply the remaining Net Available Cash in accordance with
Section 4.07(a)(ii)(D). The Company shall not be required to make such an offer
to purchase Notes (and other Senior Subordinated Indebtedness) pursuant to this
Section 4.07 if the Net Available Cash available therefor (after application of
the proceeds as provided in clauses (A) and (B) of Section 4.07(a)(ii)) is less
than $5.0 million (which lesser amount shall be carried forward for purposes of
determining whether such an offer is required with respect to any subsequent
Asset Disposition).
(c) (1) Promptly, and in any event within 10 days after the
Company becomes obligated to make an Offer, the Company shall be obligated to
deliver to the Trustee and send, by first-class mail to each Holder, a written
notice stating that the Holder may elect to have his Notes purchased by the
Company either in whole or in part (subject to prorationing as hereinafter
described in the event the Offer is oversubscribed) in integral multiples of
$1,000 of principal amount, at the applicable purchase price. The notice shall
specify a purchase date not less than 30 days nor more than 60 days after the
date of such notice (the "Purchase Date") and shall contain such information
concerning the business of the Company which the Company in good faith believes
will enable such Holders to make an informed decision (which at a minimum will
include (i) the most recently filed Annual Report on Form 10-K (including
audited consolidated financial statements) of the Company, the most recent
subsequently filed Quarterly Report on Form 10-Q and any Current Report on Form
8-K of the Company filed subsequent to such Quarterly Report, other than Current
Reports describing Asset Dispositions otherwise described in the offering
materials (or corresponding successor reports), (ii) a description of material
developments in the Company's business subsequent to the date of the latest of
such Reports, and (iii) if material, appropriate pro forma financial information
and all instructions and materials necessary to tender Notes pursuant to the
Offer, together with the information contained in clause (3).
37
(2) Not later than the date upon which written notice of an
Offer is delivered to the Trustee as provided below, the Company shall deliver
to the Trustee an Officers' Certificate as to (i) the amount of the Offer (the
"Offer Amount"), (ii) the allocation of the Net Available Cash from the Asset
Dispositions pursuant to which such Offer is being made and (iii) the compliance
of such allocation with the provisions of Section 4.07(a). On such date, the
Company shall also irrevocably deposit with the Trustee or with a paying agent
(or, if the Company is acting as its own paying agent, segregate and hold in
trust) in Temporary Cash Investments, maturing on the day prior to the Purchase
Date or on the Purchase Date if funds are immediately available by open of
business an amount equal to the Offer Amount to be held for payment in
accordance with the provisions of this Section. Upon the expiration of the
period for which the Offer remains open (the "Offer Period"), the Company shall
deliver to the Trustee for cancellation the Notes or portions thereof which have
been properly tendered to and are to be accepted by the Company. The Trustee
shall, on the Purchase Date, mail or deliver payment to each tendering Holder in
the amount of the purchase price. In the event that the aggregate purchase price
of the Notes delivered by the Company to the Trustee is less than the Offer
Amount, the Trustee shall deliver the excess to the Company immediately after
the expiration of the Offer Period for application in accordance with this
Section.
(3) Holders electing to have a Note purchased will be required
to surrender the Note, with an appropriate form duly completed, to the Company
at the address specified in the notice at least three Business Days prior to the
Purchase Date. Holders will be entitled to withdraw their election if the
Trustee or the Company receives not later than one Business Day prior to the
Purchase Date, a telegram, telex, facsimile transmission or letter setting forth
the name of the Holder, the Accreted Value of the Note which was delivered for
purchase by the Holder and a statement that such Holder is withdrawing his
election to have such Note purchased. If at the expiration of the Offer Period
the aggregate Accreted Value of Notes surrendered by Holders exceeds the Offer
Amount, the Company shall select the Notes to be purchased on a pro rata basis
(with such adjustments as may be deemed appropriate by the Company so that only
Notes in denominations of $1,000, or integral multiples thereof, shall be
purchased). Holders whose Notes are purchased only in part will be issued new
Notes equal in Accreted Value to the unpurchased portion of the Notes
surrendered.
(4) At the time the Company delivers Notes to the Trustee which
are to be accepted for purchase, the Company will also deliver an Officers'
Certificate stating that such Notes are to be accepted by the Company pursuant
to and in
38
accordance with the terms of this Section. A Note shall be deemed to have been
accepted for purchase at the time the Trustee, directly or through an agent,
mails or delivers payment therefor to the surrendering Holder.
(d) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to this
Section. To the extent that the provisions of any securities laws or regulations
conflict with provisions of this Section, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section by virtue thereof.
SECTIONE4.08.EELimitation on Affiliate Transactions. (a) The
Company shall not, and shall not permit any Restricted Subsidiary to, enter into
or permit to exist any transaction (including the purchase, sale, lease or
exchange of any property, employee compensation arrangements or the rendering of
any service) with any Affiliate of the Company (an "Affiliate Transaction")
unless the terms thereof (1) are no less favorable to the Company or such
restricted Subsidiary than those that could be obtained at the time of such
transaction in arm's-length dealings with a Person who is not such an Affiliate,
(2) if such Affiliate Transaction involves an amount in excess of $1.0 million,
(i) are set forth in writing and (ii) have been approved by a majority of the
members of the Board of Directors having no personal stake in such Affiliate
Transaction and (3) if such Affiliate Transaction involves an amount in excess
of $5.0 million, have been determined by nationally recognized investment
banking firm to be fair, from a financial standpoint, to the Company and its
Restricted Subsidiaries.
(b) The provisions of Section 4.08(a) shall not prohibit (i) any
Restricted Payment permitted to be paid pursuant to Section 4.05; (ii) any
issuance of securities, or other payments, awards or grants in cash, securities
or otherwise pursuant to, or the funding of, employment arrangements, stock
options and stock ownership plans approved by the Board of Directors; (iii) the
grant of stock options or similar rights to employees and directors of the
Company pursuant to plans approved by the Board of Directors; (iv) loans or
advances to employees in the ordinary course of business in accordance with the
past practices of the Company or its Restricted Subsidiaries, but in any event
not to exceed $1.0 million in the aggregate outstanding at any one time; (v) the
payment of reasonable fees to directors of the Company and its Restricted
Subsidiaries who are not employees of the Company or its Restricted
Subsidiaries; and (vi) any Affiliate Transaction between the Company and a
Wholly Subsidiary or between Wholly Owned Subsidiaries.
39
SECTION 4.09. Limitation on the Sale or Issuance of Capital Stock
of Restricted Subsidiaries. The Company shall not sell or otherwise dispose of
any shares of Capital Stock of a Restricted Subsidiary, and shall not permit any
Restricted Subsidiary, directly or indirectly, to issue or sell or otherwise
dispose of any shares of its Capital Stock except (i) to the Company or a Wholly
Owned Subsidiary or (ii) if, immediately after giving effect to such issuance,
sale or other disposition, such Restricted Subsidiary would no longer constitute
a Restricted Subsidiary.
SECTION 4.10. Unrestricted Subsidiaries. The Company shall not
permit any Unrestricted Subsidiary to engage in the business of shared
telecommunications services in commercial office buildings.
SECTION 4.11. Future Guarantors. The Company shall cause each
Person that Guarantees any Indebtedness of the Company to become an STFC
Guarantor under this Indenture and thereby Guarantee the Notes on the terms and
conditions set forth in this Indenture.
SECTION 4.12. Change of Control. (a) Upon a Change of Control,
each Holder shall have the right to require that the Company repurchase such
Holder's Notes at a purchase price in cash equal to 101% of the Accreted Value
thereof plus accrued and unpaid interest, if any, to the date of purchase
(subject to the right of Holders of record on a record date to receive interest
on the relevant interest payment date), in accordance with the terms
contemplated in Section 4.12(b). In the event that at the time of such Change of
Control the terms of the Bank Indebtedness restrict or prohibit the repurchase
of Notes pursuant to this Section, then prior to the mailing of the notice to
Holders provided for in Section 4.12(b) but in any event within 30 days
following any Change of Control, the Company shall (i) repay in full all Bank
Indebtedness or to offer to repay in full all Bank Indebtedness and repay the
Bank Indebtedness of each lender who has accepted such offer or (ii) obtain the
requisite consent under the agreements governing the Bank Indebtedness to permit
the repurchase of the Notes as provided for in Section 4.12(b).
(b) Within 30 days following any Change of Control, the Company
shall mail a notice to each Holder with a copy to the Trustee stating:
(1) that a Change of Control has occurred and that such Holder
has the right to require the Company to purchase such Holder's Notes at
a purchase price in cash equal to 101% of the Accreted Value thereof
plus accrued and unpaid interest, if any, to the date of purchase
(subject to the
40
right of Holders of record on a record date to receive interest on the
relevant interest payment date);
(2) the circumstances and relevant facts regarding such Change of
Control (including information with respect to pro forma historical
income, cash flow and capitalization after giving effect to such Change
of Control);
(3) the repurchase date (which shall be no earlier than 30 days
nor later than 60 days from the date such notice is mailed); and
(4) the instructions determined by the Company, consistent with
this Section, that a Holder must follow in order to have its Notes
purchased.
(c) Holders electing to have a Note purchased will be required to
surrender the Note, with an appropriate form duly completed, to the Company at
the address specified in the notice at least three Business Days prior to the
purchase date. Holders will be entitled to withdraw their election if the
Trustee or the Company receives not later than three Business Days prior to the
purchase date, a telegram, telex, facsimile transmission or letter setting forth
the name of the Holder, the principal amount of the Note which was delivered for
purchase by the Holder and a statement that such Holder is withdrawing his
election to have such Note purchased.
(d) On the purchase date, all Notes purchased by the Company
under this Section shall be delivered by the Trustee for cancellation, and the
Company shall pay the purchase price plus accrued and unpaid interest, if any,
to the Holders entitled thereto.
(e) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to this
Section. To the extent that the provisions of any securities laws or regulations
conflict with provisions of this Section, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section by virtue thereof.
SECTION 4.13. Compliance Certificate. The Company shall deliver
to the Trustee within 120 days after the end of each fiscal year of the Company
an Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or proposes to take
with
41
respect thereto. The Company also shall comply with TIA ss.E314(a)(4).
SECTION 4.14. Further Instruments and Acts. Upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
ARTICLE 5
Successor Company
SECTION 5.01. When Company May Merge or Transfer Assets.
(a) The Company shall not consolidate with or merge with or into, or convey,
transfer or lease, in one transaction or a series of transactions, all or
substantially all its assets to, any Person, unless:E
(i) the resulting, surviving or transferee Person (the "Successor
Company") shall be a Person organized and existing under the laws of
the United States of America, any State thereof or the District of
Columbia and the Successor Company (if not the Company) shall expressly
assume, by an indenture supplemental thereto, executed and delivered to
the Trustee, in form satisfactory to the Trustee, all the obligations
of the Company under the Notes and this Indenture;
(ii) immediately after giving effect to such transaction (and
treating any Indebtedness which becomes an obligation of the Successor
Company or any Subsidiary as a result of such transaction as having
been Incurred by such Successor Company or such Subsidiary at the time
of such transaction), no Default shall have occurred and be continuing;
(iii) immediately after giving effect to such transaction, the
Successor Company would be able to Incur an additional $1.00 of
Indebtedness pursuant to Section 4.03(a);
(iv) immediately after giving effect to such transaction, the
Successor Company shall have Consolidated Net Worth in an amount that
is not less than the Consolidated Net Worth of the Company prior to
such transaction; and
(v) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if
any) comply with the Indenture.
42
The Successor Company shall be the successor to the Company and
shall succeed to, and be substituted for, and may exercise every right and power
of, the Company under the Indenture, but the predecessor Company in the case of
a conveyance, transfer or lease shall not be released from the obligation to pay
the principal of and interest on the Notes.
Notwithstanding the foregoing clausesE(ii), (iii) and (iv), any
Restricted Subsidiary may consolidate with, merge into or transfer all or part
of its properties and assets to the Company.
(b) STFI shall not, and the Company will not permit any
Subsidiary Guarantor to, consolidate with or merge with or into, or convey,
transfer or lease, in one transaction or a series of transactions, all or
substantially all of its assets to any Person unless:E(i) in the case of STFI,
such Person is not the Company or any Restricted Subsidiary; (ii) the resulting,
surviving or transferee Person (if not STFI or such Subsidiary, as the case may
be) shall be a Person organized and existing under the laws of the jurisdiction
under which STFI or such Subsidiary, as applicable, was organized or under the
laws of the United States of America, or any State thereof or the District of
Columbia, and such Person shall expressly assume, by an amendment to the
Indenture, in a form satisfactory to the Trustee, all the obligations of STFI or
such Subsidiary (as applicable) under its Guaranty; and (iii) immediately after
giving effect to such transaction or transactions on a pro forma basis (and
treating any Indebtedness which becomes an obligation of the resulting,
surviving or transferee Person as a result of such transaction as having been
issued by such Person at the time of such transaction), no Default shall have
occurred and be continuing.
ARTICLE 6
Defaults and Remedies
SECTION 6.01. Events of Default. An "Event of Default" occurs
if:
(1) the Company defaults in any payment of interest on any Note
when the same becomes due and payable, whether or not such payment
shall be prohibited by Article 10, and such default continues for a
period of 30 days;
(2) the Company (i) defaults in the payment of the principal (or
Accreted Value) of any Note when the same becomes due and payable at
its Stated Maturity, upon redemption, upon declaration or otherwise,
whether or not such
43
payment shall be prohibited by Article 10 or (ii) fails to redeem or
purchase Notes when required pursuant to this Indenture or the Notes,
whether or not such redemption or purchase shall be prohibited by
ArticleE10;
(3) the Company or STFI fails to comply with Section 5.01;
(4) the Company fails to comply with Section 4.02, 4.03, 4.04,
4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11 or 4.12 (other than a failure
to purchase Notes when required under Section 4.07 or 4.12) and such
failure continues for 30 days after the notice specified below;
(5) the Company or any STFC Guarantor fails to comply with any of
its agreements in the Notes or this Indenture (other than those
referred to in (1), (2), (3) or (4) above) and such failure continues
for 60 days after the notice specified below;
(6) Indebtedness of the Company, STFI or any Significant
Subsidiary is not paid within any applicable grace period after final
maturity or is accelerated by the holders thereof because of a default
and the total amount of such Indebtedness unpaid or accelerated exceeds
$5.0 million or its foreign currency equivalent at the time;
(7) the Company, STFI or any Significant Subsidiary pursuant to
or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief
against it in an involuntary case;
(C) consents to the appointment of a Custodian of it
or for any substantial part of its property; or
(D) makes a general assignment for the benefit of its
creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(8) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company, STFI or any
Significant Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company, STFI or any
Significant Subsidiary or for any substantial part of its
property; or
44
(C) orders the winding up or liquidation of the
Company, STFI or any Significant Subsidiary;
or any similar relief is granted under any foreign laws and the
order or decree remains unstayed and in effect for 60 days;
(9) any judgment or decree for the payment of money in excess of
$5.0 million or its foreign currency equivalent at the time is entered
against the Company, STFI or any Significant Subsidiary, remains
outstanding for a period of 60 days following the entry of such
judgment or decree and is not discharged, waived or the execution
thereof stayed within 10 days after the notice specified below; or
(10) a Guaranty ceases to be in full force and effect (other than
in accordance with the terms of such Guaranty) or an STFC Guarantor
denies or disaffirms its obligations under its Guaranty.
The foregoing will constitute Events of Default whatever the
reason for any such Event of Default and whether it is voluntary or involuntary
or is effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body.
The term "Bankruptcy Law" means TitleE11, United States Code, or
any similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
A Default under clause (4), (5) or (9) is not an Event of Default
until the Trustee or the Holders of at least 25% in principal amount of the
Notes notify the Company of the Default and the Company does not cure such
Default within the time specified after receipt of such notice. Such notice must
specify the Default, demand that it be remedied and state that such notice is a
"Notice of Default".
The Company shall deliver to the Trustee, within 30 days after
the occurrence thereof, written notice in the form of an Officers' Certificate
of any Event of Default under clauseE(6) or (10) and any event which with the
giving of notice or the lapse of time would become an Event of Default under
clauseE(4), (5) or (9), its status and what action the Company is taking or
proposes to take with respect thereto.
SECTION 6.02. Acceleration. If an Event of Default (other than an
Event of Default specified in Section 6.01(7) or (8) with respect to the
Company) occurs and is continuing,
45
the Trustee by written notice to the Company, or the Holders of at least 25% in
principal amount of the Notes by written notice to the Company and the Trustee,
may declare the Accreted Value of and accrued but unpaid interest on all the
Notes to be due and payable (collectively, the "Default Amount"). Upon such a
declaration, the Default Amount shall be due and payable immediately. If an
Event of Default specified in Section 6.01(7) or (8) with respect to the Company
occurs, the Default Amount on all the Notes shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Noteholders. The Holders of a majority in principal amount of
the Notes by written notice to the Trustee may rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of
acceleration. No such rescission shall affect any subsequent Default or impair
any right consequent thereto.
SECTION 6.03. Other Remedies. If an Event of Default occurs and
is continuing, the Trustee may pursue any available remedy to collect the
payment of principal of or interest on the Notes or to enforce the performance
of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Noteholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04. Waiver of Past Defaults. The Holders of a majority
in principal amount of the Notes by written notice to the Trustee may waive an
existing Default and its consequences except (i) a Default in the payment of the
principal of or interest on a Note or (ii) a Default in respect of a provision
that under Section 9.02 cannot be amended without the consent of each Noteholder
affected. When a Default is waived, it is deemed cured, but no such waiver shall
extend to any subsequent or other Default or impair any consequent right.
SECTION 6.05. Control by Majority. The Holders of a majority in
principal amount of the Notes may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.01, that the Trustee
46
determines is unduly prejudicial to the rights of other Noteholders or would
involve the Trustee in personal liability; provided, however, that the Trustee
may take any other action deemed proper by the Trustee that is not inconsistent
with such direction. Prior to taking any action hereunder, the Trustee shall be
entitled to indemnification satisfactory to it in its sole discretion against
all losses and expenses caused by taking or not taking such action.
SECTION 6.06. Limitation on Suits. A Noteholder may not pursue
any remedy with respect to this Indenture or the Notes unless:
(1) the Holder gives to the Trustee written notice stating that
an Event of Default is continuing;
(2) the Holders of at least 25% in principal amount of the Notes
make a written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable
security or indemnity against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of security or indemnity;
and
(5) the Holders of a majority in principal amount of the Notes do
not give the Trustee a direction inconsistent with the request during
such 60-day period.
A Noteholder may not use this Indenture to prejudice the rights
of another Noteholder or to obtain a preference or priority over another
Noteholder.
SECTION 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder
to receive payment of principal of and interest on the Notes held by such
Holder, on or after the respective due dates expressed in the Notes, or to bring
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section
7.07.
47
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may
file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Noteholders allowed
in any judicial proceedings relative to the Company, its creditors or its
property and, unless prohibited by law or applicable regulations, may vote on
behalf of the Holders in any election of a trustee in bankruptcy or other Person
performing similar functions, and any Custodian in any such judicial proceeding
is hereby authorized by each Holder to make payments to the Trustee and, in the
event that the Trustee shall consent to the making of such payments directly to
the Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and its counsel, and any other amounts due the Trustee under Section 7.07.
SECTION 6.10. Priorities. If the Trustee collects any money or
property pursuant to this Article 6, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to holders of Senior Indebtedness to the extent required
by ArticleE10;
THIRD: to Noteholders for amounts due and unpaid on the Notes for
principal (or Accreted Value) and interest, ratably, without preference
or priority of any kind, according to the amounts due and payable on
the Notes for principal (or Accreted Value) and interest, respectively;
and
FOURTH: to the Company.
The Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section. At least 15Edays before such
record date, the Company shall mail or cause to be mailed to each Noteholder and
the Trustee a notice that states the record date, the payment date and amount to
be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section does not apply to a
suit by the Trustee, a suit by a Holder pursuant to
48
Section 6.07 or a suit by Holders of more than 10% in principal amount of the
Notes.
SECTION 6.12. Waiver of Stay or Extension Laws. The Company (to
the extent it may lawfully do so) shall not at any time insist upon, or plead,
or in any manner whatsoever claim or take the benefit or advantage of, any stay
or extension law wherever enacted, now or at any time hereafter in force, which
may affect the covenants or the performance of this Indenture; and the Company
(to the extent that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law, and shall not hinder, delay or impede the
execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law had been enacted.
ARTICLE 7
Trustee
SECTION 7.01. Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements
of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:
(1) this paragraph does not limit the effect of paragraphE(b) of
this Section;
49
(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 6.05.
(d) Every provision of this Indenture that in any way relates to
the Trustee is subject to paragraphsE(a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
Notwithstanding anything to the contrary contained herein, the
Trustee shall not be charged with knowledge of any default or Event of Default
(other than those under SectionsE6.01 and 6.02) unless and until a Trust Officer
receives written notice of or has actual knowledge of any such default or Event
of Default.
SECTION 7.02. Rights of Trustee. (a) The Trustee may rely on any
document believed by it to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate any fact or matter stated in
the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
the Officers' Certificate or Opinion of Counsel.
50
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Trustee's conduct does not
constitute wilful misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Notes shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.
SECTION 7.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Company or its Affiliates with the same rights it
would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar or
co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Notes, it shall not be accountable for the Company's use
of the proceeds from the Notes, and it shall not be responsible for any
statement of the Company in the Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Trustee's
certificate of authentication.
SECTION 7.05. Notice of Defaults. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
Noteholder notice of the Default within 90 days after it occurs. Except in the
case of a Default in payment of principal (or Accreted Value) of or interest on
any Note, the Trustee may withhold the notice if and so long as a committee of
its Trust Officers in good faith determines that withholding the notice is in
the interests of Noteholders.
SECTION 7.06. Reports by Trustee to Holders. As promptly as
practicable after each MayE15 beginning with the MayE15 following the date of
this Indenture, and in any event prior to JulyE15 in each year, the Trustee
shall mail to each Noteholder a brief report dated as of MayE15 that complies
with TIA ss.E313(a). The Trustee also shall comply with TIA ss.E313(b).
51
A copy of each report at the time of its mailing to Noteholders
shall be filed with the SEC and each stock exchange (if any) on which the Notes
are listed. The Company agrees to notify promptly the Trustee whenever the Notes
become listed on any stock exchange and of any delisting thereof.
SECTION 7.07. Compensation and Indemnity. The Company or the STFC
Guarantors if the Company fails to do so shall 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 or the STFC Guarantors if the Company fails to do so shall reimburse the
Trustee upon request for all reasonable out-of-pocket expenses incurred or made
by it, including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Company and each STFC Guarantors shall, jointly and severally,
indemnify the Trustee against any and all loss, liability or expense (including
attorneys' fees) incurred by it in connection with the administration of this
trust and the performance of its duties hereunder. The Trustee shall notify the
Company and the STF Guarantors promptly of any claim for which it may seek
indemnity. Failure by the Trustee to so notify the Company shall not relieve the
Company of its obligations hereunder. The Company and the STFC Guarantors shall
defend the claim and the Trustee may retain separate counsel and the Company
shall pay the reasonable fees and expenses of such counsel. The Company and the
STFC Guarantors need not reimburse any expense or indemnify against any loss,
liability or expense incurred by the Trustee through the Trustee's own wilful
misconduct, negligence or bad faith.
To secure the Company's and the STFC Guarantors' payment
obligations in this Section, the Trustee shall have a lien prior to the Notes on
all money or property held or collected by the Trustee other than money or
property held in trust to pay principal (or Accreted Value) of and interest on
particular Notes.
The Company's and the STFC Guarantors' payment obligations
pursuant to this Section shall survive the discharge of this Indenture. When the
Trustee incurs expenses after the occurrence of a Default specified in
Section 6.01(7) or (8) with respect to the Company or any STFC Guarantor, the
expenses are intended to constitute expenses of administration under the
Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. The Trustee may resign at
any time by so notifying the Company. The
52
Holders of a majority in principal amount of the Notes may remove the Trustee by
so notifying the Trustee and may appoint a successor Trustee. The Company shall
remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the
Holders of a majority in principal amount of the Notes and such Holders do not
reasonably promptly appoint a successor Trustee, or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture and the retiring Trustee shall have no further rights
powers or duties under the Indenture. The successor Trustee shall mail a notice
of its succession to Noteholders. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07.
If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee or the Holders
of 10% in principal amount of the Notes may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Noteholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust
53
business or assets to, another corporation or banking association, the
resulting, surviving or transferee corporation without any further act shall be
the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Trustee may authenticate such Notes either
in the name of any predecessor hereunder or in the name of the successor to the
Trustee; and in all such cases such certificates shall have the full force which
it is anywhere in the Notes or in this Indenture provided that the certificate
of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at
all times satisfy the requirements of TIA ss.E310(a). The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
ss.E310(b); provided, however, that there shall be excluded from the operation
of TIAEss.E310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in
TIAEss.E310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims AgainstECompany.
The Trustee shall comply with TIA ss.E311(a), excluding any creditor
relationship listed in TIA ss.E311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss.E311(a) to the extent indicated.
ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Notes; Defeasance.
(a) When (i) the Company delivers to the Trustee all outstanding Notes (other
than Notes replaced pursuant to Section 2.06) for cancellation or (ii) all
outstanding Notes have become due and payable, whether at maturity or as a
result of the mailing of a notice of redemption pursuant to ArticleE3 hereof and
the Company irrevocably deposits with the Trustee funds sufficient to pay at
maturity or upon redemption all outstanding Notes, including interest thereon to
maturity or such redemption date (other than Notes replaced pursuant to
54
Section 2.06), and if in either case the Company pays all other sums payable
hereunder by the Company, then this Indenture shall, subject to Sections
8.01(c), cease to be of further effect. The Trustee shall acknowledge
satisfaction and discharge of this Indenture on demand of the Company
accompanied by an Officers' Certificate and an Opinion of Counsel and at the
cost and expense of the Company.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any
time may terminate (i) all its obligations under the Notes and this Indenture
("legal defeasance option") or (ii) its obligations under SectionsE4.02, 4.03,
4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11 and 4.12 and the operation of
Sections 6.01(4), 6.01(6), 6.01(7) (but only with respect to Significant
Subsidiaries) and 6.01(9) ("covenant defeasance option"). The Company may
exercise its legal defeasance option notwithstanding its prior exercise of its
covenant defeasance option.
If the Company exercises its legal defeasance option, payment of
the Notes may not be accelerated because of an Event of Default. If the Company
exercises its covenant defeasance option, payment of the Notes may not be
accelerated because of an Event of Default specified in SectionsE6.01(4),
6.01(6), 6.01(7) (but only with respect to Significant Subsidiaries) or 6.01(9)
or because of the failure of the Company to comply with SectionsE5.01(a)(iii)
and (iv) or Section 5.01(b)(iii). If the Company exercises its legal defeasance
option or its covenant defeasance option, each STFC Guarantor will be released
from all of its obligations under its Guaranty.
Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.
(c) Notwithstanding clausesE(a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 7.07, 7.08, 8.04, 8.05 and
8.06 shall survive until the Notes have been paid in full. Thereafter, the
Company's obligations in Sections 7.07, 8.04 and 8.05 shall survive.
SECTION 8.02. Conditions to Defeasance. The Company may exercise
its legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee
money orEU.S. Government Obligations for the payment of principal of
and interest on the Notes to maturity or redemption, as the case may
be;
55
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and
without reinvestment on the depositedEU.S. Government Obligations plus
any deposited money without investment will provide cash at such times
and in such amounts as will be sufficient to pay principal and interest
when due on all the Notes to maturity or redemption, as the case may
be;
(3) 123Edays pass after the deposit is made and during the
123-day period no Default specified in Section 6.01(7) or (8) with
respect to the Company occurs which is continuing at the end of the
period;
(4) the deposit does not constitute a default under any other
agreement binding on the Company and is not prohibited by Article 10;
(5) the Company delivers to the Trustee an Opinion of Counsel to
the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under
the Investment Company Act of 1940;
(6) in the case of the legal defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that
(i) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (ii) since the date of this
Indenture there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the Noteholders will not recognize
income, gain or loss for Federal income tax purposes as a result of
such defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such defeasance had not occurred;
(7) in the case of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Noteholders will not recognize income, gain or loss for
Federal income tax purposes as a result of such covenant defeasance and
will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
covenant defeasance had not occurred; and
(8) the Company delivers to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
to the defeasance and discharge of the Notes as contemplated by this
Article 8 have been complied with.
56
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Notes at a future date in
accordance with Article 3.
SECTION 8.03. Application of Trust Money. The Trustee shall hold
in trust money orEU.S. Government Obligations deposited with it pursuant to this
ArticleE8. It shall apply the deposited money and the money fromEU.S. Government
Obligations through the Paying Agent and in accordance with this Indenture to
the payment of principal of and interest on the Notes. Money and securities so
held in trust are not subject to Article 10.
SECTION 8.04. Repayment to Company. The Trustee and the Paying
Agent shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and
the Paying Agent shall pay to the Company upon request any money held by them
for the payment of principal or interest that remains unclaimed for two years,
and, thereafter, Noteholders entitled to the money must look to the Company for
payment as general creditors.
SECTION 8.05. Indemnity for Government Obligations. The Company
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against depositedEU.S. Government Obligations or the
principal and interest received on suchEU.S. Government Obligations.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is
unable to apply any money orEU.S. Government Obligations in accordance with this
Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to this Article 8 until such time as the Trustee or Paying
Agent is permitted to apply all such money orEU.S. Government Obligations in
accordance with this ArticleE8; provided, however, that, if the Company has made
any payment of interest on or principal of any Notes because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money or U.S.
Government Obligations held by the Trustee or Paying Agent.
57
ARTICLE 9
Amendments
SECTION 9.01. Without Consent of Holders. The Company, the STFC
Guarantors and the Trustee may amend this Indenture or the Notes without notice
to or consent of any Noteholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Notes in addition to or in
place of certificated Notes; provided, however, that the uncertificated
Notes are issued in registered form for purposes of Section 163(f) of
the Code or in a manner such that the uncertificated Notes are
described in Section 163(f)(2)(B) of the Code;
(4) to make any change in ArticleE10 that would limit or
terminate the benefits available to any holder of Senior Indebtedness
(or Representatives therefor) under ArticleE10;
(5) to add guarantees with respect to the Notes, including any
new Subsidiary Guaranties, or to secure the Notes;
(6) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company;
(7) to comply with any requirements of the SEC in connection with
qualifying, or maintaining the qualification of this Indenture under
the TIA; or
(8) to make any change that does not adversely affect the rights
of any Noteholder.
An amendment under this Section may not make any change that
adversely affects the rights under Article 10 of any holder of Senior
Indebtedness then outstanding unless the holders of such Senior Indebtedness (or
any group or representative thereof authorized to give a consent) consent to
such change.
After an amendment under this Section becomes effective, the
Company shall mail to Noteholders a notice briefly describing such amendment.
The failure to give such notice to all Noteholders, or any defect therein, shall
not
58
impair or affect the validity of an amendment under this Section.
SECTION 9.02. With Consent of Holders. The Company, the STFC
Guarantors and the Trustee may amend this Indenture or the Notes without notice
to any Noteholder but with the written consent of the Holders of at least a
majority in principal amount of the Notes. However, without the consent of each
Noteholder affected, an amendment may not:
(1) reduce the amount of Notes whose Holders must consent to an
amendment;
(2) reduce the rate of or extend the time for payment of interest
on any Note;
(3) reduce the principal or Accreted Value of or extend the
Stated Maturity of any Note;
(4) reduce the premium payable upon the redemption of any Note or
change the time at which any Note may be redeemed in accordance with
ArticleE3;
(5) make any Note payable in money other than that stated in the
Note;
(6) make any change in Article 10 or ArticleE12 that adversely
affects the rights of any Noteholder under ArticleE10 or ArticleE12;
(7) make any change in Section 6.04 or 6.07 or the second
sentence of this Section; or
(8) make any change in any Guaranty that would adversely affect
the Noteholders.
It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
An amendment under this Section may not make any change that
adversely affects the rights under Article 10 of any holder of Senior
Indebtedness then outstanding unless the holders of such Senior Indebtedness (or
any group or representative thereof authorized to give a consent) consent to
such change.
After an amendment under this Section becomes effective, the
Company shall mail to Noteholders a notice briefly describing such amendment.
The failure to give such notice to all Noteholders, or any defect therein, shall
not
59
impair or affect the validity of an amendment under this Section.
SECTION 9.03. Compliance with Trust Indenture Act. Every
amendment to this Indenture or the Notes shall comply with the TIA as then in
effect.
SECTION 9.04. Revocation and Effect of Consents
and Waivers. A consent to an amendment or a waiver by a Holder of a Note shall
bind the Holder and every subsequent Holder of that Note or portion of the Note
that evidences the same debt as the consenting Holder's Note, even if notation
of the consent or waiver is not made on the Note. However, any such Holder or
subsequent Holder may revoke the consent or waiver as to such Holder's Note or
portion of the Note if the Trustee receives the notice of revocation before the
date the amendment or waiver becomes effective. After an amendment or waiver
becomes effective, it shall bind every Noteholder. An amendment or waiver
becomes effective upon the execution of such amendment or waiver by the Trustee.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Noteholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Noteholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than 120
days after such record date.
SECTION 9.05. Notation on or Exchange of Notes. If an amendment
changes the terms of a Note, the Trustee may require the Holder of the Note to
deliver it to the Trustee. The Trustee may place an appropriate notation on the
Note regarding the changed terms and return it to the Holder. Alternatively, if
the Company or the Trustee so determines, the Company in exchange for the Note
shall issue and the Trustee shall authenticate a new Note that reflects the
changed terms. Failure to make the appropriate notation or to issue a new Note
shall not affect the validity of such amendment.
SECTION 9.06. Trustee To Sign Amendments. The Trustee shall sign
any amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive
60
indemnity reasonably satisfactory to it and to receive, and (subject to Section
7.01) shall be fully protected in relying upon, an Officers' Certificate and an
Opinion of Counsel stating that such amendment is authorized or permitted by
this Indenture and that such amendment constitutes the legal, valid and binding
obligation of the Company and each STFC Guarantor subject to the customary
exceptions.
SECTION 9.07. Payment for Consent. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Notes unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
ARTICLE 10
Subordination of the Notes
SECTION 10.01. Agreement To Subordinate. The Company agrees, and
each Noteholder by accepting a Note agrees, that the Indebtedness evidenced by
the Notes is subordinated in right of payment, to the extent and in the manner
provided in this Article 10, to the prior payment of all Senior Indebtedness of
the Company and that the subordination is for the benefit of and enforceable by
the holders of such Senior Indebtedness. The Notes shall in all respects rank
pari passu with all other Senior Subordinated Indebtedness of the Company and
only Indebtedness of the Company which is Senior Indebtedness shall rank senior
to the Notes in accordance with the provisions set forth herein. All provisions
of this ArticleE10 shall be subject to Section 10.12.
SECTION 10.02. Liquidation, Dissolution, Bankruptcy. Upon any
payment or distribution of the assets of the Company to creditors upon a total
or partial liquidation or a total or partial dissolution of the Company or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or its property:
(1) holders of Senior Indebtedness of the Company shall be
entitled to receive payment in full of such Senior Indebtedness in cash
or cash equivalents before Noteholders shall be entitled to receive any
payment of principal of or interest on the Notes; and
61
(2) until such Senior Indebtedness is paid in full in cash or
cash equivalents, any distribution to which Noteholders would be
entitled but for this Article 10 shall be made to holders of such
Senior Indebtedness as their interests may appear, except that
Noteholders may receive shares of stock and any debt securities that
are subordinated to such Senior Indebtedness, and to any debt
securities received by holders of such Senior Indebtedness, to at least
the same extent as the Notes are subordinated to Senior Indebtedness of
the Company.
SECTION 10.03. Default on Senior Indebtedness of the Company. The
Company may not pay the principal of or premium, if any, or interest on the
Notes or make any deposit pursuant to Section 8.01 and may not repurchase,
redeem or otherwise retire or defease any Notes (collectively, "pay the Notes")
if (i) any Designated Senior Indebtedness is not paid when due or (ii) any other
default on Designated Senior Indebtedness occurs and the maturity of such
Designated Senior Indebtedness is accelerated in accordance with its terms
unless, in either case, (x) the default has been cured or waived and any such
acceleration has been rescinded or (y) such Designated Senior Indebtedness has
been paid in full; provided, however, that the Company may pay the Notes without
regard to the foregoing if the Company and the Trustee receive written notice
approving such payment from the Representatives of the Designated Senior
Indebtedness. During the continuance of any default (other than a default
described in clause (i) or (ii) of the preceding sentence) with respect to any
Designated Senior Indebtedness pursuant to which the maturity thereof may be
accelerated immediately without further notice (except such notice as may be
required to effect such acceleration) or the expiration of any applicable grace
periods, the Company may not pay the Notes for a period (a "Payment Blockage
Period") commencing upon the receipt by the Company and the Trustee of written
notice (a "Blockage Notice") of such default from the Representative of such
Designated Senior Indebtedness specifying an election to effect a Payment
Blockage Period and ending 179Edays thereafter (or earlier if such Payment
Blockage Period is terminated (i) by written notice to the Trustee and the
Company from the Person or Persons who gave such Blockage Notice, (ii) by
repayment in full of such Designated Senior Indebtedness or (iii) because the
default giving rise to such Blockage Notice is no longer continuing).
Notwithstanding the provisions described in the immediately preceding sentence
(but subject to the provisions contained in the first sentence of this Section),
unless the holders of such Designated Senior Indebtedness or the Representative
of such holders shall have accelerated the maturity of such Designated Senior
Indebtedness, the Company may resume payments on the Notes after such Payment
Blockage Period. Not more than one Blockage Notice may be given in any
consecutive 360-day
62
period, irrespective of the number of defaults with respect to Designated Senior
Indebtedness during such period; provided, however, that if any Blockage Notice
within such 360-day period is given by or on behalf of any holders of Designated
Senior Indebtedness (other than the Bank Indebtedness), the Representative of
the Bank Indebtedness may give another Blockage Notice within such period;
provided further, however, that in no event may the total number of days during
which any Payment Blockage Period or Periods is in effect exceed 179Edays in the
aggregate during any 360 consecutive day period. For purposes of this Section,
no default or event of default which existed or was continuing on the date of
the commencement of any Payment Blockage Period with respect to the Designated
Senior Indebtedness initiating such Payment Blockage Period shall be, or be
made, the basis of the commencement of a subsequent Payment Blockage Period by
the Representative of such Designated Senior Indebtedness, whether or not within
a period of 360 consecutive days, unless such default or event of default shall
have been cured or waived for a period of not less than 90 consecutive days.
SECTION 10.04. Acceleration of Payment of Notes. If payment of
the Notes is accelerated because of an Event of Default, the Company or the
Trustee shall promptly notify the Representative for the holders of the
Designated Senior Indebtedness by written notice to the address set forth in
Section 13.02 hereof or at any other address specified in writing to the Trustee
from time to time.
SECTION 10.05. When Distribution Must Be Paid Over. If a
distribution is made to Noteholders that because of this Article 10 should not
have been made to them, the Noteholders who receive the distribution shall hold
it in trust for holders of Senior Indebtedness of the Company and pay it over to
them or their Representatives as their interests may appear.
SECTION 10.06. Subrogation. After all Senior Indebtedness of the
Company is paid in full and until the Notes are paid in full, Noteholders shall
be subrogated to the rights of holders of such Senior Indebtedness to receive
distributions applicable to such Senior Indebtedness. A distribution made under
this Article 10 to holders of such Senior Indebtedness which otherwise would
have been made to Noteholders is not, as between the Company and Noteholders, a
payment by the Company on such Senior Indebtedness.
SECTION 10.07. Relative Rights. This Article 10 defines the
relative rights of Noteholders and holders of Senior Indebtedness of the
Company. Nothing in this Indenture shall:
63
(1) impair, as between the Company and Noteholders, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Notes in accordance with their terms;
or
(2) prevent the Trustee or any Noteholder from exercising its
available remedies upon a Default, subject to the rights of holders of
Senior Indebtedness of the Company to receive distributions otherwise
payable to Noteholders.
SECTION 10.08. Subordination May Not Be Impaired by Company. No
right of any holder of Senior Indebtedness of the Company to enforce the
subordination of the Indebtedness evidenced by the Notes shall be impaired by
any act or failure to act by the Company or by its failure to comply with this
Indenture.
SECTION 10.09. Rights of Trustee and Paying Agent.
Notwithstanding Section 10.03, the Trustee or Paying Agent may continue to make
payments on the Notes and shall not be charged with knowledge of the existence
of facts that would prohibit the making of any such payments unless, not less
than two Business Days prior to the date of such payment, a Trust Officer of the
Trustee receives written notice satisfactory to it that payments may not be made
under this Article 10. The Company, the Registrar or co-registrar, the Paying
Agent, a Representative or a holder of Senior Indebtedness of the Company may
give the notice; provided, however, that, if an issue of Senior Indebtedness of
the Company has a Representative, only the Representative may give the notice.
The Trustee in its individual or any other capacity may hold
Senior Indebtedness of the Company with the same rights it would have if it were
not Trustee. The Registrar and co-registrar and the Paying Agent may do the same
with like rights. The Trustee shall be entitled to all the rights set forth in
this Article 10 with respect to any such Senior Indebtedness which may at any
time be held by it, to the same extent as any other holder of such Senior
Indebtedness; and nothing in Article 7 shall deprive the Trustee of any of its
rights as such holder. Nothing in this Article 10 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 7.07.
SECTION 10.10. Distribution or Notice to Representative. Whenever
a distribution is to be made or a notice given to holders of Senior Indebtedness
of the Company, the distribution may be made and the notice given to their
Representative (if any).
SECTION 10.11. ArticleE10 Not To Prevent Events of Default or
Limit Right To Accelerate. The failure to make a payment pursuant to the Notes
by reason of any provision in
64
this Article 10 shall not be construed as preventing the occurrence of a
Default. Nothing in this Article 10 shall have any effect on the right of the
Noteholders or the Trustee to accelerate the maturity of the Notes.
SECTION 10.12. Trust Moneys Not Subordinated. Notwithstanding
anything contained herein to the contrary, payments from money or the proceeds
ofEU.S. Government Obligations held in trust under Article 8 by the Trustee for
the payment of principal of and interest on the Notes shall not be subordinated
to the prior payment of any Senior Indebtedness of the Company or subject to the
restrictions set forth in this Article 10, and none of the Noteholders shall be
obligated to pay over any such amount to the Company or any holder of Senior
Indebtedness of the Company or any other creditor of the Company.
SECTION 10.13. Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article 10, the Trustee and the Noteholders shall
be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 10.02
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Noteholders or (iii) upon the Representatives for the holders of Senior
Indebtedness of the Company for the purpose of ascertaining the Persons entitled
to participate in such payment or distribution, the holders of such Senior
Indebtedness and other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article 10. In the event that the Trustee
determines, in good faith, that evidence is required with respect to the right
of any Person as a holder of Senior Indebtedness of the Company to participate
in any payment or distribution pursuant to this Article 10, the Trustee may
request such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of such Senior Indebtedness held by such Person, the
extent to which such Person is entitled to participate in such payment or
distribution and other facts pertinent to the rights of such Person under this
ArticleE10, and, if such evidence is not furnished, the Trustee may defer any
payment to such Person pending judicial determination as to the right of such
Person to receive such payment. The provisions of Sections 7.01 and 7.02 shall
be applicable to all actions or omissions of actions by the Trustee pursuant to
this Article 10.
SECTION 10.14. Trustee To Effectuate Subordination. Each
Noteholder by accepting a Note authorizes and directs the Trustee on his behalf
to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination
65
between the Noteholders and the holders of Senior Indebtedness of the Company as
provided in this Article 10 and appoints the Trustee as attorney-in-fact for any
and all such purposes.
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness of the Company and shall not be liable to any
such holders if it shall mistakenly pay over or distribute to Noteholders or the
Company or any other Person, money or assets to which any holders of such Senior
Indebtedness shall be entitled by virtue of this Article 10 or otherwise.
SECTION 10.16. Reliance by Holders of Senior Indebtedness on
Subordination Provisions. Each Noteholder by accepting a Note acknowledges and
agrees that the foregoing subordination provisions are, and are intended to be,
an inducement and a consideration to each holder of any Senior Indebtedness of
the Company, whether such Senior Indebtedness was created or acquired before or
after the issuance of the Notes, to acquire and continue to hold, or to continue
to hold, such Senior Indebtedness and such holder of such Senior Indebtedness
shall be deemed conclusively to have relied on such subordination provisions in
acquiring and continuing to hold, or in continuing to hold, such Senior
Indebtedness.
ARTICLE 11
Guaranties
SECTION 11.01. Guaranties. Each STFC Guarantor hereby
unconditionally and irrevocably guarantees, jointly and severally, to each
Holder and to the Trustee and its successors and assigns (a) the full and
punctual payment of principal or Accreted Value of and interest on the Notes
when due, whether at maturity, by acceleration, by redemption or otherwise, and
all other monetary obligations of the Company under this Indenture and the Notes
and (b) the full and punctual performance within applicable grace periods of all
other obligations of the Company under this Indenture and the Notes (all the
foregoing being hereinafter collectively called the "Obligations"). Each STFC
Guarantor further agrees that the Obligations may be extended or renewed, in
whole or in part, without notice or further assent from such STFC Guarantor and
that such STFC Guarantor will remain bound under this ArticleE11 notwithstanding
any extension or renewal of any Obligation.
Each STFC Guarantor waives presentation to, demand of, payment
from and protest to the Company of any of the Obligations and also waives notice
of protest for nonpayment. Each STFC Guarantor waives notice of any default
under the
66
Notes or the Obligations. The obligations of each STFC Guarantor hereunder shall
not be affected by (a) the failure of any Holder or the Trustee to assert any
claim or demand or to enforce any right or remedy against the Company or any
other Person under this Indenture, the Notes or any other agreement or
otherwise; (b) any extension or renewal of any thereof; (c) any rescission,
waiver, amendment or modification of any of the terms or provisions of this
Indenture, the Notes or any other agreement; (d) the release of any security
held by any Holder or the Trustee for the Obligations or any of them; (e) the
failure of any Holder or Trustee to exercise any right or remedy against any
other guarantor of the Obligations; or (f) any change in the ownership of such
STFC Guarantor.
Each STFC Guarantor further agrees that its Guarantee herein
constitutes a guarantee of payment, performance and compliance when due (and not
a guarantee of collection) and waives any right to require that any resort be
had by any Holder or the Trustee to any security held for payment of the
Obligations.
Each Guaranty is, to the extent and in the manner set forth in
ArticleE12, subordinated and subject in right of payment to the prior payment in
full of the principal of and premium, if any, and interest on all Senior
Indebtedness of the STFC Guarantor giving such Guaranty and each Guaranty is
made subject to such provisions of this Indenture.
Except as expressly set forth in SectionsE8.01(b), 11.02 and
11.06, the obligations of each STFC Guarantor hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason, including
any claim of waiver, release, surrender, alteration or compromise, and shall not
be subject to any defense of setoff, counterclaim, recoupment or termination
whatsoever or by reason of the invalidity, illegality or unenforceability of the
Obligations or otherwise. Without limiting the generality of the foregoing, the
obligations of each STFC Guarantor herein shall not be discharged or impaired or
otherwise affected by the failure of any Holder or the Trustee to assert any
claim or demand or to enforce any remedy under this Indenture, the Notes or any
other agreement, by any waiver or modification of any thereof, by any default,
failure or delay, willful or otherwise, in the performance of the obligations,
or by any other act or thing or omission or delay to do any other act or thing
which may or might in any manner or to any extent vary the risk of such STFC
Guarantor or would otherwise operate as a discharge of such STFC Guarantor as a
matter of law or equity.
Each STFC Guarantor further agrees that its Guarantee herein
shall continue to be effective or be
67
reinstated, as the case may be, if at any time payment, or any part thereof, of
principal or Accreted Value of or interest on any Obligation is rescinded or
must otherwise be restored by any Holder or the Trustee upon the bankruptcy or
reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any
other right which any Holder or the Trustee has at law or in equity against any
STFC Guarantor by virtue hereof, upon the failure of the Company to pay the
principal or Accreted Value of or interest on any Obligation when and as the
same shall become due, whether at maturity, by acceleration, by redemption or
otherwise, or to perform or comply with any other Obligation, each STFC
Guarantor hereby promises to and will, upon receipt of written demand by the
Trustee, forthwith pay, or cause to be paid, in cash, to the Holders or the
Trustee an amount equal to the sum of (i) the unpaid amount of such Obligations,
(ii) accrued and unpaid interest on such Obligations (but only to the extent not
prohibited by law) and (iii) all other monetary Obligations of the Company to
the Holders and the Trustee.
Each STFC Guarantor agrees that it shall not be entitled to any
right of subrogation in respect of any Obligations guaranteed hereby until
payment in full of all Obligations and all obligations to which the Obligations
are subordinated as provided in ArticleE12. Each STFC Guarantor further agrees
that, as between it, on the one hand, and the Holders and the Trustee, on the
other hand, (x) the maturity of the Obligations Guaranteed hereby may be
accelerated as provided in Article 6 for the purposes of such STFC Guarantor's
Guarantee herein, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the Obligations guaranteed hereby,
and (y) in the event of any declaration of acceleration of such obligations as
provided in ArticleE6, such Obligations (whether or not due and payable) shall
forthwith become due and payable by such STFC Guarantor for the purposes of this
Section.
Each STFC Guarantor also agrees to pay any and all costs and
expenses (including reasonable attorneys' fees) incurred by the Trustee or any
Holder in enforcing any rights under this Section.
SECTION 11.02. Limitation on Liability. Any term or provision of
this Indenture to the contrary notwithstanding, the maximum, aggregate amount of
the obligations guaranteed hereunder by any Subsidiary Guarantor shall not
exceed the maximum amount that can be hereby guaranteed without rendering this
Indenture, as it relates to such Subsidiary Guarantor, voidable under applicable
law relating to fraudulent conveyance or fraudulent transfer or
68
similar laws affecting the rights of creditors generally (taking into account,
for purposes of such determination, the full amount, without any reduction, of
such STFC Guarantor's liability under its guarantee of Bank Indebtedness or any
other guarantee of Senior Indebtedness).
SECTION 11.03. Successors and Assigns. This ArticleE11 shall be
binding upon each STFC Guarantor and its successors and assigns and shall enure
to the benefit of the successors and assigns of the Trustee and the Holders and,
in the event of any transfer or assignment of rights by any Holder or the
Trustee, the rights and privileges conferred upon that party in this Indenture
and in the Notes shall automatically extend to and be vested in such transferee
or assignee, all subject to the terms and conditions of this Indenture.
SECTION 11.04. No Waiver. Neither a failure nor a delay on the
part of either the Trustee or the Holders in exercising any right, power or
privilege under this Article 11 shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise of any
right, power or privilege. The rights, remedies and benefits of the Trustee and
the Holders herein expressly specified are cumulative and not exclusive of any
other rights, remedies or benefits which either may have under this Article 11
at law, in equity, by statute or otherwise.
SECTION 11.05. Modification. No modification, amendment or waiver
of any provision of this ArticleE11, nor the consent to any departure by any
STFC Guarantor therefrom, shall in any event be effective unless the same shall
be in writing and signed by the Trustee, and then such waiver or consent shall
be effective only in the specific instance and for the purpose for which given.
No notice to or demand on any STFC Guarantor in any case shall entitle such STFC
Guarantor to any other or further notice or demand in the same, similar or other
circumstances.
SECTION 11.06. Release of Subsidiary Guarantor. Upon the sale
(including any sale pursuant to any exercise of remedies by a holder of Senior
Indebtedness) or other disposition (including by way of consolidation or merger)
of a Subsidiary Guarantor, or the sale or disposition of all or substantially
all the assets of such Subsidiary Guarantor (in each case other than to the
Company or an Affiliate of the Company), such Subsidiary Guarantor shall be
deemed released from all obligations under this ArticleE11 without any further
action required on the part of the Trustee or any Holder. At the request of the
Company, the Trustee shall execute and deliver an appropriate instrument
evidencing such release.
69
ARTICLE 12
Subordination of STFC Guaranties
SECTION 12.01. Agreement To Subordinate. Each STFC Guarantor
agrees, and each Noteholder by accepting a Note agrees, that the Obligations of
such STFC Guarantor are subordinated in right of payment, to the extent and in
the manner provided in this Article 12, to the prior payment of all Senior
Indebtedness of such STFC Guarantor and that the subordination is for the
benefit of and enforceable by the holders of such Senior Indebtedness. The
Obligations of an STFC Guarantor shall in all respects rank pari passu with all
other Senior Subordinated Indebtedness of such STFC Guarantor and only Senior
Indebtedness of such STFC Guarantor (including such STFC Guarantor's Guarantee
of Senior Indebtedness of the Company) shall rank senior to the Obligations of
such STFC Guarantor in accordance with the provisions set forth herein.
SECTION 12.02. Liquidation, Dissolution, Bankruptcy. Upon any
payment or distribution of the assets of any STFC Guarantor to creditors upon a
total or partial liquidation or a total or partial dissolution of such STFC
Guarantor or in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to such STFC Guarantor or its property:
(1) holders of Senior Indebtedness of such STFC Guarantor shall
be entitled to receive payment in full of such Senior Indebtedness in
cash or cash equivalents before Noteholders shall be entitled to
receive any payment pursuant to any Obligations of such STFC Guarantor;
and
(2) until the Senior Indebtedness of any STFC Guarantor is paid
in full in cash or cash equivalents, any distribution to which
Noteholders would be entitled but for this Article 12 shall be made to
holders of such Senior Indebtedness as their interests may appear,
except that Noteholders may receive shares of stock and any debt
securities of such STFC Guarantor that are subordinated to Senior
Indebtedness, and to any debt securities received by holders of Senior
Indebtedness, of such STFC Guarantor to at least the same extent as the
Obligations of such STFC Guarantor are subordinated to Senior
Indebtedness of such STFC Guarantor.
SECTION 12.03. Default on Senior Indebtedness of STFC Guarantor.
No STFC Guarantor may make any payment pursuant to any of its Obligations or
repurchase, redeem or otherwise retire or defease any Notes or other Obligations
(collectively, "pay its Guaranty") if (i) any Designated Senior Indebtedness of
the Company is not paid when due or (ii) any other default on Designated Senior
Indebtedness of
70
the Company occurs and the maturity of such Designated Senior Indebtedness is
accelerated in accordance with its terms unless, in either case, (x) the default
has been cured or waived and any such acceleration has been rescinded or
(y) such Designated Senior Indebtedness has been paid in full; provided,
however, that any STFC Guarantor may pay its Guaranty without regard to the
foregoing if such STFC Guarantor and the Trustee receive written notice
approving such payment from the Representatives of the Designated Senior
Indebtedness. No STFC Guarantor may pay its Guaranty during the continuance of
any Payment Blockage Period after receipt by the Company and the Trustee of a
Payment Notice under Section 10.03. Notwithstanding the provisions described in
the immediately preceding sentence (but subject to the provisions contained in
the first sentence of this Section), unless the holders of Designated Senior
Indebtedness giving such Payment Notice or the Representative of such holders
shall have accelerated the maturity of such Designated Senior Indebtedness, any
STFC Guarantor may resume payments pursuant to its Obligations after such
Payment Blockage Period.
SECTION 12.04. Demand for Payment. If a demand for payment is
made on an STFC Guarantor pursuant to ArticleE11, the Trustee shall promptly
notify the holders of the Designated Senior Indebtedness (or their
Representatives) of such demand.
SECTION 12.05. When Distribution Must Be Paid Over. If a
distribution is made to Noteholders that because of this Article 12 should not
have been made to them, the Noteholders who receive the distribution shall hold
it in trust for holders of the relevant Senior Indebtedness and pay it over to
them or their Representatives as their interests may appear.
SECTION 12.06. Subrogation. After all Senior Indebtedness of an
STFC Guarantor is paid in full and until the Notes are paid in full, Noteholders
shall be subrogated to the rights of holders of such Senior Indebtedness to
receive distributions applicable to Senior Indebtedness. A distribution made
under this Article 12 to holders of such Senior Indebtedness which otherwise
would have been made to Noteholders is not, as between the relevant STFC
Guarantor and Noteholders, a payment by such STFC Guarantor on such Senior
Indebtedness.
SECTION 12.07. Relative Rights. This Article 12 defines the
relative rights of Noteholders and holders of Senior Indebtedness of an STFC
Guarantor. Nothing in this Indenture shall:
(1) impair, as between an STFC Guarantor and Noteholders, the
obligation of such STFC Guarantor, which is
71
absolute and unconditional, to pay its Obligations to the extent set
forth in ArticleE11 or the relevant Guaranty; or
(2) prevent the Trustee or any Noteholder from exercising its
available remedies upon a default by such STFC Guarantor under its
Obligations, subject to the rights of holders of Senior Indebtedness of
such STFC Guarantor to receive distributions otherwise payable to
Noteholders.
SECTION 12.08. Subordination May Not Be Impaired by Company. No
right of any holder of Senior Indebtedness of any STFC Guarantor to enforce the
subordination of the Obligations of such STFC Guarantor shall be impaired by any
act or failure to act by such STFC Guarantor or by its failure to comply with
this Indenture.
SECTION 12.09. Rights of Trustee and Paying Agent.
Notwithstanding Section 12.03, the Trustee or Paying Agent may continue to make
payments on any Guaranty and shall not be charged with knowledge of the
existence of facts that would prohibit the making of any such payments unless,
not less than two Business Days prior to the date of such payment, a Trust
Officer of the Trustee receives written notice satisfactory to it that payments
may not be made under this Article 12. The Company, the relevant STFC Guarantor,
the Registrar or co-registrar, the Paying Agent, a Representative or a holder of
Senior Indebtedness of any STFC Guarantor may give the notice; provided,
however, that, if an issue of Senior Indebtedness of any STFC Guarantor has a
Representative, only the Representative may give the notice.
The Trustee in its individual or any other capacity may hold
Senior Indebtedness with the same rights it would have if it were not Trustee.
The Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article 12 with respect to any Senior Indebtedness of any STFC Guarantor which
may at any time be held by it, to the same extent as any other holder of Senior
Indebtedness; and nothing in Article 7 shall deprive the Trustee of any of its
rights as such holder. Nothing in this Article 12 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 7.07.
SECTION 12.10. Distribution or Notice to Representative. Whenever
a distribution is to be made or a notice given to holders of Senior Indebtedness
of any STFC Guarantor, the distribution may be made and the notice given to
their Representative (if any).
SECTION 12.11. ArticleE12 Not To Prevent Defaults Under a
Guaranty or Limit Right To Demand Payment. The failure to make a payment
pursuant to a Guaranty by reason of
72
any provision in this Article 12 shall not be construed as preventing the
occurrence of a default under such Guaranty. Nothing in this Article 12 shall
have any effect on the right of the Noteholders or the Trustee to make a demand
for payment on any STFC Guarantor pursuant to ArticleE11 or the relevant
Guaranty.
SECTION 12.12. Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article 12, the Trustee and the Noteholders shall
be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 12.02
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Noteholders or (iii) upon the Representatives for the holders of Senior
Indebtedness of any STFC Guarantor for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of such
Senior Indebtedness and other indebtedness of such STFC Guarantor, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article 12. In the event that
the Trustee determines, in good faith, that evidence is required with respect to
the right of any Person as a holder of Senior Indebtedness of any STFC Guarantor
to participate in any payment or distribution pursuant to this Article 12, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness of such STFC
Guarantor held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and other facts pertinent to the
rights of such Person under this ArticleE12, and, if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment. The
provisions of Sections 7.01 and 7.02 shall be applicable to all actions or
omissions of actions by the Trustee pursuant to this Article 12.
SECTION 12.13. Trustee To Effectuate Subordination. Each
Noteholder by accepting a Note authorizes and directs the Trustee on his behalf
to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Noteholders and the holders of Senior
Indebtedness of any STFC Guarantor as provided in this Article 12 and appoints
the Trustee as attorney-in-fact for any and all such purposes.
SECTION 12.14. Trustee Not Fiduciary for Holders of Senior
Indebtedness of STFC Guarantor. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness of any STFC Guarantor and
shall not be liable to
73
any such holders if it shall mistakenly pay over or distribute to Noteholders or
the Company or any other Person, money or assets to which any holders of such
Senior Indebtedness shall be entitled by virtue of this Article 12 or otherwise.
SECTION 12.15. Reliance by Holders of Senior Guarantor Debt on
Subordination Provisions. Each Noteholder by accepting a Note acknowledges and
agrees that the foregoing subordination provisions are, and are intended to be,
an inducement and a consideration to each holder of any Senior Indebtedness of
any STFC Guarantor, whether such Senior Indebtedness was created or acquired
before or after the issuance of the Notes, to acquire and continue to hold, or
to continue to hold, such Senior Indebtedness and such holder of Senior
Indebtedness shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Senior Indebtedness.
ARTICLE 13
Miscellaneous
SECTION 13.01. Trust Indenture Act Controls. If any provision of
this Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 13.02. Notices. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:
if to the Company or any STFC Guarantor:
Shared Technologies Fairchild Corp.
100 Great Meadow Road
Wethersfield, Connecticut 06109
Attention: KennethEM. Dorros
Senior Vice President, General
Counsel and Secretary
if to the Trustee:
United States Trust Company of New York
114 West 47th Street
New York, New York 10036
Attention: RobertEF. Lee
Corporate Trust Administration
74
if to the Representative of the Designated Senior Indebtedness:
Credit Suisse
Tower 49
12EEast 49th Street
New York, New York 10017
Attention: Lisa Perrotto
Agency Group
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Noteholder shall be
mailed to the Noteholder at the Noteholder's address as it appears on the
registration books of the Registrar and shall be sufficiently given if so mailed
within the time prescribed.
Failure to mail a notice or communication to a Noteholder or any
defect in it shall not affect its sufficiency with respect to other Noteholders.
If a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
SECTION 13.03. Communication by Holders with Other Holders.
Noteholders may communicate pursuant to TIA ss. 312(b) with other Noteholders
with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA ss.
312(c).
SECTION 13.04. Certificate and Opinion as to Conditions
Precedent. Upon any request or application by the Company to the Trustee to take
or refrain from taking any action under this Indenture, the Company shall
furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
75
SECTION 13.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a covenant or
condition provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 13.06. When Notes Disregarded. In determining whether the
Holders of the required principal amount of Notes have concurred in any
direction, waiver or consent, Notes owned by the Company or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes which the Trustee receives an Officer's Certificate certifying that such
Notes are so owned shall be so disregarded. Also, subject to the foregoing, only
Notes outstanding at the time shall be considered in any such determination.
SECTION 13.07. Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by or a meeting of Noteholders. The
Registrar and the Paying Agent may make reasonable rules for their functions.
SECTION 13.08. Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or a day on which banking institutions are not required to be open in the
State of New York. If a payment date is a Legal Holiday, payment shall be made
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period. If a regular record date is a Legal Holiday,
the record date shall not be affected.
SECTION 13.09. Governing Law. This Indenture and the Notes shall
be governed by, and construed in accordance with, the laws of the State of
New York but without giving
76
effect to applicable principles of conflicts of law to the extent that the
application of the laws of another jurisdiction would be required thereby.
SECTION 13.10. No Recourse Against Others. A director, officer,
employee or stockholder, as such, of the Company or any STFC Guarantor shall not
have any liability for any obligations of the Company under the Notes or this
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Note, each Noteholder shall waive
and release all such liability. The waiver and release shall be part of the
consideration for the issue of the Notes.
SECTION 13.11. Successors. All agreements of the Company and the
STFC Guarantors in this Indenture and the Notes and Guaranties shall bind its
successors. All agreements of the Trustee in this Indenture shall bind its
successors.
SECTION 13.12. Multiple Originals. The parties may sign any
number of copies of this Indenture. Each signed copy shall be an original, but
all of them together represent the same agreement. One signed copy is enough to
prove this Indenture.
SECTION 13.13. Table of Contents; Headings. The table of
contents, cross-reference sheet and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not
intended to be considered a part hereof and shall not modify or restrict any of
the terms or provisions hereof.
IN WITNESS WHEREOF, the parties have caused this Indenture to be
duly executed as of the date first written above.
SHARED TECHNOLOGIES FAIRCHILD
COMMUNICATIONSECORP.,
by: /s/ Vincent DiVincenzo
------------------------
Name: Vincent DiVincenzo
Title: Treasurer
SHARED TECHNOLOGIES INC.,
as Guarantor,
by: /s/ Vincent DiVincenzo
------------------------
Name: Vincent DiVincenzo
Title: Treasurer
77
MULTI-TENANT SERVICES, INC.,
as Guarantor,
by: /s/ Vincent DiVincenzo
------------------------
Name: Vincent DiVincenzo
Title: Treasurer
BOSTON TELECOMMUNICATIONS
GROUP, INC.,
as Guarantor,
by: /s/ Vincent DiVincenzo
------------------------
Name: Vincent DiVincenzo
Title: Treasurer
OFFICE TELEPHONE MANAGEMENT,
as Guarantor,
by: /s/ Vincent DiVincenzo
------------------------
Name: Vincent DiVincenzo
Title: Treasurer
STI INTERNATIONAL, INC.,
as Guarantor,
by: /s/ Vincent DiVincenzo
------------------------
Name: Vincent DiVincenzo
Title: Treasurer
UNITED STATES TRUST COMPANY OF
NEW YORK,
by: /s/ Gerard V. Ganey
------------------------
Name: Gerard V. Ganey
Title: Senior Vice President