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Exhibit 4.7
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PRIMEDIA Inc.
and the Guarantors listed herein
8 7/8% Senior Notes due 2011
Series A and Series B
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INDENTURE
Dated as of May 8, 2001
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THE BANK OF NEW YORK
Trustee
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TABLE OF CONTENTS
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PAGE
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ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE.............................................1
Section 1.01. Definitions.............................................................1
Section 1.02. Other Definitions......................................................20
Section 1.03. Incorporation by Reference of Trust Indenture Act......................20
Section 1.04. Rules of Construction..................................................20
ARTICLE 2 THE SECURITIES........................................................................21
Section 2.01. Additional Securities; Form and Dating.................................21
Section 2.02. Execution and Authentication...........................................22
Section 2.03. Registrar and Paying Agent.............................................23
Section 2.04. Paying Agent to Hold Money in Trust....................................23
Section 2.05. Holder Lists...........................................................23
Section 2.06. Transfer and Exchange..................................................24
Section 2.07. Replacement Securities.................................................36
Section 2.08. Outstanding Securities.................................................36
Section 2.09. Treasury securities....................................................37
Section 2.10. Temporary Securities...................................................37
Section 2.11. Cancellation...........................................................37
Section 2.12. Defaulted Interest.....................................................37
Section 2.13. CUSIP Numbers..........................................................38
ARTICLE 3 OPTIONAL REDEMPTION AND OPTIONAL REDEMPTION UPON CHANGE OF CONTROL....................38
Section 3.01. Notices to Trustee.....................................................38
Section 3.02. Selection of Securities to Be Redeemed.................................38
Section 3.03. Notices to Holders.....................................................39
Section 3.04. Effect of Notice of Redemption.........................................39
Section 3.05. Deposit of Redemption Price or Purchase Price..........................40
Section 3.06. Securities Redeemed in Part............................................40
Section 3.07. Optional Redemption....................................................40
Section 3.08. Optional Redemption Upon Change of Control.............................41
Section 3.09. Sinking Fund...........................................................41
ARTICLE 4 COVENANTS.............................................................................42
Section 4.01. Payment of Securities..................................................42
Section 4.02. Maintenance of Office or Agency........................................42
Section 4.03. SEC Reports; Financial Statements......................................42
Section 4.04. Compliance Certificate.................................................43
Section 4.05. Compliance with Laws, Taxes............................................44
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Section 4.06. Stay, Extension and Usury Laws.........................................44
Section 4.07. Limitations on Restricted Payments.....................................44
Section 4.08. Dividends and Payment Restrictions Affecting Restricted Subsidiaries...48
Section 4.09. Incurrence of Indebtedness.............................................49
Section 4.10. Change of Control......................................................51
Section 4.11. Limitations on Asset Sales.............................................53
Section 4.12. Transactions with Affiliates...........................................54
Section 4.13. Limitations on Liens...................................................55
Section 4.14. Investments in Unrestricted Subsidiaries...............................55
Section 4.15. Payments for Consent...................................................57
Section 4.16. Corporate Existence....................................................57
Section 4.17. Rule 144A Information Requirement......................................58
ARTICLE 5 SUCCESSORS............................................................................58
Section 5.01. Merger, Consolidation, or Sale of Assets...............................58
Section 5.02. Successor Corporation Substituted......................................58
ARTICLE 6 DEFAULTS AND REMEDIES.................................................................59
Section 6.01. Events of Default......................................................59
Section 6.02. Acceleration...........................................................61
Section 6.03. Other Remedies.........................................................61
Section 6.04. Waiver of Past Defaults................................................61
Section 6.05. Control by Majority....................................................62
Section 6.06. Limitations on Suits...................................................62
Section 6.07. Rights of Holders to Receive Payment...................................62
Section 6.08. Collection Suit by Trustee.............................................63
Section 6.09. Trustee May File Proofs of Claim.......................................63
Section 6.10. Priorities.............................................................63
Section 6.11. Undertaking for Costs..................................................64
ARTICLE 7 TRUSTEE...............................................................................64
Section 7.01. Duties of Trustee......................................................64
Section 7.02. Rights of Trustee......................................................65
Section 7.03. Individual Rights of Trustee...........................................66
Section 7.04. Trustee's Disclaimer...................................................66
Section 7.05. Notice of Defaults.....................................................66
Section 7.06. Reports by Trustee to Holders..........................................66
Section 7.07. Compensation and Indemnity.............................................66
Section 7.08. Replacement of Trustee.................................................67
Section 7.09. Successor Trustee by Merger, etc.......................................68
Section 7.10. Eligibility; Disqualification..........................................68
Section 7.11. Preferential Collection of Claims Against Company......................69
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ARTICLE 8 LEGAL AND COVENANT DEFEASANCE.........................................................69
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance...............69
Section 8.02. Legal Defeasance and Discharge.........................................69
Section 8.03. Covenant Defeasance....................................................69
Section 8.04. Conditions to Legal or Covenant Defeasance.............................70
Section 8.05. Deposited Money and Government Securities to be Held in Trust; Other
Miscellaneous Provisions...............................................71
Section 8.06. Repayment to Company...................................................71
Section 8.07. Reinstatement..........................................................72
ARTICLE 9 AMENDMENTS............................................................................72
Section 9.01. Without Consent of Holders.............................................72
Section 9.02. With Consent of Holders................................................73
Section 9.03. Compliance with Trust Indenture Act....................................74
Section 9.04. Revocation and Effect of Consents......................................74
Section 9.05. Notation on or Exchange of Securities..................................75
Section 9.06. Trustee to Sign Amendments, etc........................................75
ARTICLE 10 GUARANTEE............................................................................75
Section 10.01. Subsidiary Guarantee..................................................75
Section 10.02. Execution and Delivery of Guarantee...................................76
Section 10.03. Guarantors May Consolidate, etc., on Certain Terms....................77
Section 10.04. Releases Following Sale of Assets.....................................77
Section 10.05. "Trustee" to Include Paying Agent.....................................78
Section 10.06. Existing and Additional Subsidiary Guarantees.........................78
ARTICLE 11 MISCELLANEOUS........................................................................78
Section 11.01. Trust Indenture Act Controls..........................................78
Section 11.02. Notices...............................................................79
Section 11.03. Communication by Holders with Other Holders...........................80
Section 11.04. Certificate and Opinion as to Conditions Precedent....................80
Section 11.05. Statements Required in Certificate or Opinion.........................80
Section 11.06. Rules by Trustee and Agents...........................................81
Section 11.07. Legal Holidays........................................................81
Section 11.08. No Recourse Against Others............................................81
Section 11.09. Governing Law.........................................................81
Section 11.10. No Adverse Interpretation of Other Agreements.........................81
Section 11.11. Successors............................................................81
Section 11.12. Severability..........................................................81
Section 11.13. Counterpart Originals.................................................82
Section 11.14. Trustee as Paying Agent and Registrar.................................82
Section 11.15. Table of Contents, Headings, etc......................................82
Section 11.16. Bank of New York Not Acting in Individual Capacity....................82
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Section 11.17. Additional Rights of Holders of Transfer Restricted Securities........82
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SIGNATURES .....................................................................................67, 68, 69
</Table>
EXHIBIT A-1 FORM OF SECURITY
EXHIBIT A-2 FORM OF REGULATION S GLOBAL NOTE
EXHIBIT A-3 FORM OF GUARANTEE
EXHIBIT B FROM OF CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION
OF TRANSFER OF SECURITIES
EXHIBIT C FORM OF CERTIFICATE OF EXCHANGE
EXHIBIT D FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED
INVESTOR
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CROSS-REFERENCE TABLE*
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<Caption>
Trust Indenture
Act Section Indenture Section
- ----------------- -----------------
310(a)(1)..................................................... 7.10
(a)(2)..................................................... 7.10
(a)(3)..................................................... N.A.
(a)(4)..................................................... N.A.
(a)(5)..................................................... 7.10
(b)........................................................ 7.10
(c)........................................................ N.A.
311(a)........................................................ 7.11
(b)........................................................ 7.11
(c)........................................................ N.A.
312(a)........................................................ 2.05
(b)........................................................ 11.03
(c)........................................................ 11.03
313(a)........................................................ 7.06
(b)(1)..................................................... 11.03
(b)(2)..................................................... 7.06, 7.07
(c)........................................................ 7.06, 11.02
(d)........................................................ 7.06
314(a)........................................................ 4.03, 11.02
(b)........................................................ N.A.
(c)(1)..................................................... 11.04
(c)(2)..................................................... 11.04
(c)(3)..................................................... N.A.
(d)........................................................ N.A.
(e)........................................................ 11.05
(f)........................................................ N.A.
315(a)........................................................ 7.01
(b)........................................................ 7.05, 11.02
(c)........................................................ 7.01
(d)........................................................ 7.01
(e)........................................................ 6.11
316(a) (last sentence)........................................ 2.09
(a)(1)(A).................................................. 6.05
(a)(1)(B).................................................. 6.04
(a)(2)..................................................... N.A.
(b)........................................................ 6.07
(c)........................................................ 2.12
317(a)(1)..................................................... 6.08
(a)(2)..................................................... 6.09
(b)........................................................ 2.04
318(a)........................................................ 11.01
(b)........................................................ N.A.
(c)........................................................ 11.01
N.A. means not applicable
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*This Cross-Reference Table is not part of the Indenture
</Table>
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INDENTURE, dated as of May 8, 2001, among PRIMEDIA Inc., a
Delaware corporation (the "COMPANY"), the corporations listed on Schedule I
hereto (each a "GUARANTOR" and collectively, the "GUARANTORS") and The Bank of
New York, a New York banking corporation, as Trustee.
Each party agrees as follows for the benefit of the other
parties and for the equal and ratable benefit of the Holders (as defined
below) of the 8 7/8% Senior Notes due 2011 (the "SERIES A NOTES") and the
8 7/8% Senior Notes due 2011 to be issued in exchange for the Series A Notes
(the "Series B Notes" and, together with the Series A Notes, the "NOTES" or
the "SECURITIES") issued by the Company:
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS
"144A GLOBAL NOTE" means a Global Note in the form of Exhibit
A-1 hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Securities sold in reliance on Rule 144A.
"ADJUSTED CONSOLIDATED NET INCOME" means, with respect to any
Person for any period, (i) the Consolidated Net Income of such Person for such
period, plus (ii) in the case of the Company and its Restricted Subsidiaries,
all cash received during such period by the Company or any Restricted Subsidiary
from its Unrestricted Subsidiaries from the payment of dividends or
distributions (including tax sharing payments and loans or advances which are
junior in right of payment to the Securities and have a longer Average Life than
the Securities), but only to the extent such cash payments are not otherwise
included in "Adjusted Consolidated Net Income." Each item of Adjusted
Consolidated Net Income will be determined in conformity with GAAP, except that,
for purposes of the application of Accounting Principles Board Opinions Nos. 16
and 17, such Person may select any amortization practice allowable by GAAP up to
40 years, notwithstanding the use of a different amortization in such Person's
consolidated financial statements. Any designation of a Subsidiary of the
Company as a Restricted Subsidiary or Unrestricted Subsidiary at or prior to the
time of the calculation of Adjusted Consolidated Net Income of a Subsidiary will
be treated as if it had occurred at the beginning of the applicable period.
"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. A Person shall be deemed to "control"
(including the correlative meanings, the terms "controlling," "controlled by,"
and "under common control with") another Person if the controlling Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management or policies, of the controlled person, whether through ownership
of voting securities, by agreement or otherwise.
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"AGENT" means any Registrar or Paying Agent.
"APPLICABLE PREMIUM" with respect to any Security being
redeemed pursuant to Section 3.08 shall equal the greater of (i) 1.0% of the
then outstanding principal amount of such Security and (ii) the excess of (A)
the present value of the required interest and principal payments due on such
Security, computed using a discount rate equal to the Treasury Rate plus the
Applicable Spread, over (B) the then outstanding principal amount of such
Security.
"APPLICABLE PROCEDURES" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary, Euroclear and Clearstream that apply to such
transfer or exchange.
"APPLICABLE SPREAD" means one half of one percent.
"ASSET SALE" means, with respect to any Person, the sale,
lease, conveyance, disposition or other transfer by the referent Person of any
of its assets (including by way of a sale-and-leaseback and including the sale
or other transfer of any of the Capital Stock of any Subsidiary of the referent
Person); PROVIDED, that notwithstanding the foregoing, the term "Asset Sale"
shall not include the sale, lease, conveyance, disposition or other transfer of
(i) with respect to an Unrestricted Subsidiary, (A) any assets not constituting
all or substantially all of the assets of any Net Cash Flow Unrestricted
Subsidiary and (B) any Capital Stock or any assets of any Restricted Payment
Unrestricted Subsidiary, (ii) all or substantially all of the assets of the
Company, as permitted pursuant to Section 5.01 hereof, (iii) any assets between
the Company, any Restricted Subsidiary or any Unrestricted Subsidiary, (iv) (A)
cash and cash equivalents, (B) inventory in the ordinary course of business and
(C) any other tangible or intangible asset, in each case in the ordinary course
of business of the Company or its Restricted Subsidiaries, (v) the sale or
discount, in each case without recourse, of accounts receivable arising in the
ordinary course of business, but only in connection with the compromise or
collection thereof or (vi) Receivables and Other Assets pursuant to a Qualified
Securitization Transaction.
"AVERAGE LIFE" means, as of the date of determination, with
respect to any debt security, the quotient obtained by dividing (i) the sum of
the products of the numbers of years from the date of determination to the dates
of each successive scheduled principal payment (assuming the exercise by the
obligor of such debt security of all unconditional (other than as to the giving
of notice) extension options of each such scheduled payment date) of such debt
security multiplied by the amount of such principal payment by (ii) the sum of
all such principal payments.
"BANK CREDIT FACILITIES" means (1) the Credit Agreement, dated
as of March 11, 1999, among the Company, the lending institutions listed
therein, The Bank of New York and Bankers Trust Company, as Co-Syndication
Agents, The Bank of Nova Scotia, as Documentation Agent, and The Chase Manhattan
Bank, as Administrative Agent and (2) the Credit Agreement, dated as of May 24,
1996, among the Company, the lending institutions listed therein, The Bank of
New York and Bankers Trust Company, as Co-Syndication Agents, The Bank of Nova
Scotia, as Documentation Agent, and The Chase Manhattan Bank, as Administrative
Agent.
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"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors.
"BOARD OF DIRECTORS" means the Board of Directors of the
Company or any authorized committee of the Board of Directors of the Company.
"BUSINESS DAY" means any day other than a Saturday, a Sunday
or a day on which banking institutions in The City of New York or at a place of
payment are authorized or obligated by law, regulation or executive order to
remain closed.
"CAPITAL LEASE OBLIGATION" means, at the time any
determination thereof is to be made, the amount of the liability in respect of a
capital lease which would at such time be so required to be capitalized on the
balance sheet in accordance with GAAP.
"CAPITAL STOCK" means any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock.
"CHANGE OF CONTROL" means such time as (i) a "person" or
"group" (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act),
other than KKR and its Affiliates, becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act) of more than (A) 35 percent (35%) of the
total voting power of the then outstanding voting stock of the Company and (B)
the total voting power of the then outstanding voting stock of the Company
beneficially owned by KKR and its Affiliates or (ii) during any period of two
consecutive calendar years, individuals who at the beginning of such period
constituted the Company's Board of Directors (together with any new directors
whose election by the Company's Board of Directors or whose nomination for
election by the Company's shareholders was approved by a vote of at least
two-thirds of the Directors then still in office who either were 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
directors then in office.
"CLASS D DEBENTURE INDENTURE" means the indenture governing
the Class D Subordinated Debentures.
"CLASS D SUBORDINATED DEBENTURES" means the 10% Class D
Subordinated Exchange Debentures due 2008 of the Company issuable in exchange
for the Series D Preferred Stock.
"CLASS F DEBENTURE INDENTURE" means the indenture governing
the Class F Subordinated Debentures.
"CLASS F SUBORDINATED DEBENTURES" means the 9.20% Class F
Subordinated Exchange Debentures due 2009 of the Company issuable in exchange
for the Series F Preferred Stock.
"CLASS H DEBENTURE INDENTURE" means the indenture governing
the Class H Subordinated Debentures.
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"CLASS H SUBORDINATED DEBENTURES" means the 8 5/8% Class H
Subordinated Exchange Debentures due 2010 of the Company issuable in exchange
for the Series H Preferred Stock.
"CLEARSTREAM" means Clearstream Banking S.A.
"COMMON STOCK" means the common stock, par value $0.01 per
share, of the Company.
"COMPANY" means (i) PRIMEDIA Inc., a Delaware corporation, and
(ii) any successor of PRIMEDIA Inc. pursuant to Article 5 hereof.
"CONSOLIDATED CASH FLOW" means, with respect to any Person for
any period, the Adjusted Consolidated Net Income of such Person for such period
PLUS (a) (i) with respect to any Restricted Subsidiary other than a Partially
Owned Restricted Subsidiary, provision for taxes based on income or profits to
the extent such provision for taxes was included in computing Adjusted
Consolidated Net Income and (ii) with respect to any Partially Owned Restricted
Subsidiary, the Pro Rata Portion of any provision for taxes based on income or
profits to the extent such provision for taxes was included in computing
Adjusted Consolidated Net Income, PLUS (b) (i) with respect to any Restricted
Subsidiary other than a Partially Owned Restricted Subsidiary, consolidated
Interest Expense, whether paid or accrued, to the extent such expense was
deducted in computing Adjusted Consolidated Net Income (including amortization
of original issue discount and non-cash interest payments), and (ii) with
respect to any Partially Owned Restricted Subsidiary, the Pro Rata Portion of
consolidated Interest Expense, whether paid or accrued, to the extent such
expense was deducted in computing Adjusted Consolidated Net Income (including
amortization of original issue discount and non-cash interest payments), PLUS
(c) (i) with respect to any Restricted Subsidiary other than a Partially Owned
Restricted Subsidiary, depreciation, amortization and other non-cash charges to
the extent such depreciation, amortization and other non-cash charges were
deducted in computing Adjusted Consolidated Net Income (including amortization
of goodwill and other intangibles) and (ii) with respect to any Partially Owned
Restricted Subsidiary, the Pro Rata Portion of depreciation, amortization and
other non-cash charges to the extent such depreciation, amortization and other
non-cash charges were deducted in computing Adjusted Consolidated Net Income
(including amortization of goodwill and other intangibles); PROVIDED, with
respect to the calculation of a Person's Debt to Consolidated Cash Flow Ratio,
that if, during such period, (a) such Person or any of its Subsidiaries shall
have made any Asset Sales (other than, in the case of the Company and its
Restricted Subsidiaries, sales of the Capital Stock of or any assets of
Unrestricted Subsidiaries which constitute Asset Sales), Consolidated Cash Flow
of such Person for such period shall be reduced by an amount equal to the
Consolidated Cash Flow (if positive), to the extent such Consolidated Cash Flow
was included in computing Consolidated Cash Flow, directly attributable to the
assets or Capital Stock which are the subject of such Asset Sales for such
period or increased by an amount equal to the Consolidated Cash Flow (if
negative), to the extent such Consolidated Cash Flow was included in computing
Consolidated Cash Flow, directly attributable thereto for such period and (b)
such Person or any of its Subsidiaries (other than, in the case of the Company
and its Restricted Subsidiaries, Unrestricted Subsidiaries) has made any
acquisition of assets or Capital Stock (occurring by merger or otherwise),
including without limitation, any acquisition of assets or Capital Stock
occurring in connection with a transaction causing a calculation to be made
hereunder, Consolidated Cash Flow of such person
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shall be calculated (notwithstanding clause (i) of the definition of
Consolidated Net Income) as if such acquisition of assets or Capital Stock
(including the incurrence of any Indebtedness in connection with any such
acquisition and the application of the proceeds thereof) took place on the
first day of such period. Consolidated Cash Flow of such Person shall be
determined for any period without regard to changes in Working Capital of
such Person and its Subsidiaries during such period.
"CONSOLIDATED FIXED CHARGES" means, with respect to any Person
for any period, the (a) consolidated Interest Expense, whether paid or accrued,
to the extent such expense was deducted in computing Adjusted Consolidated Net
Income (including amortization of original issue discount and non-cash interest
payments) and (b) the amount of all cash dividend payments on all series of
preferred stock other than cash dividends on preferred stock of Unrestricted
Subsidiaries and cash dividends paid to such Person or its Subsidiaries;
PROVIDED that with respect to Partially Owned Restricted Subsidiaries, only the
Pro Rata Portion of any amounts covered by clauses (a) and (b) above shall be
included in calculating Consolidated Fixed Charges; PROVIDED FURTHER that if,
during such period, (i) such Person or any of its Subsidiaries shall have made
any Asset Sales (other than, in the case of the Company and its Restricted
Subsidiaries, sales of the Capital Stock of or any assets of Unrestricted
Subsidiaries which constitute asset sales), Consolidated Fixed Charges of such
Person for such period shall be reduced by an amount equal to the Consolidated
Fixed Charges directly attributable to the assets which are the subject of such
Asset Sales for such period and (ii) such Person or any of its Subsidiaries
(other than, in the case of the Company and its Restricted Subsidiaries,
Unrestricted Subsidiaries) has made any acquisition of assets or Capital Stock
(occurring by merger or otherwise), including, without limitation, any
acquisition of assets or Capital Stock occurring in connection with the
transaction causing a calculation to be made hereunder, Consolidated Fixed
Charges of such Person shall be calculated as if such acquisition of assets or
Capital Stock (including the incurrence of any Indebtedness in connection with
any such acquisition and the application of the proceeds thereof) took place on
the first day of such period.
"CONSOLIDATED NET CASH FLOW" means, with respect to any Person
for any period, the aggregate Consolidated Cash Flow of such Person for such
period, MINUS (a) capital expenditures of such Person and its Subsidiaries (and
in the case of the Company and its Restricted Subsidiaries, excluding
Unrestricted Subsidiaries and, in the case of Partially Owned Restricted
Subsidiaries, including only the Pro Rata Portion thereof), MINUS (b) the
aggregate amount of all cash dividends paid by such Person and its Subsidiaries
(and in the case of the Company and its Restricted Subsidiaries, excluding
Unrestricted Subsidiaries and, in the case of Partially Owned Restricted
Subsidiaries, including only the Pro Rata Portion thereof) to holders of its
Capital Stock other than to such Person or its Subsidiaries, MINUS (c) the
aggregate amount of all taxes based on income or profits paid by such Person and
its Subsidiaries (and in the case of the Company and its Restricted
Subsidiaries, excluding Unrestricted Subsidiaries and, in the case of Partially
Owned Restricted Subsidiaries, including only the Pro Rata Portion thereof)
other than to such Person or its Subsidiaries, MINUS (d) cash Interest Expense
of such Person and its Subsidiaries (and in the case of the Company and its
Restricted Subsidiaries, excluding Unrestricted Subsidiaries and, in the case of
Partially Owned Restricted Subsidiaries, including only the Pro Rata Portion
thereof), MINUS (e) repayments of principal of Indebtedness by such Person and
its Subsidiaries (and in the case of the Company and its Restricted
Subsidiaries, excluding Unrestricted Subsidiaries and, in the case of Partially
Owned Restricted Subsidiaries, including only the Pro Rata Portion thereof),
MINUS (f) any increases in Working Capital of such
5
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Person and its Subsidiaries (and in the case of the Company and its
Restricted Subsidiaries, excluding Unrestricted Subsidiaries and, in the case
of Partially Owned Restricted Subsidiaries, including only the Pro Rata
Portion thereof), and PLUS (g) any decreases in Working Capital of such
Person and its Subsidiaries (and in the case of the Company and its
Restricted Subsidiaries, excluding Unrestricted Subsidiaries and, in the case
of Partially Owned Restricted Subsidiaries, including only the Pro Rata
Portion thereof), in each case, for such period and determined in accordance
with GAAP; PROVIDED that in calculating the amount referred to in clause (f)
or (g) above, as the case may be, for any period during which the Company or
any of its Restricted Subsidiaries has consummated an Asset Sale (other than,
the case of the Company and its Restricted Subsidiaries, sales of Capital
Stock of, cash or any assets of Unrestricted Subsidiaries which constitute
Asset Sales), the portion of the change in Working Capital for such period
attributable to the entity or business sold or purchased shall be based (x)
in the case of such an Asset Sale, on the change in Working Capital
attributable to the entity or business sold from the first day of such period
to the date of the consummation of such sale and (y) in the case of an
acquisition, on the change in Working Capital attributable to the entity or
business acquired from the date of consummation of such acquisition to the
last day of such period.
"CONSOLIDATED NET INCOME" means, with respect to any Person
for any period, the aggregate net income (or loss) of such Person and its
Subsidiaries (and in the case of the Company and its Restricted Subsidiaries,
excluding Unrestricted Subsidiaries and, with respect to any Partially Owned
Restricted Subsidiary, including only the Pro Rata Portion of the net income (or
loss) of such Partially Owned Restricted Subsidiary as of any date of
determination of Consolidated Net Income for the Company and its Restricted
Subsidiaries) for such period, on a consolidated basis, determined in accordance
with GAAP, PROVIDED that (i) the net income (or loss) of any Person which is not
a Subsidiary or is accounted for by the equity method of accounting shall be
included only to the extent of the amount of cash dividends or distributions
(including tax sharing payments and loans or advances which are junior in right
of payment to the Securities and have a longer Average Life than the Securities)
paid to the referent Person or a Subsidiary of the referent Person, (ii) except
to the extent includable pursuant to the foregoing clause (i), the income (or
loss) of any Person accrued prior to the date it becomes a Subsidiary of such
Person or is merged into or consolidated with such Person or any of its
Subsidiaries or that Person's assets are acquired by such Person or any of its
Subsidiaries shall be excluded, (iii) any gains or losses attributable to Asset
Sales net of related tax costs or tax benefits, as the case may be, shall be
excluded and (iv) the net income of any Unrestricted Subsidiary (and, solely for
purposes of Section 4.07 hereof, the net income of any Partially Owned
Restricted Subsidiary) shall be excluded to the extent that the declaration or
payment of dividends or similar distributions by that Unrestricted Subsidiary
(or, solely for the purposes of Section 4.07 hereof, any Partially Owned
Restricted Subsidiary) of that net income is not at the date of determination
permitted without any prior governmental approval (that has not been obtained)
or, directly or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Subsidiary or its stockholders that, in each such
case, has not been legally waived or otherwise satisfied.
In addition, "Consolidated Net Income" will not include,
without limitation:
(A) any non-capitalized transaction costs and expenses
incurred in connection with financings, investments
or acquisitions, including, but not limited to,
financing and refinancing fees;
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(B) any extraordinary or nonrecurring charges relating to
any premium or penalty paid, write-off of deferred
financing costs or other financial recapitalization
charges in connection with the redemption or
retirement of any Indebtedness prior to its stated
maturity; and
(C) any non-recurring charges arising out of the
restructuring or consolidation of the operations of
any persons or business either alone or together with
the Company or any Restricted Subsidiary, incurred
within 18 months following the acquisition of those
persons or businesses by the Company or any
Restricted Subsidiary.
"CONSOLIDATED NET WORTH" means, for purposes of this
Indenture, at any date of determination, the sum of the Capital Stock and
additional paid-in capital plus retained earnings (or minus accumulated deficit)
of the referent Person and its Subsidiaries on a consolidated basis, less
amounts attributable to Redeemable Stock, each item to be determined in
conformity with GAAP (excluding the effects of foreign currency exchange
adjustments under Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 52), except that all effects of the application of
Accounting Principles Board Opinions Nos. 16 and 17 and related interpretations
shall be disregarded.
"CORPORATE TRUST OFFICE" means the principal office of the
Trustee at which at any particular time its corporate trust business shall be
administered, which office at the date of execution of this Indenture is located
at 101 Barclay Street, New York, New York 10286, Attention: Corporate Trust and
Agency Group.
"CREDIT FACILITIES" means, with respect to the Company or any
of its Restricted Subsidiaries, one or more debt facilities (including, without
limitation, the Bank Credit Facilities) or commercial paper facilities with
banks or other institutional lenders providing for revolving credit loans, term
loans or letters of credit, in each case, as amended, restated, modified,
renewed, refunded, replaced or refinanced in whole or in part from time to time.
"CURRENCY AGREEMENT" means the obligations of any Person
pursuant to any foreign exchange contract, currency swap agreement or other
similar agreement or arrangement designed to protect such Person or any of its
subsidiaries against fluctuations in currency values.
"CUSTODIAN" means any receiver, trustee, assignee, liquidator
or similar official under any Bankruptcy Law.
"DEBT TO CONSOLIDATED CASH FLOW RATIO" means the ratio of all
Indebtedness of the Company and its Restricted Subsidiaries to Consolidated Cash
Flow.
"DEFAULT" means any event, act or condition that is, or after
notice or the passage of time or both would be, an Event of Default.
"DEFINITIVE NOTE" means a certificated Security registered in
the name of the Holder thereof and issued in accordance with Section 2.06
hereof, in the form of Exhibit A hereto except that such Security shall not bear
the Global Note Legend and shall not have the "Schedule of Exchanges of
Interests in the Global Note" attached thereto.
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"DEPOSITARY" means, with respect to the Securities issuable or
issued in whole or in part in global form, the Person specified in Section 2.03
hereof as the Depositary with respect to the Securities, and any and all
successors thereto appointed as depositary hereunder and having become such
pursuant to the applicable provision of this Indenture.
"EQUITY INTERESTS" means Capital Stock, warrants, options or
other rights to acquire Capital Stock (but excluding any debt security which is
convertible into, or exchangeable for, Capital Stock).
"EQUITY OFFERING" means any public or private offering of
Equity Interests (other than Redeemable Stock) of the Company.
"EUROCLEAR" means Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear system.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXCHANGE OFFER" means the offer which may be made by the
Company pursuant to the Registration Rights Agreement to exchange Series A Notes
for the Series B Notes.
"EXCHANGE OFFER REGISTRATION STATEMENT" has the meaning set
forth in the Registration Rights Agreement.
"EXISTING INDEBTEDNESS" means Indebtedness of the Company and
its Subsidiaries (other than the Bank Credit Facilities and the Outstanding
Notes) in existence on the date of this Indenture, until such amounts are
repaid.
"FIXED CHARGE COVERAGE RATIO" means the ratio of Consolidated
Cash Flow to Consolidated Fixed Charges.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession, which are applicable to the circumstances as of the date
of this Indenture.
"GLOBAL NOTES" means, individually and collectively, each of
the Restricted Global Notes and the Unrestricted Global Notes, in the form of
Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(iv),
2.06(d)(ii) or 2.06(f) hereof.
"GLOBAL NOTE LEGEND" means the legend set forth in Section
2.06(g)(ii), which is required to be placed on all Global Notes issued under
this Indenture.
"GUARANTEE" means, individually and collectively, the
guarantees given by the Guarantors pursuant to Article 10 hereof, including a
notation in the Securities substantially in the form attached hereto as Exhibit
A-3.
"GUARANTEE DATE" means the date upon which a Guarantor
executes a Guarantee.
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"GUARANTOR" means each domestic Restricted Subsidiary of the
Company, other than any Securitization Subsidiary, which is wholly owned,
directly or indirectly, by the Company.
"HOLDER" means a Person in whose name a Security is
registered.
"IAI GLOBAL NOTE" means the Global Note in the form of Exhibit
A-1 hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of and registered in the name of the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Securities sold to Institutional Accredited Investors.
"INDEBTEDNESS" of any Person means any indebtedness,
contingent or otherwise, in respect of borrowed money (whether or not the
recourse of the lender is to the whole of the assets of such Person or only to a
portion thereof), or evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement obligations with respect
thereto) or representing the balance deferred and unpaid of the purchase price
of any property (including pursuant to financing leases), if and to the extent
any of the foregoing indebtedness would appear as a liability upon a balance
sheet of such Person prepared in accordance with GAAP (except that any such
balance that constitutes a trade payable and/or an accrued liability arising in
the ordinary course of business shall not be considered Indebtedness), and shall
also include, to the extent not otherwise included, any Capital Lease
Obligations, the maximum fixed repurchase price of any Redeemable Stock,
indebtedness secured by a Lien to which the property or assets owned or held by
such Person is subject, whether or not the obligations secured thereby shall
have been assumed, guarantees of items that would be included within this
definition to the extent of such guarantees (exclusive of whether such items
would appear upon such balance sheet), and net liabilities in respect of
Currency Agreements and Interest Rate Agreements. For purposes of the preceding
sentence, the maximum fixed repurchase price of any Redeemable Stock which does
not have a fixed repurchase price shall be calculated in accordance with the
terms of such Redeemable Stock as if such Redeemable Stock were repurchased on
any date on which Indebtedness shall be required to be determined pursuant to
this Indenture, PROVIDED that if such Redeemable Stock is not then permitted to
be repurchased, the repurchase price shall be the book value of such Redeemable
Stock. The amount of Indebtedness of any Person at any date shall be without
duplication (i) the outstanding balance at such date of all unconditional
obligations as described above and the maximum liability of any such contingent
obligations at such date and (ii) in the case of Indebtedness of others secured
by a Lien to which the property or assets owned or held by such Person is
subject, the lesser of the fair market value at such date of any asset subject
to a Lien securing the Indebtedness of others and the amount of the Indebtedness
secured. For the purpose of determining the aggregate Indebtedness of the
Company and its Restricted Subsidiaries, such Indebtedness shall exclude (a) the
Indebtedness of any Unrestricted Subsidiary of the Company or any Unrestricted
Subsidiary of a Restricted Subsidiary and (b) with respect to any Partially
Owned Restricted Subsidiary, the Pro Rata Portion of any Indebtedness of any
Partially Owned Restricted Subsidiary of the Company or any Partially Owned
Restricted Subsidiary of a Restricted Subsidiary pursuant to which the lender
thereunder does not have recourse to any of the assets of the Company or any of
its Restricted Subsidiaries.
"INDENTURE" means this Indenture as amended from time to time.
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"INDIRECT PARTICIPANT" means a Person who holds a
beneficial interest in a Global Note through a Participant.
"INITIAL PURCHASER" means Salomon Smith Barney Inc., Banc
of America Securities LLC, J.P. Morgan Securities Inc., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, BNY Capital Markets, Inc., Scotia
Capital (USA) Inc., Fleet Securities, Inc. and Mizuho International plc.
"INSTITUTIONAL ACCREDITED INVESTOR" means an institution
that is an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act, who are not also QIBs.
"INTEREST EXPENSE" means, with respect to any Person, for
any period, the aggregate amount of interest in respect of Indebtedness
(including all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing and the net
cost (benefit) associated with Interest Rate Agreements, and excluding
amortization of deferred finance fees and interest recorded as accretion in
the carrying value of liabilities (other than Indebtedness) recorded at a
discounted value) and all but the principal component of rentals in respect
of Capital Lease Obligations, paid, accrued or scheduled to be paid or
accrued by such Person during such period.
"INTEREST PAYMENT DATE" has the meaning assigned to such
term in the Securities.
"INTEREST RATE AGREEMENTS" means the obligations of any
Person pursuant to any interest rate swap agreement, interest rate collar
agreement or other similar agreement or arrangement designed to protect such
Person or any of its subsidiaries against fluctuations in interest rates.
"INVESTMENT" means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business, which
are recorded as accounts receivable on the balance sheet of any Person or its
Subsidiaries) or other extension of credit 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, bonds, notes, debentures or other securities
issued by any other Person. For the purposes of Sections 4.07 and 4.14
hereof, (i) "Investment" shall include and be valued at the fair market value
of the net assets of any Restricted Subsidiary at the time that such
Restricted Subsidiary is designated an Unrestricted Subsidiary and shall
exclude the fair market value of the net assets of any Unrestricted
Subsidiary at the time that such Unrestricted Subsidiary is designated a
Restricted Subsidiary and (ii) any property transferred to or from an
Unrestricted Subsidiary shall be valued at fair market value at the time of
such transfer, in each case as determined by the Board of Directors of the
Company in good faith.
"KKR" means Kohlberg Kravis Roberts & Co., L.P.
"LETTER OF TRANSMITTAL" means the letter of transmittal to
be prepared by the Company and sent to all Holders of the Securities for use
by such Holders in connection with the Exchange Offer.
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"LIEN" means any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind, whether or not filed, recorded or
otherwise perfected under applicable law (including any conditional sale or
other title retention agreement or lease in the nature thereof).
"LIQUIDATED DAMAGES" means, with respect to any Securities,
all unpaid liquidated damages owing by the Company pursuant to the
Registration Rights Agreement for such Securities.
"NET CASH FLOW UNRESTRICTED SUBSIDIARY" means an
Unrestricted Subsidiary which is not a Restricted Payment Unrestricted
Subsidiary.
"NET PROCEEDS" means, with respect to any Asset Sale, the
aggregate cash proceeds (including any cash received by way of deferred
payment pursuant to a note receivable issued in connection with such Asset
Sale, other than the portion of such deferred payment constituting interest,
and including any amounts received as disbursement or withdrawals from any
escrow or similar account established in connection with any such Asset Sale,
but, in either such case, only as and when so received) received by the
Company or any of its Subsidiaries in respect of such Asset Sale, net of (i)
the cash expenses of such sale (including, without limitation, the payment of
principal, premium, if any, and interest on Indebtedness required to be paid
as a result of such Asset Sale (other than the Outstanding Notes and the
Securities and amounts repaid pursuant to the Credit Facilities) and legal,
accounting and investment banking fees and sales commissions), (ii) taxes
paid or payable as a result thereof, (iii) any portion of cash proceeds which
the Company determines in good faith should be reserved for post-closing
adjustments, it being understood and agreed that on the day that all such
post-closing adjustments have been determined, the amount (if any) by which
the reserved amount in respect of such Asset Sale exceeds the actual
post-closing adjustments payable by the Company or any of its Subsidiaries
shall constitute Net Proceeds on such date and (iv) any relocation expenses
and pension, severance and shutdown costs incurred as a result thereof.
"NON-COMPETE NOTES" means the promissory notes issued by
the Company pursuant to the Non-Competition Agreement, dated as of June 17,
1991, among PRIMEDIA Holdings, Inc., News America Holdings Incorporated and
the other parties thereto in an aggregate principal amount not to exceed
$50.0 million, as such notes may be amended, supplemented or otherwise
modified from time to time in accordance with the terms thereof.
"NON-RECOURSE INDEBTEDNESS" means Indebtedness (i) as to
which neither the Company nor any Restricted Subsidiary (other than a
Securitization Subsidiary) (a) provides credit support of any kind (including
any undertaking, agreement or instrument that would constitute Indebtedness),
(b) is directly or indirectly liable (as a guarantor or otherwise) or (c)
constitutes the lender, (ii) as to which no default (including any rights
that the holders thereof may have to take enforcement action against an
Unrestricted Subsidiary) would permit (upon notice, lapse of time or both)
any holder of any other Indebtedness of the Company or any Restricted
Subsidiary (other than a Securitization Subsidiary) to declare a default on
such other Indebtedness or cause the payment thereof to be accelerated or
payable prior to its stated maturity and (iii) as to which the lenders have
been notified in writing they will not have recourse to the shares or assets
of the Company or any Restricted Subsidiary (other than a Securitization
Subsidiary).
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"NON-U.S. PERSON" means a Person who is not a U.S. Person.
"OBLIGATIONS" means any principal, interest, penalties,
fees, indemnifications, reimbursements, damages and other liabilities payable
under the documentation governing any Indebtedness.
"OFFICERS" means the President, the Treasurer, any
Assistant Treasurer, Controller, Secretary or any Vice President of the
Company or any Guarantor, as applicable.
"OFFICERS' CERTIFICATE" means a certificate signed by two
Officers, one of whom must be the Company's chief executive officer, chief
financial officer or controller financial accounting.
"OPINION OF COUNSEL" means an opinion from legal counsel
that meets the requirements of Section 11.05 hereof. The counsel may be an
employee of or counsel to the Company, any Subsidiary of the Company or the
Trustee.
"OUTSTANDING NOTES" means the 10 1/4% Senior Notes due
2004, the 8 1/2% Senior Notes due 2006 and the 7 5/8% Senior Notes due 2008
of the Company, as each may be amended, supplemented or otherwise modified
from time to time.
"OUTSTANDING NOTE INDENTURES" means the Indenture, dated as
of May 31, 1994, among the Company, the guarantors listed therein and Bankers
Trust Company, as trustee, relating to the 10 1/4% Senior Notes due 2004, the
Indenture, dated as of January 24, 1996, among the Company, the guarantors
listed therein and The Bank of New York, as trustee, relating to the 8 1/2%
Senior Notes due 2006 and the Indenture, dated as of February 17, 1998, among
the Company, the guarantors listed therein and The Bank of New York, as
trustee, relating to the 7 5/8% Senior Notes due 2008, as each may be
amended, supplemented or otherwise modified from time to time.
"PARTIALLY OWNED RESTRICTED SUBSIDIARY" means any
Restricted Subsidiary other than a wholly owned Restricted Subsidiary.
"PARTICIPANT" means, with respect to the Depositary,
Euroclear or Clearstream, a Person who has an account with the Depositary,
Euroclear or Clearstream, respectively (and, with respect to The Depository
Trust Company, shall include Euroclear and Clearstream).
"PARTICIPATING BROKER-DEALER" has the meaning set forth in
the Registration Rights Agreement.
"PERMITTED LIENS" means (i) Liens for taxes, assessments,
governmental charges or claims which are being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted and for
which a reserve or other appropriate provision, if any, as shall be required
in conformity with GAAP shall have been made; (ii) statutory Liens of
landlords and carriers', warehousemen's, mechanics', suppliers',
materialmen's, repairmen's, or other like Liens arising in the ordinary
course of business and with respect to amounts not yet delinquent or being
contested in good faith by appropriate proceedings, if a reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP
shall have been made therefor; (iii) Liens incurred or deposits made in the
ordinary course of business in connection with
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workers' compensation, unemployment insurance and other types of social
security; (iv) Liens incurred or deposits made to secure the performance of
tenders, bids, leases, statutory obligations, surety and appeal bonds,
government contracts, performance and return-of-money bonds and other
obligations of a like nature incurred in the ordinary course of business
(exclusive of obligations for the payment of borrowed money); (v) easements,
rights-of-way, restrictions, minor defects or irregularities in title and
other similar charges or encumbrances not interfering in any material respect
with the business of the Company or any of its Subsidiaries incurred in the
ordinary course of business; (vi) Liens (including extensions and renewals
thereof) upon real or tangible personal property acquired after the date of
this Indenture, PROVIDED that (a) any such Lien is created solely for the
purpose of securing Indebtedness representing, or incurred to finance,
refinance or refund, the cost (including the cost of construction) of the
item of property subject thereto, (b) the principal amount of the
Indebtedness secured by such Lien does not exceed 100% of such cost, (c) such
Lien does not extend to or cover any other property other than such item of
property and any improvements on such item and (d) the incurrence of such
Indebtedness is permitted by Section 4.09 hereof; (vii) Liens securing
reimbursement obligations with respect to letters of credit which encumber
documents and other property relating to such letters of credit and the
products and proceeds thereof; (viii) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of customs duties in
connection with the importation of goods; (ix) judgment and attachment Liens
not giving rise to an Event of Default; (x) leases or subleases granted to
others not interfering in any material respect with the business of the
Company or any of its Subsidiaries; (xi) Liens encumbering customary initial
deposits and margin deposits, and other Liens incurred in the ordinary course
of business and which are within the general parameters customary in the
industry, in each case securing Indebtedness under Interest Rate Agreements
and Currency Agreements; (xii) Liens encumbering deposits made to secure
obligations arising from statutory, regulatory, contractual or warranty
requirements of the Company or its Subsidiaries; (xiii) Liens arising out of
consignment or similar arrangements for the sale of goods entered into by the
Company or any of its Subsidiaries in the ordinary course of business of the
Company and its Subsidiaries; (xiv) any interest or title of a lessor in the
property subject to any Capital Lease Obligation or operating lease; (xv)
Liens arising from filing Uniform Commercial Code financing statements
regarding leases; (xvi) Liens permitted by the Credit Facilities as in effect
on the date of this Indenture; (xvii) Liens securing Indebtedness described
in clause (xii) of the second paragraph of Section 4.09 hereof; (xviii) Liens
between the Company and any Restricted Subsidiary or between Restricted
Subsidiaries; (xix) Liens securing letters of credit in an amount not to
exceed $75 million in the aggregate at any one time; (xx) Liens in an amount
not to exceed $50 million in the aggregate at any one time; (xxi) Liens
incurred by Partially Owned Restricted Subsidiaries which do not exceed 10%
of Total Assets in the aggregate at any one time; and (xxii) Liens on assets
of a Securitization Subsidiary arising in connection with a Qualified
Securitization Transaction.
"PERSON" means any individual, corporation, partnership,
joint venture, incorporated or unincorporated association, joint-stock
company, trust, unincorporated organization or government or other agency or
political subdivision thereof or other entity of any kind.
"PRIVATE PLACEMENT LEGEND" means the legend set forth in
Section 2.06(g)(i) to be placed on all Securities issued under this Indenture
except where otherwise permitted by the provisions of this Indenture.
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"PRO RATA PORTION" means, with respect to any Partially
Owned Restricted Subsidiary, the percentage of such Partially Owned
Restricted Subsidiary's outstanding Equity Interests beneficially owned by
the Company and its Restricted Subsidiaries.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"QUALIFIED SECURITIZATION TRANSACTION" means any
transaction or series of transactions that may be entered into by the Company
or any Restricted Subsidiary pursuant to which the Company or any Restricted
Subsidiary may sell, convey or otherwise transfer to (a) a Securitization
Subsidiary (in the case of a transfer by the Company or of any Restricted
Subsidiary) and (b) any other person (in the case of a transfer by a
Securitization Subsidiary), or may grant a security interest, in Receivables
and Other Assets.
"RECEIVABLES AND OTHER ASSETS" means, with respect to any
Person, all of the following property and interests in property of such
Person, whether now existing or existing in the future or hereafter acquired
or arising:
(1) accounts;
(2) accounts receivable or other similar rights to future
payments in respect of assets sold or to be sold,
rights granted or to be granted or services rendered
or to be rendered, including, without limitation, all
rights to payment created by or arising from sales of
goods, lease of goods or the rendition of services no
matter how evidenced, whether or not earned by
performance;
(3) all unpaid seller's or lessor's rights, including,
without limitation, recession, replevin, reclamation
and stoppage in transit, relating to any of the
foregoing or arising therefrom;
(4) all rights to any goods or merchandise represented by
any of the foregoing, including, without limitation,
returned or repossessed goods;
(5) all reserves and credit balances with respect to any
such accounts receivable or account debtors;
(6) all letters of credit, security or guarantees of any
of the foregoing;
(7) all insurance policies or reports relating to any of
the foregoing;
(8) all collection or deposit accounts relating to any of
the foregoing;
(9) all proceeds of any of the foregoing; and
(10) all books and records relating to any of the
foregoing.
"REDEEMABLE STOCK" means any Equity Interest which, by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable before the stated maturity of the Securities), or upon the
happening of any event, matures or is mandatorily
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redeemable, in whole or in part, prior to the stated maturity of the
Securities, or is, by its terms or upon the happening of any event,
redeemable at the option of the holder thereof, in whole or in part, at any
time prior to the stated maturity of the Securities except for Equity
Interests of the Company issued to present and former members of management
of the Company and its Subsidiaries pursuant to subscription and option
agreements in effect on the date hereof or under any stock option plan of
About.com, Inc. existing on the date hereof and common stock and options of
the Company issued to future members of management of the Company and its
Subsidiaries pursuant to subscription agreements executed subsequent to the
date hereof containing provisions for the repurchase of such common stock and
options upon death, disability or termination of employment of such persons
which are substantially identical to those contained in the subscription
agreements in effect on the date hereof; PROVIDED that for purposes of
Section 4.07 hereof and that for purposes of the definition of Indebtedness,
Redeemable Stock does not include the Series D Preferred Stock, the Series F
Preferred Stock or the Series H Preferred Stock.
"REGISTRATION RIGHTS AGREEMENT" means (a) the registration
rights agreement, dated May 8, 2001, among the Company, the Guarantors and
the Initial Purchasers and (b) with respect to each issuance of Additional
Securities issued in a transaction exempt from the registration requirements
of the Securities Act, the registration rights agreement, if any, among the
Company and the persons purchasing such Additional Securities under the
related purchase agreement.
"REGULATION S" means Regulation S promulgated under the
Securities Act.
"REGULATION S GLOBAL NOTE" means a Regulation S Temporary
Global Note or Regulation S Permanent Global Note, as appropriate.
"REGULATION S PERMANENT GLOBAL NOTE" means a permanent
Global Note in the form of Exhibit A-1 hereto bearing the Global Note Legend
and the Private Placement Legend and deposited with or on behalf of and
registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Regulation S
Temporary Global Note upon expiration of the Restricted Period.
"REGULATION S TEMPORARY GLOBAL NOTE" means a temporary
Global Note in the form of Exhibit A-2 hereto bearing the Private Placement
Legend and deposited with or on behalf of and registered in the name of the
Depositary or its nominee, issued in a denomination equal to the outstanding
principal amount of the Securities initially sold in reliance on Rule 903 of
Regulation S.
"RESPONSIBLE OFFICER" means, when used with respect to the
Trustee, any officer within the Corporate Trust and Agency Group (or any
successor group thereto) of the Trustee, including any Vice President,
Assistant Vice President or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above
designated officers and, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer's knowledge
and familiarity with the particular subject and who shall have direct
responsibility for the administration of this Indenture.
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"RESTRICTED DEFINITIVE NOTE" means a Definitive Note
bearing the Private Placement Legend.
"RESTRICTED GLOBAL NOTE" means a Global Note bearing the
Private Placement Legend.
"RESTRICTED PAYMENT UNRESTRICTED SUBSIDIARY" means an
Unrestricted Subsidiary which was capitalized exclusively with a permitted
Restricted Payment or the proceeds from the issuance of an Equity Interest by
the Company or with the proceeds of the sale of stock or substantially all of
the assets of any other Unrestricted Subsidiary which was capitalized with
such funds to the extent that a liquidating dividend is paid to the Company
or any Restricted Subsidiary from the proceeds of such sale.
"RESTRICTED PERIOD" means the 40-day restricted period as
defined in Regulation S.
"RESTRICTED SUBSIDIARY" means, for the purposes of this
Indenture, a Subsidiary of the Company which at the time of determination is
not an Unrestricted Subsidiary.
"RULE 144" means Rule 144 promulgated under the Securities
Act.
"RULE 144A" means Rule 144A promulgated under the
Securities Act.
"RULE 903" means Rule 903 promulgated under the Securities
Act.
"RULE 904" means Rule 904 promulgated the Securities Act.
"SEC" means the Securities and Exchange Commission.
"SECURITIES" means the Securities described above issued
under this Indenture.
"SECURITIES ACT" means the Securities Act of 1933, as
amended.
"SECURITIZATION SUBSIDIARY" means any Person to which the
Company or any Restricted Subsidiary transfers Receivables and Other Assets
and that engages in no activities other than in connection with financing of
Receivables and Other Assets and that is designated by the Board of Directors
as a Securitization Subsidiary and
(A) no portion of the Indebtedness or any other
Obligations (contingent or otherwise) of which
(i) is guaranteed by the Company or any
Restricted Subsidiary (excluding guarantees
of Obligations (other than the principal of,
and interest on, Indebtedness) pursuant to
Standard Securitization Undertakings);
(ii) is recourse to or obligates the Company or
any Restricted Subsidiary (other than such
Securitization Subsidiary) in any way other
than pursuant to Standard Securitization
Undertakings;
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(iii) subjects any property or asset of the
Company or any Restricted Subsidiary (other
than such Securitization Subsidiary),
directly or indirectly, contingently or
otherwise, to the satisfaction thereof,
other than pursuant to Standard
Securitization Undertakings;
(B) with which neither the Company nor any Restricted
Subsidiary (other than such Securitization
Subsidiary) has any material contract, agreement,
arrangement or understanding other than on terms no
less favorable to the Company or such Restricted
Subsidiary than those that might be obtained at the
time from Persons that are not Affiliates of the
Company, other than fees payable in the ordinary
course of business in connection with servicing
Receivables and Other Assets of such entity, and
(C) to which neither the Company nor any Restricted
Subsidiary (other than such Securitization
Subsidiary) has any obligation to maintain or
preserve such entity's financial condition or cause
such entity to achieve certain levels of operating
results.
Any designation of a Securitization Subsidiary shall be
evidenced to the Trustee by filing with the Trustee a certified copy of the
resolution of the Board of Directors of the Company giving effect to the
designation and an Officers' Certificate certifying that the designation
complied with the preceding conditions and was permitted by this Indenture.
"SERIES D PREFERRED STOCK" means the Company's $10.00
Series D Exchangeable Preferred Stock Redeemable 2008, par value $.01 per
share.
"SERIES F PREFERRED STOCK" means the Company's $9.20 Series
F Exchangeable Preferred Stock Redeemable 2009, issuable in exchange for the
Series E Preferred Stock and containing terms identical to the Series E
Preferred Stock.
"SERIES H PREFERRED STOCK" means the Company's $8.625
Series H Exchangeable Preferred Stock Redeemable 2010 issuable in exchange
for the Series G Preferred Stock and containing terms identical to the Series
G Preferred Stock.
"SHELF REGISTRATION STATEMENT" means the Shelf Registration
Statement as defined in the Registration Rights Agreement.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be
a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation
S-X, promulgated pursuant to the Securities Act, as such Regulation is in
effect on the date of the Indenture.
"STANDARD SECURITIZATION UNDERTAKINGS" means
representations, warranties, covenants and indemnities entered into by the
Company or any Restricted Subsidiary that are reasonably customary in a
Qualified Securitization Transaction.
"SUBORDINATED DEBENTURES" means the Company's 10% Class D
Subordinated Exchange Debentures due 2008, the 9.20% Class F Subordinated
Exchange Debentures due 2009 and the 8 5/8% Class H Subordinated Exchange
Debentures due 2010.
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"SUBSIDIARY" of any Person means any corporation, association
or other business entity of which more than 50% of the total voting power of
shares of Capital Stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by such Person or
one or more of the other Subsidiaries of such Person or a combination thereof.
"TIA" means the Trust Indenture Act of 1939, as amended (15
U.S.C. Sections 77aaa-77bbbb).
"TOTAL ASSETS" means the total consolidated assets of the
Company and its Restricted Subsidiaries.
"TRANSFER RESTRICTED SECURITIES" means each Security, until
the earliest to occur of (a) the date on which such Security is exchanged in the
Exchange Offer and entitled to be resold to the public by the Holder thereof
without complying with the prospectus delivery requirements of the Securities
Act, (b) the date on which such Security has been disposed of in accordance with
a Shelf Registration Statement, (c) the date on which such Security is disposed
of by any broker or dealer registered under the Exchange Act pursuant to the
"Plan of Distribution" contemplated by the Exchange Offer Registration Statement
(including delivery of the Prospectus contained therein) or (d) the date on
which such Security is distributable to the public pursuant to Rule 144 under
the Securities Act.
"TRANSFERS" means (i) any payment of interest on Indebtedness,
dividends or repayments of loans or advances and (ii) any other transfers of
assets, in each case from an Unrestricted Subsidiary to the Company or any of
its Restricted Subsidiaries.
"TREASURY RATE" means, for the purposes of this Indenture, the
yield to maturity at the time of computation of United States Treasury
securities with a constant maturity (as compiled by and published in the most
recent Federal Reserve Statistical Release H.15 (519) which has become publicly
available at least two Business Days prior to the date fixed for prepayment (or,
if such Statistical Release is no longer published, any publicly available
source of similar market data)) most nearly equal to the then remaining Average
Life of the Securities; PROVIDED that if the Average Life of the Securities is
not equal to the constant maturity of a United States Treasury security for
which a weekly average yield is given, the Treasury Rate shall be obtained by
linear interpolation (calculated to the nearest one-twelfth of a year) from the
weekly average yields of United States Treasury securities for which such yields
are given, except that if the Average Life of the Securities is less than one
year, the weekly average yield on actually traded United States Treasury
securities adjusted to a constant maturity of one year shall be used.
"TRUSTEE" means the party named as such above until a
successor replaces it in accordance with the applicable provisions of this
Indenture and thereafter means the successor serving hereunder.
"UNRESTRICTED DEFINITIVE NOTE" means one or more Definitive
Notes that do not bear and are not required to bear the Private Placement
Legend.
"UNRESTRICTED GLOBAL NOTE" means a permanent Global Note in
the form of Exhibit A attached hereto that bears the Global Note Legend and that
has the "Schedule of
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Exchanges of Interests in the Global Note" attached thereto, and that is
deposited with or on behalf of and registered in the name of the Depositary,
representing a series of Securities that do not bear the Private Placement
Legend.
"UNRESTRICTED SUBSIDIARY" means, for the purposes of this
Indenture, (i) each of the following Subsidiaries of the Company, unless and
until such Subsidiary ceases to be a Subsidiary o the Company or is designated
as a Restricted Subsidiary pursuant to the terms hereof: PRIMEDIANet Inc.;
PRIMEDIA Ventures, Inc.; PRIMEDIA Teenclick Corp.; PRIMEDIA Digital Video
Holdings LLC; About.com, Inc.; HPC Interactive, LLC; Media Central Acquisition,
LLC; Kagan World Media Limited; Kagan Asia Media, Ltd.; In New York LLC; and
PRIMEDIA International, Inc., (ii) any other Subsidiary of the Company which at
the time of determination is an Unrestricted Subsidiary (as designated by the
Board of Directors, as provided below) and (iii) 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 owns any Capital Stock of, or
owns, or holds any Lien on, any property of, any other Subsidiary of the Company
which is not a Subsidiary of the Subsidiary to be so designated; PROVIDED that
(a) the Company certifies that such designation complies with Section 4.07 and
4.14 hereof, and (b) the Subsidiary to be so designated has not at the time of
designation, and does not thereafter, create, incur, issue, assume, guarantee or
otherwise become directly or indirectly liable with respect to any Indebtedness
pursuant to which the lender has recourse to any of the assets of the Company or
any of its Restricted Subsidiaries. The Board of Directors may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; PROVIDED that immediately
after giving effect to such designation, the Company could incur at least $1.00
of additional Indebtedness pursuant to the first paragraph of Section 4.09
hereof (without giving effect to clauses (i) through (xvi) of the second
paragraph thereof), on a PRO FORMA basis taking into account such designation.
"U.S. GOVERNMENT OBLIGATIONS" means direct noncallable
obligations of or guaranteed by the United States of America.
"U.S. PERSON" means a U.S. person as defined in Rule 902(k)
under the Securities Act.
"WORKING CAPITAL" means, with respect to any Person for any
period, the current assets of such Person and its Subsidiaries (and in the case
of the Company and its Restricted Subsidiaries, excluding Unrestricted
Subsidiaries and, in the case of Partially Owned Restricted Subsidiaries,
including only the Pro Rata Portion thereof) on a consolidated basis, after
excluding therefrom cash and cash equivalents and deferred income taxes, less
the current liabilities of such person and its Subsidiaries (and in the case of
the Company and its Restricted Subsidiaries, excluding Unrestricted Subsidiaries
and, in the case of Partially Owned Restricted Subsidiaries, including only the
Pro Rata Portion thereof) on a consolidated basis, after excluding therefrom, in
each case to the extent otherwise included therein, all short-term Indebtedness
for borrowed money, the current portion of any long-term Indebtedness,
liabilities arising from the honoring by a bank or other financial institution
of a check, draft or similar instrument inadvertently (except in the case of
daylight overdrafts, which will not be, and will not be deemed to be,
inadvertent) drawn against insufficient funds in the ordinary course of
business, PROVIDED that such liabilities are extinguished within three business
days of this incurrence, and deferred income taxes of such Person and its
Subsidiaries (and in the case of the
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Company and its Restricted Subsidiaries, excluding Unrestricted Subsidiaries
and, in the case of Partially Owned Restricted Subsidiaries, including only the
Pro Rata Portion thereof).
SECTION 1.02. OTHER DEFINITIONS
<Table>
<Caption>
Defined in
Term Section
---- ---------
"Additional Securities"..............................................2.01
"Affiliate Transaction"..............................................4.12
"Change of Control Offer"............................................4.10
"Change of Control Payment"..........................................4.10
"Change of Control Payment Date".....................................4.10(2)
"Event of Default"...................................................6.01
"Legal Holiday".....................................................11.07
"Paying Agent".......................................................2.03
"Registrar"..........................................................2.03
"Refinancing Indebtedness"...........................................4.09
"Restricted Payments"................................................4.07
"Retired Capital Stock"..............................................4.07
"Refunding Capital Stock"............................................4.07
"Successor"..........................................................5.01(i)
</Table>
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the
following meanings:
"INDENTURE SECURITIES" means the Securities and the
Guarantees.
"INDENTURE SECURITY HOLDER" means a Holder;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the
Trustee; and
"OBLIGOR" on the Securities means the Company, any other
obligor upon the Securities or any successor obligor upon the Securities or any
Guarantor.
All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule under
the TIA have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION
Unless the context otherwise requires:
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(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular; and
(5) provisions apply to successive events and
transactions.
ARTICLE 2
THE SECURITIES
SECTION 2.01. ADDITIONAL SECURITIES; FORM AND DATING
(a) ISSUANCE OF ADDITIONAL SECURITIES. The Company may,
subject to Section 4.09 hereof, issue additional Securities (the "Additional
Securities") under this Indenture which will have identical terms as the
Securities issued on the date hereof other than with respect to their date of
issuance, issue price and first payment of interest. The Securities issued on
the date hereof and any Additional Securities subsequently issued shall be
treated as a single class for all purposes under this Indenture.
(b) GENERAL. The Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto. The
Securities may have notations, legends or endorsements required by law, stock
exchange rule or usage. Each Security shall be dated the date of its
authentication. The Securities shall be in denominations of $1,000 and integral
multiples thereof.
The terms and provisions contained in the Securities shall
constitute, and are hereby expressly made, a part of this Indenture and the
Company, the Guarantors and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.
However, to the extent any provision of any Security conflicts with the express
provisions of this Indenture, the provisions of this Indenture shall govern and
be controlling.
(c) GLOBAL NOTES. Securities issued in global form shall be
substantially in the form of Exhibit A attached hereto (including the Global
Note Legend thereon and the "Schedule of Exchanges of Interests in the Global
Note" attached thereto). Securities issued in definitive form shall be
substantially in the form of Exhibit A attached hereto (but without the Global
Note Legend thereon and without the "Schedule of Exchanges of Interests in the
Global Note" attached thereto). Each Global Note shall represent such of the
outstanding Securities as shall be specified therein and each shall provide that
it shall represent the aggregate principal amount of outstanding Securities from
time to time endorsed thereon and that the aggregate principal amount of
outstanding Securities represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges and redemptions. Any endorsement
of a Global Note to reflect the amount of any increase or decrease in the
aggregate principal amount of
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outstanding Securities represented thereby shall be made by the Trustee or the
Security.Custodian, at the direction of the Trustee, in accordance with
instructions given by the Holder thereof as required by Section 2.06 hereof.
(d) TEMPORARY GLOBAL NOTES. Securities offered and sold in
reliance on Regulation S shall be issued initially in the form of the Regulation
S Temporary Global Note, which shall be deposited on behalf of the purchasers of
the Securities represented thereby with the Trustee, as custodian for the
Depositary, and registered in the name of the Depositary or the nominee of the
Depositary for the accounts of designated agents holding on behalf of Euroclear
or Clearstream, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The Restricted Period shall be terminated upon the receipt
by the Trustee of (i) a written certificate from the Depositary, together with
copies of certificates from Euroclear and Clearstream certifying that they have
received certification of non-United States beneficial ownership of 100% of the
aggregate principal amount of the Regulation S Temporary Global Note (except to
the extent of any beneficial owners thereof who acquired an interest therein
during the Restricted Period pursuant to another exemption from registration
under the Securities Act and who will take delivery of a beneficial ownership
interest in a 144A Global Note or an IAI Global Note bearing a Private Placement
Legend, all as contemplated by Section 2.06(a)(ii) hereof), and (ii) an
Officers' Certificate from the Company. Following the termination of the
Restricted Period, beneficial interests in the Regulation S Temporary Global
Note shall be exchanged for beneficial interests in Regulation S Permanent
Global Notes pursuant to the Applicable Procedures. Simultaneously with the
authentication of Regulation S Permanent Global Notes, the Trustee shall cancel
the Regulation S Temporary Global Note. The aggregate principal amount of the
Regulation S Temporary Global Note and the Regulation S Permanent Global Notes
may from time to time be increased or decreased by adjustments made on the
records of the Trustee and the Depositary or its nominee, as the case may be, in
connection with transfers of interest as hereinafter provided.
(e) EUROCLEAR AND CLEARSTREAM PROCEDURES APPLICABLE. The
provisions of the "Operating Procedures of the Euroclear System" and "Terms and
Conditions Governing Use of Euroclear" and the "General Terms and Conditions of
Clearstream" and "Customer Handbook" of Clearstream shall be applicable to
transfers of beneficial interests in the Regulation S Global Notes that are held
by Participants through Euroclear or Clearstream.
SECTION 2.02. EXECUTION AND AUTHENTICATION
One Officer shall sign the Securities for the Company by
manual or facsimile signature. The Company's seal may be reproduced on the
Securities and may be in facsimile form.
If an Officer whose signature is on a Security no longer holds
that office at the time a Note is authenticated, the Security shall nevertheless
be valid.
A Security shall not be valid until authenticated by the
manual signature of the Trustee. The signature shall be conclusive evidence that
the Security has been authenticated under this Indenture.
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The Trustee shall, upon a written order of the Company signed
by two Officers (an "Authentication Order"), authenticate Securities for
original issue.
The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT
The Company shall maintain an office or agency where
Securities may be presented for registration of transfer or for exchange
("REGISTRAR") and an office or agency where Securities may be presented for
payment ("PAYING AGENT"). The Registrar shall keep a register of the Securities
and of their transfer and exchange. The Company may appoint one or more
co-registrars and one or more additional paying agents. The term "Registrar"
includes any co-registrar and the term "Paying Agent" includes any additional
paying agent. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company shall notify the Trustee in writing of the
name and address of any Agent not a party to this Indenture. If the Company
fails to appoint or maintain another entity as Registrar or Paying Agent, the
Trustee shall act as such. The Company or any of its Subsidiaries may act as
Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company
("DTC") to act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the
Registrar and Paying Agent and to act as Note Custodian with respect to the
Global Notes.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST
The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Trustee all money held by the Paying Agent for the
payment of principal, premium or Liquidated Damages, if any, or interest on the
Securities, and will notify the Trustee of any default by the Company in making
any such payment. While any such default continues, the Trustee may require a
Paying Agent to pay all money held by it to the Trustee. The Company at any time
may require a Paying Agent to pay all money held by it to the Trustee. Upon
payment over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Company, the
Trustee shall serve as Paying Agent for the Securities.
SECTION 2.05. HOLDER LISTS
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of all Holders and shall otherwise comply with TIA Section 312(a). If
the Trustee is not the Registrar, the Company shall furnish to the
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Trustee at least seven Business Days before each interest payment date and at
such other times as the Trustee may request in writing, a list in such form and
as of such date as the Trustee may reasonably require of the names and addresses
of the Holders of Securities and the Company shall otherwise comply with TIA
Section 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE
(a) TRANSFER AND EXCHANGE OF GLOBAL NOTES. A Global Note may
not be transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. All Global Notes
will be exchanged by the Company for Definitive Notes if (i) the Company
delivers to the Trustee notice from the Depositary that it is unwilling or
unable to continue to act as Depositary or that it is no longer a clearing
agency registered under the Exchange Act and, in either case, a successor
Depositary is not appointed by the Company within 90 days after the date of such
notice from the Depositary or (ii) the Company in its sole discretion determines
that the Global Notes (in whole but not in part) should be exchanged for
Definitive Notes and delivers a written notice to such effect to the Trustee.
Upon the occurrence of either of the preceding events in (i) or (ii) above,
Definitive Notes shall be issued in such names as the Depositary shall instruct
the Trustee. Global Notes also may be exchanged or replaced, in whole or in
part, as provided in Sections 2.07 and 2.11 hereof. Every Security authenticated
and delivered in exchange for, or in lieu of, a Global Note or any portion
thereof, pursuant to Section 2.07 or 2.11 hereof, shall be authenticated and
delivered in the form of, and shall be, a Global Note. A Global Note may not be
exchanged for another Security other than as provided in this Section 2.06(a),
however, beneficial interests in a Global Note may be transferred and exchanged
as provided in Section 2.06(b), (c) or (f) hereof.
(b) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN THE
GLOBAL NOTES. The transfer and exchange of beneficial interests in the Global
Notes shall be effected through the Depositary, in accordance with the
provisions of this Indenture and the Applicable Procedures. Beneficial interests
in the Restricted Global Notes shall be subject to restrictions on transfer
comparable to those set forth herein to the extent required by the Securities
Act. Transfers of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well as
one or more of the other following subparagraphs as applicable:
(i) TRANSFER OF BENEFICIAL INTERESTS IN THE SAME GLOBAL NOTE.
Beneficial interests in any Restricted Global Note may be transferred
to Persons who take delivery thereof in the form of a beneficial
interest in the same Restricted Global Note in accordance with the
transfer restrictions set forth in the Private Placement Legend;
PROVIDED, that prior to the expiration of the Restricted Period
transfers of beneficial interests in the Regulation S Global Note may
not be made to a U.S. Person or for the account or benefit of a U.S.
Person (other than an Initial Purchaser). Beneficial interests in any
Unrestricted Global Note may be transferred only to Persons who take
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note. No written orders or instructions shall be
required to be delivered to the Registrar to effect the transfers
described in this Section 2.06(b)(i).
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(ii) ALL OTHER TRANSFERS AND EXCHANGES OF BENEFICIAL INTERESTS
IN GLOBAL NOTES. In connection with all transfers and exchanges of
beneficial interests (other than a transfer of a beneficial interest in
a Global Note to a Person who takes delivery thereof in the form of a
beneficial interest in the same Global Note), the transferor of such
beneficial interest must deliver to the Registrar either (A) (1) a
written order from a Participant or an Indirect Participant given to
the Depositary in accordance with the Applicable Procedures directing
the Depositary to credit or cause to be credited a beneficial interest
in another Global Note in an amount equal to the beneficial interest to
be transferred or exchanged and (2) instructions given in accordance
with the Applicable Procedures containing information regarding the
Participant account to be credited with such increase or (B) (1) a
written order from a Participant or an Indirect Participant given to
the Depositary in accordance with the Applicable Procedures directing
the Depositary to cause to be issued a Definitive Note in an amount
equal to the beneficial interest to be transferred or exchanged and (2)
instructions given by the Depositary to the Registrar containing
information regarding the Person in whose name such Definitive Note
shall be registered to effect the transfer or exchange referred to in
(1) above; PROVIDED, that in no event shall Definitive Notes be issued
upon the transfer or exchange of beneficial interests in the Regulation
S Global Note prior to (x) the expiration of the Restricted Period and
(y) the receipt by the Registrar of any certificates required pursuant
to Rule 903 under the Securities Act. Upon an Exchange Offer by the
Company in accordance with Section 2.06(f) hereof, the requirements of
this Section 2.06(b)(ii) shall be deemed to have been satisfied upon
receipt by the Registrar of the instructions contained in the Letter of
Transmittal delivered by the Holder of such beneficial interests in the
Restricted Global Notes. Upon satisfaction of all of the requirements
for transfer or exchange of beneficial interests in Global Notes
contained in this Indenture, the Securities and otherwise applicable
under the Securities Act, the Trustee shall adjust the principal amount
of the relevant Global Note(s) pursuant to Section 2.06(h) hereof.
(iii) TRANSFER OF BENEFICIAL INTERESTS TO ANOTHER RESTRICTED
GLOBAL NOTE. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(ii) above and the
Registrar receives the following:
(A) if the transferee will take delivery in the form
of a beneficial interest in the 144A Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (1) thereof;
(B) if the transferee will take delivery in the form
of a beneficial interest in the Regulation S Temporary Global
Note or the Regulation S Permanent Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form
of a beneficial interest in the IAI Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications and certificates and
Opinion of Counsel required by item (3) thereof, if
applicable, and the transferee must deliver a certificate in
the form of Exhibit D hereto.
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(iv) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR BENEFICIAL INTERESTS IN THE UNRESTRICTED
GLOBAL NOTE. A beneficial interest in any Restricted Global Note may be
exchanged by any holder thereof for a beneficial interest in an
Unrestricted Global Note or transferred to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Note if the exchange or transfer complies with the requirements of
Section 2.06(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the holder of the beneficial interest to be
transferred, in the case of an exchange, or the transferee, in
the case of a transfer, is not (1) a broker-dealer, (2) a
Person participating in the distribution of the Securities or
(3) a Person who is an affiliate (as defined in Rule 144) of
the Company;
(B) any such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the
Registration Rights Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration
Statement in accordance with the Registration Rights
Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial
interest in a Restricted Global Note proposes to exchange such
beneficial interest for a beneficial interest in an
Unrestricted Global Note, a certificate from such holder in
the form of Exhibit C hereto, including the certifications in
item (1)(a) thereof;
(2) if the holder of such beneficial
interest in a Restricted Global Note proposes to transfer such
beneficial interest to a Person who shall take delivery
thereof in the form of a beneficial interest in an
Unrestricted Global Note, a certificate from such holder in
the form of Exhibit B hereto, including the certifications in
item (4) thereof; and
(3) in each such case set forth in this
subparagraph (D), an Opinion of Counsel in form reasonably
acceptable to the Registrar to the effect that such exchange
or transfer is in compliance with the Securities Act and that
the restrictions on transfer contained herein and in the
Private Placement Legend are not required in order to maintain
compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B)
or (D) above at a time when an Unrestricted Global Note has
not yet been issued, the Company shall issue and, upon receipt
of an authentication order in accordance with Section 2.02
hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount
equal to the principal amount of beneficial interests
transferred pursuant to subparagraph (B) or (D) above.
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Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in
the form of, a beneficial interest in a Restricted Global Note.
(c) TRANSFER OR EXCHANGE OF BENEFICIAL INTERESTS FOR
DEFINITIVE NOTES.
(i) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES TO
RESTRICTED DEFINITIVE NOTES. If any holder of a beneficial interest in
a Restricted Global Note proposes to exchange such beneficial interest
for a Definitive Note or to transfer such beneficial interest to a
Person who takes delivery thereof in the form of a Definitive Note,
then, upon receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Definitive Note, a certificate from such holder
in the form of Exhibit C hereto, including the certifications
in item (2)(a) thereof;
(B) if such beneficial interest is being transferred
to a QIB in accordance with Rule 144A under the Securities
Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (1) thereof;
(C) if such beneficial interest is being transferred
to a Non-U.S. Person in an offshore transaction in accordance
with Rule 903 or Rule 904 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of
the Securities Act in accordance with Rule 144 under the
Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(a)
thereof;
(E) if such beneficial interest is being transferred
to an Institutional Accredited Investor in reliance on an
exemption from the registration requirements of the Securities
Act other than those listed in subparagraphs (B) through (D)
above, a certificate to the effect set forth in Exhibit B
hereto, including the certifications, certificates and Opinion
of Counsel required by item (3) thereof, if applicable, and a
certificate in the form of Exhibit D hereto;
(F) if such beneficial interest is being transferred
to the Company or any of its Subsidiaries, a certificate to
the effect set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof; or
(G) if such beneficial interest is being transferred
pursuant to an effective registration statement under the
Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(c)
thereof,
the Trustee shall cause the aggregate principal amount of the
applicable Global Note to be reduced accordingly pursuant to Section
2.06(h) hereof, and the Company shall execute and the Trustee shall
authenticate and make available for delivery to the Person
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designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a
beneficial interest in a Restricted Global Note pursuant to this
Section 2.06(c) shall be registered in such name or names and in such
authorized denomination or denominations as the holder of such
beneficial interest shall instruct the Registrar through instructions
from the Depositary and the Participant or Indirect Participant. The
Trustee shall make available for delivery such Definitive Notes to the
Persons in whose names such Notes are so registered. Any Definitive
Note issued in exchange for a beneficial interest in a Restricted
Global Note pursuant to this Section 2.06(c)(i) shall bear the Private
Placement Legend and shall be subject to all restrictions on transfer
contained therein.
(ii) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES TO
UNRESTRICTED DEFINITIVE NOTES. A holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial interest
to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note only if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the holder of such beneficial interest, in the
case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal
that it is not (1) a broker-dealer, (2) a Person participating
in the distribution of the Exchange Notes or (3) a Person who
is an affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(C) such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration
Statement in accordance with the Registration Rights
Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Definitive Note that does not bear the Private
Placement Legend, a certificate from such holder in the form
of Exhibit C hereto, including the certifications in item
(1)(b) thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the
form of a Definitive Note that does not bear the Private
Placement Legend, a certificate from such holder in the form
of Exhibit B hereto, including the certifications in item (4)
thereof; and
(3) in each such case set forth in this
subparagraph (D), if the Registrar so requests or if the
Applicable Procedures so require, an Opinion of Counsel in
form reasonably acceptable to the Registrar to the effect that
such exchange or transfer is in compliance with the Securities
Act and that the
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restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
(iii) BENEFICIAL INTERESTS IN UNRESTRICTED GLOBAL NOTES TO
UNRESTRICTED DEFINITIVE NOTES. If any holder of a beneficial interest
in an Unrestricted Global Note proposes to exchange such beneficial
interest for a Definitive Note or to transfer such beneficial interest
to a Person who takes delivery thereof in the form of a Definitive
Note, then, upon satisfaction of the conditions set forth in Section
2.06(b)(ii) hereof, the Trustee shall cause the aggregate principal
amount of the applicable Global Note to be reduced accordingly pursuant
to Section 2.06(h) hereof, and the Company shall execute and the
Trustee shall authenticate and make available for delivery to the
Person designated in the instructions a Definitive Note in the
appropriate principal amount. Any Definitive Note issued in exchange
for a beneficial interest pursuant to this Section 2.06(c)(iii) shall
be registered in such name or names and in such authorized denomination
or denominations as the holder of such beneficial interest shall
instruct the Registrar through instructions from the Depositary and the
Participant or Indirect Participant. The Trustee shall make available
for delivery such Definitive Notes to the Persons in whose names such
Notes are so registered. Any Definitive Note issued in exchange for a
beneficial interest pursuant to this section 2.06(c)(iii) shall not
bear the Private Placement Legend. A beneficial interest in an
Unrestricted Global Note cannot be exchanged for a Definitive Note
bearing the Private Placement Legend or transferred to a Person who
takes delivery thereof in the form of a Definitive Note bearing the
Private Placement Legend.
(d) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR BENEFICIAL
INTERESTS.
(i) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES. If any Holder of a Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note or to transfer such Definitive Notes to a Person
who takes delivery thereof in the form of a beneficial interest in a
Restricted Global Note, then, upon receipt by the Registrar of the
following documentation:
(A) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in item
(2)(b) thereof;
(B) if such Restricted Definitive Note is being
transferred to a QIB in accordance with Rule 144A under the
Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (1)
thereof;
(C) if such Restricted Definitive Note is being
transferred to a Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or Rule 904 under the Securities Act,
a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being
transferred pursuant to an exemption from the registration
requirements of the Securities Act in
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accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being
transferred to the Company or any of its Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof;
(F) if such Restricted Definitive Note is being
transferred pursuant to an effective registration statement
under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in
item (3)(c) thereof; or
(G) if such Restricted Definitive Note is being
transferred to an Institutional Accredited Investor in
reliance on an exemption from the registration requirements of
the Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications, certificates
and Opinion of Counsel required by item (3) thereof, and a
certificate in the form of Exhibit D hereto,
the Trustee shall cancel the Definitive Note, increase or cause to be
increased the aggregate principal amount of, in the case of clause (A)
above, the appropriate Restricted Global Note, in the case of clause
(B) above, the 144A Global Note, in the case of clause (C) above, the
Regulation S Global Note and in the case of clause (G) above, the IAI
Global Note.
(ii) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN
UNRESTRICTED GLOBAL NOTES. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global
Note or transfer such Restricted Definitive Note to a Person who takes
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note only if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, is not (1) a
broker-dealer, (2) a Person participating in the distribution
of the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the
Registration Rights Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration
Statement in accordance with the Registration Rights
Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes proposes
to exchange such Notes for a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in
the form of Exhibit C hereto, including the certifications in
item (1)(c) thereof; and
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(2) if the Holder of such Definitive Notes proposes
to transfer such Notes to a Person who shall take delivery
thereof in the form of a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in
the form of Exhibit B hereto, including the certifications in
item (4) thereof;
in each such case set forth in this subparagraph (D), an Opinion of
Counsel in form reasonably acceptable to the Company to the effect that
such exchange or transfer is in compliance with the Securities Act,
that the restrictions on transfer contained herein and in the Private
Placement Legend are not required in order to maintain compliance with
the Securities Act, and such Definitive Notes are being exchanged or
transferred in compliance with any applicable blue sky securities laws
of any State of the United States.
Upon satisfaction of the conditions of any of the subparagraphs in this
Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes and
increase or cause to be increased the aggregate principal amount of the
Unrestricted Global Note.
(iii) UNRESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS
IN UNRESTRICTED GLOBAL NOTES. A Holder of an Unrestricted Definitive
Note may exchange such Note for a beneficial interest in an
Unrestricted Global Note or transfer such Definitive Notes to a Person
who takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note at any time. Upon receipt of a request for
such an exchange or transfer, the Trustee shall cancel the applicable
Unrestricted Definitive Note and increase or cause to be increased the
aggregate principal amount of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or
(iii) above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an authentication order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of beneficial interests transferred pursuant to subparagraphs
(ii)(B), (ii)(D) or (iii) above.
(e) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR DEFINITIVE
NOTES. Upon request by a Holder of Definitive Notes and such Holder's compliance
with the provisions of this Section 2.06(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by his attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, pursuant to the provisions of this Section 2.06(e).
(i) RESTRICTED DEFINITIVE NOTES TO RESTRICTED DEFINITIVE
NOTES. Restricted Definitive Notes may be transferred to and registered
in the name of Persons who take delivery thereof if the Registrar
receives the following:
(A) if the transfer will be made pursuant to Rule
144A under the Securities Act, then the transferor must
deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (1) thereof;
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(B) if the transfer will be made pursuant to Rule 903
or Rule 904, then the transferor must deliver a certificate in
the form of Exhibit B hereto, including the certifications in
item (2) thereof;
(C) if the transfer will be made pursuant to an
exemption from the registration requirements of the Securities
Act to an Institutional Accredited Investor, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications and certificates and
Opinion of Counsel required by item (3) thereof, if
applicable, and the transferee must deliver a certificate in
the form of Exhibit D hereto; and
(D) if the transfer will be made pursuant to any
other exemption from the registration requirements of the
Securities Act, then the transferor must deliver (x) a
certificate in the form of Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required
by item (3) thereof, if applicable.
(ii) RESTRICTED DEFINITIVE NOTES TO UNRESTRICTED DEFINITIVE
NOTES. Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted Definitive Note or transferred to a Person
or Persons who take delivery thereof in the form of an Unrestricted
Definitive Note if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, is not (1) a
broker-dealer, (2) a Person participating in the distribution
of the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the
Registration Rights Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration
Statement in accordance with the Registration Rights
Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted
Definitive Notes proposes to exchange such Notes for an
Unrestricted Definitive Note, a certificate from such Holder
in the form of Exhibit C hereto, including the certifications
in item (1)(a) thereof;
(2) if the Holder of such Restricted
Definitive Notes proposes to transfer such Notes to a Person
who shall take delivery thereof in the form of an Unrestricted
Definitive Note, a certificate from such Holder in the form of
Exhibit B hereto, including the certifications in item (4)
thereof; and
(3) in each such case set forth in this
subparagraph (D), an Opinion of Counsel in form reasonably
acceptable to the Company to the effect that such exchange or
transfer is in compliance with the Securities Act, that the
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restrictions on transfer contained herein and in the Private
Placement Legend are not required in order to maintain
compliance with the Securities Act, and such Restricted
Definitive Note is being exchanged or transferred in
compliance with any applicable blue sky securities laws of any
State of the United States.
(iii) A Holder of Unrestricted Definitive Notes may transfer
such Notes to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note. Upon receipt of a request for such a
transfer, the Registrar shall register the Unrestricted Definitive
Notes pursuant to the instructions from the Holder thereof.
Unrestricted Definitive Notes cannot be exchanged for or transferred to
Persons who take delivery thereof in the form of a Restricted
Definitive Note.
(f) EXCHANGE OFFER. Upon the occurrence of the Exchange Offer
in accordance with the Registration Rights Agreement, the Company shall issue
and, upon receipt of an authentication order in accordance with Section 2.02,
the Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by persons that
are not (x) broker-dealers, (y) Persons participating in the distribution of the
Exchange Notes or (z) Persons who are affiliates (as defined in Rule 144) of the
Company and accepted for exchange in the Exchange Offer and (ii) Definitive
Notes in an aggregate principal amount equal to the principal amount of the
Restricted Definitive Notes accepted for exchange in the Exchange Offer.
Concurrent with the issuance of such Notes, the Trustee shall cause the
aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Company shall execute and the Trustee shall
authenticate and make available for delivery to the Persons designated by the
Holders of Definitive Notes so accepted Definitive Notes in the appropriate
principal amount.
(g) LEGENDS. The following legends shall appear on the face of
all Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) PRIVATE PLACEMENT LEGEND.
(A) Except as permitted by subparagraph (b) below,
each Global Note and each Definitive Note (and all Notes
issued in exchange therefor or substitution thereof) shall
bear the legend in substantially the following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY
EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A OR REGULATION S THEREUNDER. THE HOLDER OF THE
SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE
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COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (1)(a) INSIDE THE UNITED STATES TO A PERSON WHO
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE
THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, (d) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(A)(1),
(2), (3) OR (7) OF THE SECURITIES ACT (AN "INSTITUTIONAL ACCREDITED
INVESTOR") THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS (THE
FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH
TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF
SECURITIES LESS THAN $100,000, AN OPINION OF COUNSEL THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT OR (e) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE
COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE."
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(iv),
(c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f)
to this Section 2.06 (and all Notes issued in exchange
therefor or substitution thereof) shall not bear the Private
Placement Legend.
(ii) GLOBAL NOTE LEGEND. Each Global Note shall bear a legend
in substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE
BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY
PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE Trustee MAY MAKE
SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF
THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT
IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL
NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO
SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE
TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF
THE COMPANY."
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(h) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTES. At such
time as all beneficial interests in a particular Global Note have been
exchanged for Definitive Notes or a particular Global Note has been redeemed,
repurchased or cancelled in whole and not in part, each such Global Note
shall be returned to or retained and cancelled by the Trustee in accordance
with Section 2.11 hereof. At any time prior to such cancellation, if any
beneficial interest in a Global Note is exchanged for or transferred to a
Person who will take delivery thereof in the form of a beneficial interest in
another Global Note or for Definitive Notes, the principal amount of
Securities represented by such Global Note shall be reduced accordingly and
an endorsement shall be made on such Global Note, by the Trustee or by the
Depositary at the direction of the Trustee, to reflect such reduction; and if
the beneficial interest is being exchanged for or transferred to a Person who
will take delivery thereof in the form of a beneficial interest in another
Global Note, such other Global Note shall be increased accordingly and an
endorsement shall be made on such Global Note, by the Trustee or by the
Depositary at the direction of the Trustee, to reflect such increase.
(i) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Global Notes
and Definitive Notes upon the Company's order or at the Registrar's
request.
(ii) No service charge shall be made to a holder of a
beneficial interest in a Global Note or to a Holder of a Definitive
Note for any registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than
any such transfer taxes or similar governmental charge payable upon
exchange or transfer pursuant to Sections 2.10, 3.06, 4.08, and 9.05
hereof).
(iii) The Registrar shall not be required to register the
transfer of or exchange any Security selected for redemption in whole
or in part, except the unredeemed portion of any Security being
redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive
Notes shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as
the Global Notes or Definitive Notes surrendered upon such registration
of transfer or exchange.
(v) The Company shall not be required (A) to issue, to
register the transfer of or to exchange Securities during a period
beginning at the opening of business 15 days before the day of mailing
of a notice of redemption under Section 3.02 hereof and ending at the
close of business on the day of selection, (B) to register the transfer
of or to exchange any Security so selected for redemption in whole or
in part, except the unredeemed portion of any Security being redeemed
in part or (C) to register the transfer of or to exchange a Security
between a record date and the next succeeding Interest Payment Date.
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(vi) Prior to due presentment for the registration of a
transfer of any Security, the Trustee, any Agent and the Company may
deem and treat the Person in whose name any Security is registered as
the absolute owner of such Security for the purpose of receiving
payment of principal of and interest on such Securities and for all
other purposes, and none of the Trustee, any Agent or the Company shall
be affected by notice to the contrary.
(vii) The Trustee shall authenticate Global Notes and
Definitive Notes in accordance with the provisions of Section 2.02
hereof.
(viii) All certifications, certificates and Opinions of
Counsel required to be submitted to the Registrar pursuant to this
Section 2.06 to effect a transfer or exchange may be submitted by
facsimile.
SECTION 2.07. REPLACEMENT SECURITIES.
If any mutilated Security is surrendered to the Trustee or the
Company and the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Security, the Company shall issue and the
Trustee, upon receipt of an Authentication Order, shall authenticate a
replacement Security if the Trustee's requirements are met. If required by the
Trustee or the Company, an indemnity bond must be supplied by the Holder that is
sufficient in the judgment of the Trustee and the Company to protect the
Company, the Trustee, any Agent and any authenticating agent from any loss that
any of them may suffer if a Security is replaced. The Company may charge for its
expenses in replacing a Security.
Every replacement Security is an additional obligation of the
Company and shall be entitled to all of the benefits of this Indenture equally
and proportionately with all other Securities duly issued hereunder.
SECTION 2.08. OUTSTANDING SECURITIES.
The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation, those reductions in the interest in a Global Note
effected by the Trustee in accordance with the provisions hereof, and those
described in this Section as not outstanding. Except as set forth in Section
2.09 hereof, a Security does not cease to be outstanding because the Company or
an Affiliate of the Company holds the Security; however, Securities held by the
Company or a Subsidiary of the Company shall not be deemed to be outstanding for
purposes of Section 3.07(b) hereof.
If a Security is replaced pursuant to Section 2.07 hereof, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Security is held by a bona fide purchaser.
If the principal amount of any Security is considered paid
under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases
to accrue.
If the Paying Agent (other than the Company, a Subsidiary or
an Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Securities payable
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on that date, then on and after that date such Securities shall be deemed to
be no longer outstanding and shall cease to accrue interest.
SECTION 2.09. TREASURY SECURITIES.
In determining whether the Holders of the required principal
amount of Securities have concurred in any direction, waiver or consent,
Securities 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 considered as though not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Securities that a Responsible Officer of
the Trustee actually knows are so owned shall be so disregarded.
SECTION 2.10. TEMPORARY SECURITIES.
Until certificates representing Securities are ready for
delivery, the Company may prepare and the Trustee, upon receipt of an
Authentication Order, shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of certificated Securities but may
have variations that the Company considers appropriate for temporary Securities
and as shall be reasonably acceptable to the Trustee. Without unreasonable
delay, the Company shall prepare and the Trustee shall authenticate definitive
Securities in exchange for temporary Securities.
Holders of temporary Securities shall be entitled to all of
the benefits of this Indenture.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Securities to the Trustee
for cancellation. The Registrar and Paying Agent shall forward to the Trustee
any Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee and no one else shall cancel all Securities surrendered for
registration of transfer, exchange, payment, replacement or cancellation. The
Company may not issue new Securities to replace Securities that it has paid or
that have been delivered to the Trustee for cancellation.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the
Securities, it shall pay the defaulted interest in any lawful manner plus, to
the extent lawful, interest payable on the defaulted interest, to the Persons
who are Holders on a subsequent special record date, in each case at the rate
provided in the Securities and in Section 4.01 hereof. The Company shall notify
the Trustee in writing of the amount of defaulted interest proposed to be paid
on each Security and the date of the proposed payment. The Company shall fix or
cause to be fixed each such special record date and payment date, PROVIDED that
no such special record date shall be less than 10 days prior to the related
payment date for such defaulted interest. At least 15 days before the special
record date, the Company (or, upon the written request of the Company, the
Trustee in the name and at the expense of the Company) shall mail or cause to be
mailed to Holders a notice that states the special record date, the related
payment date and the amount of such interest to be paid.
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SECTION 2.13. CUSIP NUMBERS
The Company in issuing the Securities s 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 that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Securities or as contained in any notice
of redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Trustee of any change in the "CUSIP" numbers.
ARTICLE 3
OPTIONAL REDEMPTION AND
OPTIONAL REDEMPTION UPON CHANGE OF CONTROL
SECTION 3.01. NOTICES TO TRUSTEE
(a) If the Company elects to redeem Securities pursuant to the
optional redemption provisions of Section 3.07 hereof, it shall furnish to the
Trustee, at least 45 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth that such redemption shall occur pursuant to
Section 3.07 hereof and setting forth the redemption date, the principal amount
of Securities to be redeemed and the redemption price.
(b) If the Company elects to redeem Securities pursuant to the
provisions of Section 3.08 hereof, it shall furnish to the Trustee, at least 45
days but not more than 60 days before the redemption date, an Officers'
Certificate setting forth that a Change of Control has occurred and the date of
such Change of Control and that such redemption shall occur pursuant to Section
3.08 hereof, and further setting forth the principal amount of Securities to be
redeemed, the redemption price of such Securities and the intended redemption
date.
SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED
If less than all of the Securities are to be redeemed at any
time, selection of the Securities for redemption will be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which the Securities are listed, or, if the Securities are not listed
on a national securities exchange, on a PRO RATA basis, by lot or by such method
as the Trustee shall deem fair and appropriate; PROVIDED that no Security in
denominations of $1,000 or less shall be redeemed in part. The Trustee may
select for redemption any portion (equal to $1,000 or any integral multiple
thereof) of the principal of Securities that have denominations larger than
$1,000. Except as provided in the preceding sentence, provisions of this
Indenture that apply to Securities called for redemption also apply to portions
of Securities called for redemption.
The Trustee shall promptly notify the Company in writing of
the Securities selected for redemption and, in the case of any Security selected
for partial redemption, the principal amount thereof to be redeemed. The
particular Securities to be redeemed shall be selected, unless otherwise
provided herein, not less than 30 nor more than 60 days prior to the
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redemption date by the Trustee from the outstanding Securities not previously
called for redemption.
SECTION 3.03. NOTICES TO HOLDERS
(a) If the Company elects to redeem Securities pursuant to
either of Section 3.07 or 3.08 hereof, notice of redemption shall be mailed by
first class mail at least 30 days but not more than 60 days before the
redemption date to each Holder of Securities to be redeemed at its registered
address.
The notice shall identify the Securities to be redeemed
(including CUSIP number) and shall state:
(1) the redemption date;
(2) the redemption price;
(3) if any Security is being redeemed in part, the
portion of the principal amount of such Security to
be redeemed and that, after the redemption date, upon
surrender of such Security, a new Security or
Securities in principal amount equal to the
unredeemed portion will be issued;
(4) the name and address of the Paying Agent;
(5) that Securities called for redemption must be
surrendered to the Paying Agent at the address
specified in such notice to collect the redemption
price;
(6) that interest on Securities or portions of them
called for redemption ceases to accrue on and after
the redemption date;
(7) the paragraph of the Securities pursuant to which the
Securities are being redeemed; and
(8) the aggregate principal amount of Securities that are
being redeemed.
(b) At the Company's timely request, the Trustee shall give
the notice required in Section 3.03(a) hereof above in the Company's name and at
its expense and setting forth the information to be stated in such notice as
provided in Section 3.03(a) hereof.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION
Once notice of redemption is mailed (after the Trustee has
received the notice provided for in Section 3.01 hereof), Securities called for
redemption become due and payable on the redemption date at the redemption price
and shall cease to bear interest from and after the redemption date (unless the
Company shall fail to make payment of the redemption price or accrued interest
on the redemption date). Upon surrender to the Paying Agent, such Securities
shall be paid at the redemption price, plus premium and Liquidated Damages, if
any, plus accrued interest, if any, to the redemption date, but interest
installments whose maturity is on the
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redemption date and Liquidated Damages which become payable on the redemption
date will be payable to the Holder of record at the close of business on the
relevant record dates referred to in the Securities.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE OR PURCHASE PRICE
Prior to 10:00 a.m. on the redemption date, the Company shall
deposit with the Trustee or with the Paying Agent money (in same-day funds)
sufficient to pay the redemption price of, premium and Liquidated Damages, if
any, and accrued interest on, all Securities to be redeemed on that date other
than Securities or portions thereof called for redemption on that date which
previously have been delivered by the Company to the Trustee for cancellation.
The Trustee or the Paying Agent shall return to the Company any such money not
required for that purpose.
If the Company complies with the preceding paragraph, interest
on the Securities or portions thereof to be redeemed, whether or not such
Securities are presented for payment, will cease to accrue on the applicable
redemption date. If any Security called for redemption shall not be so paid upon
surrender for redemption because of the failure of the Company to comply with
the preceding paragraph, then interest will be paid on the unpaid principal from
the redemption date until such principal is paid and on any interest not paid on
such unpaid principal, in each case, at the rate provided in the Securities and
in Section 4.01 hereof.
SECTION 3.06. SECURITIES REDEEMED IN PART
Upon surrender of a Security that is redeemed in part, the
Company shall issue and the Trustee, upon the written order of the Company,
shall authenticate for the Holder at the expense of the Company a new Security
equal in principal amount to the unredeemed portion of the Security surrendered.
SECTION 3.07. OPTIONAL REDEMPTION
At any time prior to May 15, 2004, the Company may on any one
or more occasions redeem up to 35% of the aggregate principal amount of
Securities (which includes Additional Securities, if any) issued hereunder at a
redemption price of 108.875% of the principal amount of such Securities, plus
accrued and unpaid interest to the redemption date, with the net cash proceeds
of one or more Equity Offerings; PROVIDED that:
(1) at least 65% of the aggregate principal amount of
Securities (which includes Additional Securities, if
any) issued remains outstanding immediately after the
occurrence of each of those redemptions (excluding
Securities held by the Company and its Subsidiaries);
and
(2) any redemption must occur within 60 days of the date
of closing of such Equity Offering.
Except as provided in the preceding paragraph and other than
in connection with a Change of Control pursuant to Section 3.08 herein, the
Company may not redeem the Securities prior to May 15, 2006. On or after May 15,
2006, the Company may, at its option, redeem the Securities, in whole or in
part, at the redemption prices (expressed as percentages of the principal
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amount) set forth in the immediately succeeding paragraph, plus accrued and
unpaid interest thereon to the applicable redemption date.
The redemption price as a percentage of the principal amount
shall be as follows, if the Securities are redeemed during the twelve-month
period beginning May 15 of the years indicated below:
<Table>
<Caption>
YEAR PERCENTAGE
2006..................................................104.438%
2007..................................................102.958%
2008..................................................101.479%
2009 and thereafter...................................100.000%
</Table>
If the optional redemption date is on or after an interest
record date and on or before the related interest payment date, the accrued and
unpaid interest, if any, will be paid to the Person in whose name the Security
is registered at the close of business on that record date, and no additional
interest will be payable to holders whose Securities will be subject to
redemption by the Company.
Notwithstanding the foregoing, upon the occurrence at any time
of a Change in Control, the Securities will be redeemable, at the option of the
Company, in whole or in part, pursuant to the provisions of Section 3.08 hereof.
Any redemption pursuant to this Section 3.07 shall be made, to
the extent applicable, pursuant to the provisions of Sections 3.01 through 3.06
hereof.
SECTION 3.08. OPTIONAL REDEMPTION UPON CHANGE OF CONTROL
In addition to any redemption pursuant to Section 3.07 hereof,
the Company may, at its option, redeem the Securities, in whole or in part, at
any time within 160 days after a Change of Control upon not less than 30 nor
more than 60 days' prior notice to each Holder of Securities to be redeemed, at
a redemption price equal to the sum of (i) the then outstanding principal amount
of the Securities being redeemed plus (ii) accrued and unpaid interest, if any,
to the redemption date plus (iii) the Applicable Premium.
Any redemption pursuant to this Section 3.08 shall be made, to
the extent applicable, pursuant to the provisions of Sections 3.01 through 3.06
hereof.
SECTION 3.09. SINKING FUND
The Securities will not be entitled to any sinking fund
payments.
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ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF SECURITIES
The Company shall pay the principal of and interest on the
Securities on the dates and in the manner provided in the Securities, and
shall pay Liquidated Damages, if any, on the dates and in the manner provided
in the Registration Rights Agreement. Principal and interest shall be
considered paid on the date due if the Paying Agent, other than the Company
or a Subsidiary of the Company, holds on that date money deposited by the
Company in available funds and designated for and sufficient to pay all
principal and interest then due.
The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal and
premium, if any, at the same rate per annum on the Securities to the extent
lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace period) at the same rate to the
extent lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY
The Company shall maintain, in the Borough of Manhattan,
The City of New York, an office or agency (which may be an office of the
Trustee or the Registrar) where Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Securities and this Indenture may be served.
The Company shall give prompt written notice to the Trustee of the location,
and any change in the location, of such office or agency. If at any time the
Company shall fail to maintain any such required office or agency or shall
fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.
The Company may also from time to time designate one or
more other offices or agencies where the Securities may be presented or
surrendered for any or all such purposes and may from time to time rescind
such designations; PROVIDED, HOWEVER, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an
office or agency in the Borough of Manhattan, The City of New York for such
purposes. The Company shall give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.
The Company hereby designates the Corporate Trust Office of
the Trustee as one such office or agency of the Company in accordance with
Section 2.03 hereof.
SECTION 4.03. SEC REPORTS; FINANCIAL STATEMENTS
(a) The Company and the Guarantors shall file with the
Trustee, within 15 days after it files the same with the SEC, copies of the
annual reports and the information, documents and other reports (or copies of
such portions of any of the foregoing as the SEC may by rules and regulations
prescribe) that the Company and/or the Guarantors are required to file with
the SEC pursuant to Section 13 or 15(d) of the Exchange Act. If the Company
is not subject to the requirements of such Section 13 or 15(d), the Company
shall file with the Trustee,
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within 15 days after it would have been required to file the same with the
SEC, financial statements, including any notes thereto (and with respect to
annual reports, an auditors' report by a firm of established national
reputation), and a "Management's Discussion and Analysis of Financial
Condition and Results of Operations," both comparable to that which the
Company would have been required to include in such annual reports,
information, documents or other reports if the Company had been subject to
the requirements of such Section 13 or 15(d). Any Guarantor not required to
file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act shall
not be required to file such reports with the SEC or Trustee. The Company and
the Guarantors shall also comply with the other provisions of TIA
Section314(a).
(b) If the Company is required to furnish annual or
quarterly reports to its stockholders pursuant to the Exchange Act, the
Company shall cause any annual report furnished to its stockholders generally
and any quarterly or other financial reports furnished by it to its
stockholders generally to be filed with the Trustee and mailed to the Holders
at their addresses appearing in the register of Securities maintained by the
Registrar. If the Company is not required to furnish annual or quarterly
reports to its stockholders pursuant to the Exchange Act, so long as at least
5% of the original principal amount of the Securities remain outstanding, the
Company shall cause its financial statements referred to in Section 4.03(a)
hereof, including any notes thereto (and with respect to annual reports, an
auditors' report by a firm of established national reputation), and a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" to be so mailed to the Holders within 90 days after the end of
each of the Company's fiscal years and within 60 days after the end of each
of the Company's first three fiscal quarters. The Company will cause to be
disclosed in a statement accompanying any annual report or comparable
information as of the date of the most recent financial statements in each
such report or comparable information the amount available for payments
pursuant to Section 4.07 hereof. As of the date hereof, the Company's fiscal
year ends on December 31. Any Guarantor not required to file with the SEC
pursuant to Section 13 or 15(d) of the Exchange Act shall not be required to
file such reports with the SEC or Trustee.
Delivery of such reports, information and documents to the
Trustee is for information purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein
or determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.04. COMPLIANCE CERTIFICATE
(a) 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 a review of the activities of the Company and its
Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under
this Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his knowledge the Company has kept,
observed, performed and fulfilled each and every covenant contained in this
Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions hereof (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of
Default of which he may have knowledge and what action the Company is taking
or proposes to take with respect thereto) and that to the best of his
knowledge no event has occurred
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and remains in existence by reason of which payments on account of the
principal of or interest, if any, on the Securities are prohibited or, if
such event has occurred, a description of the event and what action the
Company is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current
recommendations of the American Institute of Certified Public Accountants,
the year-end financial statements delivered pursuant to Section 4.03 hereof
shall be accompanied by a written statement of the Company's independent
public accountants (who shall be a firm of established national reputation)
that in making the examination necessary for certification of such financial
statements nothing has come to their attention that would lead them to
believe that the Company has violated any provisions of Articles 4 or 5 of
this Indenture or, if any such violation has occurred, specifying the nature
and period of existence thereof, it being understood that such accountants
shall not be liable directly or indirectly to any Person for any failure to
obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Securities are
outstanding, (i) deliver to the Trustee, forthwith (and in any event within
five Business Days) upon any Officer becoming aware of any Default or Event
of Default under this Indenture, an Officers' Certificate specifying such
Default or Event of Default and what action the Company is taking or proposes
to take with respect thereto and (ii) promptly notify the Trustee of any
Change of Control.
SECTION 4.05. COMPLIANCE WITH LAWS, TAXES
The Company shall, and shall cause each of its Subsidiaries
to, comply with all statutes, laws, ordinances, or government rules and
regulations to which it is subject, noncompliance with which would materially
adversely affect the business, earnings, properties, assets or condition,
financial or otherwise, of the Company and its Subsidiaries taken as a whole.
The Company shall, and shall cause each of its Subsidiaries
to, pay prior to delinquency all taxes, assessments, and governmental levies
except as contested in good faith and by appropriate proceedings.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS
The Company covenants (to the extent that it may lawfully
do so) that it shall not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay, extension or
usury law wherever enacted, now or at any time hereafter in force, that may
affect the Company's obligation to pay the Securities; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law insofar as such law applies to the Securities, and
covenants that it shall not, by resort to any such law, hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law had
been enacted.
SECTION 4.07. LIMITATIONS ON RESTRICTED PAYMENTS
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, (i) declare or pay any
dividend or make any distribution on account of the Company's or any of its
Restricted Subsidiaries' Capital Stock or other Equity Interests (other
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than (A) dividends or distributions payable in Equity Interests (other than
Redeemable Stock) of the Company or such Restricted Subsidiary, (B) dividends
or distributions payable to the Company or any of its Restricted Subsidiaries
or (C) dividends or distributions by a Partially Owned Restricted Subsidiary
so long as, in the case of any dividend or distribution payable on or in
respect of any class or series of securities issued by that Partially Owned
Restricted Subsidiary, the Company or a Restricted Subsidiary receives at
least its pro rata share of that dividend or distribution in accordance with
its Equity Interests in that class or series of securities), (ii) (A)
voluntarily purchase, redeem or otherwise acquire or retire for value any
preferred stock of the Company or any of its Restricted Subsidiaries, which
by its terms, is exchangeable for any Indebtedness ("Exchangeable Preferred
Stock") that is pari passu with or subordinated in right of payment to the
Securities or (B) purchase, redeem or otherwise acquire or retire for value
any Equity Interests (other than Exchangeable Preferred Stock) of the Company
or any of its Restricted Subsidiaries (other than any such Equity Interests
purchased from the Company or any of its Restricted Subsidiaries), (iii)
voluntarily purchase, repay, redeem, defease (including, but not limited to,
covenant or legal defeasance) or otherwise acquire or retire for value any
Indebtedness that is subordinated in right of payment to the Securities
(other than in connection with the refunding or refinancing of such
Indebtedness), except a payment of interest or principal at the stated
maturity of such Indebtedness or in anticipation of satisfying a sinking fund
obligation, principal installment or final maturity, in each case due within
one year of such payment, and other than Indebtedness between and among the
Company and its Restricted Subsidiaries or (iv) make Investments in
Restricted Payment Unrestricted Subsidiaries (the foregoing actions set forth
in clauses (i) through (iv) being referred to as "Restricted Payments"), if,
at the time of such Restricted Payment:
(a) a Default or Event of Default shall have occurred and be
continuing or shall occur as a consequence thereof; or
(b) the Company could not incur at least $1.00 of additional
Indebtedness pursuant to the first paragraph of Section 4.09 hereof
(without giving effect to clauses (i) through (xvi) of the second
paragraph thereof), which calculation shall be made on a PRO FORMA
basis deducting from Adjusted Consolidated Net Income the amount of any
Investment the Company has made in an Unrestricted Subsidiary during
the relevant period and any Investment the Company intends to make in
an Unrestricted Subsidiary, to the extent that such Investment is made
with amounts included in Adjusted Consolidated Net Income as a result
of Transfers described in clause (c)(x) of this Section 4.07 or clause
(c)(y) of Section 4.14 hereof; or
(c) such Restricted Payment, together with the aggregate of
all other Restricted Payments made after May 13, 1992, exceeds the sum
of the following: (w) 50% of the amount of the Adjusted Consolidated
Net Income (other than amounts included in the next succeeding clause
(c)(x)) of the Company for the period (taken as one accounting period)
from the beginning of the first quarter commencing immediately after
May 13, 1992 through the end of the Company's fiscal quarter ending
immediately prior to the time of such Restricted Payment (or, if
Adjusted Consolidated Net Income for such period is a deficit, 100% of
such deficit); PLUS (x) 100% of the amount of all Transfers from a
Restricted Payment Unrestricted Subsidiary up to the aggregate amount
of the Investment (after taking into account all prior Transfers from
such Restricted Payment Unrestricted Subsidiary) in such Restricted
Payment Unrestricted Subsidiary
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(valued in each case as provided in the definition of "Investment");
PLUS (y) in the event of a designation of a Restricted Payment
Unrestricted Subsidiary as a Restricted Subsidiary, 100% of an
amount equal to the greater of (A) the fair market value of such
Subsidiary as determined by the Board of Directors of the Company in
good faith (or, if such fair market value may exceed $25.0 million,
as determined in writing by an independent investment banking firm
of nationally recognized standing) at the time of the redesignation
of such Restricted Payment Unrestricted Subsidiary as a Restricted
Subsidiary and (B) the Consolidated Net Cash Flow generated by such
Subsidiary for the period (taken as one accounting period) from the
beginning of its first fiscal quarter commencing immediately after
the date of its designation as a Restricted Payment Unrestricted
Subsidiary through such Subsidiary's fiscal quarter ending immediately
prior to its designation as a Restricted Subsidiary (or if such
Consolidated Net Cash Flow for such period is a deficit, 100% of such
deficit); PLUS (z) 100% of the aggregate net cash proceeds received by
the Company from (i) the issuance or sale of Equity Interests of the
Company (other than such Equity Interests issued or sold to a
Restricted Subsidiary of the Company and other than Redeemable Stock)
or (ii) the sale of the stock of an Unrestricted Subsidiary or the sale
of all or substantially all of the assets of an Unrestricted Subsidiary
to the extent that a liquidating dividend is paid to the Company or
any Restricted Subsidiary from the proceeds of such sale;
PROVIDED, HOWEVER, that for purposes of making Investments in Unrestricted
Subsidiaries, if the amount determined in accordance with clauses (w) or (y)
above is a deficit, such deficit shall be excluded from the computation of this
clause (c); and PROVIDED, FURTHER, that all such amounts applied pursuant to
this clause (c) shall not be available for application under clause (c) of
Section 4.14 hereof.
The foregoing provisions shall not prohibit (i) the payment
of any dividend within 60 days after the date of declaration thereof, if at
said date of declaration such payment would have complied with the provisions
of this Indenture; (ii) (A) the retirement of any shares of the Company's
Capital Stock (the "Retired Capital Stock") either (1) in exchange for or (2)
out of the net proceeds of the substantially concurrent sale (other than to a
Restricted Subsidiary) of other shares of the Company's Capital Stock (the
"Refunding Capital Stock") other than any Redeemable Stock, and (B) if
immediately prior to such retirement of such Retired Capital Stock the
declaration and payment of dividends thereon was permitted under either
clause (iii) or (vii) of this paragraph, the declaration and payment of
dividends on the Refunding Capital Stock in an aggregate amount per year no
greater than the aggregate amount of dividends per year that was declarable
and payable on such Retired Capital Stock immediately prior to such
retirement; (iii) the declaration and payment of dividends to the holders of
the Series D Preferred Stock, Series F Preferred Stock and the Series H
Preferred Stock; (iv) the repurchase, redemption or other acquisition or
retirement for value of any Equity Interests of the Company issued to present
and former members of management of the Company and its Subsidiaries pursuant
to subscription and option agreements in effect on the date hereof or under
any stock option plan of About.com, Inc. existing on the date hereof and
Equity Interests of the Company issued to future members of management
pursuant to subscription agreements executed subsequent to the date hereof,
containing provisions for the repurchase of such Equity Interests upon death,
disability or termination of employment of such persons which are
substantially identical to those contained in the subscription agreements in
effect on the date hereof; (v) the declaration and payment of dividends on
the Company's Common Stock of up to $25.0 million per annum plus 6% per
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annum of the net proceeds received at any time by the Company from (a) the
issue or sale of Common Stock or (b)(1) the issuance of securities
convertible into Common Stock (other than any such convertible securities
issued to (A) members of the Company's management or its Board of Directors
and (B) any Subsidiary of the Company) and (2) the conversion of such
convertible securities into Common Stock, in both cases at the time of such
conversion into Common Stock; (vi) the repurchase, redemption or other
acquisition or retirement for value of Indebtedness of the Company or any
Guarantor which is subordinated in right of payment to the Securities either
(A) in exchange for or (B) with the proceeds of the issuance of, Equity
Interests (other than Redeemable Stock) of the Company; (vii) the declaration
and payment of dividends to holders of any class or series of the Company's
preferred stock issued after the date hereof (including, without limitation,
the declaration and payment of dividends on Refunding Capital Stock in excess
of the dividends declarable and payable thereon pursuant to clause (ii) of
this paragraph), PROVIDED that at the time of such issuance the Company's
Fixed Charge Coverage Ratio, after giving effect to such issuance, would be
greater than 1.25 to 1; (viii) the redemption, repurchase or other
acquisition or retirement for value of any Indebtedness of the Company or any
Guarantor which is subordinated in right of payment to the Securities (A)
with the proceeds of, or in exchange for, Indebtedness incurred pursuant to
clause (vii) of the second paragraph of Section 4.09 hereof or (B) if, after
giving effect to such redemption, repurchase or retirement, the Company could
incur at least $1.00 of Indebtedness under the first paragraph of Section
4.09 hereof (without giving effect to clauses (i) through (xvi) of the second
paragraph thereof); (ix) the retirement of the Series D Preferred Stock,
Series F Preferred Stock and Series H Preferred Stock in exchange for the
issuance of the Class D Subordinated Debentures, Class F Subordinated
Debentures and Class H Subordinated Debentures, respectively, pursuant to the
respective certificates of designations relating thereto, (x) the purchase of
Class D Subordinated Debentures, Class F Subordinated Debentures and Class H
Subordinated Debentures in accordance with the Change of Control covenants in
the Class D Debenture Indenture, the Class F Debenture Indenture and the
Class H Debenture Indenture, respectively; (xi) Investments in Unrestricted
Subsidiaries having an aggregate fair market value, when taken together with
all other Investments made pursuant to this clause (xi) that are at that time
outstanding, not to exceed $50.0 million at the time of such Investment (with
the fair market value of each Investment being measured at the time made and
without giving effect to subsequent changes in value); (xii) the repurchase,
retirement or other acquisition for value of Equity Interests of the Company
which are not held by KKR or any of its Affiliates; PROVIDED, that (A) the
aggregate Restricted Payments made under this clause (xii) in any calendar
year shall not exceed $75 million and (B) immediately after giving effect to
each Restricted Payment made pursuant to this clause (xii) on a pro forma
basis, the Company could incur at least $1.00 of additional Indebtedness
pursuant to the first paragraph of Section 4.09 hereof (without giving effect
to clauses (i) through (xvi) of the second paragraph of Section 4.09), (xiii)
other Restricted Payments in an aggregate amount not to exceed $50.0 million
and (xiv) any Investment made in a Securitization Subsidiary in connection
with a Qualified Securitization Transaction, which Investment consists of the
transfer of Receivables and Other Assets; PROVIDED that in determining the
aggregate amount expended for Restricted Payments in accordance with
paragraph (c) above, (1) no amounts expended under clauses (ii)(A)(1),
(vi)(A), (viii), (ix) and (xiv) of this paragraph will be included, (2) 100%
of the amounts expended under clauses (ii)(A)(2), (iv), (v), (vi)(B), (vii),
(x), (xi), (xii) and (xiii) of this paragraph will be included, (3) 50% of
the amounts expended under clause (iii) of this paragraph will be included,
(4) amounts expended under clause (ii)(B) of this paragraph will be included
to the extent previously included for the Retired Capital Stock and (5) 100%
of the amounts expended under clause (i) to the extent not included
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under subclauses (1) through (4) of this proviso will be included. For the
purposes of determining compliance with this Section 4.07, in the event that
a Restricted Payment meets the criteria of more than one of the categories of
permitted Restricted Payments described in clauses (i) through (xiv) above or
is entitled to be incurred pursuant to the first paragraph of this Section
4.07 (including clauses (a), (b) and (c) thereof), the Company shall, in its
sole discretion, classify such Restricted Payment in any manner that complies
with the covenants described above and such Restricted Payment will be
treated as having been made pursuant to only one of such clauses or pursuant
to the first paragraph of this Section 4.07.
Not later than the date of making any Restricted Payment,
the Company shall deliver to the Trustee an Officer's Certificate stating
that such Restricted Payment is permitted and setting forth the basis upon
which the calculations required by this Section 4.07 were computed, which
calculations may be based on the Company's latest available internal
financial statements.
SECTION 4.08. DIVIDENDS AND PAYMENT RESTRICTIONS AFFECTING RESTRICTED
SUBSIDIARIES
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause
or suffer to exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary to (i) pay dividends or make any other
distributions on its Capital Stock, or any other interest or participation
in, or measured by, its profits, owned by the Company or any of its
Restricted Subsidiaries, or pay any Indebtedness owed to the Company or any
of its Restricted Subsidiaries, (ii) make loans or advances to the Company or
any of its Restricted Subsidiaries or (iii) transfer any of its properties or
assets to the Company or any of its Restricted Subsidiaries, except for such
encumbrances or restrictions existing under or by reason of: (A) the terms
(as in effect on the date hereof) of the Existing Indebtedness, (B) the terms
(as in effect on the date hereof) of the Bank Credit Facilities and the
Outstanding Notes and Outstanding Note Indentures, (C) the terms of
Indebtedness of the Company incurred in accordance with Section 4.09 hereof;
PROVIDED that such terms of any such Indebtedness constitute no greater
encumbrance or restriction on the ability of any Restricted Subsidiary to pay
dividends or make distributions, make loans or advances or transfer
properties or assets than is permitted by this Section 4.08, (D) the terms of
this Indenture and the Securities, (E) applicable law, (F) customary
non-assignment provisions entered into in the ordinary course of business and
consistent with past practices, (G) the terms of purchase money obligations
for property acquired in the ordinary course of business, but only to the
extent that such purchase money obligations restrict or prohibit the transfer
of the property so acquired, (H) the terms of the Class D Subordinated
Debentures, the Class D Debenture Indenture, the Class F Subordinated
Debentures, the Class F Debenture Indenture, the Class H Subordinated
Debentures and the Class H Debenture Indenture, (I) any encumbrance or
restriction with respect to a Subsidiary of the Company that is not a
Subsidiary of the Company on the date of this Indenture, which encumbrance or
restriction is in existence at the time such Person becomes a Subsidiary of
the Company or is created on the date it becomes a Subsidiary of the Company,
(J) any encumbrance or restriction with respect to a Subsidiary of the
Company imposed pursuant to an agreement which has been entered into for the
sale or disposition of all or substantially all the Capital Stock or assets
of such Subsidiary, (K) customary provisions in joint venture agreements and
other similar agreements entered into in the ordinary course of business, (L)
customary provisions contained in leases and other agreements entered into in
the ordinary
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course of business, (M) the terms of any Indebtedness for borrowed money of
any Partially Owned Restricted Subsidiary, (N) in the case of clause (iii) of
the first sentence of this Section 4.08, any encumbrance or restriction
contained in mortgages, pledges or other security agreements permitted under
the Indenture securing Indebtedness of the Company or a Restricted Subsidiary
of the Company to the extent that encumbrance or restriction restricts the
transfer of the property subject to those mortgages, pledges or other
security agreements, (O) any contractual requirements incurred with respect
to Qualified Securitization Transactions relating exclusively to a
Securitization Subsidiary that, in the good faith determination of the Board
of Directors of the Company, are customary in Qualified Securitization
Transactions or (P) any encumbrance or restriction existing under any
agreement which refinances or replaces the agreements described in clauses
(A), (B), (D), (H), (K), (L) and (M), PROVIDED that the terms and conditions
of any such encumbrances or restrictions contained in any such agreements
constitute no greater encumbrance or restriction on the ability of any
Restricted Subsidiary to pay dividends or make distributions, make loans or
advances or transfer properties or assets than those under or pursuant to the
agreement evidencing the Indebtedness or obligations refinanced. Nothing
contained in this Section 4.08 shall prevent the Company or a Restricted
Subsidiary from entering into any agreement permitting or providing for the
incurrence of Liens otherwise permitted by Section 4.13 hereof.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable with
respect to any Indebtedness unless the Company's Debt to Consolidated Cash
Flow Ratio for its four full fiscal quarters ending immediately prior to the
date such additional Indebtedness is created, incurred, issued, assumed or
guaranteed would have been no greater than 6.0 to 1, and such Indebtedness is
not senior in right of payment to the Securities; PROVIDED that such
calculation shall give effect to (A) the incurrence of any Indebtedness
(after giving effect to the application of the proceeds thereof) in
connection with the simultaneous acquisition of any person, business,
property or assets and (B) the Consolidated Cash Flow generated by such
acquired person, business, property or assets, giving effect in each case to
such incurrence of Indebtedness, application of proceeds and Consolidated
Cash Flow as if such acquisition had occurred at the beginning of such four
quarter period. For purposes of the foregoing provision, cash flow generated
by any acquired person, business, property or asset shall be determined on
the same basis as the definition of Consolidated Cash Flow and shall be based
on the actual earnings before interest, taxes, depreciation and amortization
of such acquired person, business, property or asset during the immediately
preceding four full fiscal quarters PLUS (y)(i) the savings in cost of goods
sold that would have resulted during that period from the effect of using the
Company's actual costs for comparable goods and services during that period
and (ii) other savings in cost of goods sold or eliminations of selling,
general and administrative expenses as determined by the Company in good
faith in its consideration of such acquisitions and consistent with the
Company's experiences in acquisitions of similar businesses MINUS (z) the
incremental expenses that would be included in cost of goods sold and
selling, general and administrative expenses that would have been incurred by
the Company in the operation of such acquired person, business, property or
assets during such period.
The foregoing limitations shall not apply to the incurrence
of (i) Indebtedness pursuant to the Credit Facilities (provided that the
principal amount of such Indebtedness shall
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not exceed $1.3 billion, less the amount of all repayments made in respect of
term loans and of all permanent commitment reductions with respect to
revolving loans (except to the extent, and only to the extent, that any
required repayments of principal in connection with such commitment reduction
are not made) made under the Credit Facilities (excluding such repayments and
commitment reductions which occur substantially contemporaneously with a
refinancing or a refunding thereof)), PLUS any amounts then available under
clause (vi) of this paragraph; (ii) Existing Indebtedness; (iii) Indebtedness
represented by the Outstanding Notes and the Securities (but not any
Additional Securities); (iv) Indebtedness represented by the Class D
Subordinated Debentures issued in exchange for all the outstanding Series D
Preferred Stock, the Class F Subordinated Debentures issued in exchange for
all the outstanding Series F Preferred Stock and the Class H Subordinated
Debentures issued in exchange for all the outstanding Series H Preferred
Stock; (v) Capital Lease Obligations in an aggregate principal amount which,
when aggregated with the principal amount of all other Capital Lease
Obligations then outstanding and incurred pursuant to this clause (v) and
including all Refinancing Indebtedness (as defined below) incurred to refund,
refinance or replace any other Indebtedness incurred pursuant to this clause
(v), does not exceed 5% of Total Assets; (vi) Indebtedness in an aggregate
principal amount equal to the greater of (A) $225.0 million in the aggregate
at any one time outstanding for the Company and its Restricted Subsidiaries
or (B) Indebtedness created, incurred, issued, assumed or guaranteed (x) by
the Company at any one time outstanding not in excess of 7% of the
Consolidated Net Worth of the Company at the time of such creation,
incurrence, issuance, assumption or guarantee or (y) by any Restricted
Subsidiary of the Company at any one time outstanding not in excess of 7% of
the Consolidated Net Worth of such Restricted Subsidiary at the time of such
creation, incurrence, issuance, assumption or guarantee; (vii) Indebtedness
created, incurred, issued, assumed or guaranteed in exchange for or the
proceeds of which are used to extend, refinance, renew, replace, substitute
or refund Indebtedness referred to in clauses (i) through (vi) above,
including additional Indebtedness incurred to pay premiums and fees in
connection therewith (the "Refinancing Indebtedness"); PROVIDED, that (A) the
principal amount of such Refinancing Indebtedness shall not exceed the
principal amount of Indebtedness (including unused commitments and additional
Indebtedness incurred to pay premiums and fees in connection therewith) so
extended, refinanced, renewed, replaced, substituted or refunded PLUS any
amounts then available under clause (vi) of this paragraph, (B) in the case
of Refinancing Indebtedness for Indebtedness permitted under clauses (ii) and
(iv) of this paragraph, the Refinancing Indebtedness permitted under clauses
(ii) and (iv) of this paragraph shall have an Average Life equal to or
greater than the Average Life of the Indebtedness being extended, refinanced,
renewed, replaced, substituted or refunded and (C) the Refinancing
Indebtedness for Indebtedness permitted under clauses (ii) and (iv) of this
paragraph shall rank, in right of payment, no more senior than such
Indebtedness being extended, refinanced, renewed, replaced, substituted or
refunded and the Refinancing Indebtedness for Indebtedness permitted under
clauses (i), (iii), (v) and (vi) of this paragraph shall rank, in right of
payment, PARI PASSU with or junior to the Securities; (viii) intercompany
Indebtedness incurred in connection with Investments in Unrestricted
Subsidiaries; PROVIDED that such Investments are permitted by Section 4.07 or
Section 4.14 hereof; (ix) Indebtedness under Currency Agreements and Interest
Rate Agreements, PROVIDED that in the case of Currency Agreements which
relate to other Indebtedness, such Currency Agreements do not increase the
Indebtedness of the Company outstanding other than as a result of
fluctuations in foreign currency exchange rates; (x) Indebtedness arising
from agreements providing for indemnification, adjustment of purchase price
or similar obligations, or from guarantees or letters of credit, surety bonds
or performance bonds securing any obligations of the Company or any
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Restricted Subsidiary of the Company pursuant to such agreements, incurred or
assumed by the acquired Subsidiary in connection with the acquisition or
disposition of any business, assets or Restricted Subsidiary of the Company,
other than guarantees or similar credit support by the Company of
Indebtedness incurred by any Person acquiring all or any portion of such
business, assets or Restricted Subsidiary for the purpose of financing such
acquisition; PROVIDED that the maximum aggregate liability in respect of all
such Indebtedness in the nature of such guarantees shall at no time exceed
the gross proceeds actually received from the sale of such business, assets
or Restricted Subsidiary; (xi) Indebtedness arising from the honoring by a
bank or other financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts, which will not be,
and will not be deemed to be, inadvertent) drawn against insufficient funds
in the ordinary course of business, PROVIDED that such Indebtedness is
extinguished within three Business Days of its incurrence; (xii) Indebtedness
of an entity at the time it is acquired as a Restricted Subsidiary, PROVIDED
that such Indebtedness was not incurred or assumed by such entity in
connection with or in anticipation of such acquisition; (xiii) Indebtedness
between the Company and any Restricted Subsidiary; PROVIDED that any
subsequent transfer of any Capital Stock which results in any Restricted
Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer
of such Indebtedness (other than to the Company or another Restricted
Subsidiary) shall be deemed in each case to constitute the incurrence of such
Indebtedness by the obligor thereon; (xiv) Non-Compete Notes, not to exceed
$50.0 million in aggregate principal amount less the amount of all principal
repayments made in respect thereof; (xv) the Company's Obligations arising
from the repurchase, redemption or other acquisitions of Capital Stock from
management investors to the extent permitted by Section 4.07 hereof and (xvi)
Indebtedness incurred by a Securitization Subsidiary in connection with a
Qualified Securitization Transaction that is Non-Recourse Indebtedness with
respect to the Company and its Restricted Subsidiaries (except for Standard
Securitization Undertakings); PROVIDED that in the event such Securitization
Subsidiary ceases to qualify as a Securitization Subsidiary or such
Indebtedness ceases to constitute such Non-Recourse Indebtedness, such
Indebtedness will be deemed, in each case, to be incurred at such time. For
the purposes of determining the aggregate Indebtedness of any referent
Person, Indebtedness shall not include guarantees by any other Person of such
Indebtedness. For the purposes of determining compliance with this Section
4.09, (A) in the event that an item of Indebtedness meets the criteria of
more than one of the categories of permitted Indebtedness described in
clauses (i) through (xvi) of this Section 4.09 or is entitled to be incurred
pursuant to the first paragraph of this Section 4.09, the Company shall, in
its sole discretion, classify such item of Indebtedness in any manner that
complies with the covenants described above; PROVIDED that any Indebtedness
classified as incurred pursuant to clause (vi) above may later be
reclassified as having been incurred pursuant to the first paragraph of this
covenant to the extent such reclassified Indebtedness could be incurred
pursuant to the first paragraph at the time of such reclassification; and (B)
such item of Indebtedness will be treated as having been incurred pursuant to
only one of such clauses or pursuant to the first paragraph of this Section
4.09 except as otherwise set forth in clause (A). Accrual of interest, the
accretion of accreted value and the payment of interest in the form of
additional Indebtedness will not be deemed to be an incurrence of
Indebtedness for purposes of this Section 4.09.
SECTION 4.10. CHANGE OF CONTROL
Upon the occurrence of a Change of Control, each Holder shall
have the right to require the Company to repurchase all or any part of such
Holder's Securities pursuant to the
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offer described below (the "Change of Control Offer") at a purchase price
equal to 101% of the aggregate principal amount of such Securities plus
accrued and unpaid interest, if any, to the date of purchase (the "Change of
Control Payment"). Within 40 days following any Change of Control, the
Company shall mail a notice to each Holder stating:
(1) that the Change of Control Offer is being made pursuant to
this Section 4.10 and that all Securities tendered will be accepted for
payment;
(2) the purchase price and the purchase date, which shall be
no earlier than 30 days nor later than 60 days from the date such
notice is mailed (the "Change of Control Payment Date");
(3) that any Security not tendered will continue to accrue
interest;
(4) that, unless the Company defaults in the payment of the
Change of Control Payment, all Securities accepted for payment pursuant
to the Change of Control Offer shall cease to accrue interest after the
Change of Control Payment Date;
(5) that Holders electing to have any Securities purchased
pursuant to a Change of Control Offer will be required to surrender the
Securities, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Security completed, to the Paying Agent at the
address specified in the notice prior to the close of business on the
Business Day preceding the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election
if the Paying Agent receives, not later than the close of business on
the third Business Day preceding the Change of Control Payment Date, a
telegram, telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Securities delivered
for purchase, and a statement that such Holder is withdrawing his
election to have such Securities purchased; and
(7) that Holders whose Securities are being purchased only in
part will be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered; PROVIDED that each
Holder shall tender Securities, and each Security purchased and each
such new Security issued by the Company shall be in a principal amount
of $1,000 or integral multiples thereof.
If the Change of Control Payment Date is on the related
interest payment date, any accrued interest will be paid to the person in whose
name a Security is registered at the close of business on such record date, and
no additional interest will be payable to Holders who tender Securities pursuant
to the Change of Control Offer.
On the Change of Control Payment Date, the Company shall, to
the extent lawful, (1) accept for payment Securities or portions thereof
tendered pursuant to the Change of Control Offer, (2) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all
Securities or portions thereof so tendered and (3) deliver or cause to be
delivered to the Trustee, the Securities so accepted together with an Officers'
Certificate stating the Securities or portions thereof were tendered to the
Company. The Paying Agent shall promptly mail to each Holder of Securities so
accepted, payment in an amount equal to the purchase price for such
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Securities, and the Trustee shall promptly authenticate and mail to such
Holder a new Security equal in principal amount to any unpurchased portion of
the Securities surrendered; PROVIDED that each such new Security shall be in
a principal amount of $1,000 or integral multiples thereof. The Company will
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
The Company shall not be required to make a Change of
Control Offer upon a Change of Control if a third party makes the Change of
Control Offer in the manner, at the times and otherwise in compliance with
the requirements included in this Section 4.10 applicable to a Change of
Control Offer made by the Company and purchases all Securities validly
tendered and not withdrawn under that Change of Control Offer.
SECTION 4.11. LIMITATIONS ON ASSET SALES
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, consummate an Asset Sale
(including the sale of any of the stock of any Subsidiary) unless at least
100% of the Net Proceeds from such Asset Sale (or, in the case of a Partially
Owned Restricted Subsidiary, the Company's Pro Rata Portion thereof, after
repayment by such Partially Owned Restricted Subsidiary of its Indebtedness)
are applied first to repay Obligations or reduce commitments under the Credit
Facilities in accordance with the terms thereof, second to offer to redeem at
par the Outstanding Notes and third to offer to redeem at par the Securities.
The foregoing application of Net Proceeds from Asset Sales is not required in
the case of (i) sales or dispositions generating cash proceeds of less than,
with respect to the Company and its Restricted Subsidiaries, $2.5 million and
(ii) sales and dispositions as to which the Company delivers a reinvestment
notice and the proceeds are so reinvested in one or more communications,
publishing, information, education or media assets or businesses within 12
months of the date the relevant Asset Sale is consummated. Notwithstanding
the foregoing provisions of this Section 4.11, neither the Company nor its
Restricted Subsidiaries shall be required to apply the Net Proceeds from any
Asset Sale (i) to the extent that the aggregate Net Proceeds from such Asset
Sale, together with the Net Proceeds, if any, of any other Asset Sale which
have not been previously applied, are less than $25.0 million or (ii) to the
extent that, and for so long as, such Net Proceeds cannot be so applied as a
result of an encumbrance or restriction permitted pursuant to Section 4.13
hereof.
(b) At least 15 days prior to the Company's mailing of a
notice of a Net Proceeds Offer, the Company shall notify the Trustee of the
Company's obligation to make such Net Proceeds Offer. Notice of a Net
Proceeds Offer shall be mailed by the Company not less than 30 Business Days
nor more than 40 days before the Net Proceeds Payment Date to the Holders of
the Securities at their last registered addresses with a copy to the Trustee
and the Paying Agent. The Net Proceeds Offer shall remain open from the time
of mailing until the close of business on the Business Day prior to the Net
Proceeds Payment Date. The notice shall contain all instructions and
materials necessary to enable such Holders to tender Securities pursuant to
the Net Proceeds Offer. The notice, which shall govern the terms of the Net
Proceeds Offer, shall state:
(1) that the Net Proceeds Offer is being made
pursuant to this Section 4.11 and that the Securities will be
accepted for payment on a PRO RATA basis (rounded down to the
nearest $1,000), if necessary;
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(2) the Purchase Price and the Net Proceeds Payment
Date;
(3) that any Security not tendered or accepted for
payment will continue to accrue interest;
(4) that any Security accepted for payment pursuant
to the Net Proceeds Offer shall cease to accrue interest after
the Net Proceeds Payment Date;
(5) that each Holder of a Security electing to have
such Security purchased pursuant to a Net Proceeds Offer will
be required to surrender the Security, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the
Security completed, to the Trustee at the address specified in
the notice prior to the close of business on the Business Day
prior to the Net Proceeds Payment Date;
(6) that Holders will be entitled to withdraw their
election if the Trustee receives, not later than the close of
business on the fifth Business Day next preceding the Net
Proceeds Payment Date, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of
Securities the Holder delivered for purchase and a statement
that such Holder is withdrawing his election to have such
Securities purchased; and
(7) that Holders whose Securities are purchased only
in part will be issued new Securities equal in principal
amount to the unpurchased portion of the Securities
surrendered.
The Trustee shall notify the Company at the opening of
business on the Net Proceeds Payment Date as to the principal amount of each of
the Securities or portions thereof which have been surrendered to the Trustee in
connection with the Net Proceeds Offer. On the Net Proceeds Payment Date, the
Company shall (i) accept for payment on a PRO RATA basis (if necessary)
Securities or portions thereof tendered pursuant to the Net Proceeds Offer, (ii)
deposit with the Paying Agent money sufficient to pay the purchase price of all
Securities or portions thereof so accepted and (iii) deliver or cause to be
delivered to the Trustee all Securities so accepted together with an Officers'
Certificate stating the Securities or portions thereof accepted for payment by
the Company and any other information that the Trustee may reasonably request in
order to make the payments required to be made on the Net Proceeds Payment Date.
The Paying Agent shall promptly mail to Holders of Securities so accepted,
payment in an amount equal to the Purchase Price, and the Trustee shall promptly
authenticate and mail to such Holders a new Security equal in principal amount
to any unpurchased portion of the Security surrendered. Any Securities not so
accepted shall be promptly mailed by the Trustee to the Holder thereof. The
Company will publicly announce the results of the Net Proceeds Offer on or as
soon as practicable after the Net Proceeds Payment Date. For purposes of this
Section 4.11, the Trustee shall act as the Paying Agent.
SECTION 4.12. TRANSACTIONS WITH AFFILIATES
Neither the Company nor any of its Restricted Subsidiaries
shall make any loan, advance, guarantee or capital contribution to, or for the
benefit of, or sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or for the benefit of, or purchase or lease
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any property or assets from, or enter into or amend any contract, agreement or
understanding (each an "Affiliate Transaction") with, or for the benefit of, (i)
any Person (or any Affiliate of such Person) holding 10% or more of any class of
Capital Stock of the Company or any of its Restricted Subsidiaries or (ii) any
Affiliate of the Company or any of its Restricted Subsidiaries, in each case
involving aggregate payments or consideration in excess of $5.0 million, unless
(a) such Affiliate Transaction is on terms that are not materially less
favorable to the Company or the relevant Restricted Subsidiary than those that
would have been obtained in a comparable transaction by the Company or such
Restricted Subsidiary with an unrelated Person and (b) the Company delivers to
the Trustee with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of $10.0
million, a resolution adopted by the majority of the Board of Directors
approving such Affiliate Transaction and set forth in an Officers' Certificate
certifying that such Affiliate Transaction complies with clause (a) of this
Section 4.12.
The foregoing restriction shall not apply to (i) the payment
of an annual fee to KKR for the rendering of management consulting and financial
services to the Company and its Restricted Subsidiaries in an aggregate amount
which is reasonable in relation thereto, (ii) the payment of transaction fees to
KKR in amounts which are in accordance with past practices for the rendering of
financial advice and services in connection with acquisitions, dispositions and
financings by the Company and its Subsidiaries, (iii) loans to officers,
directors and employees of the Company and its Subsidiaries for business or
personal purposes and other loans and advances to such officers, directors and
employees for travel, entertainment, moving and other relocation expenses made
in the ordinary course of business of the Company and its Subsidiaries, (iv) any
Restricted Payments not prohibited by Section 4.07 hereof or any Investment not
prohibited by Section 4.14 hereof, (v) transactions between or among any of the
Company and its Restricted Subsidiaries, (vi) allocation of corporate overhead
to Unrestricted Subsidiaries on a basis not materially less favorable to the
Company than such allocations to Restricted Subsidiaries, (vii) the payment of
reasonable and customary fees paid to, and indemnity provided on behalf of,
officers, directors, employees or consultants of the Company or any Restricted
Subsidiary or (viii) sales or other transfers or dispositions of Receivables and
Other Assets transferred to a Securitization Subsidiary in a Qualified
Securitization Transaction.
SECTION 4.13. LIMITATIONS ON LIENS
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
suffer to exist any Lien (other than Permitted Liens) on any of its assets or
any income or profits therefrom or assign or convey any right to receive income
therefrom unless the Securities are equally and ratably secured with the
Indebtedness secured by such Lien for so long as such Indebtedness is so
secured. Upon the release and discharge of the initial Lien, any Lien created in
favor of the Securities as a result of the initial Lien shall be automatically
released.
SECTION 4.14. INVESTMENTS IN UNRESTRICTED SUBSIDIARIES
The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, make any Investment in any Unrestricted
Subsidiary, if at the time of such Investment:
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(a) a Default or Event of Default shall have occurred and be
continuing or shall occur as a consequence thereof; or
(b) immediately before such Investment, the Company would not
be permitted to incur at least $1.00 of Indebtedness pursuant to the
first paragraph of Section 4.09 hereof (without giving effect to
clauses (i) through (xvi) of the second paragraph thereof), which
calculation shall be made on a PRO FORMA basis deducting from Adjusted
Consolidated Net Income the amount of any Investment the Company has
made in an Unrestricted Subsidiary during the relevant period and any
Investment the Company intends to make in an Unrestricted Subsidiary,
to the extent that such Investment is made with amounts included in
Adjusted Consolidated Net Income as a result of Transfers described in
clause (c)(x) of Section 4.07 hereof or clause (c)(y) of this Section
4.14; or
(c) such Investment, together with the aggregate of all other
Investments in Unrestricted Subsidiaries made after May 13, 1992,
exceeds (w) the aggregate Consolidated Net Cash Flow of the Company for
the period (taken as one accounting period) from the beginning of the
first quarter immediately after May 13, 1992 to the end of the
Company's most recently ended fiscal quarter at the time of such
Investment; PLUS (x) 100% of the aggregate net cash proceeds received
by the Company from (i) the issue or sale of Equity Interests of the
Company (other than such Equity Interests issued or sold to a
Restricted Subsidiary of the Company and other than Redeemable Stock)
or (ii) the sale of the stock of an Unrestricted Subsidiary or the sale
of all or substantially all of the assets of an Unrestricted Subsidiary
to the extent that a liquidating dividend is paid to the Company or any
Restricted Subsidiary from the proceeds of such sale; PLUS (y) 100% of
the amount of all Transfers from a Net Cash Flow Unrestricted
Subsidiary up to the aggregate Investment (after taking into account
all prior Transfers from such Net Cash Flow Unrestricted Subsidiary) in
such Net Cash Flow Unrestricted Subsidiary resulting from such payments
or transfers of assets (valued in each case as provided in the
definition of "Investment"); PLUS (z) in the event of a designation of
a Net Cash Flow Unrestricted Subsidiary as a Restricted Subsidiary,
100% of an amount equal to the greater of (A) the fair market value of
such Subsidiary as determined by the Board of Directors in good faith
(or, if such fair market value may exceed $25.0 million, as determined
in writing by an independent investment banking firm of nationally
recognized standing) at the time of the redesignation of such Net Cash
Flow Unrestricted Subsidiary as a Restricted Subsidiary and (B) the
Consolidated Net Cash Flow generated by such Subsidiary for the period
(taken as one accounting period) from the beginning of its first fiscal
quarter commencing immediately after the date of its designation as Net
Cash Flow an Unrestricted Subsidiary through such Subsidiary's fiscal
quarter ending immediately prior to its designation as a Restricted
Subsidiary (or if such Consolidated Net Cash Flow for such period is a
deficit, 100% of such deficit);
PROVIDED, that all such amounts applied pursuant to this clause (c) shall not be
available for application under clause (c) of Section 4.07 hereof.
The foregoing limitations shall not apply to (i) an Investment
to the extent that it is to capitalize a Restricted Payment Unrestricted
Subsidiary permitted pursuant to Section 4.07 hereof; (ii) an Investment to the
extent that it is funded by the issuance of Equity Interests of the Company to
the extent net proceeds are not used to fund an optional redemption of
Securities,
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(iii) any Investment made in a Securitization Subsidiary in connection with a
Qualified Securitization Transaction, which Investment consists of the
transfer of Receivables and Other Assets and (iv) Investments in Unrestricted
Subsidiaries having an aggregate fair market value, when taken together with
all other Investments made pursuant to this clause (iv) that are at that time
outstanding, not to exceed $50.0 million at the time of such Investment (with
the fair market value of each Investment being measured at the time made and
without giving effect to subsequent changes in value). For the purposes of
determining compliance with this Section 4.14, in the event that the making
of an Investment in an Unrestricted Subsidiary meets the criteria of more
than one of the categories of permitted Investments in Unrestricted
Subsidiaries described in clauses (i) through (iv) above or is entitled to be
incurred pursuant to the first paragraph of this Section 4.14 (including
clauses (a), (b) and (c) thereof), the Company shall, in its sole discretion,
classify such Investment in an Unrestricted Subsidiary in any manner that
complies with this Section 4.14 and Investment in an Unrestricted Subsidiary
will be treated as having been made pursuant to only one of such clauses or
pursuant to the first paragraph of this Section 4.14.
Each Net Cash Flow Unrestricted Subsidiary of the Company
shall at all times remain (1) wholly owned, directly or indirectly, by the
Company or a wholly owned Restricted Subsidiary of the Company or (2) a
Subsidiary of the Company so long as there is no encumbrance or restriction on
the ability of that Subsidiary to pay dividends or make any other distributions
on its Capital Stock, or pay any Indebtedness or other obligations to, the
Company or any Restricted Subsidiary.
Not later than the date of making any Investment described
above, the Company shall deliver to the Trustee an Officer's Certificate stating
that such Investment is permitted (including, without limitation, whether such
Investment is capitalizing a Net Cash Flow Unrestricted Subsidiary or a
Restricted Payment Unrestricted Subsidiary) and setting forth the basis upon
which the calculations required by this Section 4.14 were computed, which
calculations may be based on the Company's latest available internal financial
statements.
SECTION 4.15. PAYMENTS FOR CONSENT
Neither the Company nor any of its Subsidiaries shall,
directly or indirectly, pay or cause to be paid any consideration, whether by
way of interest, fee or otherwise, to any Holder of any Securities for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Securities unless such consideration is offered to be
paid or agreed to be paid to all Holders of the Securities which so consent,
waive or agree to amend in the time frame set forth in solicitation documents
relating to such consent, waiver or agreement.
SECTION 4.16. CORPORATE EXISTENCE.
Subject to Article 5 hereof, the Company shall do or cause to
be done all things necessary to preserve and keep in full force and effect its
corporate existence and the corporate, partnership or other existence of each
Restricted Subsidiary in accordance with the respective organizational documents
of each Restricted Subsidiary and the rights (charter and statutory), licenses
and franchises of the Company and its Restricted Subsidiaries; PROVIDED that the
Company shall not be required to preserve any such right, license or franchise,
or the corporate,
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partnership or other existence of any Restricted Subsidiary, if the Board of
Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Restricted
Subsidiaries taken as a whole and that the loss thereof is not adverse in any
material respect to the Holders.
SECTION 4.17. RULE 144A INFORMATION REQUIREMENT.
The Company will furnish to the Holders or beneficial holders
of the Securities and prospective purchasers of the Securities designated by the
holders of Transfer Restricted Securities, upon their request, the information
required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act
until such time as the Company consummates the Exchange Offer or has registered
the Securities for resale under the Securities Act.
ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS
The Company may not consolidate with, merge with or into, or
transfer all or substantially all of its assets (as an entirety or substantially
as an entirety in one transaction or a series of related transactions), to any
Person (except a wholly owned Restricted Subsidiary, PROVIDED that in connection
with any merger of the Company with a Restricted Subsidiary of the Company, no
consideration (other than common stock in the surviving corporation or the
Company) shall be issued or distributed to the shareholders of the Company) or
permit any person to merge with or into it unless:
(i) the Company shall be the continuing Person, or the Person
(if other than the Company) formed by such consolidation or into which
the Company is merged or to which the properties and assets of the
Company are transferred (collectively, the "Successor") shall be a
corporation organized and existing under the laws of the United States
or any State thereof or the District of Columbia and shall expressly
assume, by a supplemental indenture, executed and delivered to the
Trustee, in form satisfactory to the Trustee, all of the obligations of
the Company under the Securities and this Indenture;
(ii) immediately after giving effect to such transaction on a
pro forma basis, (a) no Default and no Event of Default under this
Indenture shall have occurred and be continuing and (b) the Company
could incur at least $1.00 of additional Indebtedness pursuant to the
first paragraph of Section 4.09 hereof (without giving effect to
clauses (i) through (xvi) of the second paragraph thereof) or the Debt
to Consolidated Cash Flow Ratio equals or is less than the Debt to
Consolidated Cash Flow Ratio immediately prior to such transaction.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED
Upon any consolidation or merger, or any sale, lease,
conveyance or other disposition of all or substantially all of the assets of the
Company or any assignment of its obligations under this Indenture or the
Securities in accordance with Section 5.01 hereof, the Successor formed by such
consolidation or into or with which the Company is merged or to
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which such sale, lease, conveyance or other disposition or assignment is made
shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
Successor has been named as the Company herein and the predecessor Company,
in the case of a sale, lease, conveyance or other disposition or assignment,
shall be released from all obligations under this Indenture and the
Securities.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT
Each of the following constitutes an "EVENT OF DEFAULT":
(1) the Company fails to make any payment of interest on any
Security when the same shall become due and payable and the Default
continues for a period of 30 days;
(2) the Company fails to make any payment of the principal or
premium of any Security when the same shall become due and payable at
maturity, or upon acceleration, redemption or otherwise;
(3) the Company fails to comply with any of its other
agreements or covenants in, or provisions of, the Securities or this
Indenture and such failure continues for the period and after the
notice specified below;
(4) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced
any Indebtedness for money borrowed by the Company or any of its
Restricted Subsidiaries (or the payment of which is guaranteed by the
Company or any of its Restricted Subsidiaries) whether such
Indebtedness or guarantee is now existing or thereafter created in the
future, if either (A) such default is the failure to pay the final
scheduled principal installment in an amount of at least $10.0 million
in respect of any such Indebtedness on the stated maturity date thereof
(after giving effect to any extension of such maturity date by the
holder of such Indebtedness and after the expiration of any grace
period in respect of such final scheduled principal installment
contained in the instrument under which such Indebtedness is
outstanding) or (B) as a result of such default the maturity of such
Indebtedness has been accelerated prior to its express maturity and the
principal amount of such Indebtedness, together with the principal
amount of any other such Indebtedness the maturity of which has been
accelerated, aggregates $20.0 million or more; PROVIDED that an Event
of Default shall not be deemed to occur with respect to any accelerated
Indebtedness which is repaid or prepaid within 20 days after such
declaration;
(5) a final judgment that exceeds $15 million individually, or
final judgments that exceed $25 million in the aggregate, for the
payment of money are entered by a court or courts of competent
jurisdiction against the Company, or any of its Significant
Subsidiaries and such judgment or judgments shall not be discharged,
satisfied, stayed, annulled or rescinded within 60 days of being
entered;
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(6) the Company or any of its Significant Subsidiaries
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
all or substantially all of its property, or
(d) makes a general assignment for the benefit of its
creditors; or
(7) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(a) is for relief against the Company, or any of its
Significant Subsidiaries as debtor in an involuntary
case,
(b) appoints a Custodian of the Company, or any of its
Significant Subsidiaries or a Custodian for all or
substantially all of the property of the Company, or
any of its Significant Subsidiaries, or
(c) orders the liquidation of the Company, or any of its
Significant Subsidiaries,
and the order or decree remains unstayed and in effect for 60 days; and
(8) except as permitted by this Indenture and the Securities,
the Guarantees shall be held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full
force and effect with respect to any Guarantor or any Guarantor shall
deny or disaffirm its obligations under its Guarantee.
The Company is required, pursuant to Section 4.04(a) hereof,
to deliver to the Trustee annually a statement regarding compliance with this
Indenture, and the Company is required, pursuant to Section 4.04(c) hereof, upon
becoming aware of any Default or Event of Default to deliver a statement to the
Trustee specifying such Default or Event of Default. The Trustee shall not be
deemed to know of a Default unless a Responsible Officer has actual knowledge of
such Default or receives written notice of such Default with specific reference
to such Default.
In the case of any Event of Default pursuant to the provisions
of this Section 6.01 occurring by reason of any willful action (or inaction)
taken (or not taken) by or on behalf of the Company with the intention of
avoiding payment of the premium, if any, which the Company would have had to pay
if the Company then had elected to redeem the Securities pursuant to Section
3.07 hereof, an equivalent premium shall also become and be immediately due and
payable to the extent permitted by law, anything in this Indenture or in the
Securities contained to the contrary notwithstanding.
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A Default under clause (3) is not an Event of Default until
the Trustee notifies the Company, or the Holders of at least 30% in principal
amount of the then outstanding Securities notify the Company and the Trustee, in
writing, of the Default and the Company does not cure the Default within 30 days
after receipt of the notice. The notice must specify the Default, demand that it
be remedied and state that the notice is a "Notice of Default."
SECTION 6.02. ACCELERATION
If an Event of Default (other than an Event of Default with
respect to the Company specified in clauses (6) or (7) of Section 6.01 hereof)
occurs and is continuing, the Trustee by written notice to the Company, or the
Holders of at least 30% in principal amount of the then outstanding Securities
by written notice to the Company and the Trustee, may and the Trustee at the
request of such Holders shall, declare all unpaid principal of, premium and
Liquidated Damages, if any, and accrued interest on the Securities to be due and
payable immediately. Upon such declaration of acceleration such principal of,
premium and Liquidated Damages, if any, and accrued interest, due and payable on
the Securities, as determined in the next succeeding paragraph, shall be due and
payable immediately. If an Event of Default with respect to the Company
specified in clause (6) or (7) of Section 6.01 hereof occurs, all unpaid
principal of, premium and Liquidated Damages, if any, and accrued interest on
the Securities then outstanding shall IPSO FACTO become and be immediately due
and payable without any declaration, notice or other act on the part of the
Trustee or any Holder. The Holders of at least a majority in aggregate principal
amount of the then outstanding Securities 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
(except nonpayment of principal, premium and Liquidated Damages, if any, or
interest on the Securities that has become due solely as a result of such
acceleration) have been cured or waived.
In the event that the maturity of the Securities is
accelerated pursuant to this Section 6.02, 100% of the principal amount thereof
and premium or Liquidated Damages, if any, plus accrued interest to the date of
payment shall become due and payable.
SECTION 6.03. OTHER REMEDIES
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy to collect the payment of principal, premium and
Liquidated Damages, if any, or interest then due on the Securities or to enforce
the performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Holder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS
The Holders of at least a majority in principal amount of the
then outstanding Securities by notice to the Trustee may waive an existing
Default or Event of Default and its consequences (including waivers obtained in
connection with a tender offer or exchange offer for
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Securities), except a continuing Default or Event of Default in the payment
of the principal of, premium or Liquidated Damages, if any, or interest on
any Security (including, without limitation, pursuant to any mandatory or
optional redemption obligation hereunder). Upon any such waiver, such Default
shall cease to exist, and any Event of Default arising therefrom shall be
deemed to have been cured for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other Default or impair any right
consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY
The Holders of a majority in principal amount of the then
outstanding Securities may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it. However, the Trustee may refuse to follow any direction
that conflicts with law or this Indenture, that the Trustee determines may be
unduly prejudicial to the rights of other Holders, or that may involve the
Trustee in personal liability.
SECTION 6.06. LIMITATIONS ON SUITS
A Holder may not pursue a remedy with respect to this
Indenture, the Securities or any Guarantee unless:
(1) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(2) the Holders of at least 25% in principal amount of the
then outstanding Securities make a written request to the Trustee to
pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense
(including, without limitation, fees and expenses of counsel);
(4) the Trustee does not comply with the request within 30
days after receipt of the request and the offer of indemnity; and
(5) during such 30-day period the Holders of a majority in
principal amount of the then outstanding Securities do not give the
Trustee a direction which is inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another Holder or
to obtain a preference or priority over another Holder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT
Notwithstanding any other provision of this Indenture, the
right of any Holder of a Security to receive payment of principal of, premium
and Liquidated Damages, if any, and interest on the Security, on or after the
respective due dates expressed in the Security, 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 the Holder.
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SECTION 6.08. COLLECTION SUIT BY TRUSTEE
If an Event of Default specified in Section 6.01(1) or (2) or
(3) (with respect to the Company's obligations under Section 4.10 or 4.11
hereof) hereof occurs and is continuing, the Trustee is authorized to recover
judgment in its own name and as trustee of an express trust against the Company
or any Guarantor for the amount of principal, premium, if any, and interest
remaining unpaid on the Securities, determined in accordance with Section 6.02
hereof and interest on overdue principal, premium and Liquidated Damages, if
any, and, to the extent lawful, interest, and such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM
The Trustee is authorized to file such proofs of claim and
other papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel) and
the Holders allowed in any judicial proceedings relative to the Company, its
creditors or its property and shall be entitled and empowered to collect,
receive and distribute any money or other property payable or deliverable on any
such claims and any Custodian in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee, and in the event
that the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To
the extent that the payment of any such compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel, and any other amounts due
the Trustee under Section 7.07 hereof out of the estate in any such proceeding,
shall be denied for any reason, payment of the same shall be secured by a Lien
on, and shall be paid out of, any and all distributions, dividends, money,
securities and other properties which the Holders of the Securities may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 6.10. PRIORITIES
If the Trustee collects any money pursuant to this Article 6,
it shall pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.07
hereof;
SECOND: to Holders for amounts due and unpaid on the
Securities for principal, premium and Liquidated Damages, if any, and
interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities for
principal, premium, if any, and interest, respectively; and
THIRD: to the Company.
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The Trustee may fix a record date and payment date for any
payment to Holders pursuant to this Article 6.
SECTION 6.11. UNDERTAKING FOR COSTS
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as a Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees and expenses, against any party litigant in the suit,
having due regard to the merits and good faith of the claims or defenses made by
the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a
suit by a Holder pursuant to Section 6.07 hereof, or a suit by Holders of more
than 10% in principal amount of the then outstanding Securities.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE
(1) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by
this Indenture, and use the same degree of care and skill in such
exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(2) Except during the continuance of an Event of Default:
(a) the Trustee need perform only those duties that are
specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall
be read into this Indenture against the Trustee; and
(b) 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 pursuant to and conforming
to the requirements of this Indenture.
(3) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(a) this paragraph does not limit the effect of paragraph
(2) of this Section 7.01;
(b) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer
or other officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent
facts; and
(c) 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 Sections 6.02 or 6.05 hereof.
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(4) Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the Trustee is
subject to paragraphs (1), (2), (3) and (5) of this Section 7.01.
(5) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or incur any liability. The Trustee is
not obligated to perform any duty or exercise any right or power under
this Indenture at the request of the Holders of the Securities unless
it receives an offer from such Holders of security and indemnity
satisfactory to it against any loss, liability or expense (including,
without limitation, fees of counsel).
(6) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the
Company. Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
SECTION 7.02. RIGHTS OF TRUSTEE
(1) The Trustee may conclusively rely on any document (whether
in its original or facsimile form) believed by it to be genuine and to
have been signed or presented by the proper Person. The Trustee need
not investigate any fact or matter stated in the document.
(2) Before the Trustee acts or refrains from acting, it may
require receipt of an Officers' Certificate or an Opinion of Counsel or
both. The Trustee shall not be liable for any action it takes or omits
to take in good faith in reliance on such Officers' Certificate or
Opinion of Counsel. The Trustee may consult with counsel of its
selection and the advice of such counsel or any Opinion of Counsel
shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder and in reliance
thereon.
(3) The Trustee may act through agents, attorneys, custodians
and nominees and shall not be responsible for the misconduct or
negligence of any such agent, attorney, custodian or nominee appointed
with due care.
(4) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or
within its rights or powers conferred upon it by this Indenture.
(5) Unless otherwise specifically provided in this Indenture,
any demand, request, direction or notice from the Company or any
Guarantor shall be sufficient if signed by an Officer of the Company or
such Guarantor.
(6) The Trustee shall not be deemed to have notice of any
Default or Event of Default unless a Responsible Officer of the Trustee
has actual knowledge thereof or unless written notice of any event
which is in fact such a default is received by the Trustee at the
Corporate Trust Office of the Trustee, and such notice references the
Securities in this Indenture.
(7) The rights, privileges, protections, immunities and
benefits given to the
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Trustee, including, without limitation, its right to be indemnified,
are extended to, and shall be enforceable by, the Trustee in each of
its capacities hereunder, and each agent, custodian and other Person
employed to act hereunder.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE
The Trustee in its individual or any other capacity may become
the owner or pledgee of Securities and may otherwise deal with the Company or
any of its Affiliates with the same rights it would have if it were not Trustee.
Any Agent may do the same with like rights. However, the Trustee is subject to
Sections 7.10 and 7.11 hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER
The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Securities, it shall not be accountable for
the Company's use of the proceeds from the Securities or any money paid to the
Company or upon the Company's direction under any provision hereof, it shall not
be responsible for the use or application of any money received by any Paying
Agent other than the Trustee and it shall not be responsible for any statement
or recital herein or any statement in the Securities other than its certificate
of authentication.
SECTION 7.05. NOTICE OF DEFAULTS
If a Default or Event of Default occurs and is continuing and
if it is actually known to a Responsible Officer of the Trustee, the Trustee
shall mail to each Holder a notice of the Default or Event of Default within 90
days after it occurs or, if later, within ten days after such Default or Event
of Default becomes so known to the Trustee unless such Default or Event of
Default has been cured. Except in the case of a Default or Event of Default in
payment of principal of, premium and Liquidated Damages, if any, or interest on
any Security or that resulted from a failure to comply with Section 4.10 hereof,
the Trustee may withhold the notice if and so long as a committee of its
Responsible Officers determines in good faith that withholding the notice is in
the interests of the Holders.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS
Within 60 days after each May 15 beginning with May 15, 2001,
the Trustee shall mail to Holders a brief report dated as of such reporting date
that complies with TIA Section 313(a) (but if no event described in TIA Section
313(a) has occurred within the twelve months preceding the reporting date, no
report need be transmitted). The Trustee also shall comply with TIA Section
313(b). The Trustee also shall transmit by mail all reports as required by TIA
Section 313(c).
A copy of each report at the time of its mailing to Holders
shall be filed with the SEC and each stock exchange on which the Securities are
listed in accordance with TIA Section 313(d). The Company shall notify the
Trustee when the Securities are listed on any stock exchange or delisted
therefrom.
SECTION 7.07. COMPENSATION AND INDEMNITY
The Company shall pay to the Trustee from time to time such
compensation for its acceptance of this Indenture and services hereunder as the
parties shall agree from time to
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time in writing. The Trustee's compensation shall not be limited by any law
relating to compensation of a trustee of an express trust. The Company shall
reimburse the Trustee promptly upon request for all disbursements, advances and
expenses incurred by it. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.
The Company shall fully indemnify and hold harmless the
Trustee and its directors, officers, employees and agents against any loss,
liability, claim, damage or expense (including without limitation fees and
expenses of counsel) incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture including,
without limitation, costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of its powers and
duties hereunder, except as set forth in the next paragraph. The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity. The
Company shall defend the claim and the Trustee shall cooperate in the defense.
The Trustee may have separate counsel and the Company shall pay the reasonable
fees and expenses of such counsel. The Company need not pay for any settlement
made without its consent, which consent shall not be unreasonably withheld.
The Company need not reimburse any expense or indemnify
against any loss or liability determined by a court of competent jurisdiction to
have been caused or incurred as a result of the Trustee's own negligence or
willful misconduct.
To secure the Company's payment obligations in this Section
7.07, the Trustee shall have a Lien prior to the Securities on all money or
property held or collected by the Trustee, except that held in trust to pay
principal of, premium and Liquidated Damages, if any, and interest on particular
Securities. Such Lien shall survive the satisfaction and discharge of the
Indenture.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(6) or (7) hereof occurs, the expenses
and the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA Section
313(b)(2) to the extent applicable.
SECTION 7.08. REPLACEMENT OF TRUSTEE
The Trustee may resign and be discharged from the trust hereby
created by so notifying the Company. The Holders of a majority in principal
amount of the then outstanding Securities may remove the Trustee by so notifying
the Trustee and the Company. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) the Trustee is adjudged a bankrupt or an insolvent or
an order for relief is entered with respect to the
Trustee under any Bankruptcy Law;
(3) a Custodian or public officer takes charge of the
Trustee or its property; or
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(4) the Trustee becomes incapable of acting.
The foregoing notwithstanding, a resignation or removal of the Trustee and
appointment of a successor Trustee shall become effective only upon the
successor Trustee's acceptance of appointment as provided in this Section 7.08,
and thereafter the Trustee shall have no liability for any acts or omissions of
any successor Trustee.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of at least 10% in principal amount of the then
outstanding Securities may petition at the expense of the Company any court of
competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10 hereof, any
Holder may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to the Holders. 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 hereof. Notwithstanding replacement of the Trustee
pursuant to this Section 7.08, the Company's obligations under Section 7.07
hereof shall continue for the benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
Subject to Section 7.10 hereof, if the Trustee consolidates,
merges or converts into, or transfers all or substantially all of its corporate
trust business to, another corporation or national banking association, the
successor entity without any further act shall be the successor Trustee. In case
any Securities have been authenticated, but not delivered, by the Trustee then
in office, any successor by merger, conversion or consolidation of such
authenticating trustee may adopt such authentication and deliver the Securities
so authenticated with the same effect as if such successor trustee had itself
authenticated such Securities.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION
There shall at all times be a Trustee hereunder which shall be
a corporation organized and doing business under the laws of the United States
of America, any state thereof or the District of Columbia authorized under such
laws to exercise corporate trust powers, shall be subject to supervision or
examination by Federal or state (or the District of Columbia) authority and
shall have a combined capital and surplus of at least $50 million as set forth
in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).
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SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY
The Trustee is subject to TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
ARTICLE 8
LEGAL AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE
The Company may, at the option of its Board of Directors
evidenced by a resolution set forth in an Officers' Certificate, at any time,
elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding
Securities upon compliance with the conditions set forth below in this Article
8.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.02, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to
have been discharged from its obligations with respect to all outstanding
Securities on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance means that
the Company shall be deemed to have paid and discharged the entire Indebtedness
represented by the outstanding Securities, which shall thereafter be deemed to
be "outstanding" only for the purposes of Section 8.05 hereof and the other
Sections of this Indenture referred to in (a) and (b) below, and to have
satisfied all its other obligations under such Securities and this Indenture
(and the Trustee, on demand of and at the expense of the Company, shall execute
proper instruments acknowledging the same), except for the following provisions
which shall survive until otherwise terminated or discharged hereunder: (a) the
rights of Holders of outstanding Securities to receive solely from the trust
fund described in Section 8.04 hereof, and as more fully set forth in such
Section, payments in respect of the principal of, premium on, if any, and
interest on such Securities when such payments are due, (b) the Company's
obligations with respect to such Securities under Article 2 and Section 4.02
hereof, (c) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and the Company's obligations in connection therewith and (d) this
Article 8. Subject to compliance with this Article 8, the Company may exercise
its option under this Section 8.02 notwithstanding the prior exercise of its
option under Section 8.03 hereof.
SECTION 8.03. COVENANT DEFEASANCE
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.03, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be released
from its obligations under the covenants contained in Sections 4.07, 4.08, 4.09,
4.10, 4.11, 4.12, 4.13, 4.14, 4.15 and 4.16 hereof with respect to the
outstanding Securities on and after the date the conditions set forth in Section
8.04 are satisfied (hereinafter, "Covenant Defeasance"), and the Securities
shall thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding"
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for all other purposes hereunder (it being understood that such Securities shall
not be deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the outstanding Securities, the Company
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.01 hereof, but, except as specified
above, the remainder of this Indenture and such Securities shall be unaffected
thereby. In addition, upon the Company's exercise under Section 8.01 hereof of
the option applicable to this Section 8.03 hereof, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, Sections 6.01(3) through
6.01(5) and 6.01(8) hereof shall not constitute Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE
The following shall be the conditions to the application of
either Section 8.02 or 8.03 hereof to the outstanding Securities:
In order to exercise either Legal Defeasance or Covenant
Defeasance:
(a) the Company irrevocably deposits, or causes to be
deposited, in trust with the Trustee or the Paying Agent, or, at the option of
the Trustee, with a trustee satisfactory to the Trustee and the Company under
the terms of an irrevocable trust agreement in form and substance satisfactory
to the Trustee, money or U.S. Government Obligations in an amount sufficient
(without reinvestment thereof) to pay principal and interest on the Securities
to maturity or redemption, as the case may be, as such amounts become due, and
to pay all other sums payable by it hereunder; PROVIDED that (i) the trustee of
the irrevocable trust shall have been irrevocably instructed to pay such money
or the proceeds of such U.S. Government Obligations to the Trustee and (ii) the
Trustee shall have been irrevocably instructed to apply such money or the
proceeds of such U.S. Government Obligations to the payment of said principal,
premium and Liquidated Damages, if any, and interest with respect to the
Securities;
(b) in the case of an election under Section 8.02 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States acceptable to the Trustee or an Internal Revenue Service ruling to the
effect that the Holders of the outstanding Securities will not recognize income,
gain or loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the same amount, in the
same manner and at the same times as would have been the case if such Legal
Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States acceptable to the Trustee confirming that the Holders of the outstanding
Securities will not recognize income, gain or loss for federal income tax
purposes as a result of such Covenant Defeasance and will be subject to federal
income tax on the same amount, in the same manner and at the same times as would
have been the case if such Covenant Defeasance had not occurred;
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(d) no Default or Event of Default shall have occurred and be
continuing (A) on the date of such deposit or (B) insofar as Sections 6.01(6) or
6.01(7) hereof is concerned, at any time in the period ending on the 91st day
after the date of deposit; and
(e) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS
Subject to Section 8.06 hereof, all money and non-callable
U.S. Government Obligations (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
8.05, the "Trustee") pursuant to Section 8.04 hereof in respect of the
outstanding Securities shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as Paying Agent) as the Trustee may determine, to the Holders of such
Securities of all sums due and to become due thereon in respect of principal,
premium on, if any, and interest, but such money need not be segregated from
other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the cash or non-callable
U.S. Government Obligations deposited pursuant to Section 8.04 hereof or the
principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the Holders of the
outstanding Securities.
Anything in this Article 8 to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon the
written request of the Company any money or non-callable U.S. Government
Obligations held by it as provided in Section 8.04 hereof which, in the opinion
of a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.04(a) hereof), are in excess of the amount thereof
that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
SECTION 8.06. REPAYMENT TO COMPANY
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of, premium
on, if any, or interest on any Security and remaining unclaimed for two years
after such principal, and premium, if any, or interest has become due and
payable shall be paid to the Company on its written request or (if then held by
the Company) shall be discharged from such trust; and the Holder of such
Security shall thereafter, as a secured creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such paying agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the New York Times and The
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified
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therein, which shall not be less than 30 days from the date of such notification
or publication, any unclaimed balance of such money then remaining will be
repaid to the Company.
SECTION 8.07. REINSTATEMENT
If the Trustee or paying agent is unable to apply any United
States dollars or non-callable Government Securities in accordance with Section
8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as
the Trustee or paying agent is permitted to apply all such money in accordance
with Section 8.02 or 8.03 hereof, as the case may be; provided, however, that,
if the Company makes any payment of principal of, premium on, if any, or
interest on any Security following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money held by the Trustee or paying agent.
ARTICLE 9
AMENDMENTS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS
The Company and the Trustee may amend this Indenture, the
Securities or the Guarantee or waive any provision hereof or thereof without the
consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Securities in addition
to or in place of certificated Securities;
(3) to comply with Section 5.01 hereof;
(4) to make any change that would provide any additional
rights or benefits to the Holders or that does not
adversely affect the rights hereunder of any Holder;
or
(5) to comply with requirements of the SEC in order to
effect or maintain the qualification of this
Indenture under the TIA.
Upon the request of the Company, accompanied by a resolution
of the Board of Directors authorizing the execution of any such supplemental
indenture, and upon receipt by the Trustee of the documents described in Section
9.06 hereof, the Trustee shall join with the Company in the execution of any
supplemental indenture authorized or permitted by the terms of this Indenture
and make any further appropriate agreements and stipulations that may be therein
contained, but the Trustee shall not be obligated to enter into any supplemental
indenture that, in its reasonable discretion, affects its own rights, duties or
immunities under this Indenture or otherwise. After an amendment or waiver under
this Section 9.01 becomes effective, the Company shall mail to the Holders of
each Security affected thereby a notice briefly describing
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the amendment or waiver. Any failure of the Company to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture.
SECTION 9.02. WITH CONSENT OF HOLDERS
Except as provided below in this Section 9.02, this Indenture,
the Securities or the Guarantee may be amended or supplemented, with the written
consent of the Holders of at least a majority in principal amount of the then
outstanding Securities (including consents obtained in connection with a tender
offer or exchange offer for Securities).
Upon the request of the Company, accompanied by a resolution
of the Board of Directors authorizing the execution of any such supplemental
indenture, and upon the filing with the Trustee of evidence of the consent of
the Holders as aforesaid, and upon receipt by the Trustee of the documents
described in Section 9.06 hereof, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the Holders under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
The Holders of at least a majority in principal amount of the
Securities then outstanding may waive compliance in a particular instance by the
Company with any provision of this Indenture or the Securities (including
waivers obtained in connection with a tender offer for Securities) or any
existing default. However, without the consent of each Holder affected, an
amendment or waiver under this Section may not (with respect to any Securities
held by a non-consenting Holder):
(1) reduce the principal amount of Securities whose
Holders must consent to an amendment, supplement or
waiver;
(2) reduce the principal of or change the fixed maturity
of any Security or alter the provisions with respect
to the redemption or purchase price in connection
with repurchases under Sections 3.07, 3.08, 4.10 or
4.11 hereof;
(3) reduce the rate of or change the time for payment of
interest on any Security;
(4) waive a Default or Event of Default in the payment of
principal of or premium and Liquidated Damages, if
any, or interest on the Securities (except a
rescission of acceleration of the Securities by the
Holders of at least a majority in aggregate principal
amount of the Securities as provided in Section 6.02
hereof);
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(5) make any Securities payable in money other than that
stated in the Securities;
(6) make any change in Section 6.04 or 6.07 hereof;
(7) waive a redemption payment with respect to any
Security; or
(8) make any change in the foregoing.
The right of any Holder to participate in any consent required
or sought pursuant to any provision of this Indenture (and the obligation of the
Company to obtain any such consent otherwise required from such Holder) may be
subject to the requirement that such Holder shall have been the Holder of record
of any Securities with respect to which such consent is required or sought as of
a date identified by the Trustee in a notice furnished to Holders in accordance
with the terms of this Indenture.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT
Every amendment to this Indenture or the Securities shall
comply in form and substance with the TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS
Until an amendment (which includes any supplement) or waiver
becomes effective, a consent to it by a Holder of a Security is a continuing
consent by the Holder and every subsequent Holder of a Security or portion of a
Security that evidences the same debt as the consenting Holder's Security, even
if notation of the consent is not made on any Security. However, any such Holder
or subsequent Holder may revoke the consent as to his or her Security or portion
of a Security if the Trustee receives written notice of revocation before the
date the amendment or waiver becomes effective. An amendment or waiver becomes
effective in accordance with its terms and thereafter binds every Holder.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders entitled to consent to any
amendment or waiver. If the Company elects to fix a record date for such
purpose, the record date shall be fixed at (i) the later of 30 days prior to the
first solicitation of such consent or the date of the most recent list of
Holders furnished to the Trustee prior to such solicitation pursuant to Section
2.05 hereof, or (ii) such other date as the Company shall designate. If a record
date is fixed, then notwithstanding the provisions of the immediately preceding
paragraph, those Persons who were Holders at such record date (or their duly
designated proxies), and only those Persons, shall be entitled to consent to
such amendment or waiver or to revoke any consent previously given, whether or
not such Persons continue to be Holders after such record date. No consent shall
be valid or effective for more than 90 days after such record date unless
consents from Holders of the principal amount of Securities required hereunder
for such amendment or waiver to be effective shall have also been given and not
revoked within such 90-day period.
After an amendment or waiver becomes effective it shall bind
every Holder, unless it is of the type described in any of clauses (1) through
(8) of Section 9.02 hereof. In such case, the amendment or waiver shall bind
each Holder of a Security who has consented to it and
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every subsequent Holder of a Security that evidences the same debt as the
consenting Holder's Security.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation about the changed
terms and return it to the Holder and the Trustee may place an appropriate
notation on any Security thereafter authenticated. Alternatively, if the Company
or Trustee so determines, the Company in exchange for all Securities shall issue
and the Trustee shall authenticate new Securities that reflect the changed
terms.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amendment or supplemental indenture
authorized pursuant to this Article 9 if the amendment does not, in the
Trustee's reasonable discretion, adversely affect the rights, duties,
liabilities or immunities of the Trustee. If it does, the Trustee may, but need
not, sign it. In signing or refusing to sign such amendment or supplemental
indenture, the Trustee shall be entitled to receive and, subject to Section 7.01
hereof, shall be fully protected in relying upon, an Officers' Certificate and
an Opinion of Counsel as conclusive evidence that such amendment or supplemental
indenture is authorized or permitted by this Indenture, that it is not
inconsistent herewith, and that it will be valid and binding upon the Company in
accordance with its terms.
ARTICLE 10
GUARANTEE
SECTION 10.01. SUBSIDIARY GUARANTEE
Each of the Guarantors hereby, jointly and severally, fully
and unconditionally guarantees to each Holder of a Security authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the
Securities or the obligations of the Company hereunder or thereunder, that: (a)
the principal of, and premium and Liquidated Damages, if any, and interest on
the Securities will be promptly paid in full when due, whether at maturity, by
acceleration, redemption or otherwise, and interest on the overdue principal of,
premium and Liquidated Damages, if any, and interest on the Securities, if any,
if lawful, and all other obligations of the Company to the Holders or the
Trustee hereunder or thereunder will be promptly paid in full or performed, all
in accordance with the terms hereof and thereof; and (b) in case of any
extension of time of payment or renewal of any Securities or any of such other
obligations, the same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise; PROVIDED, HOWEVER, that the maximum
liability of a Guarantor pursuant to this Guarantee shall in no event exceed the
Maximum Guaranteed Amount (as defined below). Failing payment when due of any
amount so guaranteed or any performance so guaranteed for whatever reason, the
Guarantors will be jointly and severally obligated to pay the same immediately.
The Guarantors hereby agree that their obligations hereunder shall be absolute
and unconditional, irrespective of the validity, regularity or enforceability of
the Securities or this Indenture, the absence of any action to enforce the same,
any waiver or consent
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by any Holder of the Securities with respect to any provisions hereof or
thereof, the recovery of any judgment against the Company, any action to
enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor other than the defense
that payment has been made or that the other relevant obligations have been
paid or performed. Each Guarantor hereby waives diligence, presentment,
demand of payment, claim of fraud, filing of claims with a court in the event
of insolvency or bankruptcy of the Company, any right to require a proceeding
first against the Company, protest, notice and all demands whatsoever and
covenant that this Guarantee will not be discharged except by complete
performance of the obligations contained in the Securities and this
Indenture. If any Holder or the Trustee is required by any court or otherwise
to return to the Company or Guarantors, or any Custodian, trustee, liquidator
or other similar official acting in relation to either the Company or
Guarantors, any amount paid by either to the Trustee or such Holder, this
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect. Each Guarantor agrees that it shall not be entitled to any
right of subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed hereby.
Each Guarantor further agrees that, as between the Guarantors, on the one
hand, and the Holders and the Trustee, on the other hand, (x) the maturity of
the obligations guaranteed hereby may be accelerated as provided in Article 6
for the purposes of this Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such obligations as provided in Article 6, such obligations (whether or not
due and payable) shall forthwith become due and payable by the Guarantors for
the purpose of this Guarantee. The Guarantors shall have the right to seek
contribution from any non-paying Guarantor so long as the exercise of such
right does not impair the rights of the Holders under the Guarantee.
The "Maximum Guaranteed Amount" means, with respect to any
Guarantor, the amount which allows the Guarantee to be enforceable to the
fullest extent permitted by law, limited only to the extent necessary for the
Guarantee to not constitute a fraudulent conveyance.
Each Guarantor shall be subrogated to all rights of each
Holder of any Securities against the Company in respect of any amounts paid to
the Holders by such Guarantor pursuant to the provisions of this Guarantee;
PROVIDED that the Guarantors shall not be entitled to enforce, or to receive,
any payments arising out of or based upon, such right of subrogation until the
principal of, premium and Liquidated Damages, if any, and interest on all the
Securities shall have been paid in full and nothing remains owed to the Trustee
pursuant to this Indenture.
The Guarantee set forth in this Section 10.01 shall not be
valid or become obligatory for any purpose with respect to a Security until the
certificate of authentication on such Security shall have been signed by or on
behalf of the Trustee.
No Unrestricted Subsidiary shall become a guarantor of any
Indebtedness of the Company or any Restricted Subsidiaries unless such
Unrestricted Subsidiary becomes a guarantor of the Securities.
SECTION 10.02. EXECUTION AND DELIVERY OF GUARANTEE
To evidence its Guarantee set forth in Section 10.01 hereof,
each Guarantor hereby agrees that a notation of such Guarantee substantially in
the form of Exhibit A-1 shall be
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endorsed by an officer of such Guarantor on each Security authenticated and
delivered by the Trustee and that this Indenture shall be executed on behalf
of such Guarantor by its President or one of its Vice Chairmen or Vice
Presidents.
Each Guarantor hereby agrees that its Guarantee set forth in
Section 10.01 shall remain in full force and effect notwithstanding any failure
to endorse on each Security a notation of such Guarantee.
If an officer or Officer whose signature is on this Indenture
of on the Guarantee no longer holds that office at the time the Trustee
authenticates the Security on which a Guarantee is endorsed, the Guarantee shall
be valid, binding and enforceable nevertheless.
The delivery of any Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the Guarantee
set forth in this Indenture on behalf of the Guarantors.
SECTION 10.03. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS
(a) Except as set forth in Articles 4 and 5 hereof, nothing
contained in this Indenture or in any of the Securities shall prevent any
consolidation or merger of a Guarantor with or into the Company or another
Guarantor or shall prevent any sale or conveyance of the property of a Guarantor
as an entirety or substantially as an entirety, to the Company or another
Guarantor. Upon any such consolidation, merger, sale or conveyance, the
Guarantee given by such Guarantor shall no longer have any force or effect.
(b) Except as set forth in Articles 4 and 5 hereof, nothing
contained in this Indenture or in any of the Securities shall prevent any
consolidation or merger of a Guarantor with or into a corporation or
corporations other than the Company or another Guarantor (whether or not
affiliated with the Guarantor), or successive consolidations or mergers in which
a Guarantor or its successor or successors shall be a party or parties, or shall
prevent any sale or conveyance of the property of a Guarantor as an entirety or
substantially as an entirety, to a corporation other than the Company or another
Guarantor (whether or not affiliated with the Guarantor) authorized to acquire
and operate the same; PROVIDED that each such Guarantor is sold or disposed of
for fair market value, evidenced by a resolution of the Board of Directors set
forth in an Officer's Certificate delivered to the Trustee; and PROVIDED,
FURTHER, that the foregoing proviso shall not apply to the sale or disposition
of a Guarantor in a foreclosure proceeding to the extent that such proviso would
be inconsistent with the Uniform Commercial Code. Upon any such consolidation,
merger, sale or conveyance, the Guarantee given by such Guarantor shall no
longer have any force or effect.
SECTION 10.04. RELEASES FOLLOWING SALE OF ASSETS
Concurrently with any sale of assets (including, if
applicable, all of the capital stock of any Guarantor), any Liens in favor of
the Trustee in the assets sold thereby shall be released; PROVIDED that any such
assets are sold or disposed of for fair market value, evidenced by a resolution
of the Board of Directors set forth in an Officer's Certificate delivered to the
Trustee and, PROVIDED, FURTHER, that, the foregoing proviso shall not apply to
the sale or disposition of a Guarantor in a foreclosure proceeding to the extent
that such proviso would be inconsistent with the Uniform Commercial Code. If the
assets sold in such sale or other
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disposition include all or substantially all of the assets of any Guarantor
or all of the capital stock of any Guarantor, then such Guarantor (in the
event of a sale or other disposition of all of the capital stock of such
Guarantor) or the corporation acquiring the property and such Guarantor (in
the event of a sale or other disposition of all or substantially all of the
assets of a Guarantor) shall automatically be released and relieved of its
obligations under this Article 10, PROVIDED that any such sale or disposition
of all or substantially all of the assets of a Guarantor is sold or disposed
of for fair market value, evidenced by a resolution of the Board of Directors
set forth in an Officer's Certificate delivered to the Trustee and, PROVIDED,
FURTHER, that the foregoing proviso shall not apply to the sale or
disposition of a Guarantor in a foreclosure proceeding to the extent that
such proviso would be inconsistent with the Uniform Commercial Code. Upon
delivery by the Company to the Trustee of an Officers' Certificate and an
Opinion of Counsel to the effect that such sale or other disposition was made
by the Company in accordance with the provisions of this Indenture, the
Trustee shall execute any documents reasonably required in order to evidence
the release of any Guarantor from its obligations under its Guarantee. Any
Guarantor not released from its obligations under its Guarantee shall remain
liable for the full amount of principal of and interest on the Securities and
for the other obligations of any Guarantor under the Indenture as provided in
this Article 10.
SECTION 10.05. "TRUSTEE" TO INCLUDE PAYING AGENT
In case at any time any Paying Agent other than the Trustee
shall have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article 10 shall in such case (unless the context
shall otherwise require) be construed as extending to and including such Paying
Agent within its meaning as fully and for all intents and purposes as if such
Paying Agent were named in this Article 10 in place of the Trustee.
SECTION 10.06. EXISTING AND ADDITIONAL SUBSIDIARY GUARANTEES
The Company shall (a) cause each Subsidiary which, after the
date of this Indenture (if not then a Guarantor), becomes a Restricted
Subsidiary to execute a Guarantee of the Obligations of the Company hereunder in
the form set forth in this Article 10 hereof and Exhibit A-1 hereto, PROVIDED
that no Subsidiary organized outside of the United States of America,
Unrestricted Subsidiary, Partially Owned Restricted Subsidiary or Securitization
Subsidiary shall be required to be a Guarantor, and (b) deliver to the Trustee
an Opinion of Counsel, in form reasonably satisfactory to the Trustee, that such
Subsidiary Guarantee is a valid, binding and enforceable obligation of such
Restricted Subsidiary, subject to customary exceptions for bankruptcy,
fraudulent conveyance and equitable principles and the implied covenant of good
faith and fair dealing.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. TRUST INDENTURE ACT CONTROLS
If any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by TIA Section 318(c), the imposed duties
shall control.
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SECTION 11.02. NOTICES
Any notice or communication by the Company, the Guarantors or
the Trustee to the other is duly given if in writing and delivered in person or
mailed by first-class mail (registered or certified, return receipt requested),
telex, telecopier or overnight air courier guaranteeing next day delivery, to
the other's address:
If to the Company or the Guarantors:
PRIMEDIA INC.
745 Fifth Avenue
New York, New York 10151
Attention: General Counsel
Telecopier No.: (212) 745-0199
With a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: Gary I. Horowitz, Esq.
Telecopier No.: (212) 455-2502
If to the Trustee:
The Bank of New York
101 Barclay Street -- 21W
New York, New York 10286
Attention: Corporate Trust Administration
Telecopier No.: (212) 815-5915/5917
The Company, the Guarantors or the Trustee by notice to the
other may designate additional or different addresses for subsequent notices or
communications.
All notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt acknowledged, if telecopied; and
the next Business Day after timely delivery to the courier, if sent by overnight
air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by
first-class mail, certified or registered, return receipt requested, to the
Holder's address shown on the register kept by the Registrar. Any notice or
communication shall also be mailed to any Person described in TIA Section
313(c), to the extent required by the TIA. Failure to mail a notice or
communication to a Holder or any defect in it shall not affect its sufficiency
with respect to other Holders.
If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the addressee
receives it.
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If the Company mails a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.
SECTION 11.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS
Holders may communicate pursuant to TIA Section 312(b) with
other Holders with respect to their rights under this Indenture or the
Securities. The Company, the Guarantors, the Trustee, the Registrar and anyone
else shall have the protection of TIA Section 312(c).
SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT
Upon any request or application by the Company and/or any
Guarantors to the Trustee to take any action under this Indenture, the Company
and/or such Guarantor as the case may be shall furnish to the Trustee:
(1) an Officers' Certificate (which shall include the
statements set forth in Section 11.05 hereof) stating that, in the
opinion of the signers, all conditions precedent and covenants, if any,
provided for in this Indenture relating to the proposed action have
been complied with; and
(2) an Opinion of Counsel (which shall include the statements
set forth in Section 11.05 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been complied
with.
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of
TIA Section 314(e) and shall include:
(1) a statement that the Person making such certificate or
opinion has read and understands such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with; PROVIDED
that with respect to matters of fact Opinions of Counsel may rely on an
Officers' Certificate or certificates of public officials.
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SECTION 11.06. RULES BY TRUSTEE AND AGENTS
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
SECTION 11.07. LEGAL HOLIDAYS
A "Legal Holiday" is a Saturday, a Sunday or a day on which
banking institutions in The City of New York or at a place of payment are
authorized or obligated by law, regulation or executive order to remain closed.
If a payment date is a Legal Holiday at a place of payment, payment may be made
at that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.
SECTION 11.08. NO RECOURSE AGAINST OTHERS
No director, officer, employee, incorporator or shareholder of
the Company, as such, shall have any liability for any obligations of the
Company under the Securities, this Indenture or the Guarantees or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder of the Securities by accepting the Securities waives and releases
all such liability. The waiver and release are part of the consideration for
issuance of the Securities.
SECTION 11.09. GOVERNING LAW
This Indenture, the Securities and the Guarantee shall be
governed by and construed in accordance with the laws of the State of New York,
without regard to principles of conflicts of law.
SECTION 11.10. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS
This Indenture may not be used to interpret another indenture,
loan or debt agreement of the Company or a Subsidiary. Any such indenture, loan
or debt agreement may not be used to interpret this Indenture.
SECTION 11.11. SUCCESSORS
All agreements of the Company in this Indenture and the
Securities shall bind its successor. All agreements of the Trustee in this
Indenture shall bind its successor.
SECTION 11.12. SEVERABILITY
In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
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SECTION 11.13. COUNTERPART ORIGINALS
The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement.
SECTION 11.14. TRUSTEE AS PAYING AGENT AND REGISTRAR
The Company initially appoints the Trustee as Paying Agent and
Registrar. The provisions regarding the indemnification of the Trustee set forth
in Section 7.07 shall also apply to the Trustee in its capacity as Paying Agent
and Registrar hereunder.
SECTION 11.15. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of
the Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
SECTION 11.16. BANK OF NEW YORK NOT ACTING IN INDIVIDUAL CAPACITY
Notwithstanding anything to the contrary contained herein,
this Indenture has been accepted by The Bank of New York not in its individual
capacity but solely as Trustee and in no event shall The Bank of New York have
any liability for the representations, warranties, covenants, agreements or
other obligations of the Company herein or in any of the certificates, notices
or agreements delivered by the Company pursuant hereto, as to all of which
recourse shall be had solely to the assets of the Company, and under no
circumstances shall The Bank of New York be personally liable for the payment of
any indebtedness or expenses of the Company.
SECTION 11.17. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES
In addition to the rights provided to Holders of Securities
under the Indenture, Holders of Transfer Restricted Securities shall have all
the rights set forth in the Registration Rights Agreement.
[Signatures on Following Pages]
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SIGNATURES
PRIMEDIA INC.
Dated as of May 8, 2001 By: /s/ Beverly Chell
--------------------------------------
Name: Beverly Chell
Title: Vice Chairman & General Counsel
<Page>
Adams/Intertec International, Inc.
Adams/Laux Company, Inc.
Bacon's Information, Inc.
Canoe & Kayak, Inc.
Channel One Communications Corp.
Climbing, Inc.
Cover Concepts Marketing Services, LLC
CSK Publishing Company Incorporated
ENO Productions, Inc.
Films for the Humanities & Sciences, Inc.
Game & Fish Publications, Inc.
Haas Publishing Companies, Inc.
Hacienda Productions, Inc.
HPC Brazil, Inc.
Intertec Publishing Corporation
Kitplanes Acquisition Company
Paul Kagan Associates, Inc.
PRIMEDIA Enterprises, Inc.
PRIMEDIA Finance Shared Services Inc.
PRIMEDIA Holdings III Inc.
PRIMEDIA Information Inc.
PRIMEDIA Magazines Inc.
PRIMEDIA Magazine Finance Inc.
PRIMEDIA Special Interest Publications Inc.
PRIMEDIA Workplace Learning, LP
Bowhunter Magazine, Inc.
PRIMEDIA Enthusiast Publications, Inc.
Princeton/American Communications Company, Inc.
Communication Concepts, Inc.
Cowles History Group, Inc.
Symbol of Excellence Publishers, Inc.
The Virtual Flyshop, Inc.
GO LO Entertainment, Inc.
Horse & Rider, Inc.
IntelliChoice, Inc.
Kagan Media Appraisals, Inc.
Kagan Seminars, Inc.
Low Rider Publishing Group, Inc.
McMullen Argus Publishing, Inc.
Miramar Communications Inc.
Dated as of May 8, 2001 By: /s/ Beverly Chell
--------------------------------------
Name: Beverly Chell
Title: Vice Chairman & General Counsel
<Page>
THE BANK OF NEW YORK,
as Trustee
Dated as of May 8, 2001 By: /s/ [ILLEGIBLE]
--------------------------------------
Vice President
<Page>
EXHIBIT A-1
[__]% SENIOR NOTES DUE 2011
No. _________________ CUSIP _________________
$_____________________
PRIMEDIA INC., a Delaware corporation (herein called the "COMPANY"), for value
received hereby promises to pay to CEDE & CO., or registered assigns, the
principal sum of _______________________________
on [_____________] [__], 2011.
INTEREST PAYMENT DATES: [_____________] and [_________________]
RECORD DATES: [_____________] and [_______________________]
Reference is hereby made to the further provisions of this Senior Note due 2011
set forth on the reverse side hereof and such further provisions shall for all
purposes have the same effect as if set forth on the front side hereof.
IN WITNESS WHEREOF, the Company has caused this certificate to be signed
manually or by facsimile.
DATED: [_____________] [__], 2011
CERTIFICATE OF AUTHENTICATION:
This is one of the Global Notes referred to in the within mentioned Indenture.
THE BANK OF NEW YORK, PRIMEDIA INC.
as Trustee
By:___________________________ By:________________________________
Authorized Signatory Name:
Title:
<Page>
[___]% SENIOR NOTES DUE 2011
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS
MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL
NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF
THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL
NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN
CONSENT OF THE COMPANY.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING
THIS SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY
MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE
SECOND ANNIVERSARY OF THE ISSUANCE HEREOF (OR A PREDECESSOR SECURITY
HERETO) OR (Y) BY ANY HOLDER THAT WAS AN AFFILIATE OF THE COMPANY AT
THE TIME DURING THREE MONTHS PRECEDING THE DATE OF SUCH TRANSFER, IN
EITHER CASE OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS THIS SECURITY
IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A"), TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A,
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR
OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY
THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE
REVERSE OF THIS SECURITY), (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE
WITH REGULATION S UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX
CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE
OF THIS SECURITY), (4) TO AN INSTITUTION THAT IS AN "ACCREDITED
INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON
THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY) THAT IS
ACQUIRING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR
DISTRIBUTION, AND A CERTIFICATE WHICH MAY BE OBTAINED FROM THE COMPANY
OR THE TRUSTEE IS DELIVERED BY THE TRANSFEREE TO THE COMPANY AND THE
TRUSTEE, (5) PURSUANT TO ANY EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE
SECURITIES ACT, OR (6) PURSUANT TO AN EFFECTIVE
A-1-2
<Page>
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES. AN INSTITUTIONAL ACCREDITED INVESTOR HOLDING THIS
SECURITY AGREES THAT IT WILL FURNISH TO THE COMPANY AND THE TRUSTEE
SUCH CERTIFICATES AND OTHER INFORMATION AS THEY MAY REASONABLY
REQUIRE TO CONFIRM THAT TRANSFER BY IT OF THIS SECURITY COMPLIES
WITH THE FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY PURCHASING
THIS SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY
THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A OR (2) PURCHASING FROM A PERSON NOT PARTICIPATING IN THE
INITIAL DISTRIBUTION OF THIS SECURITY (OR ANY PREDECESSOR SECURITY),
THAT IT IS AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT
AND THAT IT IS HOLDING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT
FOR DISTRIBUTION OR (3) A NON-U.S. PERSON OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF
PARAGRAPH (k)(2)(i) OF RULE 902 UNDER) REGULATION S UNDER THE
SECURITIES ACT.
Capitalized terms used herein have the meaning assigned to
them in the Indenture unless otherwise indicated.
1. INTEREST; LIQUIDATED DAMAGES. The Company promises to
pay interest on the principal amount of this Security at [__]% per annum from
the date of issuance until maturity and shall pay the Liquidated Damages
payable pursuant to the Registration Rights Agreement. The Company will pay
interest and Liquidated Damages, if any, semi-annually on [_____________] and
[____________]of each year, or if any such day is not a Business Day, on the
next succeeding Business Day (each an "Interest Payment Date"). Interest on
the Securities will accrue from the most recent date on which interest has
been paid or, if no interest has been paid, from the date of issuance;
PROVIDED that if there is no existing Default in the payment of interest, and
if this Security is authenticated between a record date referred to on the
face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; PROVIDED, FURTHER,
that the first Interest Payment Date shall be [_____________] [__], 2001. The
Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium, if
any, from time to time on demand at the same rate per annum on the Securities
to the extent lawful; it shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue installments of
interest (without regard to any applicable grace periods) from time to time
on demand at the same rate to the extent lawful. Interest will be computed on
the basis of a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the
Securities (except defaulted interest) and premium and Liquidated Damages, if
any, to the Persons who are registered Holders of Securities at the close of
business on the [____________] and [_________] next preceding the Interest
Payment Date, even if such Securities are cancelled after such record
A-1-3
<Page>
date and on or before such Interest Payment Date. The Securities will be
payable as to principal, premium, interest and Liquidated Damages at the
office or agency of the Company maintained for such purpose within or without
the City and State of New York, or, at the option of the Company, payment of
interest, premium and Liquidated Damages may be made by check mailed to the
Holders of the Securities at their addresses set forth in the register of
Holders of Securities.
3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New
York, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent, Registrar or co-registrar
without notice to any Holder. The Company or any of its Subsidiaries may act
in any such capacity.
4. INDENTURE. The Company issued the Securities under an
Indenture, dated as of [_____________] [__], 2001 (the "Indenture"), among
the Company, the Guarantors and the Trustee. The terms of the Securities
include those stated in the Indenture and those made part of the Indenture by
reference to the TIA (15 U.S. Code Sections 77aaa-77bbbb). The Securities are
subject to all such terms, and Holders are referred to the Indenture and such
Act for a statement of such terms. The Securities are senior obligations of
the Company initially limited to $[____] million in aggregate principal
amount, plus premiums and Liquidated Damages, if any, plus amounts, if any,
sufficient to pay interest on outstanding Securities as set forth in
Paragraph 2 hereof. Additional Securities may be issued from time to time
subject to Section 4.09 of the Indenture. The Securities and any Additional
Securities subsequently issued would be treated as a single class for all
purposes under the Indenture, including, without limitation, waivers,
amendments, redemptions and offers to purchase.
5. OPTIONAL REDEMPTION.
At any time prior to [____________] [__], 2004, the Company
may on any one or more occasions redeem up to 35% of the aggregate principal
amount of Securities (which includes Additional Securities, if any) issued
hereunder at a redemption price of [__]% of the principal amount of such
Securities, plus accrued and unpaid interest to the redemption date, with the
net cash proceeds of one or more Equity Offerings; PROVIDED that:
(1) at least 65% of the aggregate principal amount of
Securities (which includes Additional Securities, if
any) issued remains outstanding immediately after the
occurrence of each of those redemptions (excluding
Securities held by the Company and its Subsidiaries);
and
(2) any redemption must occur within 60 days of the date
of closing of such Equity Offering.
Except as provided in the preceding paragraph and other
than in connection with a Change of Control pursuant to Section 3.08 of the
Indenture, the Company may not redeem the Securities prior to [______________]
[__], 2006. On or after [_____________] [__], 2006, the Company may, at its
option, redeem the Securities, in whole or in part, at the redemption prices
(expressed as percentages of the principal amount) set forth in the
immediately succeeding paragraph, plus accrued and unpaid interest thereon to
the applicable redemption date.
A-1-4
<Page>
The redemption price as a percentage of the principal amount
shall be as follows, if the Securities are redeemed during the twelve-month
period beginning [_________] [__] of the years indicated below:
<Table>
<Caption>
YEAR PERCENTAGE
---- ----------
2006..................................................[_____]%
2007..................................................[_____]%
2008..................................................[_____]%
2009 and thereafter...................................100.000%
</Table>
If the optional redemption date is on or after an interest
record date and on or before the related interest payment date, the accrued
and unpaid interest, if any, will be paid to the Person in whose name the
Security is registered at the close of business on that record date, and no
additional interest will be payable to holders whose Securities will be
subject to redemption by the Company.
Notwithstanding the foregoing, upon the occurrence at any
time of a Change in Control, the Securities will be redeemable, at the option
of the Company, in whole or in part, pursuant to the provisions of Section
3.08 of the Indenture.
Any redemption pursuant to this Section 3.07 shall be made,
to the extent applicable, pursuant to the provisions of Sections 3.01 through
3.06 of the Indenture.
6. MANDATORY OFFERS TO REPURCHASE; ASSET SALES.
(a) Upon the occurrence of a Change of Control, each Holder
shall have the right to require the Company to repurchase all or any
part of such Holder's Securities pursuant to the offer described below
(the "Change of Control Offer") at a purchase price equal to 101% of
the aggregate principal amount of such Securities plus accrued and
unpaid interest, if any, to the date of purchase (the "Change of
Control Payment"). On the Change of Control Payment Date, the Company
shall, to the extent lawful, (1) accept for payment Securities or
portions thereof tendered pursuant to the Change of Control Offer, (2)
deposit with the Paying Agent an amount equal to the Change of Control
Payment in respect of all Securities or portions thereof so tendered
and (3) deliver or cause to be delivered to the Trustee, the Securities
so accepted together with an Officers' Certificate stating the
Securities or portions thereof were tendered to the Company. The Paying
Agent shall promptly mail to each Holder of Securities so accepted,
payment in an amount equal to the purchase price for such Securities,
and the Trustee shall promptly authenticate and mail to such Holder a
new Security equal in principal amount to any unpurchased portion of
the Securities surrendered; PROVIDED that each such new Security shall
be in a principal amount of $1,000 or integral multiples thereof. The
Company will publicly announce the results of the Change of Control
Offer on or as soon as practicable after the Change of Control Payment
Date.
A Holder of Securities may tender all or any portion of his
Securities at his discretion by completing the form entitled "OPTION OF
HOLDER TO ELECT PURCHASE" appearing on this Security.
A-1-5
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(b) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, consummate an Asset
Sale (including the sale of any of the stock of any Subsidiary) unless
at least 100% of the Net Proceeds from such Asset Sale (or, in the case
of a Partially Owned Restricted Subsidiary, the Company's Pro Rata
Portion thereof, after repayment by such Partially Owned Restricted
Subsidiary of its Indebtedness) are applied first to repay Obligations
or reduce commitments under the Credit Facilities in accordance with
the terms thereof, second to offer to redeem at par the Outstanding
Notes and third to offer to redeem at par the Securities. The foregoing
application of Net Proceeds from Asset Sales is not required in the
case of (i) sales or dispositions generating cash proceeds of less
than, with respect to the Company and its Restricted Subsidiaries, $2.5
million and (ii) sales and dispositions as to which the Company
delivers a reinvestment notice and the proceeds are so reinvested in
one or more communications, publishing, information, education or media
assets or businesses within 12 months of the date the relevant Asset
Sale is consummated. Notwithstanding the foregoing provisions of this
paragraph (b), neither the Company nor its Restricted Subsidiaries
shall be required to apply the Net Proceeds from any Asset Sale (i) to
the extent that the aggregate Net Proceeds from such Asset Sale,
together with the Net Proceeds, if any, of any other Asset Sale which
have not been previously applied, are less than $25.0 million or (ii)
to the extent that, and for so long as, such Net Proceeds cannot be so
applied as a result of an encumbrance or restriction permitted pursuant
to Section 4.13 of the Indenture.
7. NOTICE OF REDEMPTION. Notice of any redemption pursuant
to Section 3.07 or 3.08 of the Indenture will be mailed by first class mail
at least 30 days but not more than 60 days before the redemption date to each
Holder whose Securities are to be redeemed at its registered address.
Securities in denominations larger than $1,000 may be redeemed in part but
only in whole multiples of $1,000, unless all of the Securities held by a
Holder are to be redeemed. On and after the redemption date interest ceases
to accrue on Securities or portions thereof called for redemption.
8. DENOMINATIONS, TRANSFER, EXCHANGE. The Securities are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Securities may be registered and
Securities may be exchanged as provided in the Indenture. The Registrar and
the Trustee may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and the Company may require a Holder to
pay any taxes and fees required by law or permitted by the Indenture. The
Company need not exchange or register the transfer of any Security or portion
of a Security selected for redemption, except the unredeemed portion of any
Security being redeemed in part. Also, it need not exchange or register the
transfer of any Securities for a period of 15 days before the mailing of a
Notice of Redemption and ending on the date of such mailing or during the
period between a record date and the corresponding Interest Payment Date.
9. PERSONS DEEMED OWNERS. The registered Holder of a
Security may be treated as its owner for all purposes.
10. AMENDMENTS AND WAIVERS. Subject to certain exceptions,
the Indenture, the Securities or the Guarantee may be amended or supplemented
and any existing Default under, or compliance with any provision of, the
Indenture may be waived with the consent of the Holders
A-1-6
<Page>
of at least a majority in principal amount of the Securities then outstanding
(including consents obtained in connection with a tender offer or exchange
offer for Securities). Without the consent of any Holder, the Company and the
Trustee may amend or supplement the Indenture or the Securities to cure any
ambiguity, defect or inconsistency; to provide for uncertificated Securities
in addition to or in place of certificated Securities; to comply with Section
5.01 of the Indenture; to make any change that would provide any additional
rights or benefits to the Holders of the Securities or that does not
adversely affect the legal rights under the Indenture of any such Holder; or
to comply with requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the TIA.
Without the consent of each Holder affected, an amendment
or waiver may not (with respect to any Securities held by a non-consenting
Holder of Securities) (i) reduce the principal amount of Securities whose
Holders must consent to an amendment, supplement or waiver, (ii) reduce the
principal of or change the fixed maturity of any Security or alter the
provisions with respect to the redemption or purchase price in connection
with repurchases under Sections 3.07, 3.08, 4.10 or 4.11 of the Indenture,
(iii) reduce the rate of or change the time for payment of interest on any
Security, (iv) waive a Default or Event of Default in the payment of
principal of or premium or Liquidated Damages, if any, or interest on the
Securities (except a rescission of acceleration of the Securities by the
Holders of at least a majority in aggregate principal amount of the
Securities as provided in Section 6.02 of the Indenture), (v) make any
Securities payable in money other than that stated in the Securities, (vi)
make any change in Section 6.04 or 6.07 of the Indenture, (vii) waive a
redemption payment with respect to any Security or (viii) make any change in
the foregoing.
The right of any Holder to participate in any consent
required or sought pursuant to any provision of the Indenture or this
Security (and the obligation of the Company to obtain any such consent
otherwise required from such Holder) may be subject to the requirement that
such Holder shall have been the Holder of record of any Securities with
respect to which such consent is required or sought as of a date identified
by the Trustee in a notice furnished to Holders in accordance with the terms
of the Indenture.
11. DEFAULTS AND REMEDIES. Events of Default include:
default in payment of interest or Liquidated Damages on the Securities for 30
days; default in payment of the principal or premium of any Security at
maturity, or upon acceleration, redemption or otherwise; failure by the
Company for 30 days after written notice to it from the Trustee, or after
written notice to it and the Trustee from Holders of at least 30% in
principal amount of the then outstanding Securities, to comply with any of
its other agreements in the Indenture or the Securities; certain defaults
under other Indebtedness; certain final judgments that remain undischarged
for 60 days after being entered; certain events of bankruptcy or insolvency;
and, except as permitted by the Indenture and the Securities, the Guarantees
are held in any judicial proceeding to be unenforceable or invalid or
otherwise cease for any reason to be in full force and effect with respect to
any Guarantor or any Guarantor denies or disaffirms its obligations under its
Guarantee. If an Event of Default occurs and is continuing, the Trustee or
the Holders of at least 30% in principal amount of the then outstanding
Securities may declare all the Securities to be immediately due and payable
for an amount equal to 100% of the principal amount of the Securities plus
premium and Liquidated Damages, if any, and accrued interest to the date of
payment, except that in the case of an Event of Default arising from certain
events of bankruptcy or insolvency, all outstanding Securities become due and
payable immediately without further
A-1-7
<Page>
action or notice. Holders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Securities.
Subject to certain limitations, Holders of a majority in principal amount of
the then outstanding Securities may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Holders notice of any
continuing Default or Event of Default (except a Default or an Event of
Default in payment of principal, premium or Liquidated Damages, if any, or
interest or that resulted from a failure to comply with Section 4.10 of the
Indenture) if and so long as a committee of its Responsible Officers
determines in good faith that withholding notice is in their interests. The
Company must furnish an annual compliance certificate to the Trustee.
12. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from,
and perform services for the Company or its Affiliates, and may otherwise
deal with the Company or its Affiliates, as if it were not Trustee.
13. NO RECOURSE AGAINST OTHERS. No director, officer,
employee, incorporator or shareholder of the Company, as such, shall have any
liability for any obligations of the Company under the Securities, this
Indenture or the Guarantees or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of the Securities
by accepting the Securities waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the
Securities.
14. AUTHENTICATION. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.
15. ABBREVIATIONS. Customary abbreviations may be used in
the name of a Holder or an assignee, such as: TEN COM (= tenants in common),
TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).
16. GUARANTORS. Payment of principal, premium and
Liquidated Damages, if any, and interest (including interest on overdue
principal of, premium, if any, and interest, if lawful) is unconditionally
guaranteed by each of the Guarantors.
The Company will furnish to any Holder upon written request
and without charge a copy of the Indenture. Requests may be made to:
PRIMEDIA INC.
745 Fifth Avenue
New York, New York 10151
Attention: Treasurer
A-1-8
<Page>
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we) assign and transfer
this Security to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------
to transfer this Security on the books of the Company. The agent may substitute
another to act for him.
- --------------------------------------------------------------------------------
Date:
--------------------------------------
Your Signature:
--------------------------
(Sign exactly as your name
appears on the Security)
Signature Guarantee.*
- ----------------------------------------
*Signature must be guaranteed by a financial institution that is a member of the
Securities Transfer Agent Medallion Program in accordance with the Securities
Exchange Act of 1934, as amended.
A-1-9
<Page>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section or 4.10 or 4.11 of the Indenture, check the appropriate box:
/ / Section 4.10 / / Section 4.11
If you want to elect to have only part of the Security purchased by the
Company pursuant to Section 4.10 or 4.11 of the Indenture, state the amount you
elect to have purchased: $___________
Date: Your Signature:
----------------------------- --------------------------
(Sign exactly as your name
appears on the Security)
Signature Guarantee.*
- -------------------------------
*Signature must be guaranteed by a financial institution that is a member of the
Securities Transfer Agent Medallion Program in accordance with the Securities
Exchange Act of 1934, as amended.
A-1-10
<Page>
SCHEDULE OF EXCHANGES FOR GLOBAL NOTES
<Table>
<Caption>
AMOUNT OF PRINCIPAL AMOUNT OF THIS
AMOUNT OF DECREASE IN INCREASE IN GLOBAL NOTE SIGNATURE OF
DATE OF PRINCIPAL AMOUNT OF PRINCIPAL AMOUNT OF FOLLOWING SUCH DECREASE AUTHORIZED
EXCHANGE THIS GLOBAL NOTE THIS GLOBAL NOTE (OR INCREASE) SIGNATORY
- -------- --------------------- ------------------- ------------------------ ------------
</Table>
A-1-11
<Page>
EXHIBIT A-2
[__]% SENIOR NOTES DUE 2011
No. _________________ CUSIP _________________
$----------------------
PRIMEDIA INC., a Delaware corporation (herein called the "COMPANY"), for value
received hereby promises to pay to CEDE & CO., or registered assigns, the
principal sum of _______________________________
on [_____________] [__], 2011.
INTEREST PAYMENT DATES: [_____________] and [_________________]
RECORD DATES: [_____________] and [_______________________]
Reference is hereby made to the further provisions of this Senior Note due 2011
set forth on the reverse side hereof and such further provisions shall for all
purposes have the same effect as if set forth on the front side hereof.
IN WITNESS WHEREOF, the Company has caused this certificate to be signed
manually or by facsimile.
DATED: [_____________] [__], 2011
CERTIFICATE OF AUTHENTICATION:
This is one of the Global Notes referred
to in the within mentioned Indenture.
THE BANK OF NEW YORK, PRIMEDIA INC.
as Trustee
By:_______________________________ By:________________________________
Authorized Signatory Name:
Title:
A-2-1
<Page>
[_______]% SENIOR NOTES DUE 2011
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF INTEREST HEREON.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING
THIS SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY
MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE
SECOND ANNIVERSARY OF THE ISSUANCE HEREOF (OR A PREDECESSOR SECURITY
HERETO) OR (Y) BY ANY HOLDER THAT WAS AN AFFILIATE OF THE COMPANY AT
THE TIME DURING THREE MONTHS PRECEDING THE DATE OF SUCH TRANSFER, IN
EITHER CASE OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS THIS SECURITY
IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A"), TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A,
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR
OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY
THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE
REVERSE OF THIS SECURITY), (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE
WITH REGULATION S UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX
CHECKED BY THE TRANSFEROR ON THE
A-2-2
<Page>
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (4) TO AN
INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT (AS INDICATED BY
THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON
THE REVERSE OF THIS SECURITY) THAT IS ACQUIRING THIS SECURITY FOR
INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION, AND A CERTIFICATE
WHICH MAY BE OBTAINED FROM THE COMPANY OR THE TRUSTEE IS DELIVERED
BY THE TRANSFEREE TO THE COMPANY AND THE TRUSTEE, (5) PURSUANT TO
ANY EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT, OR (6) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES. AN INSTITUTIONAL ACCREDITED INVESTOR
HOLDING THIS SECURITY AGREES THAT IT WILL FURNISH TO THE COMPANY AND
THE TRUSTEE SUCH CERTIFICATES AND OTHER INFORMATION AS THEY MAY
REASONABLY REQUIRE TO CONFIRM THAT TRANSFER BY IT OF THIS SECURITY
COMPLIES WITH THE FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF
THE COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A OR (2) PURCHASING FROM A PERSON NOT
PARTICIPATING IN THE INITIAL DISTRIBUTION OF THIS SECURITY (OR ANY
PREDECESSOR SECURITY), THAT IT IS AN INSTITUTION THAT IS AN
"ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7)
UNDER THE SECURITIES ACT AND THAT IT IS HOLDING THIS SECURITY FOR
INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (3) A NON-U.S.
PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN
ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH (k)(2)(i) OF RULE
902 UNDER) REGULATION S UNDER THE SECURITIES ACT.
Capitalized terms used herein have the meaning assigned to
them in the Indenture unless otherwise indicated.
1. INTEREST; LIQUIDATED DAMAGES. The Company promises to pay
interest on the principal amount of this Security at [__]% per annum from the
date of issuance until maturity and shall pay the Liquidated Damages payable
pursuant to the Registration Rights Agreement. The Company will pay interest and
Liquidated Damages, if any, semi-annually on [_____________] and [____________]
of each year, or if any such day is not a Business Day, on the next succeeding
Business Day (each an "Interest Payment Date"). Interest on the Securities will
accrue from the most recent date on which interest has been paid or, if no
interest has been paid, from the date of issuance; PROVIDED that if there is no
existing Default in the payment of interest, and if this Security is
authenticated between a record date referred to on the face hereof and the next
succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; PROVIDED, FURTHER, that the first Interest
Payment Date shall be
A-2-3
<Page>
[_____________] [__], 2001. The Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal and premium, if any, from time to time on demand at the same rate
per annum on the Securities to the extent lawful; it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law)
on overdue installments of interest (without regard to any applicable grace
periods) from time to time on demand at the same rate to the extent lawful.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. METHOD OF PAYMENT. The Company will pay interest on the
Securities (except defaulted interest) and premium and Liquidated Damages, if
any, to the Persons who are registered Holders of Securities at the close of
business on the [____________] and [_________] next preceding the Interest
Payment Date, even if such Securities are cancelled after such record date and
on or before such Interest Payment Date. The Securities will be payable as to
principal, premium, interest and Liquidated Damages at the office or agency of
the Company maintained for such purpose within or without the City and State of
New York, or, at the option of the Company, payment of interest, premium and
Liquidated Damages may be made by check mailed to the Holders of the Securities
at their addresses set forth in the register of Holders of Securities.
3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New
York, the Trustee under the Indenture, will act as Paying Agent and Registrar.
The Company may change any Paying Agent, Registrar or co-registrar without
notice to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. INDENTURE. The Company issued the Securities under an
Indenture, dated as of [_____________] [__], 2001 (the "Indenture"), among the
Company, the Guarantors and the Trustee. The terms of the Securities include
those stated in the Indenture and those made part of the Indenture by reference
to the TIA (15 U.S. Code Sections 77aaa-77bbbb). The Securities are subject to
all such terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. The Securities are senior obligations of the Company
initially limited to $[____] million in aggregate principal amount, plus
premiums and Liquidated Damages, if any, plus amounts, if any, sufficient to pay
interest on outstanding Securities as set forth in Paragraph 2 hereof.
Additional Securities may be issued from time to time subject to Section 4.09 of
the Indenture. The Securities and any Additional Securities subsequently issued
would be treated as a single class for all purposes under the Indenture,
including, without limitation, waivers, amendments, redemptions and offers to
purchase.
5. OPTIONAL REDEMPTION.
At any time prior to [____________] [__], 2004, the Company
may on any one or more occasions redeem up to 35% of the aggregate principal
amount of Securities (which includes Additional Securities, if any) issued
hereunder at a redemption price of [__]% of the principal amount of such
Securities, plus accrued and unpaid interest to the redemption date, with the
net cash proceeds of one or more Equity Offerings; PROVIDED that:
(3) at least 65% of the aggregate principal amount of
Securities (which includes Additional Securities, if
any) issued remains outstanding immediately after the
occurrence of each of those redemptions (excluding
Securities held by the Company and its Subsidiaries);
and
A-2-4
<Page>
(4) any redemption must occur within 60 days of the date
of closing of such Equity Offering.
Except as provided in the preceding paragraph and other than
in connection with a Change of Control pursuant to Section 3.08 of the
Indenture, the Company may not redeem the Securities prior to [______________]
[__], 2006. On or after [_____________] [__], 2006, the Company may, at its
option, redeem the Securities, in whole or in part, at the redemption prices
(expressed as percentages of the principal amount) set forth in the immediately
succeeding paragraph, plus accrued and unpaid interest thereon to the applicable
redemption date.
The redemption price as a percentage of the principal amount
shall be as follows, if the Securities are redeemed during the twelve-month
period beginning [_________] [__] of the years indicated below:
<Table>
<Caption>
YEAR PERCENTAGE
---- ----------
2006..................................................[_____]%
2007..................................................[_____]%
2008..................................................[_____]%
2009 and thereafter...................................100.000%
</Table>
If the optional redemption date is on or after an interest
record date and on or before the related interest payment date, the accrued and
unpaid interest, if any, will be paid to the Person in whose name the Security
is registered at the close of business on that record date, and no additional
interest will be payable to holders whose Securities will be subject to
redemption by the Company.
Notwithstanding the foregoing, upon the occurrence at any time
of a Change in Control, the Securities will be redeemable, at the option of the
Company, in whole or in part, pursuant to the provisions of Section 3.08 of the
Indenture.
Any redemption pursuant to this Section 3.07 shall be made, to
the extent applicable, pursuant to the provisions of Sections 3.01 through 3.06
of the Indenture.
6. MANDATORY OFFERS TO REPURCHASE; ASSET SALES.
(c) Upon the occurrence of a Change of Control, each Holder
shall have the right to require the Company to repurchase all or any
part of such Holder's Securities pursuant to the offer described below
(the "Change of Control Offer") at a purchase price equal to 101% of
the aggregate principal amount of such Securities plus accrued and
unpaid interest, if any, to the date of purchase (the "Change of
Control Payment"). On the Change of Control Payment Date, the Company
shall, to the extent lawful, (1) accept for payment Securities or
portions thereof tendered pursuant to the Change of Control Offer, (2)
deposit with the Paying Agent an amount equal to the Change of Control
Payment in respect of all Securities or portions thereof so tendered
and (3) deliver or cause to be delivered to the Trustee, the Securities
so accepted together with an Officers' Certificate stating the
Securities or portions thereof were tendered to the Company. The Paying
Agent shall promptly mail to each Holder of Securities so accepted,
payment in an amount equal to the purchase price for such Securities,
and the Trustee shall promptly
A-2-5
<Page>
authenticate and mail to such Holder a new Security equal in principal
amount to any unpurchased portion of the Securities surrendered;
PROVIDED that each such new Security shall be in a principal amount
of $1,000 or integral multiples thereof. The Company will publicly
announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
A Holder of Securities may tender all or any portion of his
Securities at his discretion by completing the form entitled "OPTION OF
HOLDER TO ELECT PURCHASE" appearing on this Security.
(d) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, consummate an Asset
Sale (including the sale of any of the stock of any Subsidiary) unless
at least 100% of the Net Proceeds from such Asset Sale (or, in the case
of a Partially Owned Restricted Subsidiary, the Company's Pro Rata
Portion thereof, after repayment by such Partially Owned Restricted
Subsidiary of its Indebtedness) are applied first to repay Obligations
or reduce commitments under the Credit Facilities in accordance with
the terms thereof, second to offer to redeem at par the Outstanding
Notes and third to offer to redeem at par the Securities. The foregoing
application of Net Proceeds from Asset Sales is not required in the
case of (i) sales or dispositions generating cash proceeds of less
than, with respect to the Company and its Restricted Subsidiaries, $2.5
million and (ii) sales and dispositions as to which the Company
delivers a reinvestment notice and the proceeds are so reinvested in
one or more communications, publishing, information, education or media
assets or businesses within 12 months of the date the relevant Asset
Sale is consummated. Notwithstanding the foregoing provisions of this
paragraph (6), neither the Company nor its Restricted Subsidiaries
shall be required to apply the Net Proceeds from any Asset Sale (i) to
the extent that the aggregate Net Proceeds from such Asset Sale,
together with the Net Proceeds, if any, of any other Asset Sale which
have not been previously applied, are less than $25.0 million or (ii)
to the extent that, and for so long as, such Net Proceeds cannot be so
applied as a result of an encumbrance or restriction permitted pursuant
to Section 4.13 of the Indenture.
7. NOTICE OF REDEMPTION. Notice of any redemption pursuant to
Section 3.07 or 3.08 of the Indenture will be mailed by first class mail at
least 30 days but not more than 60 days before the redemption date to each
Holder whose Securities are to be redeemed at its registered address. Securities
in denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Securities held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on
Securities or portions thereof called for redemption.
8. DENOMINATIONS, TRANSFER, EXCHANGE. The Securities are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Securities may be registered and Securities
may be exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Company need not
exchange or register the transfer of any Security or portion of a Security
selected for redemption, except the unredeemed portion of any Security being
redeemed in part. Also, it need not exchange or
A-2-6
<Page>
register the transfer of any Securities for a period of 15 days before the
mailing of a Notice of Redemption and ending on the date of such mailing or
during the period between a record date and the corresponding Interest
Payment Date.
9. PERSONS DEEMED OWNERS. The registered Holder of a Security
may be treated as its owner for all purposes.
10. AMENDMENTS AND WAIVERS. Subject to certain exceptions, the
Indenture, the Securities or the Guarantee may be amended or supplemented and
any existing Default under, or compliance with any provision of, the Indenture
may be waived with the consent of the Holders of at least a majority in
principal amount of the Securities then outstanding (including consents obtained
in connection with a tender offer or exchange offer for Securities). Without the
consent of any Holder, the Company and the Trustee may amend or supplement the
Indenture or the Securities to cure any ambiguity, defect or inconsistency; to
provide for uncertificated Securities in addition to or in place of certificated
Securities; to comply with Section 5.01 of the Indenture; to make any change
that would provide any additional rights or benefits to the Holders of the
Securities or that does not adversely affect the legal rights under the
Indenture of any such Holder; or to comply with requirements of the SEC in order
to effect or maintain the qualification of the Indenture under the TIA.
Without the consent of each Holder affected, an amendment or
waiver may not (with respect to any Securities held by a non-consenting Holder
of Securities) (i) reduce the principal amount of Securities whose Holders must
consent to an amendment, supplement or waiver, (ii) reduce the principal of or
change the fixed maturity of any Security or alter the provisions with respect
to the redemption or purchase price in connection with repurchases under
Sections 3.07, 3.08, 4.10 or 4.11 of the Indenture, (iii) reduce the rate of or
change the time for payment of interest on any Security, (iv) waive a Default or
Event of Default in the payment of principal of or premium or Liquidated
Damages, if any, or interest on the Securities (except a rescission of
acceleration of the Securities by the Holders of at least a majority in
aggregate principal amount of the Securities as provided in Section 6.02 of the
Indenture), (v) make any Securities payable in money other than that stated in
the Securities, (vi) make any change in Section 6.04 or 6.07 of the Indenture,
(vii) waive a redemption payment with respect to any Security or (viii) make any
change in the foregoing.
The right of any Holder to participate in any consent required
or sought pursuant to any provision of the Indenture or this Security (and the
obligation of the Company to obtain any such consent otherwise required from
such Holder) may be subject to the requirement that such Holder shall have been
the Holder of record of any Securities with respect to which such consent is
required or sought as of a date identified by the Trustee in a notice furnished
to Holders in accordance with the terms of the Indenture.
11. DEFAULTS AND REMEDIES. Events of Default include: default
in payment of interest or Liquidated Damages on the Securities for 30 days;
default in payment of the principal or premium of any Security at maturity, or
upon acceleration, redemption or otherwise; failure by the Company for 30 days
after written notice to it from the Trustee, or after written notice to it and
the Trustee from Holders of at least 30% in principal amount of the then
outstanding Securities, to comply with any of its other agreements in the
Indenture or the Securities; certain defaults under other Indebtedness; certain
final judgments that remain undischarged for 60 days
A-2-7
<Page>
after being entered; certain events of bankruptcy or insolvency; and, except
as permitted by the Indenture and the Securities, the Guarantees are held in
any judicial proceeding to be unenforceable or invalid or otherwise cease for
any reason to be in full force and effect with respect to any Guarantor or
any Guarantor denies or disaffirms its obligations under its Guarantee. If an
Event of Default occurs and is continuing, the Trustee or the Holders of at
least 30% in principal amount of the then outstanding Securities may declare
all the Securities to be immediately due and payable for an amount equal to
100% of the principal amount of the Securities plus premium and Liquidated
Damages, if any, and accrued interest to the date of payment, except that in
the case of an Event of Default arising from certain events of bankruptcy or
insolvency, all outstanding Securities become due and payable immediately
without further action or notice. Holders may not enforce the Indenture or
the Securities except as provided in the Indenture. The Trustee may require
indemnity satisfactory to it before it enforces the Indenture or the
Securities. Subject to certain limitations, Holders of a majority in
principal amount of the then outstanding Securities may direct the Trustee in
its exercise of any trust or power. The Trustee may withhold from Holders
notice of any continuing Default or Event of Default (except a Default or an
Event of Default in payment of principal, premium or Liquidated Damages, if
any, or interest or that resulted from a failure to comply with Section 4.10
of the Indenture) if and so long as a committee of its Responsible Officers
determines in good faith that withholding notice is in their interests. The
Company must furnish an annual compliance certificate to the Trustee.
12. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal with
the Company or its Affiliates, as if it were not Trustee.
13. NO RECOURSE AGAINST OTHERS. No director, officer,
employee, incorporator or shareholder of the Company, as such, shall have any
liability for any obligations of the Company under the Securities, this
Indenture or the Guarantees or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of the Securities by
accepting the Securities waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Securities.
14. AUTHENTICATION. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
15. ABBREVIATIONS. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
16. GUARANTORS. Payment of principal, premium and Liquidated
Damages, if any, and interest (including interest on overdue principal of,
premium, if any, and interest, if lawful) is unconditionally guaranteed by each
of the Guarantors.
The Company will furnish to any Holder upon written request
and without charge a copy of the Indenture. Requests may be made to:
A-2-8
<Page>
PRIMEDIA INC.
745 Fifth Avenue
New York, New York 10151
Attention: Treasurer
A-2-9
<Page>
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we) assign and transfer
this Security to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------
to transfer this Security on the books of the Company. The agent may substitute
another to act for him.
- --------------------------------------------------------------------------------
Date:
----------------------------
Your Signature:
-----------------------------
(Sign exactly as your name
appears on the face of
this Security)
Signature Guarantee.*
- ----------------------------------------
*Signature must be guaranteed by a financial institution that is a member of the
Securities Transfer Agent Medallion Program in accordance with the Securities
Exchange Act of 1934, as amended.
A-2-10
<Page>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section or 4.10 or 4.11 of the Indenture, check the appropriate box:
/ / Section 4.10 / / Section 4.11
If you want to elect to have only part of the Security purchased by the
Company pursuant to Section 4.10 or 4.11 of the Indenture, state the amount you
elect to have purchased: $
-----------
Date: Your Signature:
----------------------------- --------------------------
(Sign exactly as your name
appears on the Security)
Signature Guarantee.*
- -------------------------------
*Signature must be guaranteed by a financial institution that is a member of the
Securities Transfer Agent Medallion Program in accordance with the Securities
Exchange Act of 1934, as amended.
A-2-11
<Page>
SCHEDULE OF EXCHANGES OF REGULATION S TEMPORARY GLOBAL NOTE
The following exchanges of a part of this Regulation S
Temporary Global Note for an interest in another Global Note, or of other
Restricted Global Notes for an interest in this Regulation S Temporary Global
Note, have been made:
<Table>
<Caption>
Principal Amount
Amount of of this Global Note Signature of
decrease in Amount of increase following such authorized officer
Principal Amount in Principal Amount decrease (or of Trustee or
Date of Exchange of this Global Note of this Global Note increase) Note Custodian
---------------- ------------------- ------------------- -------- --------------
</Table>
A-2-12
<Page>
EXHIBIT A-3
[FORM OF NOTATION ON NOTE RELATING TO GUARANTEE]
GUARANTEE
Each of the corporations listed below (hereinafter referred to
as the "Guarantors", which term includes any successor or additional Guarantor
under the Indenture (the "Indenture") referred to in the Security upon which
this notation is endorsed) (i) has jointly and severally, unconditionally
guaranteed that (a) the principal of, and premium, if any, and interest on the
Securities will be promptly paid in full when due, whether at maturity, by
acceleration, redemption or otherwise, and interest on the overdue principal of,
premium, if any, and interest on the Securities, if any, if lawful, and all
other obligations of the Company to the Holders or the Trustee will be promptly
paid in full or performed, all in accordance with the terms hereof and as set
forth in the Indenture; and (b) in case of any extension of time of payment or
renewal of any Securities or any of such other obligations, the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration, or otherwise;
PROVIDED, HOWEVER, that the maximum liability of a Guarantor pursuant to this
Guarantee shall in no event exceed the Maximum Guaranteed Amount (as defined
below). Capitalized terms used herein have the meanings assigned to them in the
Indenture unless otherwise indicated.
The "Maximum Guaranteed Amount" means, with respect to any
Guarantor, the amount which allows this Guarantee to be enforceable to the
fullest extent permitted by law, limited only to the extent necessary for this
Guarantee to not constitute a fraudulent conveyance.
No stockholder, officer, director, employer or incorporator,
past, present or future, of the Guarantors, as such, shall have any personal
liability under this Guarantee by reason of his or its status as such
stockholder, officer, director, employer or incorporator.
This Guarantee shall be binding upon each Guarantor and its
successors and assigns and shall inure 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
herein conferred upon that party shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions hereof.
This Guarantee shall not be valid or obligatory for any
purpose with respect to a Security until the certificate of authentication on
the Security upon which this Guarantee is noted shall have been executed by or
on behalf of the Trustee under the Indenture by the manual signature of one of
its authorized signatories.
[LIST OF GUARANTORS TO COME]
Name:
Title:
<Page>
Schedule I
[LIST OF GUARANTORS TO COME].
A-3-2
<Page>
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
PRIMEDIA Inc.
745 Fifth Avenue
New York, New York 10151
The Bank of New York
101 Barclay Street
New York, New York 10286
Re: [ ] % SENIOR NOTES DUE 2011
Reference is hereby made to the Indenture, dated as of
[___________] [_____], 2011 (the "INDENTURE"), between PRIMEDIA Inc., as issuer
(the "COMPANY"), and The Bank of New York, as trustee. Capitalized terms used
but not defined herein shall have the meanings given to them in the Indenture.
______________, (the "TRANSFEROR") owns and proposes to
transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in
the principal amount of $___________ in such Note[s] or interests (the
"TRANSFER"), to __________ (the "TRANSFEREE"), as further specified in Annex A
hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The
Transfer is being effected pursuant to and in accordance with Rule 144A under
the United States Securities Act of 1933, as amended (the "Securities Act"),
and, accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.
2. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO
REGULATION S. The Transfer is being effected pursuant to and in accordance with
Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor
hereby further certifies that (i) the Transfer is not being made to a person in
the United States and (x) at the time the buy order was originated, the
Transferee was outside the United States or such Transferor and any Person
acting on its behalf reasonably believed and believes that the Transferee was
outside the United States or (y) the transaction was executed in, on or through
the facilities of a designated offshore securities market and neither
<Page>
such Transferor nor any Person acting on its behalf knows that the
transaction was prearranged with a buyer in the United States, (ii) no
directed selling efforts have been made in contravention of the requirements
of Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act and,
(iii) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act and (iv) if the proposed
transfer is being made prior to the expiration of the Restricted Period, the
transfer is not being made to a U.S. Person or for the account or benefit of
a U.S. Person (other than an Initial Purchaser). Upon consummation of the
proposed transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will be subject to the
restrictions on Transfer enumerated in the Private Placement Legend printed
on the Regulation S Global Note, the Temporary Regulation S Global Note
and/or the Definitive Note and in the Indenture and the Securities Act.
3. / / CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY
OF A BENEFICIAL INTEREST IN A DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE
SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The Transfer is being
effected in compliance with the transfer restrictions applicable to beneficial
interests in Restricted Global Notes and Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act and any applicable blue
sky securities laws of any state of the United States, and accordingly the
Transferor hereby further certifies that (check one):
(a) / / such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;
or
(b) / / such Transfer is being effected to the Company or a
subsidiary thereof;
or
(c) / / such Transfer is being effected pursuant to an
effective registration statement under the Securities Act and in
compliance with the prospectus delivery requirements of the
Securities Act;
or
(d) / / such Transfer is being effected to an Institutional
Accredited Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A, Rule 144 or
Rule 904, and the Transferor hereby further certifies that the Transfer
complies with the transfer restrictions applicable to Restricted
Definitive Notes and the requirements of the exemption claimed, which
certification is supported by (1) a certificate executed by the
Transferee in the form of Exhibit D to the Indenture and (2) if such
Transfer is in respect of a principal amount of Notes at the time of
transfer of less than $100,000, an Opinion of Counsel provided by the
Transferor or the Transferee (a copy of which the Transferor has
attached to this certification), to the effect that such Transfer is in
compliance with the Securities Act. Upon consummation of the proposed
transfer in accordance with the terms of the Indenture, the transferred
Definitive Note will be subject to the restrictions on transfer
enumerated in the Private Placement Legend
B-2
<Page>
printed on Definitive Notes and in the Indenture and the Securities Act.
4. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
(a) / / CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The
Transfer is being effected pursuant to and in accordance with Rule 144
under the Securities Act and in compliance with the transfer
restrictions contained in the Indenture and any applicable blue sky
securities laws of any state of the United States and (ii) the
restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in
accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend
printed on the Restricted Global Notes, on Restricted Definitive Notes
and in the Indenture.
(b) / / CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The
Transfer is being effected pursuant to and in accordance with Rule 903
or Rule 904 under the Securities Act and in compliance with the
transfer restrictions contained in the Indenture and any applicable
blue sky securities laws of any state of the United States and (ii) the
restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in
accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend
printed on the Restricted Global Notes, on Restricted Definitive Notes
and in the Indenture.
(c) / / CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION.
(i) The Transfer is being effected pursuant to and in compliance with
an exemption from the registration requirements of the Securities Act
other than Rule 144, Rule 903 or Rule 904 and in compliance with the
transfer restrictions contained in the Indenture and any applicable
blue sky securities laws of any State of the United States and (ii) the
restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in
accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the
Restricted Global Notes or Restricted Definitive Notes and in the
Indenture.
B-3
<Page>
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.
_________________________________
[Insert Name of Transferor]
By:___________________________________
Name:
Title:
Dated: ________, ___
B-4
<Page>
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(b) / / a beneficial interest in the:
(i) / / 144A Global Note (CUSIP ____), or
(ii) / / Regulation S Global Note (CUSIP ____), or
(iii) / / IAI Global Note (CUSIP_____), or
(c) / / a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) / / a beneficial interest in the:
(i) / / 144A Global Note (CUSIP ____), or
(ii) / / Regulation S Global Note (CUSIP ____), or
(iii) / / Unrestricted Global Note (CUSIP ____); or
(b) / / a Restricted Definitive Note; or
(c) / / an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
<Page>
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
PRIMEDIA Inc.
745 Fifth Avenue
New York, New York 10151
The Bank of New York
101 Barclay Street
New York, New York 10286
Re: [ ] % SENIOR NOTES 2011
(CUSIP __________)
Reference is hereby made to the Indenture, dated as of
[___________] [____], 2011 (the "INDENTURE"), between PRIMEDIA Inc., as issuer
(the "COMPANY"), and The Bank of New York, as trustee. Capitalized terms used
but not defined herein shall have the meanings given to them in the Indenture.
_____________, (the "OWNER") owns and proposes to exchange the
Note[s] or interest in such Note[s] specified herein, in the principal amount of
$____________ in such Note[s] or interests (the "EXCHANGE"). In connection with
the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL NOTE
(a) / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL
NOTE. In connection with the Exchange of the Owner's beneficial
interest in a Restricted Global Note for a beneficial interest in an
Unrestricted Global Note in an equal principal amount, the Owner hereby
certifies (i) the beneficial interest is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the United States
Securities Act of 1933, as amended (the "SECURITIES ACT"), (iii) the
restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the beneficial interest in an Unrestricted
Global Note is being acquired in compliance with any applicable blue
sky securities laws of any state of the United States.
(b) / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection
with the Exchange of the Owner's beneficial interest in a Restricted
Global Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Definitive Note is being acquired for the Owner's own
account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to the Restricted
Global Notes and pursuant to and in
<Page>
accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend
are not required in order to maintain compliance with the Securities
Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the
United States.
(c) / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE
NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In
connection with the Owner's Exchange of a Restricted Definitive Note
for a beneficial interest in an Unrestricted Global Note, the Owner
hereby certifies (i) the beneficial interest is being acquired for
the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in
accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend
are not required in order to maintain compliance with the Securities
Act and (iv) the beneficial interest is being acquired in compliance
with any applicable blue sky securities laws of any state of the
United States.
(d) / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE
NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's
Exchange of a Restricted Definitive Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Unrestricted
Definitive Note is being acquired for the Owner's own account
without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive
Notes and pursuant to and in accordance with the Securities Act,
(iii) the restrictions on transfer contained in the Indenture and
the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Unrestricted
Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES
(a) / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection
with the Exchange of the Owner's beneficial interest in a Restricted
Global Note for a Restricted Definitive Note with an equal principal
amount, the Owner hereby certifies that the Restricted Definitive Note
is being acquired for the Owner's own account without transfer. Upon
consummation of the proposed Exchange in accordance with the terms of
the Indenture, the Restricted Definitive Note issued will continue to
be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the
Indenture and the Securities Act.
(b) / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE
NOTE TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In
connection with the Exchange of the Owner's Restricted Definitive
Note for a beneficial interest in the [CHECK ONE] / / 144A Global
Note, / / Regulation S Global Note or / / IAI Global Note with an
equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account
without transfer and (ii) such Exchange has been effected in
compliance
C-2
<Page>
with the transfer restrictions applicable to the Restricted Global
Notes and pursuant to and in accordance with the Securities Act, and
in compliance with any applicable blue sky securities laws of any
state of the United States. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the
beneficial interest issued will be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the
relevant Restricted Global Note and in the Indenture and the
Securities Act.
C-3
<Page>
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
_______________________________
[Insert Name of Owner]
By: ___________________________
Name:
Title:
Dated: ________, __
C-4
<Page>
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
PRIMEDIA Inc.
745 Fifth Avenue
New York, New York 10151
The Bank of New York
101 Barclay Street
New York, New York 10286
Re: [ ] % SENIOR NOTES DUE 2011
Reference is hereby made to the Indenture, dated as of
[___________] [____], 2011 (the "INDENTURE"), between PRIMEDIA Inc., as issuer
(the "COMPANY"), and The Bank of New York, as trustee. Capitalized terms used
but not defined herein shall have the meanings given to them in the Indenture.
In connection with our proposed purchase of $____________
aggregate principal amount of:
(a) / / a beneficial interest in a Global Note, or
(b) / / a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or
any interest therein is subject to certain restrictions and conditions set forth
in the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "SECURITIES ACT").
2. We understand that the offer and sale of the Notes have not
been registered under the Securities Act, and that the Notes and any interest
therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell the Notes or any
interest therein, we will do so only (A) to the Company or any subsidiary
thereof, (B) in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (C) to an institutional
"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to you and to the
Company a signed letter substantially in the form of this letter and, if such
transfer is in respect of a principal amount of Notes, at the time of transfer
of less than $100,000, an Opinion of Counsel in form reasonably acceptable to
the Company to the effect that such transfer is in compliance with the
Securities Act, (D) outside the United States in accordance with Rule 904 of
Regulation S under the Securities Act, (E) pursuant to the provisions of Rule
144 under the
D-1
<Page>
Securities Act or (F) pursuant to an effective registration statement under
the Securities Act, and we further agree to provide to any person purchasing
the Definitive Note or beneficial interest in a Global Note from us in a
transaction meeting the requirements of clauses (A) through (E) of this
paragraph a notice advising such purchaser that resales thereof are
restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Notes, and
we and any accounts for which we are acting are each able to bear the economic
risk of our or its investment.
5. We are acquiring the Notes or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion and we are acquiring the Notes for investment purposes and
not with a view to, or for offer or sale in connection with, any distribution in
violation of the Securities Act or other applicable securities law.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.
_______________________________________
[Insert Name of Accredited Investor]
By: ___________________________________
Name:
Title:
Dated: ________, ___
D-2