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CORE-MARK INTERNATIONAL, INC.
11-3/8% Senior Subordinated Notes due 2003
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INDENTURE
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Dated as of September 27, 1996
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BANKERS TRUST COMPANY,
Trustee
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TABLE OF CONTENTS
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ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Other Definitions . . . . . . . . . . . . . . . . . 27
SECTION 1.03. Incorporation by Reference of Trust
Indenture Act . . . . . . . . . . . . . . . . . . 27
SECTION 1.04. Rules of Construction . . . . . . . . . . . . . . . 28
ARTICLE 2
THE SECURITIES
SECTION 2.01. Form and Dating . . . . . . . . . . . . . . . . . . 29
SECTION 2.02. Execution and Authentication. . . . . . . . . . . . 31
SECTION 2.03. Registrar and Paying Agent. . . . . . . . . . . . . 32
SECTION 2.04. Paying Agent To Hold Money in Trust . . . . . . . . 33
SECTION 2.05 Securityholder Lists. . . . . . . . . . . . . . . . 33
SECTION 2.06. Transfer and Exchange . . . . . . . . . . . . . . . 33
SECTION 2.07. Replacement Securities. . . . . . . . . . . . . . . 42
SECTION 2.08. Outstanding Securities. . . . . . . . . . . . . . . 43
SECTION 2.09 Temporary Securities. . . . . . . . . . . . . . . . 43
SECTION 2.10 Cancelation . . . . . . . . . . . . . . . . . . . . 43
SECTION 2.11 Defaulted Interest. . . . . . . . . . . . . . . . . 44
SECTION 2.12. CUSIP Numbers . . . . . . . . . . . . . . . . . . . 44
ARTICLE 3
REDEMPTION
SECTION 3.01. Notices to Trustee. . . . . . . . . . . . . . . . . 44
SECTION 3.02. Selection of Securities
To Be Redeemed. . . . . . . . . . . . . . . . . . 45
SECTION 3.03. Notice of Redemption. . . . . . . . . . . . . . . . 45
SECTION 3.04. Effect of Notice of Redemption. . . . . . . . . . . 46
SECTION 3.05. Deposit of Redemption Price . . . . . . . . . . . . 46
SECTION 3.06. Securities Redeemed in Part . . . . . . . . . . . . 47
SECTION 3.07 Optional Redemption . . . . . . . . . . . . . . . . 47
2
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ARTICLE 4
COVENANTS
SECTION 4.01. Payment of Securities . . . . . . . . . . . . . . . 48
SECTION 4.02. SEC Reports . . . . . . . . . . . . . . . . . . . . 48
SECTION 4.03. Limitation on Indebtedness. . . . . . . . . . . . . 48
SECTION 4.04. Limitation on Restricted Payments . . . . . . . . . 51
SECTION 4.05. Limitation on Restrictions on
Distributions from Subsidiaries . . . . . . . . . 54
SECTION 4.06. Limitation on Sales of Assets and
Subsidiary Stock. . . . . . . . . . . . . . . . . 56
SECTION 4.07. Limitation on Transactions with
Affiliates. . . . . . . . . . . . . . . . . . . . 60
SECTION 4.08. Change of Control . . . . . . . . . . . . . . . . . 61
SECTION 4.09. Compliance Certificate. . . . . . . . . . . . . . . 63
SECTION 4.10. Further Instruments and Acts. . . . . . . . . . . . 63
SECTION 4.11. Limitation on Liens . . . . . . . . . . . . . . . . 63
SECTION 4.12. Limitation on the Sale or Issuance of
Capital Stock of Restricted Subsidiaries. . . . . 63
SECTION 4.13. Limitation on Lines of Business . . . . . . . . . . 64
Section 4.14. Limitation on the Disposition of Assets
of the Company to Restricted Subsidiaries . . . . 64
ARTICLE 5
SUCCESSOR COMPANY
SECTION 5.01. When Company May Merge or Transfer
Assets. . . . . . . . . . . . . . . . . . . . . . 65
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default . . . . . . . . . . . . . . . . . 66
SECTION 6.02. Acceleration. . . . . . . . . . . . . . . . . . . . 68
SECTION 6.03. Other Remedies. . . . . . . . . . . . . . . . . . . 69
SECTION 6.04. Waiver of Past Defaults . . . . . . . . . . . . . . 69
SECTION 6.05. Control by Majority . . . . . . . . . . . . . . . . 69
SECTION 6.06. Limitation on Suits . . . . . . . . . . . . . . . . 70
SECTION 6.07. Rights of Holders To Receive Payment. . . . . . . . 70
SECTION 6.08. Collection Suit by Trustee. . . . . . . . . . . . . 71
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SECTION 6.09. Trustee May File Proofs of Claim. . . . . . . . . . 71
SECTION 6.10. Priorities. . . . . . . . . . . . . . . . . . . . . 71
SECTION 6.11. Undertaking for Costs . . . . . . . . . . . . . . . 72
SECTION 6.12. Waiver of Stay or Extension Laws. . . . . . . . . . 72
ARTICLE 7
TRUSTEE
SECTION 7.01. Duties of Trustee . . . . . . . . . . . . . . . . . 72
SECTION 7.02. Rights of Trustee . . . . . . . . . . . . . . . . . 74
SECTION 7.03. Individual Rights of Trustee. . . . . . . . . . . . 74
SECTION 7.04. Trustee's Disclaimer. . . . . . . . . . . . . . . . 75
SECTION 7.05. Notice of Defaults. . . . . . . . . . . . . . . . . 75
SECTION 7.06. Reports by Trustee to Holders . . . . . . . . . . . 75
SECTION 7.07. Compensation and Indemnity. . . . . . . . . . . . . 75
SECTION 7.08. Replacement of Trustee. . . . . . . . . . . . . . . 77
SECTION 7.09. Successor Trustee by Merger . . . . . . . . . . . . 78
SECTION 7.10. Eligibility; Disqualification . . . . . . . . . . . 78
SECTION 7.11. Preferential Collection of Claims Against Company . 78
ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Discharge of Liability on Securities;
Defeasance. . . . . . . . . . . . . . . . . . . . 79
SECTION 8.02. Conditions to Defeasance. . . . . . . . . . . . . . 80
SECTION 8.03. Application of Trust Money. . . . . . . . . . . . . 81
SECTION 8.04. Repayment to Company. . . . . . . . . . . . . . . . 81
SECTION 8.05. Indemnity for Government Obligations. . . . . . . . 82
SECTION 8.06. Reinstatement . . . . . . . . . . . . . . . . . . . 82
ARTICLE 9
AMENDMENTS
SECTION 9.01. Without Consent of Holders. . . . . . . . . . . . . 82
SECTION 9.02. With Consent of Holders . . . . . . . . . . . . . . 83
SECTION 9.03. Compliance with Trust Indenture Act . . . . . . . . 85
SECTION 9.04. Revocation and Effect of Consents and Waivers . . . 85
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SECTION 9.05. Notation on or Exchange of Securities . . . . . . . 85
SECTION 9.06. Trustee To Sign Amendments. . . . . . . . . . . . . 86
SECTION 9.07. Payment for Consent . . . . . . . . . . . . . . . . 86
ARTICLE 10
SUBORDINATION
SECTION 10.01. Agreement To Subordinate. . . . . . . . . . . . . . 86
SECTION 10.02. Liquidation, Dissolution, Bankruptcy. . . . . . . . 87
SECTION 10.03. Default on Senior Indebtedness. . . . . . . . . . . 87
SECTION 10.04. Acceleration of Payment of Securities . . . . . . . 88
SECTION 10.05. When Distribution Must Be Paid Over . . . . . . . . 88
SECTION 10.06. Subrogation . . . . . . . . . . . . . . . . . . . . 88
SECTION 10.07. Relative Rights . . . . . . . . . . . . . . . . . . 89
SECTION 10.08. Subordination May Not Be Impaired by Company. . . . 89
SECTION 10.09. Rights of Trustee and Paying Agent. . . . . . . . . 89
SECTION 10.10. Distribution or Notice to Representative. . . . . . 90
SECTION 10.11. Article 10 Not To Prevent Events
of Default or Limit Right To Accelerate . . . . . 90
SECTION 10.12. Trust Moneys Not Subordinated . . . . . . . . . . . 90
SECTION 10.13. Trustee Entitled To Rely. . . . . . . . . . . . . . 90
SECTION 10.14. Trustee to Effectuate Subordination . . . . . . . . 91
SECTION 10.15. Trustee Not Fiduciary for Holders of
Senior Indebtedness . . . . . . . . . . . . . . . 91
SECTION 10.16. Reliance by Holders of Senior
Indebtedness on Subordination Provisions. . . . . 91
SECTION 10.17. Trustee's Compensation Not Prejudiced . . . . . . . 92
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. Trust Indenture Act Controls. . . . . . . . . . . . 92
SECTION 11.02. Notices . . . . . . . . . . . . . . . . . . . . . . 92
SECTION 11.03. Communication by Holders with Other Holders . . . . 93
SECTION 11.04. Certificate of Opinion as to Conditions
Precedent . . . . . . . . . . . . . . . . . . . . 93
SECTION 11.05. Statements Required in Certificate or Opinion . . . 93
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SECTION 11.06. When Securities Disregarded . . . . . . . . . . . . 94
SECTION 11.07. Rules by Trustee, Paying Agent and Registrar. . . . 94
SECTION 11.08. Legal Holidays. . . . . . . . . . . . . . . . . . . 94
SECTION 11.09. Governing Law . . . . . . . . . . . . . . . . . . . 95
SECTION 11.10. No Recourse Against Others. . . . . . . . . . . . . 95
SECTION 11.11. Successors. . . . . . . . . . . . . . . . . . . . . 95
SECTION 11.12. Multiple Originals. . . . . . . . . . . . . . . . . 95
SECTION 11.13. Table of Contents; Headings . . . . . . . . . . . . 95
Exhibit A - Form of Initial Security
Exhibit B - Form of Exchange Security
Exhibit C - Form of Transferee Letter of Representation
Exhibit D - Form of Note Guarantee
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
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310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . 7.08; 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) . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . 7.06
(c) . . . . . . . . . . . . . . . . . . . . . . . 11.02
(d) . . . . . . . . . . . . . . . . . . . . . . . 7.06
314(a) . . . . . . . . . . . . . . . . . . . . . . . 4.02; 4.12;
11.02
(b) . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . 11.04
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . 11.04
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . . N.A.
(e) . . . . . . . . . . . . . . . . . . . . . . . 11.05
(f) . . . . . . . . . . . . . . . . . . . . . . . 4.12
315(a) . . . . . . . . . . . . . . . . . . . . . . . 7.01
(b) . . . . . . . . . . . . . . . . . . . . . . . 7.05; 11.02
(c) . . . . . . . . . . . . . . . . . . . . . . . 7.01
(d) . . . . . . . . . . . . . . . . . . . . . . . 7.01
(e) . . . . . . . . . . . . . . . . . . . . . . . 6.11
316(a)(last
sentence) . . . . . . . . . . . . . . . . . . . . . . . 11.06
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . 6.05
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . 6.04
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . 6.07
317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . 6.08
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . 6.09
(b) . . . . . . . . . . . . . . . . . . . . . . . 2.04
318(a) . . . . . . . . . . . . . . . . . . . . . . . 11.01
N.A. means Not Applicable.
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Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
INDENTURE dated as of September 27, 1996, 1996, between
CORE-MARK INTERNATIONAL, INC., a Delaware corporation (the
"Company"), and BANKERS TRUST COMPANY, a New York banking
corporation (the "Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Company's 11-3/8% Senior
Subordinated Notes due 2003 (the "Initial Securities") and, if and when issued
pursuant to a registered exchange for Initial Securities, the Company's 11-3/8%
Senior Subordinated Notes due 2003.
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Additional Assets" means (i) any tangible property or assets (other
than Indebtedness and Capital Stock) to be used by the Company or a Restricted
Subsidiary in a Related Business; (ii) the Capital Stock of a Person that
becomes a Restricted Subsidiary as a result of the acquisition of such Capital
Stock by the Company or another Restricted Subsidiary; or (iii) Capital Stock
constituting a minority interest in any Person that at such time is a Restricted
Subsidiary; PROVIDED, HOWEVER, that, in the case of clauses (ii) and (iii), such
Restricted Subsidiary is primarily engaged in a Related Business.
"Adjusted Operating Income" for any period means (a) the sum of (x)
the Operating Income for such period, plus (y) the following to the extent
deducted in calculating such Operating Income: (i) Consolidated Non-Cash Charges
and (ii) LIFO expense, if any, for such period, minus (b) LIFO income, if any,
for such period. Notwithstanding the foregoing, the depreciation and
amortization of a Subsidiary of the Company shall be added to Operating Income
to compute Adjusted Operating Income only to the extent (and in the same
proportion) that the operating income of such Subsidiary was included in
calculating Operating Income and only if a corresponding amount would be
permitted at the date of determination to be dividended to the Company by such
Subsidiary without prior approval (that has not been obtained), pursuant to the
terms of its charter and all agreements, instruments, judgments, decrees,
orders,
2
statutes, rules and governmental regulations applicable to such Subsidiary or
its stockholders.
"Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of Section 4.07 and Section 4.06 only, "Affiliate" shall also mean any
beneficial owner of shares representing 5% or more of the total voting power of
the Voting Stock (on a fully diluted basis) of the Company or of rights or
warrants to purchase such Voting Stock (whether or not currently exercisable)
and any Person who would be an Affiliate of any such beneficial owner pursuant
to the first sentence hereof.
"Applicable Premium" means, with respect to a Security at any
Redemption Date, the greater of (i) 1.0% of the principal amount of such
Security and (ii) the excess of (A) the present value at such time of (1) the
redemption price of such Security at September 15, 2000 (such redemption price
set forth in Section 3.07) plus (2) all required interest payments (excluding
accrued but unpaid interest) due on such Security through September 15, 2000,
computed using a discount rate equal to the Treasury Rate plus 75 basis points,
over (B) the principal amount of such Security.
"Asset Disposition" means any sale, lease, transfer or other
disposition of shares of Capital Stock of a Restricted Subsidiary (other than
directors' qualifying shares), property or other assets (each referred to for
the purposes of this definition as a "disposition") by the Company or any of its
Restricted Subsidiaries (including any disposition by means of a merger,
consolidation or similar transaction) in one transaction or in a series of
related transactions which shall be viewed as one transaction other than (i) a
disposition (other than a Financing Disposition in connection with a Receivables
Financing) by a Restricted Subsidiary to the Company or by the Company or a
Restricted Subsidiary to a Wholly Owned Subsidiary, (ii) a disposition of
inventory in the ordinary course of business, (iii) dispositions (other than a
Financing Disposition in connection with a Receivables Financing) with a fair
market
3
value of less than $500,000 in the aggregate in any fiscal year, (iv) a
Financing Disposition in connection with a Receivables Financing provided that
immediately after such Financing Disposition the Indebtedness (other than
Indebtedness in respect of letters of credit) outstanding pursuant to Section
4.03(b)(i) is equal to or less than the Maximum Amount, (v) for purposes of
Section 4.06 only, a disposition subject to Section 4.04 and (vi) the
disposition of all or substantially all the assets of the Company permitted by
the Section 5.01.
"Average Life" means, as of the date of determination, with respect to
any Indebtedness or Preferred Stock, the quotient obtained by dividing (i) the
sum of the products of the numbers of years from the date of determination to
the dates of each successive scheduled principal payment of such Indebtedness or
redemption or similar payment with respect to such Preferred Stock multiplied by
the amount of such payment by (ii) the sum of all such payments.
"Bank Indebtedness" means any and all amounts payable under or in
respect of the Credit Agreement, as amended or modified from time to time, and
any Refinancing Indebtedness Incurred in respect thereof, including principal,
premium (if any), interest (including interest accruing on or after the filing
of any petition in bankruptcy or for reorganization relating to the Company
whether or not a claim for post-filing interest is allowed in such proceedings),
fees, charges, expenses, reimbursement obligations, guarantees and all other
amounts payable thereunder or in respect thereof.
"Board of Directors" means the Board of Directors of the Company or
any committee thereof duly authorized to act on behalf of such Board.
"Business Day" means a day other than a Saturday, Sunday or other day
on which banking institutions in New York State are authorized or required by
law to close.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
4
"Capitalized Lease Obligations" means an obligation that is required
to be classified and accounted for as a capitalized lease for financial
reporting purposes in accordance with GAAP, and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such
obligation determined in accordance with GAAP; and the Stated Maturity thereof
shall be the date of the last payment of rent or any other amount due under such
lease prior to the first date upon which such lease may be terminated by the
lessee without payment of a penalty.
"Change of Control" means the occurrence of any of the following
events:
(i) prior to the first public offering of Voting Stock of the Company,
the Permitted Holders cease to be the "beneficial owner" (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of a
majority in the aggregate of the total voting power of the Voting Stock of
the Company, whether as a result of issuance of securities of the Company,
any merger, consolidation, liquidation or dissolution of the Company, any
direct or indirect transfer of securities or otherwise (for purposes of
this clause (i), the Permitted Holders shall be deemed to beneficially own
any Voting Stock of a corporation (the "specified corporation") held by any
other corporation (the "parent corporation") so long as the Permitted
Holders beneficially own (as so defined), directly or indirectly, in the
aggregate a majority of the voting power of the Voting Stock of the parent
corporation);
(ii) (A) any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act), other than one or more Permitted Holders, is or
becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that such person shall be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire,
which right is subject to no conditions other than passage of time and
conditions substantially within the control of the parties to such
acquisition)), directly or indirectly, of more than 35% of the total voting
power of the Voting Stock of the Company and (B) the Permitted Holders
"beneficially own" (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act), directly or indirectly, in the aggregate a lesser percentage of the
total voting power of the Voting Stock of the
5
Company than such other person and do not have the right or ability by
voting power, contract or otherwise to elect or designate for election a
majority of the Board of Directors (for the purposes of this clause (ii),
such other person shall be deemed to beneficially own any Voting Stock of a
specified corporation held by a parent corporation, if such other person
"beneficially owns" (as defined in this clause (ii)), directly or
indirectly, a majority of the voting power of the Voting Stock of such
parent corporation;
(iii) the merger or consolidation of the Company with or into another
Person or the merger of another Person with or into the Company, or the
sale of all or substantially all the assets of the Company to another
Person (in each case, other than a Person that is controlled by the
Permitted Holders), and, in the case of any such merger or consolidation,
the securities of the Company that are outstanding immediately prior to
such transaction and which represent 100% of the aggregate voting power of
the Voting Stock of the Company are changed into or exchanged for cash,
securities or property, unless pursuant to such transaction such securities
are changed into or exchanged for, in addition to any other consideration,
securities of the surviving corporation that represent immediately after
such transaction, at least a majority of the aggregate voting power of the
Voting Stock of the surviving corporation; or
(iv) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of Directors (together
with any new directors whose election by such Board of Directors or whose
nomination for election by the shareholders of the Company was approved by
a vote of a majority of the directors of the Company then still in office
who were either directors at the beginning of such period or whose election
or nomination for election was previously so approved) cease for any reason
to constitute a majority of the Board of Directors then in office.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means the party named as such in this Indenture until a
successor replaces it pursuant to the applicable provisions of this Indenture
and, thereafter,
6
means the successor and, for purposes of any provision contained herein and
required by the TIA, such other obligor on the indenture securities.
"Consolidated Coverage Ratio" as of any date of determination means
the ratio of (i) the aggregate amount of Adjusted Operating Income for the
period of the most recent four consecutive fiscal quarters ending prior to the
date of such determination and as to which financial statements have been made
publicly available (but in no event ending more than 135 days prior to such date
of determination) to (ii) Consolidated Interest Expense for such four fiscal
quarters; PROVIDED, HOWEVER, that (1) if the Company or any Restricted
Subsidiary has Incurred any Indebtedness since the beginning of such period that
remains outstanding on such date of determination or if the transaction giving
rise to the need to calculate the Consolidated Coverage Ratio is an Incurrence
of Indebtedness, Adjusted Operating Income and Consolidated Interest Expense for
such period shall be calculated after giving effect on a pro forma basis to such
Indebtedness as if such Indebtedness had been Incurred on the first day of such
period and the discharge of any other Indebtedness repaid, repurchased, defeased
or otherwise discharged with the proceeds of such new Indebtedness as if such
discharge had occurred on the first day of such period (except that in the case
of Indebtedness to finance seasonal fluctuations in working capital needs
Incurred under a revolving credit or similar arrangement, the amount thereof
shall be deemed to be the average daily balance of such Indebtedness during such
four quarter period), (2) if since the beginning of such period the Company or
any Restricted Subsidiary shall have made any Asset Disposition, the Adjusted
Operating Income for such period shall be reduced by an amount equal to the
Adjusted Operating Income (if positive) directly attributable to the assets
which are the subject of such Asset Disposition for such period or increased by
an amount equal to the Adjusted Operating Income (if negative) directly
attributable thereto for such period and Consolidated Interest Expense for such
period shall be reduced by an amount equal to the Consolidated Interest Expense
directly attributable to any Indebtedness of the Company or any Restricted
Subsidiary repaid, repurchased, defeased or otherwise discharged with respect to
the Company and its continuing Restricted Subsidiaries in connection with such
Asset Disposition for such period (or, if the Capital Stock of any Restricted
Subsidiary is sold, the Consolidated Interest Expense for such period directly
attributable to the Indebtedness of such Restricted Subsidiary to the extent the
Company and its continuing
7
Restricted Subsidiaries are no longer liable for such Indebtedness after such
sale), (3) if since the beginning of such period the Company or any Restricted
Subsidiary (by merger or otherwise) shall have made an Investment in any
Restricted Subsidiary (or an Investment in or acquisition of any Person which
becomes a Restricted Subsidiary) or an acquisition of assets, including any
acquisition or Investment occurring in connection with a transaction causing a
calculation to be made under the Indenture, which constitutes all or
substantially all of an operating unit of a business, Adjusted Operating Income
and Consolidated Interest Expense for such period shall be calculated after
giving effect on a pro forma basis to the transaction (including the Incurrence
of any Indebtedness and repayment of then existing debt) as if such Investment
or acquisition occurred on the first day of such period and (4) if since the
beginning of such period any Person (that subsequently became a Restricted
Subsidiary or was merged with or into the Company or any Restricted Subsidiary
since the beginning of such period) shall have made any Asset Disposition or any
Investment or acquisition of assets that would have required an adjustment
pursuant to clause (2) or (3) above if made by the Company or a Restricted
Subsidiary during such period, Adjusted Operating Income and Consolidated
Interest Expense for such period shall be calculated after giving pro forma
effect thereto as if such Asset Disposition, Investment or acquisition of assets
occurred on the first day of such period. For purposes of this definition,
whenever pro forma effect is to be given to an acquisition of assets, the amount
of Operating Income relating thereto and the amount of Consolidated Interest
Expense associated with any Indebtedness Incurred in connection therewith, the
pro forma calculations shall be determined in good faith by a responsible
financial or accounting Officer of the Company. If any Indebtedness bears a
floating rate of interest and is being given pro forma effect, the interest
expense on such Indebtedness shall be calculated as if the rate in effect on the
date of determination had been the applicable rate for the entire period (taking
into account any Interest Rate Agreement applicable to such Indebtedness if such
Interest Rate Agreement has a remaining term as at the date of determination in
excess of 12 months).
"Consolidated Interest Expense" means, for any period, the total
consolidated interest expense of the Company and its Restricted Subsidiaries,
plus, to the extent Incurred by the Company and its Restricted Subsidiaries in
such period but not included in such interest expense, (i) interest expense
attributable to capital leases,
8
(ii) amortization of debt discount, (iii) capitalized interest, (iv) noncash
interest expense, (v) commissions, discounts and other fees and charges with
respect to letters of credit and bankers' acceptance financing, (vi) net costs
associated with Hedging Obligations (including amortization of fees),
(vii) Preferred Stock dividends in respect of all Preferred Stock of
Subsidiaries and Disqualified Stock of the Company held by Persons other than
the Company or a Wholly Owned Subsidiary, (viii) the interest portion of any
deferred payment obligation, (ix) interest actually paid on any Indebtedness of
any other Person, (x) the cash contributions to any employee stock ownership
plan or similar trust to the extent such contributions are used by such plan or
trust to pay interest or fees to any Person (other than the Company) in
connection with Indebtedness Incurred by such plan or trust and (ix) the earned
discount or yield with respect to the sale of Receivables (without duplication
of amounts included in Operating Income) but in no event shall Consolidated
Interest Expense include the amortization of fees incurred on or prior to the
Issue Date in respect of the Credit Agreement or the issuance of the Securities
or bank agency fees under the Credit Agreement.
"Consolidated Net Income" means, for any period, the net income (loss)
of the Company and its consolidated Subsidiaries; PROVIDED, HOWEVER, that there
shall not be included in such Consolidated Net Income:
(i) any net income (loss) of any Person if such Person is not a
Restricted Subsidiary, except that (A) subject to the limitations contained
in clause (iv) below, the Company's equity in the net income of any such
Person for such period shall be included in such Consolidated Net Income up
to the aggregate amount of cash actually distributed by such Person during
such period to the Company or a Restricted Subsidiary as a dividend or
other distribution (subject, in the case of a dividend or other
distribution to a Restricted Subsidiary, to the limitations contained in
clause (iii) below) and (B) the Company's equity in a net loss of any such
Person (other than an Unrestricted Subsidiary) for such period shall be
included in determining such Consolidated Net Income,
(ii) any net income (loss) of any person acquired by the Company or a
Subsidiary in a pooling of interests transaction for any period prior to
the date of such acquisition,
9
(iii) any net income (loss) of any Restricted Subsidiary if such
Subsidiary is subject to restrictions, directly or indirectly, on the
payment of dividends or the making of distributions by such Restricted
Subsidiary, directly or indirectly, to the Company, except that (A) subject
to the limitations contained in (iv) below, the Company's equity in the net
income of any such Restricted Subsidiary for such period shall be included
in such Consolidated Net Income up to the aggregate amount of cash that
could have been distributed by such Restricted Subsidiary during such
period to the Company or another Restricted Subsidiary as a dividend
(subject, in the case of a dividend that could have been made to another
Restricted Subsidiary, to the limitation contained in this clause) and
(B) the Company's equity in a net loss of any such Restricted Subsidiary
for such period shall be included in determining such Consolidated Net
Income,
(iv) any gain or loss realized upon the sale or other disposition of
any asset of the Company or its consolidated Subsidiaries (including
pursuant to any Sale/Leaseback Transaction) which is not sold or otherwise
disposed of in the ordinary course of business and any gain or loss
realized upon the sale or other disposition of any Capital Stock of any
Person,
(v) any extraordinary gain or loss, and
(vi) the cumulative effect of a change in accounting principles.
Notwithstanding the foregoing, for the purpose of Section 4.04 only, there shall
be excluded from Consolidated Net Income any dividends, repayments of loans or
advances or other transfers of assets from Unrestricted Subsidiaries to the
Company or a Restricted Subsidiary to the extent such dividends, repayments or
transfers increase the amount of Restricted Payments permitted under Section
4.04(a)(3)(D).
"Consolidated Net Worth" means the total of the amounts shown on the
balance sheet of the Company and the Restricted Subsidiaries, determined on a
Consolidated basis, as of the end of the most recent fiscal quarter of the
Company ending prior to the taking of any action for the purpose of which the
determination is being made and as to which financial results have been made
publicly available (but in no event ending more than 135 days prior to such
10
date of determination), as (i) the par or stated value of all outstanding
Capital Stock of the Company plus (ii) paid-in capital or capital surplus
relating to such Capital Stock plus (iii) any retained earnings or earned
surplus less (A) any accumulated deficit and (B) any amounts attributable to
Disqualified Stock.
"Consolidated Non-Cash Charges" of any Person means, for any period,
the aggregate depreciation, amortization and other non-cash charges of such
person and its Consolidated Subsidiaries for such period, on a consolidated
basis, as determined in accordance with GAAP (excluding any such other non-cash
charge to the extent it requires an accrual or reserve for cash charges for any
future period).
"Consolidation" means the consolidation of the amounts of each of the
Restricted Subsidiaries with those of the Company in accordance with GAAP
consistently applied; PROVIDED, HOWEVER, that "Consolidation" shall not include
consolidation of the accounts of any Unrestricted Subsidiary, but the interest
of the Company or any Restricted Subsidiary in a Unrestricted Subsidiary shall
be accounted for as an investment. The term "Consolidated" has a correlative
meaning.
"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 the execution of this Indenture is located at Four
Albany Street, New York, New York 10006, Attention: Corporate Trust and Agency
Group or at any other time at such other address as the Trustee may designate
from time to time by notice to the Company and the Holders.
"Credit Agreement" means the Credit Agreement dated as of August 7,
1996, among Core-Mark International, Inc., the several lenders from time to time
parties thereto and The Chase Manhattan Bank, as Administrative Agent, as in
effect on the Issue Date.
"Currency Agreement" means in respect of a Person any foreign exchange
contract, currency swap agreement or other similar agreement as to which such
Person is a party or a beneficiary.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
11
"Definitive Securities" means Securities that are in the form of
Exhibit A or Exhibit B attached hereto that do not include the information
called for by footnote 1 thereof.
"Depository" means, with respect to the Securities issuable or issued
in whole or in part in global form, the person specified in Section 2.03 as the
Depository with respect to the Securities, until a successor shall have been
appointed and become such pursuant to the applicable provisions of this
Indenture, and thereafter, "Depository" shall mean or include such successor.
"Designated Senior Indebtedness" means (i) the Bank Indebtedness and
(ii) any other Senior Indebtedness which, at the date of determination, has an
aggregate principal amount outstanding of, or under which, at the date of
determination, the holders thereof, are committed to lend at least $10 million
and is specifically designated by the Company in the instrument evidencing or
governing such Senior Indebtedness as "Designated Senior Indebtedness" for
purposes of the Indenture.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable or exercisable) or upon the
happening of any event (i) matures or is mandatorily redeemable pursuant to a
sinking fund obligation or otherwise, (ii) is convertible or exchangeable for
Indebtedness or Disqualified Stock or (iii) is redeemable at the option of the
holder thereof, in whole or in part, in each case on or prior to 180 days after
the Stated Maturity of the Securities; PROVIDED, HOWEVER, that any Capital Stock
that would not constitute Disqualified Stock but for provisions thereof giving
holders thereof the right to require the Company to purchase or redeem such
Capital Stock upon the occurrence of a change of control occurring prior to the
Stated Maturity of the Securities shall not constitute Disqualified Stock if the
change of control provisions applicable to such Capital Stock are no more
favorable to the holders of such Capital Stock than the provisions of Section
4.08 are to the holders of the Securities and such Capital Stock specifically
provides that the Company shall not purchase or redeem any such Capital Stock
pursuant to such provisions prior to the Company's purchase of the Securities as
are required to be purchased pursuant to Section 4.08.
12
"Domestic Subsidiary" means any Restricted Subsidiary of the Company
other than a Foreign Subsidiary.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange and Registration Rights Agreement" means the Exchange and
Registration Rights Agreement dated as of September 27, 1996, by and between the
Initial Purchasers and the Company, as such agreement may be amended, modified,
or supplemented from time to time in accordance with the terms thereof.
"Exchange Offer Registration Statement" shall have the meaning set
forth in the Exchange and Registration Rights Agreement.
"Exchange Securities" means the 11-3/8% Senior Subordinated Notes due
2003 to be issued pursuant to this Indenture in connection with the offer to
exchange Securities for the Initial Securities that may be made by the Company
pursuant to the Exchange and Registration Rights Agreement.
"Financing Disposition" means any sale of Receivables, or interests
therein, by the Company or any Subsidiary to the Receivables Subsidiary, or by
the Receivables Subsidiary.
"Foreign Subsidiary" means any Restricted Subsidiary of the Company
which is not organized under the laws of the United States of America or any
State thereof or the District of Columbia.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Issue Date, including those 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. All ratios and computations based on GAAP contained in
the Indenture shall be computed in conformity with GAAP.
"Global Security" means a Security that is in the form of Exhibit A or
Exhibit B hereto that includes the information called for by footnote 1 thereof.
13
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and any obligation, direct or indirect, contingent or otherwise, of such Person
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness of such other Person (whether arising by virtue of
partnership arrangements, or by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for purposes of assuring
in any other manner the obligee of such Indebtedness of the payment thereof or
to protect such obligee against loss in respect thereof (in whole or in part);
PROVIDED, HOWEVER, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Guarantor Subsidiary" means any Person that has issued a Note
Guarantee.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Securityholder" means the Person in whose name a Security
is registered on the Registrar's books.
"Incur" means issue, assume, Guarantee, incur or otherwise become
liable for; PROVIDED, HOWEVER, that any Indebtedness or Capital Stock of a
Person existing at the time such person becomes a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be Incurred by such
person at the time it becomes a Subsidiary.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication),
(i) the principal of and premium (if any) in respect of indebtedness
of such Person for borrowed money;
(ii) the principal of and premium (if any) in respect of obligations
of such Person evidenced by bonds, debentures, notes or other similar
instruments;
14
(iii) all obligations of such Person in respect of letters of credit
or other similar instruments (including reimbursement obligations with
respect thereto) (other than obligations with respect to letters of credit
securing obligations (other than obligations described in (i), (ii) and
(v)) entered into in the ordinary course of business of such Person to the
extent that such letters of credit are not drawn upon or, if and to the
extent drawn upon, such drawing is reimbursed no later than the third
Business Day following receipt by such person of a demand for reimbursement
following payment on the letter of credit);
(iv) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services (except Trade Payables), which
purchase price is due more than six months after the date of placing such
property in service or taking delivery and title thereto or the completion
of such services;
(v) all Capitalized Lease Obligations of such Person;
(vi) the amount of all obligations of such Person with respect to the
redemption, repayment or other repurchase of any Disqualified Stock or,
with respect to any Subsidiary of the Company, any Preferred Stock (but
excluding, in each case, any accrued dividends);
(vii) all Indebtedness of other Persons secured by a Lien on any asset
of such Person, whether or not such Indebtedness is assumed by such Person;
PROVIDED, HOWEVER, that the amount of Indebtedness of such Person shall be
the lesser of (A) the fair market value of such asset at such date of
determination and (B) the amount of such Indebtedness of such other
Persons;
(viii) all Indebtedness of other Persons to the extent Guaranteed by
such Person; and
(ix) to the extent not otherwise included in this definition, Hedging
Obligations of such Person. Notwithstanding the foregoing, Indebtedness
shall not include any liability for Federal, state, local or other taxes
owed or owing by the Company to any governmental entity.
15
The amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above and the
maximum liability, upon the occurrence of the contingency giving rise to the
obligation, of any contingent obligations at such date.
"Indenture" means this Indenture as amended or supplemented from time
to time.
"Initial Securities" means the 11-3/8% Senior Subordinated Notes due
2003, issued under this Indenture on or about the date hereof.
"Interest Rate Agreement" means with respect to any Person any
interest rate protection agreement, interest rate future agreement, interest
rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement as to which such Person is party or a
beneficiary.
"Investment" in any Person means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business that are
recorded as accounts receivable on the balance sheet of the Person making such
loan or advance) or other extension of credit (including by way of Guarantee or
similar arrangement) or capital contribution to (by means of any transfer of
cash or other property to others or any payment for property or services for the
account or use of others), or any purchase or acquisition of Capital Stock,
Indebtedness or other similar instruments issued by such Person. For purposes of
the definition of "Unrestricted Subsidiary" and Section 4.04, (i) "Investment"
shall include the portion (proportionate to the Company's equity interest in
such Subsidiary) of the fair market value of the net assets of any Subsidiary of
the Company at the time that such Subsidiary is designated an Unrestricted
Subsidiary; PROVIDED, HOWEVER, that upon a redesignation of such Subsidiary as a
Restricted Subsidiary, the Company shall be deemed to continue to have a
permanent "Investment" in an Unrestricted Subsidiary in an amount (if positive)
equal to (x) the Company's "Investment" in such Subsidiary at the time of such
redesignation less (y) the portion (proportionate to the Company's equity
interest in such Subsidiary) of the fair market value of the net assets of such
Subsidiary at the time of such redesignation; and (ii) any property transferred
to or from an Unrestricted Subsidiary shall be valued at its fair market value
at the
16
time of such transfer, in each case as determined in good faith by the Board of
Directors.
"Issue Date" means the date on which the Initial Securities are
originally issued.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"Management Investors" means Gary L. Walsh, Robert A. Allen, Leo F.
Korman, Leo Granucci, J. Michael Walsh and Basil P. Prokop.
"Net Available Cash" from an Asset Disposition means cash payments
received (including any cash payments received by way of deferred payment
pursuant to, or monetization (but not for less than fair market value) of, a
note or installment receivable or otherwise (other than amounts constituting
interest thereon), but only as and when received, but excluding any other
consideration received in the form of assumption by the acquiring person of
Indebtedness or other obligations relating to the properties or assets that are
the subject of such Asset Disposition or received in any other noncash form)
therefrom, in each case net of (i) all legal, title and recording tax expenses,
commissions and other fees and expenses incurred, and all Federal, state,
provincial, foreign and local taxes required or estimated in good faith to be
required to be paid or accrued as a liability under GAAP, as a consequence of
such Asset Disposition, (ii) all payments made on any Indebtedness which is
secured by any assets subject to such Asset Disposition, in accordance with the
terms of any Lien upon such assets, or which must by its terms or the terms of
any related instrument or agreement, or in order to obtain a necessary consent
to such Asset Disposition, or by applicable law be repaid out of the proceeds
from such Asset Disposition, (iii) all distributions and other payments required
to be made to minority interest holders in Subsidiaries or joint ventures as a
result of such Asset Disposition and (iv) appropriate amounts to be provided by
the seller as a reserve, in accordance with GAAP, against any liabilities
associated with the assets disposed of in such Asset Disposition and retained by
the Company or any Restricted Subsidiary after such Asset Disposition (including
without limitation amounts reserved for the cost of any indemnification payments
(fixed or contingent)
17
attributable to the seller's indemnities to the purchaser in respect of such
Asset Disposition).
"Net Cash Proceeds", with respect to any issuance or sale of Capital
Stock, means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"Note Guarantee" means any guarantee that may from time to time be
executed and delivered by a Subsidiary of the Company pursuant to which such
Subsidiary shall Guarantee payment of the Securities. Each Note Guarantee shall
be limited in amount to an amount not to exceed the maximum amount that can be
Guaranteed by that Subsidiary without rendering the Note Guarantee, as it
relates to such Subsidiary, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer or similar laws affecting the rights of
creditors generally. Each such Note Guarantee shall be in the form of Exhibit D
hereto.
"Officer" means the Chairman of the Board, Chief Executive Officer,
Chief Financial Officer, the President, any Vice President, the Controller, the
Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers.
"Operating Income" means, with respect to the Company and its
Restricted Subsidiaries for any period, operating income determined in
accordance with GAAP and Rule 5-03 under Regulation S-X promulgated by the SEC
(as interpreted in good faith by the Company and its independent public
accountants and in a manner consistent with the Company's historical audited
financial statements as of the Issue Date); PROVIDED, HOWEVER, that there shall
not be included in Operating Income: (i) any operating income (loss) of any
Restricted Subsidiary if such Subsidiary is subject to restrictions, directly or
indirectly, on the payment of dividends or the making of distributions by such
Restricted Subsidiary, directly or indirectly, to the Company, except that
(A) subject to the limitations contained in (ii) below, the Company's
proportionate share of the operating income of any such Restricted Subsidiary
for such period shall be included in such Operating Income up to the amount that
is proportionate to the net income
18
that could have been distributed by such Restricted Subsidiary during such
period to the Company or another Restricted Subsidiary in cash as a dividend
(subject, in the case of a dividend that could have been made to another
Restricted Subsidiary, to the limitation contained in this clause) and (B) the
Company's proportionate share of an operating loss of any such Restricted
Subsidiary for such period shall be included in determining such Operating
Income, (ii) any gain or loss realized upon the sale or other disposition of any
asset of the Company or its consolidated Subsidiaries (including pursuant to any
Sale/Leaseback Transaction) which is not sold or otherwise disposed of in the
ordinary course of business and any gain or loss realized upon the sale or other
disposition of any Capital Stock of any Person, and (iii) the cumulative effect
of a change in accounting principles.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Permitted Holders" means (i) each of the Management Investors,
(ii) Jupiter Partners L.P. and (iii) (a) any spouse or lineal descendant
(including by adoption) of any Person described in clause (i) or any spouse of
any such lineal descendant; (b) in the event of the incompetence or death of any
Person described in clause (i) or in subclause (a) of this clause (iii), such
Person's estate, executor, administrator or other legal representative; (c) any
trust 100% in interest of the beneficiaries of which consists of Persons
described in clause (i) or in subclause (a) of this clause (iii); or (d) any
limited liability company, corporation or partnership 100% of the members,
stockholders or partners of which are Persons described in clause (i) or in
subclause (a) of this clause (iii); PROVIDED, HOWEVER, that no Person described
in this clause (iii) shall be a Permitted Holder if such Person is the
beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act)
directly or indirectly of more than 10% of the voting power of the Voting Stock
of the applicable company.
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in (i) a Restricted Subsidiary or a Person which shall,
upon the making of such Investment, become a Restricted Subsidiary; PROVIDED,
HOWEVER, that the primary business of such Restricted Subsidiary is a Related
Business; (ii) another Person if as
19
a result of such Investment such other Person is merged or consolidated with or
into, or transfers or conveys all or substantially all its assets to, the
Company or a Restricted Subsidiary; PROVIDED, HOWEVER, that such Person's
primary business is a Related Business; (iii) Temporary Cash Investments;
(iv) receivables owing to the Company or any Restricted Subsidiary, if created
or acquired in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms; PROVIDED, HOWEVER, that such trade terms
may include such concessionary trade terms as the Company or any such Restricted
Subsidiary deems reasonable under the circumstances; (v) payroll, travel and
similar advances to cover matters that are expected at the time of such advances
ultimately to be treated as expenses for accounting purposes and that are made
in the ordinary course of business; (vi) loans or advances to employees made in
the ordinary course of business consistent with past practices of the Company or
such Restricted Subsidiary; (vii) loans to employees for the payment of the
exercise price of options to purchase Capital Stock of the Company or loans to
satisfy federal or state income tax withholding requirements relating to the
issuance of Capital Stock of the Company pursuant to the Company's employee
stock plans, in an aggregate amount with respect to all loans described in this
clause (vii) not to exceed $500,000 outstanding at any one time; (viii) stock,
obligations or securities received in settlement of debts (including payment
obligations of customers) created in the ordinary course of business and owing
to the Company or any Restricted Subsidiary or in satisfaction of judgments;
(ix) a Person to the extent such Investment represents the non-cash
consideration otherwise permitted to be received by the Company or its
Restricted Subsidiaries in connection with an Asset Disposition; (x) prepayments
and other credits to suppliers made in the ordinary course of business
consistent with the past practices of the Company and its Restricted
Subsidiaries; (xi) payments to customers in consideration for such customers'
agreements with the Company to purchase goods and inventory made in the ordinary
course of business consistent with past practices of the Company and its
Restricted Subsidiaries and (xii) performance bonds or similar Investments in
connection with pledges, deposits or payments made or given in the ordinary
course of business in connection with or to secure statutory, regulatory or
similar obligations, including obligations under health, safety or environmental
obligations.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture,
20
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"principal" of a Security means the principal of the Security plus the
premium, if any, payable on the Security which is due or overdue or is to become
due at the relevant time.
"Public Equity Offering" means an underwritten primary public offering
of common stock of the Company pursuant to an effective registration statement
under the Securities Act.
"Public Market" means any time after (x) a Public Equity Offering has
been consummated and (y) at least 15% of the total issued and outstanding common
stock of the Company has been distributed by means of an effective registration
statement under the Securities Act.
"Receivable" means a right to receive payment arising from a sale or
lease of goods or services by a Person pursuant to an arrangement with another
Person pursuant to which such other Person is obligated to pay for goods or
services under terms that permit the purchase of such goods and services on
credit, as determined in accordance with GAAP.
"Receivables Financing" means any financing by the Receivables
Subsidiary secured substantially by Receivables of the Company and its
Subsidiaries that have been transferred to the Receivables Subsidiary in a
Financing Disposition, provided that (i) all sales of Receivables to or by the
Receivables Subsidiary are made at fair market value (as determined in good
faith by the Board of Directors), (ii) the interest rate applicable to such
Receivables Financing shall be a market interest rate (as determined in good
faith by the Board of Directors) as of the time such financing is entered into
and (iii) such financing is non-recourse to the Company and its
21
Subsidiaries (other than the Receivables Subsidiary) except to a limited extent
customary for such financings.
"Receivables Subsidiary" means a bankruptcy-remote, special purpose
Wholly Owned Subsidiary formed for the purposes of a Receivables Financing that
(a) is engaged solely in the business of acquiring, selling, collecting,
financing or refinancing Receivables, accounts (as defined in the Uniform
Commercial Code) and other accounts and receivables (including any thereof
constituting or evidenced by chattel paper, instruments or general intangibles),
all proceeds thereof and all rights (contractual and other), collateral and
other assets relating thereto, and any business or activities incidental or
related to such business, and (b) is designated as a "Receivables Subsidiary" by
the Board of Directors.
"Redemption Date" means the date on which the Securities are
optionally redeemed pursuant to Section 3.07.
"Refinancing Indebtedness" means Indebtedness that is Incurred to
refund, refinance, replace, renew, repay or extend (including pursuant to any
defeasance or discharge mechanism) (collectively, "refinances," and "refinanced"
shall have a correlative meaning) any Indebtedness existing on the date of the
Indenture or Incurred in compliance with the Indenture (including Indebtedness
of the Company that refinances Indebtedness of any Restricted Subsidiary (to the
extent permitted in the Indenture) and Indebtedness of any Restricted Subsidiary
that refinances Indebtedness of another Restricted Subsidiary) including
Indebtedness that refinances Refinancing Indebtedness; PROVIDED, HOWEVER, that
(i) the Refinancing Indebtedness has a Stated Maturity no earlier than the
Stated Maturity of the Indebtedness being refinanced, (ii) the Refinancing
Indebtedness has an Average Life at the time such Refinancing Indebtedness is
Incurred that is equal to or greater than the Average Life of the Indebtedness
being refinanced and (iii) the Refinancing Indebtedness is Incurred in an
aggregate principal amount (or if issued with original issue discount, an
aggregate issue price) that is equal to or less than the aggregate principal
amount (or if issued with original issue discount, the aggregate accreted value)
then outstanding of the Indebtedness being refinanced; PROVIDED FURTHER,
HOWEVER, that Refinancing Indebtedness shall not include (x) Indebtedness of a
Restricted Subsidiary that refinances Indebtedness of the Company or (y)
Indebtedness of the Company or a Restricted Subsidiary that refinances
Indebtedness of an Unrestricted Subsidiary.
22
"Registered Exchange Offer" shall have the meaning set forth in the
Exchange and Registration Rights Agreement.
"Related Business" means the business conducted by the Company and the
Restricted Subsidiaries on the Issue Date and any business related, ancillary or
complementary thereto.
"Representative" means the trustee, agent or representative (if any)
for an issue of Senior Indebtedness.
"Restricted Securities Legend" means the legend set forth in Section
2.06 hereof.
"Restricted Subsidiary" means any Subsidiary of the Company other than
an Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to property
now owned or hereafter acquired by the Company or a Restricted Subsidiary
whereby the Company or such Restricted Subsidiary transfers such property to a
Person and the Company or such Restricted Subsidiary leases it from such Person,
other than leases between the Company and a Wholly Owned Subsidiary or between
Wholly Owned Subsidiaries.
"SEC" means the Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness of the Company secured
by a Lien.
"Securities" means, collectively, the Initial Securities and, when and
if issued as provided in the Exchange and Registration Rights Agreement, the
Exchange Securities.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to the Global
Security (as appointed by the Depository), or any successor entity thereto and
shall initially be the Trustee.
"Senior Indebtedness" means all principal of, premium (if any),
accrued interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company
23
whether or not a claim for post-filing interest is allowed in such proceedings),
fees, charges, expenses, reimbursement obligations, guarantees and other amounts
owing with respect to all Indebtedness of the Company, including all Bank
Indebtedness, whether outstanding on the Issue Date or thereafter Incurred,
unless in the instrument creating or evidencing the same or pursuant to which
the same is outstanding it is provided that such obligations are not superior in
right of payment to the Securities; PROVIDED, HOWEVER, that Senior Indebtedness
shall not include (1) any obligation of the Company to any Subsidiary, (2) any
liability for Federal, state, local or other taxes owed or owing by the Company,
(3) any Trade Payables, (4) any Indebtedness or obligation of the Company which
is subordinate or junior in any respect to any other Indebtedness or obligation
of the Company, including any Senior Subordinated Indebtedness and any
Subordinated Obligations, (5) any obligations with respect to any Capital Stock,
or (6) any Indebtedness Incurred in violation of the Indenture.
"Senior Subordinated Indebtedness" means the Securities and any other
Indebtedness of the Company that specifically provides that such Indebtedness is
to rank PARI PASSU with the Securities and is not subordinated by its terms to
any Indebtedness or other obligation of the Company which is not Senior
Indebtedness.
"Shelf Registration Statement" shall have the meaning set forth in the
Exchange and Registration Rights Agreement.
"Significant Subsidiary" means any Restricted Subsidiary that would be
a "Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision providing for the repurchase
of such security at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has
occurred).
"Subordinated Obligation" means any Indebtedness of the Company
(whether outstanding on the Issue Date or
24
thereafter Incurred) which is subordinate or junior in right of payment to the
Securities pursuant to a written agreement.
"Subsidiary" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock or other interests (including partnership
interests) entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by (i) such Person or (ii) one or
more Subsidiaries of such Person.
"Temporary Cash Investments" means any of the following: (i) any
investment in securities maturing within one year from the date of acquisition
thereof issued or Guaranteed or insured by the United States of America or any
agency thereof, (ii) investments in certificates of deposit and eurodollar time
deposits maturing within one year of the date of acquisition thereof issued by
any commercial bank having capital surplus in excess of $500,000,000,
(iii) repurchase obligations with a term of not more than 30 days for underlying
securities of the types described in clause (i) above entered into with a bank
meeting the qualifications described in clause (ii) above, (iv) investments in
commercial paper issued by a corporation organized and in existence under the
laws of the United States of America with a rating at the time as of which any
investment therein is made of "P-2" (or higher) according to Moody's Investors
Service, Inc. or "A-2" (or higher) according to Standard and Poor's Corporation,
(v) investments in securities with maturities of one year or less from the date
of acquisition issued or fully guaranteed by any state, commonwealth or
territory of the United States of America, or by any political subdivision or
taxing authority thereof or by any foreign government and rated at least "A" by
Standard & Poor's Corporation or "A" by Moody's Investors Service, Inc., (vi)
investments in securities maturing within one year from the date of acquisition
thereof backed by standby letters of credit issued by a bank meeting the
qualifications described in clause (ii) above, (vii) shares of money market
mutual or similar funds which invest primarily in assets satisfying the
requirements of clauses (i) through (vi) above, (vii) investments in any term
deposit receipts of the Bank of Montreal maturing within 90 days from the date
of acquisition thereof, (ix) investments in cash owned by the Company or any of
its Subsidiaries and denominated in Canadian dollars,
25
(x) investments in readily marketable direct obligations of the Government of
Canada or any province thereof or obligations unconditionally guaranteed by the
full faith and credit of the Government of Canada maturing within 90 days from
the date of acquisition thereof, (xi) investments in insured certificates of
deposit, deposit notes or term deposit receipts, maturing within 90 days from
the date of acquisition thereof, of any commercial bank listed on Schedule 1 of
the Bank Act (Canada), and (xii) investments in commercial paper maturing within
90 days from the date of acquisition thereof in an aggregate amount of no more
than $1,000,000 per issuer outstanding at any time, issued by any corporation
organized under the laws of Canada or any province thereof and rated at least
A-1 or better (or the then equivalent grade) by Canada Bond Rating Service or
R-2 (middle) or better (or the then equivalent grade) by Dominion Bond Rating
Service.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date of the Indenture.
"Total Receivables" means all receivables of a Person as determined in
accordance with GAAP, other than Receivables that are the subject of a
Receivables Financing.
"Trade Payables" means, with respect to any Person, any accounts
payable or any indebtedness or monetary obligation to trade creditors created,
assumed or Guaranteed by such Person arising in the ordinary course of business
in connection with the acquisition of goods or services.
"Transfer Restricted Securities" means Securities that bear or are
required to bear the legend set forth in Section 2.06 hereof.
"Treasury Rate" means the yield to maturity at the time of computation
of United States Treasury securities with a constant maturity (as compiled 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 Redemption
Date (or, if such Statistical Release is no longer published, any publicly
available source of similar market data)) most nearly equal to the period from
the Redemption Date to September 15, 2000; PROVIDED, HOWEVER, that if the period
from the Redemption Date to September 15, 2000, 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
26
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 period from the Redemption Date
to September 15, 2000 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 in the Indenture until a
successor replaces it and, thereafter, means the successor.
"Trust Officer" means when used with respect to the Trustee, any
officer within the Corporate Trust Office of the Trustee including any vice
president, assistant vice president, assistant secretary, treasurer, assistant
treasurer, managing director or any other officer of the Trustee who customarily
performs functions similar to those performed by the persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"Uniform Commercial Code" means the New York Uniform Commercial Code
as in effect from time to time.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that
at the time of determination shall be designated an Unrestricted Subsidiary by
the Board of Directors in the manner provided below and (ii) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary
of the Company (including any newly acquired or newly formed Subsidiary of the
Company) to be an Unrestricted Subsidiary unless such Subsidiary or any of its
Subsidiaries owns any Capital Stock or Indebtedness of, or owns or holds any
Lien on any property of, the Company or any other Subsidiary of the Company that
is not a Subsidiary of the Subsidiary to be so designated; PROVIDED, HOWEVER,
that either (A) the Subsidiary to be so designated has total consolidated assets
of $1,000 or less or (B) if such Subsidiary has consolidated assets greater than
$1,000, then such designation would be permitted under Section 4.04 The Board
of Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; PROVIDED, HOWEVER, that immediately after giving effect to such
designation (x) the Company could Incur $1.00 of additional Indebtedness under
Section 4.03(a) and (y) no Default shall have occurred and be continuing. Any
such designation by the Board of Directors shall be evidenced to
27
the Trustee by promptly filing with the Trustee a copy of the resolution of the
Board of Directors giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
provisions.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
"Voting Stock" of a corporation means all classes of Capital Stock of
such corporation then outstanding and normally entitled to vote in the election
of directors.
"Wholly Owned Subsidiary" means a Restricted Subsidiary of the Company
all the Capital Stock of which (other than directors' qualifying shares) is
owned by the Company or another Wholly Owned Subsidiary.
28
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
---- ----------
"Affiliate Transaction" . . . . . . . . . . . . . . . . 4.07
"Agent Members" . . . . . . . . . . . . . . . . . . . . 2.01(b)
"Bankruptcy Law". . . . . . . . . . . . . . . . . . . . 6.01
"Blockage Notice" . . . . . . . . . . . . . . . . . . . 10.03
"covenant defeasance option". . . . . . . . . . . . . . 8.01(b)
"Custodian" . . . . . . . . . . . . . . . . . . . . . . 6.01
"Event of Default". . . . . . . . . . . . . . . . . . . 6.01
"Initial Purchasers". . . . . . . . . . . . . . . . . . 2.01(a)
"legal defeasance option" . . . . . . . . . . . . . . . 8.01(b)
"Legal Holiday" . . . . . . . . . . . . . . . . . . . . 11.08
"Maximum Amount". . . . . . . . . . . . . . . . . . . . 4.03(b)
"Non-Global Purchaser". . . . . . . . . . . . . . . . . 2.01(c)
"Offer" . . . . . . . . . . . . . . . . . . . . . . . . 4.06
"Offer Amount". . . . . . . . . . . . . . . . . . . . . 4.06
"Offer Period". . . . . . . . . . . . . . . . . . . . . 4.06
"pay the Securities". . . . . . . . . . . . . . . . . . 10.03
"Paying Agent". . . . . . . . . . . . . . . . . . . . . 2.03
"Payment Blockage Period" . . . . . . . . . . . . . . . 10.03
"Purchase Agreement". . . . . . . . . . . . . . . . . . 2.01(a)
"Purchase Date" . . . . . . . . . . . . . . . . . . . . 4.06
"QIBs". . . . . . . . . . . . . . . . . . . . . . . . . 2.01(a)
"Registrar" . . . . . . . . . . . . . . . . . . . . . . 2.03
"Restricted Certificated Securities . . . . . . . . . . 2.01(c)
"Restricted Global Security". . . . . . . . . . . . . . 2.01(a)
"Restricted Payment". . . . . . . . . . . . . . . . . . 4.04
"Rule 144A" . . . . . . . . . . . . . . . . . . . . . . 2.01(a)
"Successor Company" . . . . . . . . . . . . . . . . . . 5.01
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
This Indenture is subject to the mandatory provisions of the TIA, which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
29
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION 1.04. RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) unsecured Indebtedness shall not be deemed to be subordinate or
junior to Secured Indebtedness merely by virtue of its nature as unsecured
Indebtedness;
(7) the principal amount of any noninterest bearing or other discount
security at any date shall be the principal amount thereof that would be
shown on a balance sheet of the issuer dated such date prepared in
accordance with GAAP and accretion of principal on such security shall be
deemed to be the Incurrence of Indebtedness; and
(8) the principal amount of any Preferred Stock shall be (i) the
maximum liquidation value of such Preferred Stock or (ii) the maximum
mandatory redemption or mandatory repurchase price with respect to such
Preferred Stock, whichever is greater.
30
ARTICLE 2
THE SECURITIES
SECTION 2.01. FORM AND DATING. The Initial Securities and the
Trustee's certificate of authentication shall be substantially in the form of
Exhibit A, which is hereby incorporated in and expressly made a part of this
Indenture. Any Exchange Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit B, which is
incorporated in and expressly made a part of this Indenture. The Securities may
have notations, legends or endorsements required by law, stock exchange rule,
agreements to which the Company is subject, if any, or usage (provided that any
such notation, legend or endorsement is in a form acceptable to the Company).
Each Security shall be dated the date of its authentication. The terms of the
Securities set forth in Exhibits A and B are part of the terms of this
Indenture.
(a) GLOBAL SECURITIES. The Initial Securities are being offered and
sold by the Company pursuant to a Purchase Agreement (the "Purchase Agreement"),
dated September 24, 1996, between the Company and Chase Securities Inc. and
Donaldson Lufkin & Jenrette Securities Corporation (the "Initial Purchasers").
Initial Securities offered and sold to "qualified institutional
buyers" (as defined in Rule 144A under the Securities Act) ("QIBs") in
accordance with Rule 144A under the Securities Act ("Rule 144A") as provided in
the Purchase Agreement, shall be issued initially in the form of a single,
permanent Global Security in definitive, fully registered form without interest
coupons with the Restricted Securities Legend and the legend set forth in
footnote 1 to Exhibit A hereto (the "Restricted Global Security"), which shall
be deposited on behalf of the Initial Purchasers of the Initial Securities
represented thereby with the Trustee, as Securities Custodian for the
Depository, and registered in the name of the Depository or a registered nominee
of the Depository, duly executed by the Company and authenticated by the Trustee
as hereinafter provided. The aggregate principal amount of the Restricted
Global Security may from time to time be increased or decreased by adjustments
made on the records of the Trustee, as Securities Custodian, and the Depository
or its nominee as hereinafter provided.
31
(b) BOOK-ENTRY PROVISIONS. This Section 2.01(b) shall apply only to
Global Securities deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.01(b), authenticate and deliver initially one or more Global
Securities that (i) shall be registered in the name of the Depository for such
Global Security or Global Securities or the registered nominee of such
Depository and (ii) shall be held by the Trustee as Securities Custodian for the
Depository.
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depository or by the Trustee as the custodian of the
Depository or under such Global Security, and the Depository may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depository
or impair, as between the Depository and its Agent Members, the operation of
customary practices of such Depository governing the exercise of the rights of a
holder of a beneficial interest in any Global Security.
(c) CERTIFICATED SECURITIES. Except as otherwise provided herein,
owners of beneficial interests in Global Securities shall not be entitled to
receive physical delivery of certificated Securities. Purchasers of Initial
Securities who are not QIBs (referred to herein as the "Non-Global Purchasers")
shall receive certificated Initial Securities bearing the Restricted Securities
Legend set forth in Exhibit A hereto ("Restricted Certificated Securities");
PROVIDED, HOWEVER, that upon transfer of such Restricted Certificated Securities
to a QIB or in accordance with Regulation S under the Securities Act, such
Restricted Certificated Securities shall, unless the relevant Global Security
has previously been exchanged, be exchanged for an interest in a Global Security
pursuant to the provisions of Section 2.06 hereof. Restricted Certificated
Securities shall include the Restricted Securities Legend set forth in Exhibit A
unless removed in accordance with this Section 2.01(c) or Section 2.06(g)
hereof.
32
After a transfer of any Initial Securities during the period of the
effectiveness of, and pursuant to, a Shelf Registration Statement with respect
to the Initial Securities, all requirements pertaining to legends on such
Initial Securities shall cease to apply, the requirements requiring that any
such Initial Securities issued to certain Holders be issued in global form shall
cease to apply, and certificated Initial Securities without legends shall be
made available to the Holders of such Initial Securities. Upon the consummation
of a Registered Exchange Offer with respect to the Initial Securities pursuant
to which Holders of Initial Securities are offered Exchange Securities in
exchange for their Initial Securities, all requirements pertaining to such
Initial Securities that Initial Securities issued to certain Holders be issued
in global form shall cease to apply and certificated Initial Securities with the
Restricted Securities Legend set forth in Exhibit A hereto shall be available to
Holders of such Initial Securities that do not exchange their Initial
Securities, and Exchange Securities in certificated form shall be available to
Holders that exchange such Initial Securities in such Registered Exchange Offer.
SECTION 2.02. EXECUTION AND AUTHENTICATION. Two Officers shall sign
the Securities for the Company by manual or facsimile signature. The Company's
seal shall be impressed, affixed, imprinted or reproduced on the Securities and
may be in facsimile form.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall be
valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate and deliver (1) Initial Securities for
original issue in an aggregate principal amount of $75,000,000, and (2) Exchange
Securities for issue only in a Registered Exchange Offer, pursuant to the
Exchange and Registration Rights Agreement for Initial Securities for a like
principal amount of Initial Securities exchanged pursuant thereto, in each case
upon a written order of the Company signed by two Officers or by an Officer and
either an Assistant Treasurer or an Assistant Secretary
33
of the Company. Such order shall specify the amount of the Securities to be
authenticated, the date on which the original issue of Securities is to be
authenticated and whether the Securities are to be Initial Securities or
Exchange Securities. The aggregate principal amount of Securities outstanding
at any time may not exceed $75,000,000 except as provided in Section 2.07.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate the Securities. Unless limited by the terms of
such appointment, an authenticating agent may authenticate Securities whenever
the Trustee may do so. Each reference in this Indenture to authentication by
the Trustee includes authentication by such agent. An authenticating agent has
the same rights as any Registrar, Paying Agent or agent for service of notices
and demands.
SECTION 2.03. REGISTRAR AND PAYING AGENT. The Company shall maintain
an office or agency where Securities may be presented for registration of
transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Registrar
shall keep a register of the Securities and of their transfer and exchange. The
Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall
notify the Trustee of the name and address of any such agent. If the Company
fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and
in such capacity shall be entitled to (i) all of the rights, duties, immunities
and protections of the Trustee hereunder and (ii) compensation therefor
pursuant to Section 7.07. The Company or any of its domestically incorporated
Wholly Owned Subsidiaries may act as Paying Agent, Registrar, co-registrar or
transfer agent.
The Company initially appoints the Trustee at its Corporate Trust
Office as Registrar and Paying Agent in connection with the Securities.
34
The Company initially appoints The Depository Trust Company to act as
Depository with respect to the Global Securities.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST. Prior to 2:00
p.m. New York time on each due date of the principal on any Security and at
least one Business Day prior to each due date of the interest on any Security,
the Company shall deposit with the Paying Agent a sum sufficient to pay such
principal and interest when so becoming due. The Company shall require each
Paying Agent (other than the Trustee) to agree in writing that the Paying Agent
shall hold in trust for the benefit of Securityholders or the Trustee all money
held by the Paying Agent for the payment of principal of or interest on the
Securities and shall notify the Trustee of any default by the Company in making
any such payment. If the Company or a Subsidiary acts as Paying Agent, it shall
segregate the money held by it as Paying Agent and hold it as a separate trust
fund. The Company at any time may require a Paying Agent to pay all money held
by it to the Trustee and to account for any funds disbursed by the Paying Agent.
Upon complying with this Section, the Paying Agent shall have no further
liability for the money delivered to the Trustee.
SECTION 2.05. SECURITYHOLDER LISTS. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee, in writing at least five
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Securityholders.
SECTION 2.06. TRANSFER AND EXCHANGE. (a) TRANSFER AND EXCHANGE OF
DEFINITIVE SECURITIES. When Definitive Securities are presented to the
Registrar or a co-registrar with a request:
(x) to register the transfer of such Definitive Securities; or
(y) to exchange such Definitive Securities for an equal principal
amount of Definitive Securities of other authorized denominations,
35
the Registrar or co-registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
PROVIDED, HOWEVER, that the Definitive Securities surrendered for transfer or
exchange:
(i) shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the Registrar
or co-registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing; and
(ii) in the case of Transfer Restricted Securities that are
Definitive Securities, are being transferred or exchanged pursuant to an
effective registration statement under the Securities Act or pursuant to
clause (A), (B) or (C) below, and are accompanied by the following
additional information and documents, as applicable:
(A) if such Transfer Restricted Securities are being delivered
to the Registrar by a Holder for registration in the name of such
Holder, without transfer, a certification from such Holder to that
effect (in substantially the form set forth on the reverse of the
Security); or
(B) if such Transfer Restricted Securities are being transferred
to the Company or to a "qualified institutional buyer" (as defined in
Rule 144A under the Securities Act) in accordance with Rule 144A under
the Securities Act, a certification to that effect (in substantially
the form set forth on the reverse of the Security); or
(C) if such Transfer Restricted Securities are being transferred
(w) pursuant to an exemption from registration in accordance with
Rule 144 or Regulation S under the Securities Act; or (x) to an
institutional "accredited investor" within the meaning of
Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is
acquiring the security for its own account, or for the account of such
an institutional accredited investor, in each case in a minimum
principal amount of the Securities of $250,000 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 (y) in reliance on
another exemption from
36
the registration requirements of the Securities Act: (i) a
certification to that effect (in substantially the form set forth on
the reverse of the Security), (ii) if the Company or Registrar so
requests, an Opinion of Counsel reasonably acceptable to the Company
and to the Registrar to the effect that such transfer is in compliance
with the Securities Act and (iii) in the case of clause (x), a signed
letter substantially in the form of Exhibit C hereto.
(b) RESTRICTIONS ON TRANSFER OF A DEFINITIVE SECURITY FOR A
BENEFICIAL INTEREST IN A GLOBAL SECURITY. A Definitive Security may not be
exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below. Upon receipt by the Trustee
of a Definitive Security, duly endorsed or accompanied by appropriate
instruments of transfer, in form satisfactory to the Trustee, together with:
(i) if such Definitive Security is a Transfer Restricted Security,
certification, substantially in the form set forth on the reverse of the
Security, that such Definitive Security is being transferred to a
"qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A under the Securities Act; and
(ii) whether or not such Definitive Security is a Transfer Restricted
Security, written instructions directing the Trustee to make, or to direct
the Securities Custodian to make, an adjustment on its books and records
with respect to such Global Security to reflect an increase in the
aggregate principal amount of the Securities represented by the Global
Security,
then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Securities Custodian, the
aggregate principal amount of Securities represented by the Global Security to
be increased accordingly. If no Global Securities are then outstanding, the
Company shall issue and the Trustee shall authenticate, upon written order of
the Company in the form of an Officers' Certificate, a new Global Security in
the appropriate principal amount.
37
The Trustee or Registrar has no duties to obtain certificates or other
documentation with respect to the transfer or exchange between or among any
depositary participants, members or beneficial owners in any global security and
shall have no liability or responsibility with respect to the legality thereof.
(c) TRANSFER AND EXCHANGE OF GLOBAL SECURITIES. The transfer and
exchange of Global Securities or beneficial interests therein shall be effected
through the Depository, in accordance with this Indenture (including applicable
restrictions on transfer set forth herein, if any) and the procedures of the
Depository therefor.
(d) TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL SECURITY FOR A
DEFINITIVE SECURITY.
(i) Any person having a beneficial interest in a Global Security that
is being transferred or exchanged pursuant to an effective registration
statement under the Securities Act or pursuant to clause (A),(B) or (C)
below may upon request, and if accompanied by the information specified
below, exchange such beneficial interest for a Definitive Security of the
same aggregate principal amount. Upon receipt by the Trustee of written
instructions or such other form of instructions as is customary for the
Depository from the Depository or its nominee on behalf of any Person
having a beneficial interest in a Global Security and upon receipt by the
Trustee of a written order or such other form of instructions as is
customary for the Depository or the Person designated by the Depository as
having such a beneficial interest in a Transfer Restricted Security only,
the following additional information and documents (all of which may be
submitted by facsimile):
(A) if such beneficial interest is being transferred to the
Person designated by the Depository as being the owner of a beneficial
interest in a Global Security, a certification from such Person to
that effect (in substantially the form set forth on the reverse of the
Security); or
(B) if such beneficial interest is being transferred to a
"qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A under the Securities
38
Act, a certification to that effect (in substantially the form set
forth on the reverse of the Security); or
(C) if such beneficial interest is being transferred
(w) pursuant to an exemption from registration in accordance with
Rule 144 or Regulation S under the Securities Act; or (x) to an
institutional "accredited investor" within the meaning of
Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is
acquiring the security for its own account, or for the account of such
an institutional accredited investor, in each case in a minimum
principal amount of the Securities of $250,000 for investment purposes
and not with a view to, or for offer or sale in connection with, any
distribution in violation of the Securities; or (y) in reliance on
another exemption from the registration requirements of the Securities
Act: (i) a certification to that effect from the transferee or
transferor (in substantially the form set forth on the reverse of the
Security), (ii) if the Company or Registrar so requests, an Opinion of
Counsel from the transferee or transferor reasonably acceptable to the
Company and to the Registrar to the effect that such transfer is in
compliance with the Securities Act, and (iii) in the case of
clause (x), a signed letter substantially in the form of Exhibit C
hereto,
then the Trustee or the Securities Custodian, at the direction of the
Trustee, shall cause, in accordance with the standing instructions and
procedures existing between the Depository and the Securities Custodian,
the aggregate principal amount of the Global Security to be reduced on its
books and records and, following such reduction, the Company shall execute
and the Trustee shall authenticate and deliver to the transferee a
Definitive Security.
(ii) Definitive Securities issued in exchange for a beneficial
interest in a Global Security pursuant to this Section 2.06(d) shall be
registered in such names and in such authorized denominations as the
Depository, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall
deliver such Definitive Securities to the persons in whose names such
Securities are so
39
registered in accordance with the written instructions of the Depository.
(e) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL SECURITIES.
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in subsection (f) of this Section 2.06), a Global Security
may not be transferred as a whole except by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
(f) AUTHENTICATION OF DEFINITIVE SECURITIES IN ABSENCE OF DEPOSITORY.
If at any time:
(i) the Depository for the Securities notifies the Company that the
Depository is unwilling or unable to continue as Depository for the Global
Securities and a successor Depository for the Global Securities is not
appointed by the Company within 90 days after delivery of such notice; or
(ii) the Company, in its sole discretion, notifies the Trustee in
writing that it elects to cause the issuance of Definitive Securities under
this Indenture,
then the Company shall execute, and the Trustee, upon receipt of an Officers'
Certificate requesting the authentication and delivery of Definitive Securities
to the Persons designated by the Company, shall authenticate and deliver
Definitive Securities in exchange for such Global Securities.
(g) LEGEND.
(i) Except as permitted by the following paragraph (ii), each
Security certificate evidencing the Global Securities and the Definitive
Securities (and all Securities issued in exchange therefor or substitution
thereof) shall bear a legend in substantially the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
40
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS
SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER THE
LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE
COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY
(OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO THE COMPANY,
(B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES
ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES
ACT, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE
MEANING OF RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT
THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT
OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A
MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000 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
(F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE
TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND OTHER INFORMATION SATISFACTORY TO EACH OF
THEM, AND IN THE CASE OF CLAUSE (E), A CERTIFICATE OF TRANSFER IN THE
FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND
DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND SHALL BE
REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE."
41
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global
Security) pursuant to Rule 144 under the Securities Act or an effective
registration statement under the Securities Act:
(A) in the case of any Transfer Restricted Security that is a
Definitive Security, the Registrar shall permit the Holder thereof to
exchange such Transfer Restricted Security for a Definitive Security
that does not bear the legend set forth above and rescind any
restriction on the transfer of such Transfer Restricted Security; and
(B) any such Transfer Restricted Security represented by a
Global Security shall not be subject to the provisions set forth in
clause (i) of this Section 2.06(g) (such sales or transfers being
subject only to the provisions of Section 2.06(c) hereof); PROVIDED,
HOWEVER, that with respect to any request for an exchange of a
Transfer Restricted Security that is represented by a Global Security
for a Definitive Security that does not bear a legend, which request
is made in reliance upon Rule 144, the Holder thereof shall certify in
writing to the Registrar that such request is being made pursuant to
Rule 144 (such certification to be substantially in the form set forth
on the reverse of the Security).
(h) CANCELATION AND/OR ADJUSTMENT OF GLOBAL SECURITY. At such time
as all beneficial interests in a Global Security have either been exchanged for
Definitive Securities, redeemed, repurchased or canceled, such Global Security
shall be returned to the Depository for cancelation or retained and canceled by
the Trustee. At any time prior to such cancelation, if any beneficial interest
in a Global Security is exchanged for Definitive Securities, redeemed,
repurchased or canceled, the principal amount of Securities represented by such
Global Security shall be reduced and an adjustment shall be made on the books
and records of the Trustee (if it is then the Securities Custodian for such
Global Security) with respect to such Global Security, by the Trustee or the
Securities Custodian, to reflect such reduction.
(i) OBLIGATIONS WITH RESPECT TO TRANSFERS AND EXCHANGES OF
SECURITIES.
42
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Definitive Securities and
Global Securities at the Registrar's or co-registrar's written request.
(ii) No service charge shall be made for any registration of transfer
or exchange, but the Company may require payment of a sum sufficient to
cover any transfer tax, assessments, or similar governmental charge payable
in connection therewith.
(iii) The Registrar or co-registrar shall not be required to register
the transfer of or exchange of (a) any Definitive Security selected for
redemption in whole or in part pursuant to Article 3, except the unredeemed
portion of any Definitive Security being redeemed in part, or (b) any
Security for a period beginning 15 Business Days before the mailing of a
notice of an offer to repurchase or redeem Securities or 15 Business Days
before an interest payment date.
(iv) Prior to the due presentation for registration of transfer of
any Security, the Company, the Trustee, the Paying Agent, the Registrar or
any co-registrar may deem and treat the person in whose name a Security is
registered as the absolute owner of such Security for the purpose of
receiving payment of principal of and interest on such Security and for all
other purposes whatsoever, whether or not such Security is overdue, and
none of the Company, the Trustee, the Paying Agent, the Registrar or any
co-registrar shall be affected by notice to the contrary.
(v) All Securities issued upon any transfer or exchange pursuant to
the terms of this Indenture shall evidence the same debt and shall be
entitled to the same benefits under this Indenture as the Securities
surrendered upon such transfer or exchange.
(j) NO OBLIGATION OF THE TRUSTEE. (i) The Trustee shall have no
responsibility or obligation to any beneficial owner of a Global Security, a
member of, or a participant in the Depository or other Person with respect to
the accuracy of the records of the Depository or its nominee or of any
participant or member thereof, with respect to any ownership interest in the
Securities or with respect to the delivery to any participant, member,
beneficial owner or other Person (other than the Depository) of any notice
(including any
43
notice of redemption) or the payment of any amount, under or with respect to
such Securities. All notices and communications to be given to the Holders and
all payments to be made to Holders under the Securities shall be given or made
only to or upon the order of the registered Holders (which shall be the
Depository or its nominee in the case of a Global Security). The rights of
beneficial owners in any Global Security in global form shall be exercised only
through the Depository subject to the applicable rules and procedures of the
Depository. The Trustee may conclusively rely and shall be fully protected in
relying upon information furnished by the Depository with respect to its
members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to any
transfer of any interest in any Security (including without limitation any
transfers between or among Depository participants, members or beneficial
owners in any Global Security) other than to require delivery of such
certificates and other documentation or evidence as are expressly required
by, and to do so if and when expressly required by, the terms of this
Indenture, and to examine the same to determine substantial compliance as
to form with the express requirements hereof.
SECTION 2.07. REPLACEMENT SECURITIES. If a mutilated Security is
surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements of
Section 8-405 of the Uniform Commercial Code are met, such that the Holder
(i) satisfies the Company or the Trustee within a reasonable time after he has
notice of such loss, destruction or wrongful taking and the Registrar does not
register a transfer prior to receiving such notification, (ii) so requests the
Company or the Trustee prior to the Security being acquired by a bona fide
purchaser and (iii) satisfies any other reasonable requirements of the Trustee.
If required by the Trustee or the Company, such Holder shall furnish an
indemnity bond sufficient in the judgment of the Trustee to protect the Company,
the Trustee, the Paying Agent, the Registrar and any co-registrar from any loss
that any of them may suffer if a Security is replaced. The Company and the
Trustee may
44
charge the Holder for their expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company.
SECTION 2.08. OUTSTANDING SECURITIES. Securities outstanding at any
time are all Securities authenticated by the Trustee except for those canceled
by it, those delivered to it for cancelation and those described in this Section
as not outstanding. A Security does not cease to be outstanding because the
Company or an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money sufficient to pay
all principal and interest payable on that date with respect to the Securities
(or portions thereof) to be redeemed or maturing, as the case may be, and the
Paying Agent is not prohibited from paying such money to the Securityholders on
that date pursuant to the terms of this Indenture, then on and after that date
such Securities (or portions thereof) cease to be outstanding and interest on
them ceases to accrue.
SECTION 2.09. TEMPORARY SECURITIES. Until Definitive Securities are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form
of Definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate Definitive Securities and
deliver them in exchange for temporary Securities.
SECTION 2.10. CANCELATION. The Company at any time may deliver
Securities to the Trustee for cancelation. The Registrar and the 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 and
destroy (subject to the record retention requirements of the Exchange Act) all
Securities surrendered for registration of transfer, exchange, payment
45
or cancelation and deliver a certificate of such destruction to the Company,
unless the Company directs the Trustee to deliver canceled Securities to the
Company. The Company may not issue new Securities to replace Securities it has
redeemed, paid or delivered to the Trustee for cancelation. The Trustee shall
not authenticate Securities in place of canceled Securities other than pursuant
to the terms of this Indenture.
SECTION 2.11. DEFAULTED INTEREST. If the Company defaults in a
payment of interest on the Securities, the Company shall pay the defaulted
interest (plus interest on such defaulted interest to the extent lawful) in any
lawful manner. The Company may pay the defaulted interest to the persons who
are Securityholders on a subsequent special record date. The Company shall fix
or cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail to each
Securityholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.
SECTION 2.12. CUSIP NUMBERS. The Company in issuing the Securities
may use "CUSIP" numbers (if then generally in use) and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders;
PROVIDED, HOWEVER, that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Securities or as
contained in any notice of a 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.
ARTICLE 3
REDEMPTION
SECTION 3.01. NOTICES TO TRUSTEE. If the Company elects to redeem
Securities pursuant to Section 3.07, it shall notify the Trustee in writing of
the redemption date, the principal amount of Securities to be redeemed and the
paragraph of the Securities pursuant to which the redemption shall occur.
The Company shall give each notice to the Trustee provided for in this
Section at least 60 days before the redemption date unless the Trustee consents
in writing to a
46
shorter period. Such notice shall be accompanied by an Officers' Certificate
and an Opinion of Counsel from the Company to the effect that such redemption
shall comply with the conditions herein. If fewer than all the Securities are
to be redeemed, the record date relating to such redemption shall be selected by
the Company and given to the Trustee, which record date shall be not less than
15 days after the date of notice to the Trustee. Any such notice may be
canceled at any time prior to notice of such redemption being mailed to any
Holder and shall thereby be void and of no effect.
SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED. If fewer than
all the Securities are to be redeemed, the Trustee shall select the Securities
to be redeemed pro rata or by lot or by a method that complies with applicable
legal and securities exchange requirements, if any, and that the Trustee
considers fair and appropriate and in accordance with methods generally used at
the time of selection by fiduciaries in similar circumstances. The Trustee
shall make the selection from outstanding Securities not previously called for
redemption. The Trustee may select for redemption portions of the principal of
Securities that have denominations larger than $1,000. Securities and portions
of them the Trustee selects shall be in amounts of $1,000 or a whole multiple of
$1,000. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption. The
Trustee shall notify the Company promptly of the Securities or portions of
Securities to be redeemed.
SECTION 3.03. NOTICE OF REDEMPTION. At least 30 days but not more
than 60 days before a date for redemption of Securities, the Company shall mail
a notice of redemption by first-class mail to each Holder of Securities to be
redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
47
(5) if fewer than all the outstanding Securities are to be redeemed,
the certificate numbers and principal amounts of the particular Securities
to be redeemed;
(6) that, unless the Company defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment pursuant
to the terms of this Indenture interest on Securities (or portion thereof)
called for redemption ceases to accrue on and after the redemption date;
(7) the paragraph of the Securities pursuant to which the Securities
called for redemption are being redeemed;
(8) the CUSIP number, if any, printed on the Securities being
redeemed; and
(9) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the
Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION. Once notice of
redemption is mailed, Securities called for redemption become due and payable on
the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest, if any, to the redemption
date; PROVIDED that if the redemption date is after a regular record date and on
or prior to the interest payment date, the accrued interest shall be payable to
the Securityholder of the redeemed Securities registered on the relevant record
date. Failure to give notice or any defect in the notice to any Holder shall
not affect the validity of the notice to any other Holder.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE. Prior to 2:00 p.m. New
York time on the redemption date, the Company shall deposit with the Paying
Agent (or, if the Company or a Subsidiary is the Paying Agent, shall segregate
and hold in trust) money sufficient to pay the redemption price of and accrued
interest on all Securities to be
48
redeemed on that date other than Securities or portions of Securities called for
redemption that have been delivered by the Company to the Trustee for
cancelation.
SECTION 3.06. SECURITIES REDEEMED IN PART. Upon surrender of a
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate for the Holder (at the Company's expense) a new Security
equal in principal amount to the unredeemed portion of the Security surrendered.
SECTION 3.07. OPTIONAL REDEMPTION. (a) Except as set forth in the
next two paragraphs, the Securities may not be redeemed prior to September 15,
2000. On and after that date, the Company may redeem the Securities in whole at
any time or in part from time to time at the following redemption prices
(expressed in percentages of principal amount), plus accrued interest to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date), if
redeemed during the 12-month period beginning on or after September 15 of the
years set forth below:
Redemption
Period Price
------ ----------
2000 105.688%
2001 102.844%
2002 and thereafter 100.000%
(b) Notwithstanding the foregoing, at any time prior to September 15,
1999, the Company may redeem in the aggregate up to 30% of the original
aggregate principal amount of Securities with the proceeds of one or more Public
Equity Offerings by the Company following which there is a Public Market, at a
redemption price (expressed as a percentage of principal amount) of 111.375%
plus accrued interest, if any, to the redemption date (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date); PROVIDED, HOWEVER, that at least 70% of the
original aggregate principal amount of the Securities must remain outstanding
after each such redemption.
(c) At any time on or prior to September 15, 2000, the Securities may
be redeemed as a whole at the option of the Company within 90 days after a
Change of Control, at a redemption price equal to the sum of (i) 100%
49
of the principal amount thereof plus (ii) the Applicable Premium plus
(iii) accrued but unpaid interest, if any, to the Redemption Date (subject to
the right of Holders of record on the relevant record date to receive interest
due on the relevant interest payment date).
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF SECURITIES. The Company shall promptly pay
the principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal and interest shall
be considered paid on the date due if on such date the Trustee or the Paying
Agent holds in accordance with this Indenture money sufficient to pay all
principal and interest then due and the Trustee or the Paying Agent, as the case
may be, is not prohibited from paying such money to the Securityholders on that
date pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION 4.02. SEC REPORTS. Notwithstanding that the Company may not
be or remain required to be subject to the reporting requirements of Section 13
or 15(d) of the Exchange Act, the Company shall file with the SEC, if permitted
by the SEC, and provide the Trustee and Securityholders and prospective
Securityholders (upon request) within 15 days after it files them with the SEC,
copies of its annual report and the information, documents and other reports
that are specified in Section 13 or 15(d) of the Exchange Act. In addition,
following a Public Equity Offering, the Company shall furnish to the Trustee and
the Securityholders, promptly upon their becoming available, copies of the
annual report to shareholders and any other information provided by the Company
to its public shareholders generally. The Company also shall comply with the
other provisions of TIA Section 314(a).
SECTION 4.03. LIMITATION ON INDEBTEDNESS. (a) The Company shall not,
and shall not permit any Restricted Subsidiary to, Incur any Indebtedness;
PROVIDED, HOWEVER, that the Company (but not any Restricted
50
Subsidiary) may Incur Indebtedness if on the date of such Incurrence the
Consolidated Coverage Ratio would be greater than 2:1, if such Indebtedness is
Incurred on or prior to September 30, 1999, and 2.5:1 if such Indebtedness is
Incurred thereafter.
(b) Notwithstanding the foregoing paragraph (a), the Company and its
Restricted Subsidiaries may Incur the following Indebtedness:
(i) Indebtedness of the Company and its Restricted Subsidiaries
outstanding from time to time pursuant to the Credit Agreement or otherwise
in an amount not to exceed (A) the sum (the "Maximum Amount") of (x) 85% of
the net book value of the consolidated Total Receivables of the Company and
its Restricted Subsidiaries (other than the Receivables Subsidiary) and (y)
80% of the net book value of the consolidated inventory of the Company and
its Restricted Subsidiaries (other than the Receivables Subsidiary),
determined in accordance with GAAP, and (B) $20 million but only in respect
of letters of credit;
(ii) Indebtedness of the Receivables Subsidiary Incurred pursuant to
Receivables Financings;
(iii) Indebtedness of the Company owing to and held by any Wholly
Owned Subsidiary or Indebtedness of a Restricted Subsidiary owing to and
held by the Company or any Wholly Owned Subsidiary; PROVIDED, HOWEVER, that
any subsequent issuance or transfer of any Capital Stock or any other event
which results in any such Wholly Owned Subsidiary ceasing to be a Wholly
Owned Subsidiary or any subsequent transfer of any such Indebtedness
(except to the Company or a Wholly Owned Subsidiary) shall be deemed, in
each case, to constitute the Incurrence of such Indebtedness by the issuer
thereof;
(iv) Indebtedness represented by the Securities (and the Note
Guarantees), any Indebtedness (other than the Indebtedness described in
clauses (i) and (iii) above) outstanding on the Issue Date and any
Refinancing Indebtedness Incurred in respect of any Indebtedness described
in clause (i), this clause (iv) or paragraph (a);
(v) (A) Indebtedness of a Restricted Subsidiary Incurred and
outstanding on or prior to the date on
51
which such Restricted Subsidiary was acquired by the Company (other than
Indebtedness Incurred as consideration in, in contemplation of, or to
provide all or any portion of the funds or credit support utilized to
consummate, the transaction or series of related transactions pursuant
to which such Restricted Subsidiary became a Subsidiary or was otherwise
acquired by the Company); PROVIDED, HOWEVER, that at the time such
Restricted Subsidiary is acquired by the Company, the Company would have
been able to Incur $1.00 of additional Indebtedness pursuant to
paragraph (a) after giving effect to the Incurrence of such Indebtedness
pursuant to this clause (v) and (B) Refinancing Indebtedness Incurred by
a Restricted Subsidiary in respect of Indebtedness Incurred by such
Restricted Subsidiary pursuant to this clause (v);
(vi) Indebtedness (A) in respect of performance bonds, bankers'
acceptances, letters of credit and surety or appeal bonds provided by the
Company and its Restricted Subsidiaries in the ordinary course of their
business and which do not secure other Indebtedness, and (B) under Currency
Agreements and Interest Rate Agreements; PROVIDED, HOWEVER, that, in the
case of Currency Agreements and Interest Rate Agreements, such Currency
Agreements and Interest Rate Agreements do not increase the Indebtedness of
the Company outstanding at any time other than as a result of fluctuations
in foreign currency exchange rates or interest rates or by reason of fees,
indemnities and compensation payable thereunder; or
(vii) Indebtedness of the Company (but not of a Restricted Subsidiary)
in an aggregate principal amount on the date of Incurrence which, when
added to all other Indebtedness Incurred pursuant to this clause (vii) and
then outstanding, shall not exceed $10 million.
(c) Notwithstanding any other provision of this Section 4.03, the
Company may not Incur any Indebtedness pursuant to paragraph (b) above if the
proceeds thereof are used, directly or indirectly, to repay, prepay, redeem,
defease, retire, refund or refinance any Subordinated Obligations unless such
Indebtedness shall be subordinated to the Securities to at least the same extent
as such Subordinated Obligations. The Company may not Incur any Indebtedness if
such Indebtedness is subordinate or junior in ranking in any respect to any
Senior Indebtedness unless
52
such Indebtedness is Senior Subordinated Indebtedness or is expressly
subordinated in right of payment to Senior Subordinated Indebtedness. In
addition, the Company may not Incur any Secured Indebtedness which is not
Senior Indebtedness unless contemporaneously therewith effective provision is
made to secure the Securities equally and ratably with such Secured
Indebtedness for so long as such Secured Indebtedness is secured by a Lien.
(d) For purposes of determining the outstanding principal amount of
any particular Indebtedness Incurred pursuant to this Section 4.03, (i)
Indebtedness permitted by this Section need not be permitted solely by reference
to one provision permitting such Indebtedness but may be permitted in part by
one such provision and in part by one or more other provisions of this provision
permitting such Indebtedness and (ii) in the event that Indebtedness or any
portion thereof meets the criteria of more than one of the types of Indebtedness
described in this section, the Company, in its sole discretion, shall classify
such Indebtedness and only be required to include the amount of such
Indebtedness in one of such clauses.
SECTION 4.04. LIMITATION ON RESTRICTED PAYMENTS. (a) The Company
shall not, and shall not permit any Restricted Subsidiary, directly or
indirectly, to (i) declare or pay any dividend or make any distribution on or in
respect of its Capital Stock (including any payment in connection with any
merger or consolidation involving the Company) except dividends or distributions
payable solely in its Capital Stock (other than Disqualified Stock) and except
dividends or distributions payable to the Company or another Restricted
Subsidiary (and, if such Restricted Subsidiary is not a Wholly Owned Subsidiary,
to its other shareholders on a pro rata basis in accordance with their
respective ownership of the class of Capital Stock affected), (ii) purchase,
redeem, retire or otherwise acquire for value any Capital Stock of the Company
or any Restricted Subsidiary held by Persons other than the Company or another
Restricted Subsidiary, (iii) purchase, repurchase, redeem, defease or otherwise
acquire or retire for value, prior to scheduled maturity, scheduled repayment or
scheduled sinking fund payment any Subordinated Obligations (other than the
purchase, repurchase or other acquisition of Subordinated Obligations purchased
in anticipation of satisfying a sinking fund obligation, principal installment
or final maturity, in each case due within one year of the date of acquisition)
or (iv) make any Investment (other than a Permitted Investment) in any Person
(any such dividend,
53
distribution, purchase, redemption, repurchase, defeasance, other acquisition,
retirement or Investment being herein referred to as a "Restricted Payment") if
at the time the Company or such Restricted Subsidiary makes such Restricted
Payment:
(1) a Default shall have occurred and be continuing (or would result
therefrom);
(2) the Company could not Incur at least $1.00 of additional
Indebtedness under Section 4.03(a); or
(3) the aggregate amount of such Restricted Payment and all other
Restricted Payments (the amount so expended, if other than in cash, to be
determined in good faith by the Board of Directors, whose determination
shall be conclusive and evidenced by a resolution of the Board of
Directors) declared or made subsequent to the Issue Date would exceed the
sum of:
(A) 50% of the Consolidated Net Income accrued during the period
(treated as one accounting period) from October 1, 1996, to the end of
the most recent fiscal quarter ending prior to the date of such
Restricted Payment and as to which financial results have been made
publicly available (but in no event ending more than 135 days prior to
the date of such Restricted Payment) (or, in case such Consolidated
Net Income shall be a deficit, minus 100% of such deficit);
(B) the aggregate Net Cash Proceeds received by the Company from
the issue or sale of its Capital Stock (other than Disqualified Stock)
and the amount received in cash as voluntary contributions to the
capital of the Company, subsequent to the Issue Date (other than an
issuance or sale to a Subsidiary of the Company or an employee stock
ownership plan or other trust established by the Company or any of its
Restricted Subsidiaries);
(C) the amount by which Indebtedness of the Company or its
Restricted Subsidiaries is reduced on the Company's balance sheet upon
the conversion or exchange (other than by a Subsidiary) subsequent to
the Issue Date of any Indebtedness of the Company or its Restricted
Subsidiaries convertible or exchangeable for Capital Stock
54
(other than Disqualified Stock) of the Company (less the amount of
any cash or other property distributed by the Company or any
Restricted Subsidiary upon such conversion or exchange); and
(D) the amount equal to the net reduction in Investments in
Unrestricted Subsidiaries resulting from (i) payments of dividends,
repayments of the principal of loans or advances or other transfers of
assets to the Company or any Restricted Subsidiary from Unrestricted
Subsidiaries or (ii) the redesignation of Unrestricted Subsidiaries as
Restricted Subsidiaries (valued in each case as provided in the
definition of "Investment") not to exceed, in the case of any
Unrestricted Subsidiary, the amount of Investments previously made by
the Company or any Restricted Subsidiary in such Unrestricted
Subsidiary, which amount was included in the calculation of the amount
of Restricted Payments.
(b) The provisions of the foregoing paragraph (a) shall not prohibit:
(i) any purchase or redemption of Capital Stock of the Company or
Subordinated Obligations made by exchange for, or out of the proceeds of
the substantially concurrent sale of, Capital Stock of the Company (other
than Disqualified Stock and other than Capital Stock issued or sold to a
Subsidiary or an employee stock ownership plan or other trust established
by the Company or any of its Restricted Subsidiaries); PROVIDED, HOWEVER,
that (A) such purchase or redemption shall be excluded in the calculation
of the amount of Restricted Payments and (B) the Net Cash Proceeds from
such sale shall be excluded from clause (3)(B) of paragraph (a) above;
(ii) any purchase or redemption of Subordinated Obligations made by
exchange for, or out of the proceeds of the substantially concurrent sale
of, Indebtedness of the Company which is permitted to be Incurred pursuant
to Section 4.03; PROVIDED, HOWEVER, that such purchase or redemption shall
be excluded in the calculation of the amount of Restricted Payments;
(iii) any purchase or redemption of Subordinated Obligations from Net
Available Cash to the extent permitted by Section 4.06; PROVIDED, HOWEVER,
that such
55
purchase or redemption shall be excluded in the calculation of the amount
of Restricted Payments;
(iv) dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividend would have complied
with this Section; PROVIDED, HOWEVER, that such dividend shall be included
in the calculation of the amount of Restricted Payments; or
(v) the repurchase of shares of common stock of the Company from, or
the payment of the stock appreciation on any options to purchase common
stock of the Company held by, any officer or employee of the Company or any
of its Subsidiaries pursuant to the terms of the agreements (including
employment agreements) or plans (or amendments thereto) approved by the
Board of Directors under which such individuals purchase or sell or are
granted the option to purchase or sell, shares of such common stock;
PROVIDED, HOWEVER, that the aggregate amount of such repurchases shall not
exceed $2.5 million in any calendar year and $7.5 million in the aggregate
from the Issue Date; PROVIDED FURTHER, HOWEVER, that such repurchases shall
be included in the calculation of the amount of Restricted Payments.
SECTION 4.05. LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM
RESTRICTED SUBSIDIARIES. The Company shall not, and shall not permit any
Restricted Subsidiary to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to (i) pay dividends or make any other distributions on
its Capital Stock or pay any Indebtedness owed to the Company, (ii) make any
loans or advances to the Company or (iii) transfer any of its property or assets
to the Company, except:
(1) any encumbrance or restriction pursuant to applicable law or an
agreement in effect at or entered into on the Issue Date including those
arising under the Credit Agreement;
(2) any encumbrance or restriction with respect to a Restricted
Subsidiary pursuant to an agreement relating to any Indebtedness Incurred
by such Restricted Subsidiary prior to the date on which such Restricted
Subsidiary was acquired by the Company (other than Indebtedness Incurred as
consideration in,
56
in contemplation of, or to provide all or any portion of the funds or
credit support utilized to consummate, the transaction or series of
related transactions pursuant to which such Restricted Subsidiary became a
Restricted Subsidiary or was otherwise acquired by the Company) and
outstanding on such date;
(3) any encumbrance or restriction pursuant to an agreement
constituting Refinancing Indebtedness of Indebtedness Incurred pursuant to
an agreement referred to in clause (1) or (2) of this Section or this
clause (3) or contained in any amendment to an agreement referred to in
clause (1) or (2) of this Section or this clause (3); PROVIDED, HOWEVER,
that the encumbrances and restrictions contained in any such refinancing
agreement or amendment are no less favorable to the Securityholders than
encumbrances and restrictions contained in such agreements;
(4) in the case of clause (iii), any encumbrance or restriction
(A) that restricts in a customary manner the subletting, assignment or
transfer of any property or asset that is subject to a lease, license or
similar contract, (B) contained in security agreements or mortgages
securing Indebtedness of a Restricted Subsidiary to the extent such
encumbrance or restrictions restrict the transfer of the property subject
to such security agreements or mortgages, (C) arising in connection with
any transfer of, agreement to transfer, option or right with respect to, or
Lien on, any property or asset not otherwise prohibited by this Indenture,
or (D) arising or agreed to in the ordinary course of business, PROVIDED
that such encumbrance or restriction does not, individually or in the
aggregate together with other similar encumbrances and restrictions, impair
the value of the property or assets of the Company or any Restricted
Subsidiary in any material manner;
(5) any restriction with respect to a Restricted Subsidiary imposed
pursuant to an agreement entered into for the sale or disposition of all or
substantially all the Capital Stock or assets of such Restricted Subsidiary
pending the closing of such sale or disposition; and
(6) any encumbrance or restriction with respect to the Receivables
Subsidiary pursuant to an agreement relating to Indebtedness of the
Receivables Subsidiary
57
which is permitted under Section 4.03 or pursuant to an agreement relating
to a Financing Disposition to or by the Receivables Subsidiary in
connection with a Receivables Financing.
SECTION 4.06. LIMITATION ON SALES OF ASSETS AND SUBSIDIARY STOCK. (a)
The Company shall not, and shall not permit any Restricted Subsidiary to, make
any Asset Disposition unless
(i) the Company or such Restricted Subsidiary receives consideration
(including by way of relief from, or by any other Person assuming sole
responsibility for, any liabilities, contingent or otherwise) at the time
of such Asset Disposition at least equal to the fair market value, as
determined in good faith by the Board of Directors, whose determination
shall be conclusive and evidenced by a resolution of the Board of Directors
(including as to the value of all noncash consideration), of the shares and
assets subject to such Asset Disposition;
(ii) at least 80% of the consideration thereof received by the Company
or such Restricted Subsidiary is in the form of cash; PROVIDED, HOWEVER,
that in respect of an Asset Disposition, more than 20% of the consideration
may consist of consideration other than cash or cash equivalents if (A) the
portion of such consideration that does not consist of cash or cash
equivalents consists of assets of a type ordinarily used in the operation
of the Company's distribution business (including Capital Stock of a Person
that becomes a Restricted Subsidiary and that holds such assets) to be used
by the Company or a Restricted Subsidiary in the conduct of the Company's
business, (B) the terms of such Asset Disposition have been approved by a
majority of the members of the Board of Directors having no personal stake
in such transaction, and (C) if the value of the assets being disposed of
by the Company or such Restricted Subsidiary in such transaction (as
determined in good faith by such members of the Board of Directors) is at
least $15 million, the Board of Directors has received a written opinion of
a nationally recognized investment banking firm to the effect that such
Asset Disposition is fair, from a financial point of view, to the Company
and the Company has delivered a copy of such opinion to the Trustee; and
58
(iii) an amount equal to 100% of the Net Available Cash from such
Asset Disposition is applied by the Company (or such Restricted Subsidiary,
as the case may be) (A) FIRST, to the extent the Company elects (or is
required by the terms of any Senior Indebtedness or Indebtedness (other
than Preferred Stock) of a Wholly Owned Subsidiary), to prepay, repay or
purchase Senior Indebtedness or such Indebtedness (in each case other than
Indebtedness owed to the Company or an Affiliate of the Company) within 360
days after the later of the date of such Asset Disposition or the receipt
of such Net Available Cash; (B) SECOND, to the extent of the balance of Net
Available Cash after application in accordance with clause (A), to the
extent the Company or such Restricted Subsidiary elects, to reinvest in
Additional Assets (including by means of an Investment in Additional Assets
by a Restricted Subsidiary with Net Available Cash received by the Company
or another Restricted Subsidiary) within 360 days from the later of such
Asset Disposition or the receipt of such Net Available Cash; (C) THIRD, to
the extent of the balance of such Net Available Cash after application in
accordance with clauses (A) and (B), to make an Offer (as defined below) to
purchase Securities pursuant to and subject to the conditions set forth in
section (b) of this Section, and (D) FOURTH, to the extent of the balance
of such Net Available Cash after application in accordance with clauses
(A), (B) and (C), to fund (to the extent consistent with any other
applicable provision of this Indenture) any corporate purpose; PROVIDED,
HOWEVER, that in connection with any prepayment, repayment or purchase of
Indebtedness pursuant to clause (A) or (C) above, the Company or such
Restricted Subsidiary shall retire such Indebtedness and shall cause the
related loan commitment (if any) to be permanently reduced in an amount
equal to the principal amount so prepaid, repaid or purchased.
Notwithstanding the foregoing provisions of this Section, the Company and
the Restricted Subsidiaries shall not be required to apply any Net
Available Cash in accordance with this Section except to the extent that
the aggregate Net Available Cash from all Asset Dispositions which are not
applied in accordance with this Section exceed $500,000.
For the purposes of Section 4.06(a)(ii), the following are deemed to
be cash: (x) the assumption of Indebtedness of the Company (other than
Disqualified Stock of the Company) or any Restricted Subsidiary and the release
59
of the Company or such Restricted Subsidiary from all liability on such
Indebtedness in connection with such Asset Disposition and (y) securities
received by the Company or any Restricted Subsidiary from the transferee that
are promptly converted by the Company or such Restricted Subsidiary into cash.
(b) In the event of an Asset Disposition that requires the purchase
of Securities pursuant to Section (a)(iii)(C), the Company shall be required to
purchase Securities tendered pursuant to an offer by the Company for the
Securities (the "Offer") at a purchase price of 100% of their principal amount
plus accrued interest to the date of purchase in accordance with the procedures
(including prorationing in the event of oversubscription) set forth in
Section 4.06(c). If the aggregate purchase price of Securities tendered
pursuant to the Offer is less than the Net Available Cash allotted to the
purchase of the Securities, the Company shall apply the remaining Net Available
Cash in accordance with Section 4.06(a)(iii)(D). The Company shall not be
required to make an Offer for Securities pursuant to this Section if the Net
Available Cash available therefor (after application of the proceeds as provided
in clauses (A) and (B) of Section 4.06(a)(iii)) is less than $5 million (which
lesser amount shall be carried forward for purposes of determining whether an
Offer is required with respect to the Net Available Cash from any subsequent
Asset Disposition).
(c)(1) Promptly, and in any event within 10 days after the Company
becomes obligated to make an Offer, the Company shall be obligated to deliver to
the Trustee and send, by first-class mail to each Holder, a written notice
stating that the Holder may elect to have his Securities purchased by the
Company either in whole or in part (subject to prorationing as hereinafter
described in the event the Offer is oversubscribed) in integral multiples of
$1,000 of principal amount, at the applicable purchase price. The notice shall
specify a purchase date not less than 30 days nor more than 60 days after the
date of such notice (the "Purchase Date") and shall contain such information
concerning the business of the Company which the Company in good faith believes
shall enable such Holders to make an informed decision (which at a minimum shall
include (i) the most recently filed Annual Report on Form 10-K (including
audited consolidated financial statements) of the Company, the most recent
subsequently filed Quarterly Report on Form 10-Q and any Current Report on Form
8-K of the Company filed subsequent to such Quarterly Report, other than Current
60
Reports describing Asset Dispositions otherwise described in the offering
materials (or corresponding successor reports), (ii) a description of material
developments in the Company's business subsequent to the date of the latest of
such Reports, and (iii) if material, appropriate pro forma financial
information) and all instructions and materials necessary to tender Securities
pursuant to the Offer, together with the information contained in clause (3).
(2) Not later than the date upon which written notice of an Offer is
delivered to the Trustee as provided above, the Company shall deliver to the
Trustee an Officers' Certificate as to (i) the amount of the Offer (the "Offer
Amount"), (ii) the allocation of the Net Available Cash from the Asset
Dispositions pursuant to which such Offer is being made and (iii) the compliance
of such allocation with the provisions of Section 4.06(a). On such date, the
Company shall also irrevocably deposit with the Trustee or with a paying agent
(or, if the Company is acting as its own paying agent, segregate and hold in
trust) in Temporary Cash Investments an amount equal to the Offer Amount to be
held for payment in accordance with the provisions of this Section. Upon the
expiration of the period for which the Offer remains open (the "Offer Period"),
the Company shall deliver to the Trustee for cancelation the Securities or
portions thereof which have been properly tendered to and are to be accepted by
the Company. The Trustee (or the Paying Agent, if not the Trustee) shall, on
the Purchase Date, mail or deliver payment to each tendering Holder in the
amount of the purchase price. In the event that the aggregate purchase price of
the Securities delivered by the Company to the Trustee is less than the Offer
Amount, the Trustee shall deliver the excess to the Company immediately after
the expiration of the Offer Period for application in accordance with this
Section.
(3) Holders electing to have a Security purchased shall be required
to surrender the Security, with an appropriate form duly completed, to the
Company at the address specified in the notice at least three Business Days
prior to the Purchase Date. Holders shall be entitled to withdraw their
election if the Trustee or the Company receives not later than one Business Day
prior to the Purchase Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Security which
was delivered by the Holder for purchase and a statement that such Holder is
withdrawing his election to have such Security purchased. If at the expiration
of the Offer Period the aggregate principal amount of Securities
61
surrendered by Holders exceeds the Offer Amount, the Company shall select the
Securities to be purchased on a pro rata basis (with such adjustments as may be
deemed appropriate by the Company so that only Securities in denominations of
$1,000, or integral multiples thereof, shall be purchased). Holders whose
Securities are purchased only in part shall be issued new Securities equal in
principal amount to the unpurchased portion of the Securities surrendered.
(4) At the time the Company delivers Securities to the Trustee which
are to be accepted for purchase, the Company shall also deliver an Officers'
Certificate stating that such Securities are to be accepted by the Company
pursuant to and in accordance with the terms of this Section. A Security shall
be deemed to have been accepted for purchase at the time the Trustee, directly
or through an agent, mails or delivers payment therefor to the surrendering
Holder.
(d) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section. To the extent that the provisions of any securities laws or regulations
conflict with provisions of this Section, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section by virtue thereof.
(e) The Company shall not, and shall not permit any Restricted
Subsidiary to, make any Financing Disposition in connection with a Receivables
Financing unless the Board of Directors shall have determined in good faith,
which determination shall be conclusive and evidenced by a resolution of the
Board of Directors, that such Financing Disposition is made at fair market
value.
SECTION 4.07. LIMITATION ON TRANSACTIONS WITH AFFILIATES. (a) The
Company shall not, and shall not permit any Restricted Subsidiary to, directly
or indirectly, enter into or conduct any transaction (including, the purchase,
sale, lease or exchange of any property or the rendering of any service) with
any Affiliate of the Company (an "Affiliate Transaction") on terms (i) that are
less favorable to the Company or such Restricted Subsidiary, as the case may be,
than those that could be obtained at the time of such transaction in
arm's-length dealings with a Person who is not such an Affiliate and (ii) that,
in the
62
event such Affiliate Transaction involves an aggregate amount in excess
of $1 million, are not in writing and have not been approved by a majority of
the members of the Board of Directors having no personal stake in such Affiliate
Transaction. In addition, if such Affiliate Transaction involves an amount in
excess of $5 million (other than fees to investment banking firms constituting
customary underwriting discounts for offerings of securities or customary
advisory fees for merger and acquisition and recapitalization transactions) a
fairness opinion must be provided by a nationally recognized appraisal or
investment banking firm.
(b) The provisions of Section 4.07(a) shall not prohibit (i) any
Restricted Payment permitted to be paid pursuant to Section 4.04, (ii) any
issuance of securities, or other payments, awards or grants in cash, securities
or otherwise pursuant to, or the funding of, employment arrangements, stock
options and stock ownership plans approved by the Board of Directors, or other
employee benefit arrangements with any officer, director or employee of the
Company entered into in the ordinary course of business consistent with past
practices of the Company, (iii) loans or advances to employees in the ordinary
course of business consistent with past practices of the Company, (iv) the
payment of reasonable fees to directors of the Company and its Subsidiaries who
are not employees of the Company or its Subsidiaries or (v) any transaction
between the Company and a Wholly Owned Subsidiary or between Wholly Owned
Subsidiaries.
SECTION 4.08. CHANGE OF CONTROL. (a) Upon a Change of Control, each
Holder shall have the right to require that the Company repurchase all or any
part of such Holder's Securities at a purchase price in cash equal to 101% of
the principal amount thereof plus accrued and unpaid interest, if any, to the
date of repurchase (subject to the right of Holders of record on a record date
to receive interest due on the relevant interest payment date), in accordance
with the terms contemplated in Section 4.08(b); PROVIDED, HOWEVER, that
notwithstanding the occurrence of a Change in Control, the Company shall not be
obligated to purchase the Securities pursuant to this Section 4.08 in the event
that it has exercised its right to redeem all the Securities under Section 3.07
hereof.
(b) Within 30 days following any Change of Control (except as
provided in the proviso to the first
63
sentence of Section 4.08(a)), the Company shall mail a notice to each Holder
with a copy to the Trustee stating:
(1) that a Change of Control has occurred and that such Holder has the
right to require the Company to purchase such Holder's Securities at a
purchase price in cash equal to 101% of the principal amount thereof plus
accrued and unpaid interest, if any, to the date of repurchase (subject to
the right of Holders of record on a record date to receive interest due on
the relevant interest payment date);
(2) the circumstances and relevant facts and financial information
regarding such Change of Control;
(3) the repurchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed); and
(4) the instructions determined by the Company, consistent with this
Section, that a Holder must follow in order to have its Securities
purchased.
(c) Holders electing to have a Security purchased shall be required
to surrender the Security, with an appropriate form duly completed, to the
Company at the address specified in the notice at least three Business Days
prior to the purchase date. Holders shall be entitled to withdraw their
election if the Trustee or the Company receives not later than one Business Day
prior to the purchase date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Security which
was delivered for purchase by the Holder and a statement that such Holder is
withdrawing his election to have such Security purchased.
(d) On the purchase date, all Securities purchased by the Company
under this Section shall be delivered to the Trustee for cancelation, and the
Company shall pay the purchase price plus accrued and unpaid interest, if any,
to the Holders entitled thereto.
(e) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section, the Company shall comply
with the applicable
64
securities laws and regulations and shall not be deemed to have breached its
obligations under this Section by virtue thereof.
SECTION 4.09. COMPLIANCE CERTIFICATE. The Company shall deliver to
the Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or proposes to take
with respect thereto. The Company also shall comply with TIA Section 314(a)(4).
For purposes of this paragraph, such compliance shall be determined without
regard to any period of grace or requirement of notice provided hereunder.
SECTION 4.10. FURTHER INSTRUMENTS AND ACTS. Upon request of the
Trustee, the Company shall execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 4.11. LIMITATION ON LIENS. The Company shall not, and shall
not permit any Restricted Subsidiary to, directly or indirectly, create or
permit to exist any Lien (other than Liens on Receivables that are the subject
of a Receivables Financing) on any of its property or assets (including Capital
Stock), whether owned on the Issue Date or thereafter acquired, securing any
Indebtedness other than Senior Indebtedness unless contemporaneously therewith
effective provision is made to secure the Securities equally and ratably with
(or on a senior basis to, in the case of Indebtedness subordinated in right of
payment to the Securities) such obligation for so long as such obligation is so
secured.
SECTION 4.12 LIMITATION ON THE SALE OR ISSUANCE OF CAPITAL STOCK OF
RESTRICTED SUBSIDIARIES. The Company shall not sell any shares of Capital Stock
of a Restricted Subsidiary, and shall not permit any Restricted Subsidiary,
directly or indirectly, to issue or sell any shares of its Capital Stock except:
(i) subject to Section 4.14, to the Company or a Wholly Owned
Subsidiary,
65
(ii) pursuant to arrangements entered into prior to the time a Person
becomes a Restricted Subsidiary (other than arrangements entered into in
contemplation of the transaction or series of related transactions pursuant
to which such Person became a Restricted Subsidiary) or
(iii) if, immediately after giving effect to such issuance or sale,
such Restricted Subsidiary would no longer constitute a Restricted
Subsidiary.
The proceeds of any sale of such Capital Stock permitted hereby shall be treated
as Net Available Cash from an Asset Disposition and shall be applied in
accordance with the terms of Section 4.06.
SECTION 4.13. LIMITATION ON LINES OF BUSINESS. The Company shall
not, and shall not permit any Restricted Subsidiary to, engage in any business,
other than a Related Business.
SECTION 4.14. LIMITATION ON THE DISPOSITION OF ASSETS OF THE COMPANY
TO RESTRICTED SUBSIDIARIES. The Company shall not, and shall not permit any
Guarantor Subsidiary to, sell, lease, transfer or make any other disposition of
any property or assets (including shares of Capital Stock of a Subsidiary) (each
referred to for the purposes of this Section as a "disposition") to a Restricted
Subsidiary other than (i) a disposition to a Restricted Subsidiary that at the
time of such disposition is or becomes a Guarantor Subsidiary pursuant to a Note
Guarantee, (ii) dispositions (other than a Financing Disposition in connection
with a Receivables Financing) with a fair market value of less than $2.5 million
in the aggregate for all Restricted Subsidiaries in any fiscal year, (iii) a
Financing Disposition in connection with a Receivables Financing, (iv) a
disposition permitted by Section 4.04 and (v) dispositions of inventory in the
ordinary course of business.
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ARTICLE 5
SUCCESSOR COMPANY
SECTION 5.01. WHEN COMPANY MAY MERGE OR TRANSFER ASSETS. The Company
shall not consolidate with or merge with or into, or convey, transfer or lease
all or substantially all its assets to, any Person, unless:
(i) the resulting, surviving or transferee Person (the "Successor
Company") shall be a corporation partnership, limited liability company or
business trust organized and existing under the laws of the United States
of America, any State thereof or the District of Columbia and the Successor
Company (if not the Company) shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
reasonably satisfactory to the Trustee, all the obligations of the Company
under the Securities and this Indenture;
(ii) immediately after giving effect to such transaction (and treating
any Indebtedness which becomes an obligation of the Successor Company or
any Restricted Subsidiary as a result of such transaction as having been
Incurred by the Successor Company or such Restricted Subsidiary at the time
of such transaction), no Default shall have occurred and be continuing;
(iii) except in the case of a merger the sole purpose of which is to
change the Company's jurisdiction of incorporation, immediately after
giving effect to such transaction, the Successor Company would be able to
incur an additional $1.00 of Indebtedness pursuant to Section 4.03(a);
(iv) immediately after giving effect to such transaction, the
Successor Company shall have Consolidated Net Worth in an amount which is
not less than the Consolidated Net Worth of the Company immediately prior
to such transaction; and
(v) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if any)
comply with this Indenture.
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Notwithstanding the foregoing clauses (ii), (iii) and (iv), any
Restricted Subsidiary may consolidate with, merge into or transfer all or part
of its properties and assets to the Company.
The Successor Company shall succeed to, and be substituted for, and
may exercise every right and power of, the Company under this Indenture, but the
predecessor Company in the case of a lease of all or substantially all its
assets shall not be released from the obligation to pay the principal of and
interest on the Securities.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT. An "Event of Default" occurs if:
(1) the Company defaults in any payment of interest on any Security
when the same becomes due and payable, whether or not such payment shall be
prohibited by Article 10, and such default continues for a period of 30
days;
(2) the Company defaults in the payment of the principal of any
Security when the same becomes due and payable at its Stated Maturity, upon
optional redemption, upon required repurchase, upon declaration or
otherwise, whether or not such payment shall be prohibited by Article 10;
(3) the Company fails to comply with Section 5.01;
(4) the Company fails to comply with Section 4.02, 4.03, 4.04, 4.05,
4.06, 4.07, 4.08, 4.11, 4.12, 4.13 or 4.14 (other than a failure to
purchase Securities), and such failure continues for 30 days after the
notice specified in the penultimate paragraph of this Section;
(5) the Company fails to comply with any of its agreements in the
Securities or this Indenture (other than those referred to in (1), (2), (3)
or (4) above) and such failure continues for 60 days after the notice
specified in the penultimate paragraph of this Section;
(6) Indebtedness of the Company or any Significant Subsidiary is not
paid within any applicable grace
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period after final maturity or the acceleration by the holders thereof
because of a default and the total amount of such Indebtedness unpaid or
accelerated exceeds $5 million or its foreign currency equivalent at the
time;
(7) the Company or any Significant Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in an
involuntary case;
(C) consents to the appointment of a Custodian of it or for any
substantial part of its property;
(D) makes a general assignment for the benefit of its creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(8) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any Significant
Subsidiary or for any substantial part of its property; or
(C) orders the winding up or liquidation of the Company or any
Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order or
decree remains unstayed and in effect for 60 days;
(9) any judgment or decree for the payment of money in excess of $5
million or its foreign currency equivalent at the time is entered against
the Company or any Significant Subsidiary and is not discharged, waived or
stayed and either (A) an enforcement proceeding has been commenced by any
creditor upon such judgment or decree which is not promptly stayed or
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(B) there is a period of 60 days following the entry of such judgment or
decree during which such judgment or decree is not discharged, waived or
the execution thereof stayed; or
(10) (A) any Note Guarantee shall cease to be in full force and effect
(except as contemplated by the terms thereof) or any Guarantor Subsidiary
or person acting by or on behalf of such Guarantor Subsidiary shall deny or
disaffirm its obligations under this Indenture or any Note Guarantee and
such Default continues for 10 days or (B) any Guarantor Subsidiary fails to
comply with any of its agreements in its Note Guarantee and such failure
continues for 60 days after the notice specified in the penultimate
paragraph of this Section.
The foregoing shall constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means Title 11, UNITED STATES CODE, or any
similar federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
A Default under clause (4) or (5) is not an Event of Default until the
Trustee or the Holders of at least 25% in principal amount of the outstanding
Securities notify the Company of the Default and the Company does not cure such
Default within the time specified after receipt of such notice. Such notice
must specify the Default, demand that it be remedied and state that such notice
is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default under clauses (3), (6), (7) or (10) and any event which
with the giving of notice or the lapse of time would become an Event of Default
under clause (4), (5), (8) or (9), its status and what action the Company is
taking or proposes to take with respect thereto.
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SECTION 6.02. ACCELERATION. If an Event of Default (other than an
Event of Default specified in Section 6.01(7) or (8) with respect to the
Company) occurs and is continuing, the Trustee by notice to the Company, or the
Holders of at least 25% in principal amount of the Securities by notice to the
Company and the Trustee, may declare the principal of and accrued but unpaid
interest on all the Securities to be due and payable. Upon such a declaration,
such principal and interest shall be due and payable immediately. If an Event
of Default specified in Section 6.01(7) or (8) with respect to the Company
occurs, the principal of and interest on all the Securities shall IPSO FACTO
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Securityholders. The Holders of a majority in
principal amount of the Securities by notice to the Trustee may rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default have been cured or
waived except nonpayment of principal or interest that has become due solely
because of acceleration. No such rescission shall affect any subsequent Default
or impair any right consequent thereto.
SECTION 6.03. OTHER REMEDIES. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the 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 Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04. WAIVER OF PAST DEFAULTS. The Holders of a majority in
principal amount of the Securities by written notice to the Trustee may waive an
existing Default and its consequences except (i) a Default in the payment of the
principal of or interest on a Security or (ii) a Default in respect of a
provision that under Section 9.02 cannot be amended without the consent of each
Securityholder affected. When a Default is waived, it is deemed cured, but no
such waiver shall extend to any subsequent or other Default or impair any
consequent right.
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SECTION 6.05. CONTROL BY MAJORITY. The Holders of a majority in
principal amount of the Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.01, that the Trustee determines is unduly prejudicial to
the rights of other Securityholders or would involve the Trustee in personal
liability; PROVIDED, HOWEVER, that the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such direction. Prior to
taking any action hereunder, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against all losses and expenses caused
by taking or not taking such action.
SECTION 6.06. LIMITATION ON SUITS. A Securityholder may not pursue
any remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(2) the Holders of at least 25% in principal amount of the Securities
make a written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee security or indemnity
reasonably satisfactory to it against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of security or indemnity; and
(5) the Holders of a majority in principal amount of the Securities do
not give the Trustee a direction inconsistent with the request during such
60-day period.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of principal of and interest on the Securities held by such Holder,
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on or after the respective due dates expressed in the Securities, or to bring
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE. If an Event of Default
specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section
7.07.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee may file
such proofs of claim and other papers or documents and take such other actions,
including participating as a member, voting or otherwise, of any committee of
creditors appointed in the matter, as may be necessary or advisable in order to
have the claims of the Trustee and the Securityholders allowed in any judicial
proceedings relative to the Company, any Subsidiary, their creditors or their
property and, unless prohibited by law or applicable regulations, may vote on
behalf of the Holders in any election of a trustee in bankruptcy or other Person
performing similar functions, and any Custodian in any such judicial proceeding
is hereby authorized by each Holder to make payments to the Trustee and, in the
event that the Trustee shall consent to the making of such payments directly to
the Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and its counsel, and any other amounts due the Trustee under Section 7.07.
SECTION 6.10. PRIORITIES. If the Trustee collects any money or
property pursuant to this Article 6, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to holders of Senior Indebtedness to the extent required by
Article 10;
THIRD: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
73
FOURTH: to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section. At least 15 days before such record
date, the Trustee shall mail to each Securityholder and the Company a notice
that states the record date, the payment date and amount to be paid.
SECTION 6.11. UNDERTAKING FOR COSTS. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of
more than 10% in principal amount of the Securities.
SECTION 6.12. WAIVER OF STAY OR EXTENSION LAWS. The Company (to the
extent it may lawfully do so) shall not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and shall not hinder, delay or impede the execution
of any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law had been enacted.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs.
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(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they substantially conform to the requirements of this
Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:
(1) this paragraph does not limit the effect of paragraph (b) of this
Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
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(g) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
SECTION 7.02. RIGHTS OF TRUSTEE. Subject to Section 7.01: (a) The
Trustee may conclusively rely on any document believed by it to be genuine and
to have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on the
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; PROVIDED, HOWEVER, that the Trustee's conduct does not constitute wilful
misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or opinion
of counsel with respect to legal matters relating to this Indenture and the
Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar
or co-paying agent may do the same
76
with like rights. However, the Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04. TRUSTEE'S DISCLAIMER. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company in the Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS. If a Default occurs and is
continuing and if it is actually known to a Trust Officer of the Trustee, the
Trustee shall mail to each Securityholder notice of the Default within the
earlier of 90 days after it occurs or 30 days after it is known to a Trust
Officer or written notice of it is received by the Trustee. Except in the case
of a Default in payment of principal of, premium (if any) or interest on any
Security (including payments pursuant to the mandatory redemption provisions of
such Security, if any), the Trustee may withhold the notice if and so long as a
committee of its Trust Officers in good faith determines that withholding the
notice is in the interests of Securityholders.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS. As promptly as
practicable after each May 15 beginning with the May 15 following the date of
this Indenture, and in any event prior to July 15 in each year, the Trustee
shall mail to each Securityholder a brief report dated as of May 15 that
complies with TIA Section 313(a). The Trustee shall also comply with TIA
Section 313(b) and TIA Section 313(c).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange (if any) on which the
Securities are listed. The Company agrees to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and of any delisting
thereof.
SECTION 7.07. COMPENSATION AND INDEMNITY. The Company shall pay to
the Trustee, Paying Agent and Registrar from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred or made by it,
77
including costs of collection, in addition to the compensation for its services.
Such expenses shall include the reasonable compensation and expenses, disburse-
ments and advances of the Trustee's agents, counsel, accountants and experts.
The Company shall indemnify the Trustee, Paying Agent, Registrar, and each of
their officers, directors, agents and employees (each in their respective
capacities), for and hold each of them harmless against any and all loss,
liability or expense (including reasonable attorneys' fees) incurred by them
without negligence or bad faith on their part arising out of or in connection
with the acceptance or the administration of this trust and the performance of
their duties hereunder. The Trustee, Paying Agent and Registrar shall notify
the Company of any claim for which they may seek indemnity promptly upon
obtaining actual knowledge thereof; PROVIDED that any failure so to notify the
Company shall not relieve the Company of its indemnity obligations hereunder
except to the extent the Company shall have been adversely affected thereby.
The Company shall defend the claim and the indemnified party shall provide
reasonable cooperation at the Company's expense in the defense. Such
indemnified parties may have separate counsel and the Company shall pay the
fees and expenses of such counsel; PROVIDED that the Company shall not be
required to pay such fees and expenses if it assumes such indemnified parties'
defense and, in such indemnified parties' reasonable judgment, there is no
conflict of interest between the Company and such parties in connection with
such defense. The Company need not pay for any settlement made without its
written consent. The Company need not reimburse any expense or indemnify
against any loss, liability or expense incurred by an indemnified party through
such party's own wilful misconduct, negligence or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Securities.
When the Trustee incurs expenses or renders services in connection
with a Default or an Event of Default such expenses (including the fees and
expenses of its counsel) and the compensation for such services are intended to
constitute expenses of administration under any bankruptcy law or law relating
to creditors rights generally.
78
The Company's payment obligations pursuant to this Section shall
survive the discharge or termination of this Indenture or the earlier
resignation or removal of the Trustee. When the Trustee, Paying Agent or
Registrar incurs expenses after the occurrence of a Default specified in
Section 6.01(7) or (8) with respect to the Company, the expenses are intended to
constitute expenses of administration under the Bankruptcy Law.
SECTION 7.08. REPLACEMENT OF TRUSTEE. The Trustee may resign at any
time by so notifying the Company. The Holders of a majority in principal amount
of the Securities may remove the Trustee by so notifying the Company and the
Trustee and may appoint a successor Trustee. The Company shall remove the
Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of
a majority in principal amount of the Securities and such Holders do not
reasonably promptly appoint a successor Trustee, or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal
79
amount of the Securities may petition any court of competent jurisdiction
for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
The retiring Trustee shall not be liable for the acts or omissions of
any successor Trustee hereunder.
All fees, charges and expenses of the retiring Trustee shall become
immediately due and payable upon the appointment of a successor Trustee
hereunder.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Securities shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of
any predecessor trustee, and deliver such Securities so authenticated; and in
case at that time any of the Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Securities either in the name of
any predecessor hereunder or in the name of the successor to the Trustee; and in
all such cases such certificates shall have the full force which it is anywhere
in the Securities or in this Indenture provided that the certificate of the
Trustee shall have.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. The Trustee shall at
all times satisfy the requirements of TIA Section 310(a). The Trustee shall
have a combined capital and surplus of at least $50,000,000 as set forth in its
most recent published annual report of condition. The Trustee shall comply with
TIA Section 310(b); PROVIDED, HOWEVER, that there shall be excluded from the
operation of
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TIA Section 310(b)(1) any indenture or indentures under which other securities
or certificates of interest or participation in other securities of the Company
are outstanding if the requirements for such exclusion set forth in TIA Section
310(b)(1) are met.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The
Trustee shall comply with 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.
ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. DISCHARGE OF LIABILITY ON SECURITIES; DEFEASANCE.
(a) When (i) the Company delivers to the Trustee all outstanding Securities
(other than Securities replaced pursuant to Section 2.07) for cancelation or
(ii) all outstanding Securities have become due and payable, whether at maturity
or as a result of the mailing of a notice of redemption pursuant to Article 3
hereof and the Company irrevocably deposits with the Trustee funds or U.S.
Government Obligations on which payment of principal and interest when due shall
be sufficient to pay at maturity or upon redemption all outstanding Securities,
including premium (if any) and interest thereon to maturity or such redemption
date (other than Securities replaced pursuant to Section 2.07), and if in either
case the Company pays all other sums payable hereunder by the Company, then this
Indenture shall, subject to Section 8.01(c), cease to be of further effect. The
Trustee shall acknowledge satisfaction and discharge of this Indenture on demand
of the Company accompanied by an Officers' Certificate and an Opinion of Counsel
and at the cost and expense of the Company.
(b) Subject to Sections 8.01(c), 8.02 and 8.06, the Company at any
time may terminate (i) all of its obligations under the Securities and this
Indenture ("legal defeasance option") or (ii) its obligations under
Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.11, 4.12, 4.13, 4.14,
5.01(iii) and 5.01(iv) and the operation of Section 6.01(4), 6.01(6), 6.01(7)
(with respect to Subsidiaries of the Company only), 6.01(8) (with respect to
Subsidiaries of the Company only), 6.01(9) and 6.01(10) ("covenant defeasance
option"). The Company may exercise
81
its legal defeasance option notwithstanding its prior exercise of its covenant
defeasance option.
If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default. If the
Company exercises its covenant defeasance option, payment of the Securities may
not be accelerated because of an Event of Default specified in Sections 6.01(4),
6.01(6), 6.01(7) (with respect to Subsidiaries of the Company only), 6.01(8)
(with respect to Subsidiaries of the Company only), 6.01(9) and 6.01(10) or
because of the failure of the Company to comply with Sections 5.01(iii) and
5.01(iv).
Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 7.07, 7.08, 8.04, 8.05 and
8.06 shall survive until the Securities have been paid in full. Thereafter, the
Company's obligations in Sections 7.07, 8.04 and 8.05 shall survive.
SECTION 8.02. CONDITIONS TO DEFEASANCE. The Company may exercise its
legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee money
or U.S. Government Obligations for the payment of principal, premium (if
any) and interest on the Securities to maturity or redemption, as the case
may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and without
reinvestment on the deposited U.S. Government Obligations plus any
deposited money without investment shall provide cash at such times and in
such amounts as shall be sufficient to pay principal and interest when due
on all the Securities to maturity or redemption, as the case may be;
(3) 123 days pass after the deposit is made and during the 123-day
period no Default specified in
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Section 6.01(7) or (8) with respect to the Company occurs which is
continuing at the end of the period;
(4) the deposit does not constitute a default under any other
agreement binding on the Company and is not prohibited by Article 10;
(5) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or is
qualified as, a regulated investment company under the Investment Company
Act of 1940;
(6) in the case of the legal defeasance option, the Company shall have
delivered to the Trustee an Opinion of Counsel stating that (i) the Company
has received from, or there has been published by, the Internal Revenue
Service a ruling, or (ii) since the date of this Indenture there has been a
change in the applicable federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel shall confirm that,
the Securityholders shall not recognize income, gain or loss for Federal
income tax purposes as a result of such defeasance and shall be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such defeasance had not occurred;
(7) in the case of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Securityholders shall not recognize income, gain or loss for federal income
tax purposes as a result of such covenant defeasance and shall be subject
to Federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such covenant defeasance had not
occurred; and
(8) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent to the
defeasance and discharge of the Securities as contemplated by this Article
8 have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.
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SECTION 8.03. APPLICATION OF TRUST MONEY. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article 8. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of and interest on the Securities. Money
and securities so held in trust are not subject to Article 10.
SECTION 8.04. REPAYMENT TO COMPANY. The Trustee and the Paying Agent
shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal or interest that remains unclaimed for two years, and,
thereafter, Securityholders entitled to the money must look to the Company for
payment as general creditors.
SECTION 8.05. INDEMNITY FOR GOVERNMENT OBLIGATIONS. The Company
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited U.S. Government Obligations or the
principal and interest received on such U.S. Government Obligations.
SECTION 8.06. REINSTATEMENT. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with this
Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 8 until such time as the Trustee
or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article 8; PROVIDED, HOWEVER, that, if the
Company has made any payment of interest on or principal of any Securities
because of 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 or U.S. Government Obligations held by the Trustee or Paying Agent.
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ARTICLE 9
AMENDMENTS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS. The Company and the
Trustee may amend this Indenture or the Securities without notice to or consent
of any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities; PROVIDED, HOWEVER, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(4) to make any change in Article 10 that would limit or terminate the
benefits available to any holder of Senior Indebtedness (or Representatives
therefor) under Article 10;
(5) to add Guarantees with respect to the Securities or to secure the
Securities;
(6) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company;
(7) to comply with any requirements of the SEC in connection with
qualifying this Indenture under the TIA;
(8) to make any change that does not adversely affect the rights of
any Securityholder; or
(9) to provide for the issuance and authorization of the Exchange
Securities.
An amendment under this Section may not make any change that adversely
affects the rights under Article 10 of any holder of Senior Indebtedness then
outstanding unless the holders of such Senior Indebtedness (or any group or
85
representative thereof authorized to give a consent) consent to such change.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.02. WITH CONSENT OF HOLDERS. The Company and the Trustee
may amend this Indenture or the Securities without notice to any Securityholder
but with the written consent of the Holders of at least a majority in principal
amount of the Securities. However, without the consent of each Securityholder
affected, an amendment may not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment;
(2) reduce the rate of or extend the time for payment of interest on
any Security;
(3) reduce the principal of or extend the Stated Maturity of any
Security;
(4) reduce the premium payable upon the redemption of any Security or
change the time at which any Security may be redeemed in accordance with
Article 3;
(5) make any Security payable in money other than that stated in the
Security;
(6) make any change in Article 10 that adversely affects the rights of
any Securityholder under Article 10;
(7) make any change in Section 6.04 or 6.07 or the second sentence of
this Section; or
(8) impair the right of any Securityholder to receive payment of
principal of and interest on such Holder's Securities on or after the due
dates therefor or to institute suit for the enforcement of any payment on
or with respect to such Holder's Notes.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of
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any proposed amendment, but it shall be sufficient if such consent approves the
substance thereof.
An amendment under this Section may not make any change that adversely
affects the rights under Article 10 of any holder of Senior Indebtedness then
outstanding unless the holders of such Senior Indebtedness (or any group or
representative thereof authorized to give a consent) consent to such change.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT. Every amendment
to this Indenture or the Securities shall comply with the TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS AND WAIVERS. A
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the
Security that evidences the same debt as the consenting Holder's Security,
even if notation of the consent or waiver is not made on the Security.
However, any such Holder or subsequent Holder may revoke the consent or
waiver as to such Holder's Security or portion of the Security if the Trustee
receives the notice of revocation before the date the amendment or waiver
becomes effective. After an amendment or waiver becomes effective, it shall
bind every Securityholder. An amendment or waiver becomes effective once the
requisite number of consents are received by the Company or the Trustee.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Securityholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Securityholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders
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after such record date. No such consent shall be valid or effective for more
than 120 days after such record date.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES. If an amendment
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 on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS. The Trustee shall sign any
amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.01) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture and complies with the
provisions hereof (including Section 9.03).
SECTION 9.07. PAYMENT FOR CONSENT. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Securities unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
ARTICLE 10
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE. The Company agrees, and
each Securityholder by accepting a Security agrees, that the Indebtedness
evidenced by the Securities is subordinated in right of payment, to the extent
and in the manner provided in this Article 10, to the
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prior payment in full of all Senior Indebtedness and that the subordination is
for the benefit of and enforceable by the holders of Senior Indebtedness. The
Securities shall in all respects rank PARI PASSU with all other Senior Subord-
inated Indebtedness of the Company and only Indebtedness of the Company that is
Senior Indebtedness shall rank senior to the Securities in accordance with the
provisions set forth herein. For purposes of these subordination provisions,
the Indebtedness evidenced by the Securities is deemed to include the liquidat-
ed damages payable pursuant to the provisions set forth in the Securities and
the Exchange and Registration Rights Agreement. All provisions of this Article
10 shall be subject to Section 10.12.
SECTION 10.02. LIQUIDATION, DISSOLUTION, BANKRUPTCY. Upon any
payment or distribution of the assets of the Company to creditors upon a total
or partial liquidation or a total or partial dissolution of the Company or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or its property:
(1) holders of Senior Indebtedness shall be entitled to receive
payment in full of the Senior Indebtedness before Securityholders shall be
entitled to receive any payment of principal of or interest on the
Securities; and
(2) until the Senior Indebtedness is paid in full, any payment or
distribution to which Securityholders would be entitled but for this
Article 10 shall be made to holders of Senior Indebtedness as their
interests may appear.
SECTION 10.03. DEFAULT ON SENIOR INDEBTEDNESS. The Company may not
pay the principal of, premium (if any) or interest on the Securities or make any
deposit pursuant to Section 8.01 and may not repurchase, redeem or otherwise
retire any Securities (collectively, "pay the Securities") if (i) any Senior
Indebtedness is not paid when due or (ii) any other default on Senior
Indebtedness occurs and the maturity of such Senior Indebtedness is accelerated
in accordance with its terms unless, in either case, (x) the default has been
cured or waived and any such acceleration has been rescinded or (y) such Senior
Indebtedness has been paid in full; PROVIDED, HOWEVER, that the Company may pay
the Securities without regard to the foregoing if the Company and the Trustee
receive written notice approving such payment from the Representative of the
Designated
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Senior Indebtedness with respect to which either of the events in clause
(i) or (ii) of this sentence has occurred and is continuing. During the
continuance of any default (other than a default described in clause (i) or
(ii) of the preceding sentence) with respect to any Designated Senior
Indebtedness pursuant to which the maturity thereof may be accelerated
immediately without further notice (except such notice as may be required to
effect such acceleration) or the expiration of any applicable grace periods,
the Company may not pay the Securities for a period (a "Payment Blockage
Period") commencing upon the receipt by the Company and the Trustee of
written notice (a "Blockage Notice") of such default from the Representative
of such Designated Senior Indebtedness specifying an election to effect a
Payment Blockage Period and ending 179 days thereafter (or earlier if such
Payment Blockage Period is terminated (i) by written notice to the Trustee
and the Company from the Person or Persons who gave such Blockage Notice,
(ii) by repayment in full of such Designated Senior Indebtedness or (iii)
because the default giving rise to such Blockage Notice is no longer
continuing). Notwithstanding the provisions described in the immediately
preceding sentence (but subject to the provisions contained in the first
sentence of this Section), unless the holders of such Designated Senior
Indebtedness or the Representative of such holders shall have accelerated the
maturity of such Designated Senior Indebtedness, the Company may resume
payments on the Securities after such Payment Blockage Period. Not more than
one Blockage Notice may be given in any consecutive 360-day period,
irrespective of the number of defaults with respect to Designated Senior
Indebtedness during such period; PROVIDED, HOWEVER, that if any Blockage
Notice within such 360-day period is given by or on behalf of any holders of
Designated Senior Indebtedness (other than the Bank Indebtedness), the
Representative of the Bank Indebtedness may give another Blockage Notice
within such period; PROVIDED FURTHER, HOWEVER, that in no event may the total
number of days during which any Payment Blockage Period or Periods is in
effect exceed 179 days in the aggregate during any 360 consecutive day period.
SECTION 10.04. ACCELERATION OF PAYMENT OF SECURITIES. If payment of
the Securities is accelerated because of an Event of Default, the Company or the
Trustee shall promptly notify the holders of the Designated Senior Indebtedness
(or their Representative) of the acceleration. If any Designated Senior
Indebtedness is outstanding, the Company may not pay the Securities until five
Business Days after such holders or the Representative of the Designated
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Senior Indebtedness receive notice of such acceleration and, thereafter, may pay
the Securities only if this Article 10 otherwise permits payment at that time.
SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER. If a
distribution is made to Securityholders that because of this Article 10 should
not have been made to them, the Securityholders who receive the distribution
shall hold it in trust for holders of Senior Indebtedness and pay it over to
them as their interests may appear.
SECTION 10.06. SUBROGATION. After all Senior Indebtedness is paid in
full and until the Securities are paid in full, Securityholders shall be
subrogated to the rights of holders of Senior Indebtedness to receive
distributions applicable to Senior Indebtedness. A distribution made under this
Article 10 to holders of Senior Indebtedness which otherwise would have been
made to Securityholders is not, as between the Company and Securityholders, a
payment by the Company on Senior Indebtedness.
SECTION 10.07. RELATIVE RIGHTS. This Article 10 defines the relative
rights of Securityholders and holders of Senior Indebtedness. Nothing in this
Indenture shall:
(1) impair, as between the Company and Securityholders, the obligation
of the Company, which is absolute and unconditional, to pay principal of
and interest on the Securities in accordance with their terms; or
(2) prevent the Trustee or any Securityholder from exercising its
available remedies upon a Default, subject to the rights of holders of
Senior Indebtedness to receive distributions otherwise payable to
Securityholders.
SECTION 10.08. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY. No
right of any holder of Senior Indebtedness to enforce the subordination of the
Indebtedness evidenced by the Securities shall be impaired by any act or failure
to act by the Company or by its failure to comply with this Indenture.
SECTION 10.09. RIGHTS OF TRUSTEE AND PAYING AGENT. Notwithstanding
Section 10.03, the Trustee or Paying Agent may continue to make payments on the
Securities and shall not be charged with knowledge of the existence of
91
facts that would prohibit the making of any such payments unless, not less than
two Business Days prior to the date of such payment, a Trust Officer of the
Trustee receives notice satisfactory to it that payments may not be made under
this Article 10. The Company, the Registrar or co-registrar, the Paying Agent,
a Representative or a holder of Senior Indebtedness may give the notice;
PROVIDED, HOWEVER, that, if an issue of Senior Indebtedness has a
Representative, only the Representative may give the notice. The Trustee shall
be entitled to conclusively rely on the delivery to it of a written notice by a
Person representing himself or itself to be a holder of any Senior Indebtedness
(or a Representative of such holder) to establish that such notice has been
given by a holder of such Senior Indebtedness or Representative thereof.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. The
Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article 10 with respect to any Senior Indebtedness which may at any time be held
by it, to the same extent as any other holder of Senior Indebtedness; and
nothing in Article 7 shall deprive the Trustee of any of its rights as such
holder. Nothing in this Article 10 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 7.07.
SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness,
the distribution may be made and the notice given to their Representative (if
any).
SECTION 10.11. ARTICLE 10 NOT TO PREVENT EVENTS OF DEFAULT OR LIMIT
RIGHT TO ACCELERATE. The failure to make a payment pursuant to the Securities
by reason of any provision in this Article 10 shall not be construed as
preventing the occurrence of a Default. Nothing in this Article 10 shall have
any effect on the right of the Securityholders or the Trustee to accelerate the
maturity of the Securities.
SECTION 10.12. TRUST MONEYS NOT SUBORDINATED. Notwithstanding
anything contained herein to the contrary, payments from money or the proceeds
of U.S. Government Obligations held in trust under Article 8 by the Trustee for
the payment of principal of and interest on the Securities
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shall not be subordinated to the prior payment of any Senior Indebtedness or
subject to the restrictions set forth in this Article 10, and none of the
Securityholders shall be obligated to pay over any such amount to the Company
or any holder of Senior Indebtedness of the Company or any other creditor of
the Company.
SECTION 10.13. TRUSTEE ENTITLED TO RELY. Upon any payment or
distribution pursuant to this Article 10, the Trustee and the Securityholders
shall be entitled to conclusively rely (i) upon any order or decree of a court
of competent jurisdiction in which any proceedings of the nature referred to in
Section 10.02 are pending, (ii) upon a certificate of the liquidating trustee or
agent or other Person making such payment or distribution to the Trustee or to
the Securityholders or (iii) upon the Representatives for the holders of Senior
Indebtedness for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of the Senior Indebtedness and
other Indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 10. In the event that the Trustee determines, in
good faith, that evidence is required with respect to the right of any Person as
a holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article 10, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and other facts
pertinent to the rights of such Person under this Article 10, and, if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment. The provisions of Sections 7.01 and 7.02 shall be applicable to all
actions or omissions of actions by the Trustee pursuant to this Article 10.
SECTION 10.14. TRUSTEE TO EFFECTUATE SUBORDINATION. Each
Securityholder by accepting a Security authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Securityholders and the holders of
Senior Indebtedness as provided in this Article 10 and appoints the Trustee as
attorney-in-fact for any and all such purposes.
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SECTION 10.15. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR
INDEBTEDNESS. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if it
shall mistakenly pay over or distribute to Securityholders or the Company or any
other Person, money or assets to which any holders of Senior Indebtedness shall
be entitled by virtue of this Article 10 or otherwise.
SECTION 10.16. RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS ON
SUBORDINATION PROVISIONS. Each Securityholder by accepting a Security
acknowledges and agrees that the foregoing subordination provisions are, and are
intended to be, an inducement and a consideration to each holder of any Senior
Indebtedness, whether such Senior Indebtedness was created or acquired before or
after the issuance of the Securities, to acquire and continue to hold, or to
continue to hold, such Senior Indebtedness and such holder of Senior
Indebtedness shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Senior Indebtedness.
SECTION 10.17. TRUSTEE'S COMPENSATION NOT PREJUDICED. Nothing in
this Article shall apply to amounts due to the Trustee pursuant to other
sections of this Indenture.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. TRUST INDENTURE ACT CONTROLS. If any provision of
this Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
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SECTION 11.02. NOTICES. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:
if to the Company:
Core-Mark International, Inc.
395 Oyster Point Boulevard
Suite 415
San Francisco, CA 94080
Attention of:
Chief Financial Officer
if to the Trustee:
Bankers Trust Company
Corporate Trust and Agency Group
Four Albany Street, 4th Floor
New York, New York 10006
Attention of:
Corporate Market Services
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be mailed
to the Securityholder at the Securityholder's address as it appears on the
registration books of the Registrar and shall be sufficiently given if so mailed
within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 11.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).
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SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take or refrain
from taking any action under this Indenture, the Company shall furnish to the
Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee and complying with Section 11.05 stating that,
in the opinion of the signers, all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied
with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee and complying with Section 11.05 stating that,
in the opinion of such counsel, all such conditions precedent have been
complied with. In furnishing such opinion, such counsel shall be permitted
to rely on the Officers' Certificate required by clause (1) of this
Section 11.04, on certificates of government agencies or authorities and on
any other certificate, instrument or opinion delivered pursuant to the
terms of this Indenture.
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
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SECTION 11.06. WHEN SECURITIES DISREGARDED. 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 disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which a Trust Officer of the Trustee actually knows are so owned
shall be so disregarded. Also, subject to the foregoing, only Securities
outstanding at the time shall be considered in any such determination.
SECTION 11.07. RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR. The
Trustee may make reasonable rules for action by or a meeting of Securityholders.
The Registrar and the Paying Agent may make reasonable rules for their
functions.
SECTION 11.08. LEGAL HOLIDAYS. A "Legal Holiday" is a Saturday, a
Sunday or a day on which banking institutions are not required to be open in the
State of New York. If a payment date is a Legal Holiday, payment shall be made
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period. If a regular record date is a Legal Holiday,
the record date shall not be affected.
SECTION 11.09. GOVERNING LAW. This Indenture and the Securities
shall be governed by, and construed in accordance with, the laws of the State of
New York but without giving effect to applicable principles of conflicts of law
to the extent that the application of the laws of another jurisdiction would be
required thereby.
SECTION 11.10. NO RECOURSE AGAINST OTHERS. A director, officer,
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities or this Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder shall waive and release
all such liability. The waiver and release shall be part of the consideration
for the issue of the Securities.
SECTION 11.11. SUCCESSORS. All agreements of the Company in this
Indenture and the Securities shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successors.
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SECTION 11.12. MULTIPLE ORIGINALS. The parties may sign any number
of copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture.
SECTION 11.13. TABLE OF CONTENTS; HEADINGS. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
98
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
CORE-MARK INTERNATIONAL, INC.,
by /s/ Leo F. Korman
---------------------------
Name: Leo F. Korman
Title: Senior Vice President and
Chief Financial Officer
BANKERS TRUST COMPANY, as Trustee,
by /s/ Kevin Weeks
----------------------------
Name: Kevin Weeks
Title: Assistant Treasurer
99
STATE OF CALIFORNIA )
) SS
COUNTY OF SAN MATEO )
On September 25, 1996, before me personally came Leo Korman, to me
known, who, being by me duly sworn, did depose and say that he is the of
Core-Mark International, Inc., a Delaware corporation and that he signed his
name thereto on behalf of such corporation.
/s/ James G. Douglas
---------------------------
Notary Public in and for the
State of California
Name: James G. Douglas
My commission expires:
December 3rd, 1999
---------------------------
100
STATE OF NEW YORK )
) SS
COUNTY OF NEW YORK )
On September 26, 1996, before me personally came Kevin Weeks, to me
known, who, being by me duly sworn, did depose and say that she is the
Assistant Treasurer of Bankers Trust Company, a New York banking corporation
and that she signed her name thereto on behalf of such corporation.
/s/ Margaret Bereza
---------------------------
Notary Public in and for the
State of New York
Name: Maraget Bereza
My commission expires:
2/22/98
---------------------------
EXHIBIT A
[FORM OF FACE OF INITIAL SECURITY]
[UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES
IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY
TO THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF
SUCH SUCCESSOR DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY ("DTC"), TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.] 1/
--
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT
THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS
THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT
TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE
1/To be included only if note is in global form.
--
2
SECURITIES ACT, (E) TO AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING
OF RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS ACQUIRING
THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE
SECURITIES OF $250,000 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 (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S OR THE
TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES
(D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN THE CASE OF
CLAUSE (E), A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF
THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS
LEGEND Shall BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE.
CORE-MARK INTERNATIONAL, INC.
11-3/8% SENIOR SUBORDINATED NOTE DUE 2003
No. CUSIP No.
$
CORE-MARK INTERNATIONAL, INC., a Delaware corporation, promises to pay
to , or registered assigns, the principal sum of $75,000,000 on
September 15, 2003.
Interest Payment Dates: March 15 and September 15.
Record Dates: March 1 and September 1.
3
Additional provisions of this Security are set forth on the other side
of this Security.
Dated: , 1996
CORE-MARK INTERNATIONAL, INC.
by
_______________________
Name:
Title:
_______________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
BANKERS TRUST COMPANY
as Trustee, certifies [Seal]
that this is one of
the Securities referred
to in the Indenture,
by
_____________________________
Authorized Signatory
4
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
11-3/8% Senior Subordinated Note due 2003
1. INTEREST
Core-Mark International, Inc., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above. The
Company shall use its best efforts to have the Exchange Offer Registration
Statement and, if applicable, a Shelf Registration Statement (each a
"Registration Statement") declared effective by the Commission as promptly as
practicable after the filing thereof. If (i) the applicable Registration
Statement is not filed with the Commission on or prior to 45 days after the
Issue Date, (ii) the Exchange Offer Registration Statement or, as the case may
be, the Shelf Registration Statement, is not declared effective within 105 days
after the Issue Date, (iii) the Registered Exchange Offer is not consummated on
or prior to 135 days after the Issue Date, or (iv) the Shelf Registration
Statement is filed and declared effective within 105 days after the Issue Date
but shall thereafter cease to be effective (at any time that the Company is
obligated to maintain the effectiveness thereof) without being succeeded within
30 days by an additional Registration Statement filed and declared effective
(each such event referred to in clauses (i) through (iv), a "Registration
Default"), the Company shall pay liquidated damages to each holder of Transfer
Restricted Securities, during the period of such Registration Default, in an
amount equal to $0.192 per week per $1,000 principal amount of the Securities
constituting Transfer Restricted Securities held by such holder until the
applicable Registration Statement is filed or declared effective, the Exchange
Offer is consummated or the Shelf Registration Statement again becomes
effective, as the case may be. All accrued liquidated damages shall be paid to
holders in the same manner as interest payments on the Securities on semi-annual
payment dates which correspond to interest payment dates for the Securities.
Following the cure of all Registration Defaults, the accrual of liquidated
damages shall cease. The Trustee shall have no responsibility with respect to
the determination of the amount of any such liquidated damages.
5
For purposes of the foregoing, "Transfer Restricted Securities" means
each Initial Security until (i) the date on which such Initial Security has been
exchanged for a freely transferable Exchange Security in the Exchange Offer,
(ii) the date on which such Initial Security has been effectively registered
under the Securities Act and disposed of in accordance with the Shelf
Registration Statement or (iii) the date on which such Initial Security is
distributed to the public pursuant to Rule 144 under the Securities Act or is
saleable pursuant to Rule 144(k) under the Securities Act.
The Company shall pay interest and liquidated damages, if any,
semiannually on March 15 and September 15 of each year. Interest on the
Securities shall accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from September 27, 1996. Interest shall
be computed on the basis of a 360-day year of twelve 30-day months. The Company
shall pay interest on overdue principal at the rate borne by the Securities plus
1% per annum, and it shall pay interest on overdue installments of interest at
the same rate to the extent lawful.
2. METHOD OF PAYMENT
The Company shall pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the March 1 or September 1 next preceding the interest payment
date even if Securities are canceled after the record date and on or before the
interest payment date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company shall pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts. Payments in respect of Securities
(including principal, premium and interest) shall be made by wire transfer of
immediately available funds to the accounts specified by the holders thereof or,
if no U.S. dollar account maintained by the payee with a bank in the United
States is designated by any holder to the Trustee or the Paying Agent at least
30 days prior to the relevant due date for payment (or such other date as the
Trustee may accept in its discretion), by mailing a check to the registered
address of such holder.
6
3. PAYING AGENT AND REGISTRAR
Initially, BANKERS TRUST COMPANY, a New York banking corporation
("Trustee"), shall act as Paying Agent and Registrar. The Company may appoint
and change any Paying Agent, Registrar or co-registrar without notice. The
Company or any of its domestically incorporated Wholly Owned Subsidiaries may
act as Paying Agent, Registrar or co-registrar.
4. INDENTURE
The Company issued the Securities under an Indenture dated as of
September 27, 1996 ("Indenture"), between the Company 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 Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb) as in effect on the date of the Indenture (the "Act").
Terms defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the Act for a statement of
those terms.
The Securities are general unsecured obligations of the Company
limited to $75,000,000 aggregate principal amount at any one time outstanding
(subject to Section 2.07 of the Indenture). This Security is one of the Initial
Securities referred to in the Indenture. The Securities include the Initial
Securities and any Exchange Securities issued in exchange for the Initial
Securities pursuant to the Indenture. The Initial Securities and the Exchange
Securities are treated as a single class of securities under the Indenture. The
Indenture imposes certain limitations on the Incurrence of Indebtedness by the
Company and its Restricted Subsidiaries; the payment of dividends on, and
redemption of, Capital Stock of the Company and its Restricted Subsidiaries and
the redemption of certain Subordinated Obligations of the Company and its
Restricted Subsidiaries; Investments; sales of assets and Restricted Subsidiary
Capital Stock; certain transactions with Affiliates of the Company; the sale or
issuance of Capital Stock of Restricted Subsidiaries; the creation of Liens; the
lines of business in which the Company and its Restricted Subsidiaries may
operate; the disposition of assets of the Company to Restricted Subsidiaries;
and consolidations, mergers and transfers of all or substantially all of the
7
Company's assets. In addition, the Indenture prohibits certain restrictions on
distributions and dividends from Restricted Subsidiaries.
5. OPTIONAL REDEMPTION
Except as set forth in the next two paragraphs, the Securities may not
be redeemed prior to September 15, 2000. On and after that date, the Company
may redeem the Securities in whole at any time or in part from time to time at
the following redemption prices (expressed in percentages of principal amount),
plus accrued interest to the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on the related
interest payment date):
if redeemed during the 12-month period beginning on or after
September 15 of the years set forth below:
Period Redemption
Period Price
- ------ ----------
2000......................................... 105.688%
2001......................................... 102.844%
2002 and thereafter.......................... 100.000%
Notwithstanding the foregoing, at any time prior to September 15,
1999, the Company may redeem in the aggregate up to 30% of the original
aggregate principal amount of Securities with the proceeds of one or more Public
Equity Offerings by the Company following which there is a Public Market, at a
redemption price (expressed as a percentage of principal amount) of 111.375%
plus accrued interest to the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date); PROVIDED, HOWEVER, that at least 70% of the original
aggregate principal amount of the Securities must remain outstanding after each
such redemption.
At any time on or prior to September 15, 2000, the Securities may also
be redeemed as a whole at the option of the Company within 90 days after a
Change of Control, at a redemption price equal to the sum of (i) 100% of the
principal amount thereof plus (ii) the Applicable Premium plus (iii) accrued but
unpaid interest, if any, to, the Redemption Date (subject to the right of
Holders of record
8
on the relevant record date to receive interest due on the relevant interest
payment date).
6. NOTICE OF REDEMPTION
Notice of redemption shall be mailed at least 30 days but not more
than 60 days before the redemption date to each Holder of Securities to be
redeemed at his registered address. Securities in denominations larger than
$1,000 may be redeemed in part but only in whole multiples of $1,000. If money
sufficient to pay the redemption price of and accrued interest on all Securities
(or portions thereof) to be redeemed on the redemption date is deposited with
the Paying Agent on or before the redemption date and certain other conditions
are satisfied, on and after such date interest ceases to accrue on such
Securities (or such portions thereof) called for redemption.
7. PUT PROVISIONS
Upon a Change of Control, unless the Company has elected to redeem the
Securities pursuant to paragraph 5, any Holder of Securities shall have the
right, subject to certain conditions specified in the Indenture, to cause the
Company to repurchase all or any part of the Securities of such Holder at a
repurchase price equal to 101% of the principal amount of the Securities to be
repurchased plus accrued interest to the date of repurchase (subject to the
right of holders of record on the relevant record date to receive interest due
on the relevant interest payment date) as provided in, and subject to the terms
of, the Indenture.
8. SUBORDINATION
The Securities are subordinated to Senior Indebtedness, as defined in
the Indenture. To the extent provided in the Indenture, Senior Indebtedness
must be paid before the Securities may be paid. The Company agrees, and each
Securityholder by accepting a Security agrees, to the subordination provisions
contained in the Indenture and authorizes the Trustee to give such provisions
effect and appoints the Trustee as attorney-in-fact for such purpose.
9
9. DENOMINATIONS; TRANSFER; EXCHANGE
The Securities are in registered form without coupons in denominations
of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements or transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not register the transfer of or exchange any
Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.
10. PERSONS DEEMED OWNERS
The registered Holder of this Security may be treated as the owner of
it for all purposes.
11. UNCLAIMED MONEY
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
12. DISCHARGE AND DEFEASANCE
Subject to certain conditions, the Company at any time may terminate
substantially all of its obligations under the Securities and the Indenture if
the Company deposits with the Trustee money or U.S. Government Obligations for
the payment of principal and interest on the Securities to redemption or
maturity, as the case may be.
13. AMENDMENT, WAIVER
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least
10
a majority in principal amount outstanding of the Securities and (ii) any
default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in principal amount outstanding of the
Securities. Subject to certain exceptions set forth in the Indenture, without
the consent of any Securityholder, the Company and the Trustee may amend the
Indenture or the Securities to cure any ambiguity, omission, defect or
inconsistency, or to comply with Article 5 of the Indenture, or to provide for
uncertificated Securities in addition to or in place of certificated Securities,
or to make certain changes in the Subordination provisions, or to add guarantees
with respect to the Securities or to secure the Securities, or to add additional
covenants or surrender rights and powers conferred on the Company, or to comply
with any request of the SEC in connection with qualifying the Indenture under
the Act, or to make any other change that does not adversely affect the rights
of any Securityholder, or to provide for the issuance and authorization of the
Exchange Securities.
14. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (i) default for 30 days
in payment of interest on the Securities; (ii) default in payment of principal
on the Securities at maturity, upon redemption pursuant to paragraph 5 of the
Securities, upon declaration or otherwise, or failure by the Company to redeem
or purchase Securities when required; (iii) failure by the Company to comply
with other agreements in the Indenture or the Securities, in certain cases
subject to notice and lapse of time; (iv) certain accelerations (including
failure to pay within any grace period after final maturity) of other
Indebtedness of the Company if the amount accelerated (or so unpaid) exceeds
$5,000,000; (v) certain events of bankruptcy or insolvency with respect to the
Company and the Significant Subsidiaries; (vi) certain judgments or decrees for
the payment of money in excess of $5,000,000 and (vii) a Note Guarantee ceasing
to be in full force and effect (other than in accordance with its terms). If an
Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the Securities may declare all the Securities
to be due and payable immediately. Certain events of bankruptcy or insolvency
are Events of Default which shall result in the Securities being due and payable
immediately upon the occurrence of such Events of Default.
11
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture
or the Securities unless it receives reasonable indemnity or security. Subject
to certain limitations, Holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing Default
(except a Default in payment of principal or interest) if it determines that
withholding notice is in the interest of the Holders.
15. TRUSTEE DEALINGS WITH THE COMPANY
Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
16. NO RECOURSE AGAINST OTHERS
A director, officer, employee or stockholder, as such, of the Company
or the Trustee shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Securityholder waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.
17. AUTHENTICATION
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
12
18. ABBREVIATIONS
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
19. CUSIP NUMBERS
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
THE COMPANY SHALL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN REQUEST
AND WITHOUT CHARGE TO THE SECURITYHOLDER A COPY OF THE INDENTURE WHICH HAS IN IT
THE TEXT OF THIS SECURITY IN LARGER TYPE. REQUESTS MAY BE MADE TO:
CORE-MARK INTERNATIONAL, INC.
395 OYSTER POINT BOULEVARD, SUITE 415
SAN FRANCISCO, CA 94080
ATTENTION OF CHIEF FINANCIAL OFFICER
13
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this
Security on the books of the Company. The agent may substitute another to act
for him.
_______________________________________________________________________________
Date: _______________________________ Your Signature: _________________________
Signature Guarantee:___________________________________________________________
(Signature must be guaranteed by a
participant in a recognized signature
guarantee medallion program)
_______________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
14
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER RESTRICTED
SECURITIES
This certificate relates to $_________ principal amount of Securities held in
(check applicable space) ____ book-entry or _____ definitive form by the
undersigned.
The undersigned (check one box below):
/ / has requested the Trustee by written order to deliver in exchange for its
beneficial interest in the Global Security held by the Depository a
Security or Securities in definitive, registered form of authorized
denominations and an aggregate principal amount equal to its beneficial
interest in such Global Security (or the portion thereof indicated above);
/ / has requested the Trustee by written order to exchange or register the
transfer of a Security or Securities.
In connection with any transfer or exchange of any of the Securities evidenced
by this certificate occurring prior to the date that is three years after the
later of the date of original issuance of such Securities and the last date, if
any, on which such Securities were owned by the Company or any Affiliate of the
Company, the undersigned confirms that such Securities are being:
CHECK ONE BOX BELOW:
(1) / / acquired for the undersigned's own account, without transfer
(in satisfaction of Section 2.06(a)(ii)(A) or Section
2.06(d)(i)(A) of the Indenture); or
(2) / / transferred to the Company; or
(3) / / transferred pursuant to and in compliance with Rule 144A
under the Securities Act of 1933, as amended; or
(4) / / transferred pursuant to and in compliance with Regulation S
under the Securities Act of 1933, as amended; or
15
(5) / / transferred to an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act of 1933, as amended), that has furnished to
the Trustee a signed letter containing certain
representations and agreements (the form of which letter
appears as Exhibit C to the Indenture; or
(6) / / transferred pursuant to another available exemption from the
registration requirements of the Securities Act of 1933, as
amended.
Unless one of the boxes is checked, the Trustee shall refuse to register any of
the Securities evidenced by this certificate in the name of any person other
than the registered holder thereof; PROVIDED, HOWEVER, that if box (4), (5) or
(6) is checked, the Trustee or the Company may require, prior to registering any
such transfer of the Securities, in its sole discretion, such legal opinions,
certifications and other information as the Trustee or Company has reasonably
requested to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act of 1933, as amended, such as the exemption provided by Rule 144
under such Act.
______________________________
Signature
Signature Guarantee:
_________________________ ______________________________
Signature
(Signature must be guaranteed
by a participant in a signature
guarantee medallion program)
_______________________________________________________________________________
16
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.06 or 4.08 of the Indenture, check the box:
___
/ /
---
If you want to elect to have only part of this Security purchased
by the Company pursuant to Section 4.06 or 4.08 of the Indenture, state the
amount:
$
Date: ____________________ Your Signature: ___________________________________
(Sign exactly as your name appearson the other
side of the Security)
Signature Guarantee:_______________________________________
(Signature must be guaranteed by a
participant in a recognized signature
guarantee medallion program)
EXHIBIT B
[FORM OF FACE OF EXCHANGE SECURITY]
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO
THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF
SUCH SUCCESSOR DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY ("DTC") TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN. 1/
CORE-MARK INTERNATIONAL, INC.
11-3/8% SENIOR SUBORDINATED NOTE SERIES A DUE 2003
No. Cusip No. [ ]
$[ ]
CORE-MARK INTERNATIONAL, INC., a Delaware corporation, promises to pay
to , or registered assigns, the principal sum of on September 15,
2003.
Interest Payment Dates: March 15 and September 15.
Record Dates: March 1 and September 1.
________________________
1/ This paragraph should only be added if the Security is issued in global
form.
2
Additional provisions of this Security are set forth on the other side
of this Security.
Dated:
CORE-MARK INTERNATIONAL, INC.,
by
______________________
Name:
Title:
______________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
BANKERS TRUST COMPANY,
as Trustee, certifies [Seal]
that this is one of
the Securities referred
to in the Indenture,
by
_________________________
Authorized Signatory
3
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY]
11-3/8% Senior Subordinated Note due 2003
1. INTEREST
Core-Mark International, Inc., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above. The
Company will pay interest semiannually on March 15 and September 15 of each
year. Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from September 27,
1996. Interest will be computed on the basis of a 360-day year of twelve 30-day
months. The Company shall pay interest on overdue principal at the rate borne
by the Securities plus 1% per annum, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
2. METHOD OF PAYMENT
The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the March 1 or September 1 next preceding the interest payment
date even if Securities are canceled after the record date and on or before the
interest payment date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company will pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts. Payments in respect of Securities
(including principal, premium and interest) will be made by wire transfer of
immediately available funds to the accounts specified by the holders thereof or,
if no U.S. dollar account maintained by the payee with a bank in the United
States is designated by any holder to the Trustee or the Paying Agent at least
30 days prior to the relevant due date for payment (or such other date as the
Trustee may accept in its discretion), by mailing a check to the registered
address of such holder.
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3. PAYING AGENT AND REGISTRAR
Initially, BANKERS TRUST COMPANY, a New York banking corporation
("Trustee"), will act as Paying Agent and Registrar. The Company may appoint
and change any Paying Agent, Registrar or co-registrar without notice. The
Company or any of its domestically incorporated Wholly Owned Subsidiaries may
act as Paying Agent, Registrar or co-registrar.
4. INDENTURE
The Company issued the Securities under an Indenture dated as of
September 27, 1996 ("Indenture"), between the Company 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 Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb) as in effect on the date of the Indenture (the "Act").
Terms defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the Act for a statement of
those terms.
The Securities are general unsecured obligations of the Company
limited to $75,000,000 aggregate principal amount at any one time outstanding
(subject to Section 2.07 of the Indenture). This Security is one of the
Exchange Securities referred to in the Indenture. The Securities include the
Initial Securities and any Exchange Securities issued in exchange for the
Initial Securities pursuant to the Indenture. The Initial Securities and the
Exchange Securities are treated as a single class of securities under the
Indenture. The Indenture imposes certain limitations on the Incurrence of
Indebtedness by the Company and its Restricted Subsidiaries; the payment of
dividends on, and redemption of, Capital Stock of the Company and its Restricted
Subsidiaries and the redemption of certain Subordinated Obligations of the
Company and its Restricted Subsidiaries; Investments; sales of assets and
Restricted Subsidiary Capital Stock; certain transactions with Affiliates of the
Company; the sale or issuance of Capital Stock of Restricted Subsidiaries; the
creation of Liens; the lines of business in which the Company and its Restricted
Subsidiaries may operate; the disposition of assets of the Company to Restricted
Subsidiaries; and consolidations, mergers and transfers of all or substantially
all of the
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Company's assets. In addition, the Indenture prohibits certain restrictions on
distributions and dividends from Restricted Subsidiaries.
5. OPTIONAL REDEMPTION
Except as set forth in the next two paragraphs, the Securities may not
be redeemed prior to September 15, 2000. On and after that date, the Company
may redeem the Securities in whole at any time or in part from time to time at
the following redemption prices (expressed in percentages of principal amount),
plus accrued interest to the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on the related
interest payment date):
if redeemed during the 12-month period beginning on or after
September 15 of the years set forth below:
Redemption
Period Price
- ------ ----------
2000................................................... 105.688%
2001................................................... 102.844%
2002 and thereafter.................................... 100.000%
Notwithstanding the foregoing, at any time prior to September 15,
1999, in the aggregate up to 30% of the original aggregate principal amount of
Securities with the proceeds of one or more Public Equity Offerings by the
Company following which there is a Public Market, at a redemption price
(expressed as a percentage of principal amount) of 111.375% plus accrued
interest to the redemption date (subject to the right of Holders of record on
the relevant record date to receive interest due on the relevant interest
payment date); provided, however, that at least 70% of the original aggregate
principal amount of the Securities must remain outstanding after each such
redemption.
At any time on or prior to September 15, 2000, the Notes may also be
redeemed as a whole at the option of the Company within 90 days after a Change
of Control, at a redemption price equal to the sum of (i) 100% of the principal
amount thereof plus (ii) the Applicable Premium plus (iii) accrued but unpaid
interest, if any, to, the Redemption Date (subject to the right of Holders of
record
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on the relevant record date to receive interest due on the relevant interest
payment date).
6. NOTICE OF REDEMPTION
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Securities to be redeemed
at his registered address. Securities in denominations larger than $1,000 may
be redeemed in part but only in whole multiples of $1,000. If money sufficient
to pay the redemption price of and accrued interest on all Securities (or
portions thereof) to be redeemed on the redemption date is deposited with the
Paying Agent on or before the redemption date and certain other conditions are
satisfied, on and after such date interest ceases to accrue on such Securities
(or such portions thereof) called for redemption.
7. PUT PROVISIONS
Upon a Change of Control, unless the Company has elected to redeem the
Securities pursuant to paragraph 5, any Holder of Securities will have the
right, subject to certain conditions specified in the Indenture, to cause the
Company to repurchase all or any part of the Securities of such Holder at a
repurchase price equal to 101% of the principal amount of the Securities to be
repurchased plus accrued interest to the date of repurchase (subject to the
right of holders of record on the relevant record date to receive interest due
on the relevant interest payment date) as provided in, and subject to the terms
of, the Indenture.
8. SUBORDINATION
The Securities are subordinated to Senior Indebtedness, as defined in
the Indenture. To the extent provided in the Indenture, Senior Indebtedness
must be paid before the Securities may be paid. The Company agrees, and each
Securityholder by accepting a Security agrees, to the subordination provisions
contained in the Indenture and authorizes the Trustee to give such provisions
effect and appoints the Trustee as attorney-in-fact for such purpose.
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9. DENOMINATIONS; TRANSFER; EXCHANGE
The Securities are in registered form without coupons in denominations
of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements or transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not register the transfer of or exchange any
Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.
10. PERSONS DEEMED OWNERS
The registered Holder of this Security may be treated as the owner of
it for all purposes.
11. UNCLAIMED MONEY
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
12. DISCHARGE AND DEFEASANCE
Subject to certain conditions, the Company at any time may terminate
substantially all of its obligations under the Securities and the Indenture if
the Company deposits with the Trustee money or U.S. Government Obligations for
the payment of principal and interest on the Securities to redemption or
maturity, as the case may be.
13. AMENDMENT, WAIVER
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least
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a majority in principal amount outstanding of the Securities and (ii) any
default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in principal amount outstanding of the
Securities. Subject to certain exceptions set forth in the Indenture, without
the consent of any Securityholder, the Company and the Trustee may amend the
Indenture or the Securities to cure any ambiguity, omission, defect or
inconsistency, or to comply with Article 5 of the Indenture, or to provide for
uncertificated Securities in addition to or in place of certificated Securities,
or to make certain changes in the Subordination provisions, or to add guarantees
with respect to the Securities or to secure the Securities, or to add additional
covenants or surrender rights and powers conferred on the Company, or to comply
with any request of the SEC in connection with qualifying the Indenture under
the Act, or to make certain changes in the subordination provisions, or to make
any change that does not adversely affect the rights of any Securityholder.
14. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (i) default for 30 days
in payment of interest on the Securities; (ii) default in payment of principal
on the Securities at maturity, upon redemption pursuant to paragraph 5 of the
Securities, upon declaration or otherwise, or failure by the Company to redeem
or purchase Securities when required; (iii) failure by the Company to comply
with other agreements in the Indenture or the Securities, in certain cases
subject to notice and lapse of time; (iv) certain accelerations (including
failure to pay within any grace period after final maturity) of other
Indebtedness of the Company if the amount accelerated (or so unpaid) exceeds
$5,000,000; (v) certain events of bankruptcy or insolvency with respect to the
Company and the Significant Subsidiaries; (vi) certain judgments or decrees for
the payment of money in excess of $5,000,000 and (vii) a Note Guarantee ceasing
to be in full force and effect (other than in accordance with its terms). If an
Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the Securities may declare all the Securities
to be due and payable immediately. Certain events of bankruptcy or insolvency
are Events of Default which will result in the Securities being due and payable
immediately upon the occurrence of such Events of Default.
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Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture
or the Securities unless it receives reasonable indemnity or security. Subject
to certain limitations, Holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing Default
(except a Default in payment of principal or interest) if it determines that
withholding notice is in the interest of the Holders.
15. TRUSTEE DEALINGS WITH THE COMPANY
Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
16. NO RECOURSE AGAINST OTHERS
A director, officer, employee or stockholder, as such, of the Company
or the Trustee shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Securityholder waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.
17. AUTHENTICATION
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
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18. ABBREVIATIONS
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
19. CUSIP NUMBERS
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN REQUEST
AND WITHOUT CHARGE TO THE SECURITYHOLDER A COPY OF THE INDENTURE WHICH HAS IN IT
THE TEXT OF THIS SECURITY IN LARGER TYPE. REQUESTS MAY BE MADE TO:
COREMARK INTERNATIONAL, INC.
395 OYSTER POINT BOULEVARD, SUITE 415
SAN FRANCISCO, CA 94080
ATTENTION OF CHIEF FINANCIAL OFFICER
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ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this
Security on the books of the Company. The agent may substitute another to act
for him.
_______________________________________________________________________________
Date: _____________________ Your Signature: ___________________________________
Signature Guarantee:___________________________________________________________
(Signature must be guaranteed by a
participant in a recognized signature
guarantee medallion program)
_______________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.06 or 4.08 of the Indenture, check the box:
/ /
If you want to elect to have only part of this Security purchased
by the Company pursuant to Section 4.06 or 4.08 of the Indenture, state the
amount:
$
Date: ____________________ Your Signature: ____________________________________
(Sign exactly as your name appears
on the other side of the Security)
Signature Guarantee:___________________________________________________________
(Signature must be guaranteed by a
participant in a recognized signature
guarantee medallion program)
EXHIBIT C
Transferee Letter of Representation
Core-Mark International, Inc.
c/o Bankers Trust Company
Dear Sirs:
This certificate is delivered to request a transfer of $
principal amount of the 11-3/8% Senior Subordinated Notes due 2003 (the "Notes")
of Core-Mark International, Inc. (the "Company").
Upon transfer, the Notes would be registered in the name of the new
beneficial owner as follows:
Name: ___________________________________
Address: ________________________________
Taxpayer ID Number: _____________________
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the
"Securities Act")) purchasing for our own account or for the account of such an
institutional "accredited investor," and we are acquiring the Notes not with a
view to, or for offer or sale in connection with, any distribution in violation
of the Securities Act. We have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risk of our
investment in the Notes and invest in or purchase securities similar to the
Notes in the normal course of our business. We and any accounts for which we
are acting are each able to bear the economic risk of our or its investment.
2. We understand that the Notes have not been registered under the
Securities Act and, unless so registered, may not be sold except as permitted in
the following sentence. We agree on our own behalf and on
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behalf of any investor account for which we are purchasing Notes to offer, sell
or otherwise transfer such Notes prior to the date which is three years after
the later of the date of original issue and the last date on which the Company
or any affiliate of the Company was the owner of such Notes (or any predecessor
thereto) (the "Resale Restriction Termination Date") only (a) to the Company,
(b) pursuant to a registration statement which has been declared effective under
the Securities Act, (c) in a transaction complying with the requirements of Rule
144A under the Securities Act, to a person we reasonably believe is a qualified
institutional buyer under Rule 144A (a "QIB") that purchases for its own account
or for the account of a QIB and to whom notice is given that the transfer is
being made in reliance on Rule 144A, (d) pursuant to offers and sales that occur
outside the United States within the meaning of Regulation S under the
Securities Act, (e) to an institutional "accredited investor" within the meaning
of Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is purchasing
for its own account or for the account of such an institutional "accredited
investor", in each case in a minimum principal amount of Notes of $250,000 or
(f) pursuant to any other available exemption from the registration requirements
of the Securities Act, subject in each of the foregoing cases to any requirement
of law that the disposition of our property or the property of such investor
account or accounts be at all times within our or their control and in
compliance with any applicable state securities laws. The foregoing
restrictions on resale will not apply subsequent to the Resale Restriction
Termination Date. If any resale or other transfer of the Notes is proposed to
be made pursuant to clause (e) above prior to the Resale Restriction Termination
Date, the transferor shall deliver a letter from the transferee substantially in
the form of this letter to the Company and the Trustee, which shall provide,
among other things, that the transferee is an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act and that it is acquiring such Notes for investment purposes and
not for distribution in violation of the Securities Act. Each purchaser
acknowledges that the Company and the Trustee reserve the right prior to any
offer, sale or other transfer prior to the Resale Termination Date of the Notes
pursuant
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to clauses (d), (e) or (f) above to require the delivery of an opinion of
counsel, certifications and/or other information satisfactory to the Company and
the Trustee.
TRANSFEREE:___________________
BY____________________________
EXHIBIT D
FORM OF NOTE GUARANTEE
NOTE GUARANTEE, dated as of , , made by
(the "Guarantor"), the undersigned subsidiary of Core-Mark International, Inc.,
in favor of the Holders and the Trustee (as defined in the Indenture referred to
below).
Reference is made to the Indenture dated as of September 27, 1996 (as
amended, restated, supplemented, modified or waived from time to time, the
"Indenture"), between Core-Mark International, Inc. (the "Company") and the
Trustee.
W I T N E S S E T H:
WHEREAS the Company is a party to the Indenture;
WHEREAS the Company owns directly all of or a majority interest in the
Guarantor;
WHEREAS the Guarantor shall derive substantial direct and indirect
benefit from the transactions contemplated by the Indenture;
NOW, THEREFORE, in consideration of the promises thereby, the
Guarantor hereby agrees with and for the benefit of the Holders as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINED TERMS. As used in this Note Guarantee, terms
defined in the Indenture or in the preamble or recitals hereto are used herein
as therein defined, except that the term "Holders" in this guarantee shall refer
to the term "Holders" as defined in the Indenture and the Trustee acting on
behalf or for the benefit of such holders.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE GUARANTOR
SECTION 2.01. REPRESENTATIONS AND WARRANTIES. The Guarantor hereby
represents and warrants to the Holders as follows:
(a) DUE EXISTENCE; COMPLIANCE. The Guarantor is a corporation or
limited partnership duly organized, validly existing and in good standing, where
applicable, under the laws of the jurisdiction in which it was incorporated or
organized and has all requisite power and authority under such laws to own or
lease and operate its properties and to carry on its business as now conducted
and as proposed to be conducted, and to execute, deliver and perform its
obligations under this Note Guarantee. The Guarantor is duly qualified or
licensed to do business as a foreign corporation or entity and is in good
standing, where applicable, in all jurisdictions in which it owns or leases
property, or proposes to own or lease property, or in which the conduct of its
business requires it to so qualify or be licensed, except to the extent that the
failure to so qualify or be in good standing would have no material adverse
effect on the business, operations, properties, prospects or condition
(financial or otherwise) of the Guarantor. The Guarantor is in compliance in
all material respects with all applicable law, rules, regulations and orders.
(b) CORPORATE AUTHORITIES; NO CONFLICTS. The execution, delivery and
performance by the Guarantor of this Guarantee is within its corporate or
limited partnership powers and has been duly authorized by all necessary
corporate and stockholder approvals or partnership approvals and (i) does not
contravene its organizational documents or any law, rule, regulation, judgment,
order or decree applicable to or binding on the Guarantor and (ii) does not
contravene, and shall not result in the creation of any lien under, any
provision of any contract, indenture, mortgage or agreement to which the
Guarantor is a party, or by which it or any of its properties are bound.
(c) GOVERNMENT APPROVALS AND AUTHORIZATIONS. No authorization or
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for the due execution, delivery and
performance by or enforcement against the Guarantor of this
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Note Guarantee (except such governmental approvals or authorizations as have
been duly obtained or made and remain in full force and effect).
(d) LEGAL, VALID AND BINDING. This Note Guarantee is the legal valid
and binding obligation of the Guarantor, enforceable against the Guarantor in
accordance with its terms.
(e) LITIGATION. There is no pending or threatened action or
proceeding affecting the Guarantor by or before any court, governmental agency
or arbitrator, which may materially adversely affect the condition, operations,
business, prospects, properties or assets of the Guarantor, or prohibit, limit
in any way or materially adversely affect the ability of the Guarantor to
perform its obligations under this Guarantee.
(f) IMMUNITIES. Neither the Guarantor nor its property has any
immunity from jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) under applicable law.
(g) NO DEFAULTS. There does not exist any event of default, or any
event that with notice or lapse of time or both would constitute an event of
default, under any agreement to which the Guarantor is a party or by which it
may be bound, or to which any of its properties or assets may be subject which
default would have a material adverse effect on the Guarantor, or would
materially adversely affect the Guarantor's ability to perform its obligations
under this Note Guarantee.
(h) SOLVENCY. The Guarantor is on the date hereof solvent.
ARTICLE III
GUARANTEE
SECTION 3.01. GUARANTEE. The Guarantor hereby unconditionally and
irrevocably guarantees, as a primary obligor and not merely as a surety, to each
Holder and to the Trustee (a) the full and punctual payment of principal of and
interest on the Securities when due, whether at maturity, by acceleration, by
redemption or otherwise, and
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all other monetary obligations of the Company under the Indenture (including
obligations to the Trustee) and the Securities and (b) the full and punctual
performance within applicable grace periods of all other obligations of the
Company whether for expenses, indemnification or otherwise under the Indenture
and the Securities (all the foregoing being hereinafter collectively called the
"Obligations"). The Guarantor further agrees that the Obligations may be
extended or renewed, in whole or in part, without notice or further assent from
it, and that it shall remain bound under this Article III notwithstanding any
extension or renewal of any Obligation.
The Guarantor waives presentation to, demand of payment from and
protest to the Company of any of the Obligations and also waives notice of
protest for nonpayment. The Guarantor waives notice of any default under the
Securities or the Obligations. The obligations of the Guarantor hereunder shall
not be affected by (a) the failure of any Holder to assert any claim or demand
or to enforce any right or remedy against the Company or any other person under
the Indenture, the Securities or any other agreement or otherwise; (b) any
extension or renewal of any thereof; (c) any rescission, waiver, amendment or
modification of any of the terms or provisions of the Indenture, the Securities
or any other agreement; (d) the failure of any Holder to exercise any right or
remedy against any other Guarantor of the Obligations; (e) the release of any
security held by any Holder or the Trustee for the Obligations of any of them;
or (f) any change in the ownership of such Guarantor, except as provided in
Section 3.02(b).
The Guarantor further agrees that its Note Guarantee herein
constitutes a guarantee of payment, performance and compliance when due (and not
a guarantee of collection) and waives any right to require that any resort be
had by any Holder to any security held for payment of the Obligations.
Except as otherwise provided herein, the obligations of the Guarantor
hereunder shall not be subject to any reduction, limitation, impairment or
termination for any reason, including any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to any defense of setoff,
counterclaim, recoupment or termination whatsoever or by reason of the
invalidity, illegality or unenforceability of the Obligations or otherwise.
Without limiting the generality of the foregoing, the
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obligations of the Guarantor herein shall not be discharged or impaired or
otherwise affected by the failure of any Holder to assert any claim or demand or
to enforce any remedy under the Indenture, the Securities or any other
agreement, by any waiver or modification of any thereof, by any default, failure
or delay, willful or otherwise, in the performance of the Obligations, or by any
other act or thing or omission or delay to do any other act or thing which may
or might in any manner or to any extent vary the risk of the Guarantor or would
otherwise operate as a discharge of the Guarantor as a matter of law or equity.
The Guarantor further agrees that its Note Guarantee herein shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of principal of or interest on any Obligation is
rescinded or must otherwise be restored by any Holder upon the bankruptcy or
reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which any Holder has at law or in equity against the Guarantor by virtue
hereof, upon the failure of the Company to pay the principal of or interest on
any Obligation when and as the same shall become due, whether at maturity, by
acceleration, by redemption or otherwise, or to perform or comply with any other
Obligation, the Guarantor hereby promises to and shall, upon receipt of written
demand by the Trustee or the Holders of a majority of the Securities (the
"Majority Securityholders"), forthwith pay, or cause to be paid, in cash, to the
Holders an amount equal to the sum of (i) the unpaid principal amount of such
Obligations, (ii) accrued and unpaid interest on such Obligations (but only to
the extent not prohibited by law) and (iii) all other monetary Obligations of
the Company to the Holders and the Trustee.
The Guarantor further agrees that, as between the Guarantor, 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 for the purposes of the
Guarantor's Note Guarantee herein, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such Obligations, such Obligations (whether or not due and payable) shall
forthwith become due and payable by the Guarantor for the purposes of this
Section.
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The Guarantor also agrees to pay any and all costs and expenses
(including reasonable attorneys' fees) incurred by the Trustee or any Holder in
enforcing any rights under this Section.
SECTION 3.02. LIMITATION ON LIABILITY. (a) Any term or provision of
this Note Guarantee to the contrary notwithstanding, the maximum aggregate
amount of the Obligations guarantied hereunder by the Guarantor shall not exceed
the maximum amount that can be hereby guaranteed without rendering this Note
Guarantee, as it relates to the Guarantor, voidable under applicable law
relating to fraudulent conveyance or fraudulent transfer.
(b) This Note Guarantee shall terminate and be of no further force or
effect upon the sale or other transfer (i) by the Guarantor of all or
substantially all of its assets or (ii) by the Company of all of its stock or
other equity interests in the Guarantor, to a Person that is not an Affiliate of
the Company; provided, however, that such sale or transfer constitutes an Asset
Disposition (as defined in the Indenture). Upon notice to the Trustee that such
a sale or transfer described in this clause 3.02(b) has occurred, the Trustee
shall return the original Note Guarantee to the Guarantor.
SECTION 3.03. SUCCESSORS AND ASSIGNS. Subject to Section 3.02(b)
hereof, this Article III shall be binding upon the Guarantor and its successors
and assigns and shall inure to the benefit of the successors and assigns of the
Holders and, in the event of any transfer or assignment of rights by any Holder,
the rights and privileges conferred upon that party in this Note Guarantee and
in the Securities shall automatically extend to and be vested in such transferee
or assignee, all subject to the terms and conditions of this Note Guarantee.
SECTION 3.04. NO WAIVER, ETC. Neither a failure nor a delay on the
part of the Holders or the Trustee in exercising any right, power or privilege
under this Article III shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise of any right,
power or privilege. The rights, remedies and benefits of the Holders and the
Trustee herein expressly specified are cumulative and not exclusive of any other
rights, remedies or benefits which either may have under this Article III at
law, in equity, by statute or otherwise.
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SECTION 3.05. MODIFICATION, ETC. No modification, amendment or
waiver of any provision of this Article, nor the consent to any departure by the
Guarantor therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Majority Securityholders, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which it was given. No notice to or demand on the Guarantor in any case shall
entitle the Guarantor or any other guarantor to any other or further notice or
demand in the same, similar or other circumstances.
ARTICLE IV
SUBORDINATION
SECTION 4.01. SUBORDINATION. The Obligations of the Guarantor under
this Note Guarantee are subordinate to the obligations of the Guarantor under
any Guarantee of the Credit Agreement and any other Senior Indebtedness to the
extent and in the manner that the Indebtedness evidenced by the Securities is
subordinate to the obligations of the Company under the Credit Agreement and
other Senior Indebtedness under Article X of the Indenture. By acceptance of
this Note Guarantee, the Holders agree to be bound by the foregoing provisions.
ARTICLE V
MISCELLANEOUS
SECTION 5.01. NOTICES. All notices and other communications
pertaining to this Note Guarantee or any Security shall be in writing and shall
be deemed to have been duly given upon the receipt thereof. Such notices shall
be delivered by hand, or mailed, certified or registered mail with postage
prepaid (a) if to the Guarantor, at its address set forth below, and (b) if to
the Holders or the Trustee, as provided in the Indenture.
SECTION 5.02. PARTIES. Nothing expressed or mentioned in this Note
Guarantee is intended or shall be construed to give any Person, firm or
corporation, other than the Holders and the Trustee and the holders of any
Senior Indebtedness, any legal or equitable right, remedy or
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claim under or in respect of this Note Guarantee or any provision herein
contained.
SECTION 5.03. GOVERNING LAW. This Note Guarantee shall be governed
by the laws of the State of New York regardless of the laws that might otherwise
govern under applicable principles of conflict of laws thereof.
SECTION 5.04. SEVERABILITY CLAUSE. In case any provision in this
Note Guarantee shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby and such provision shall be ineffective only to the
extent of such invalidity, illegality or unenforceability.
SECTION 5.05. WAIVERS, AMENDMENTS AND REMEDIES. The failure to
insist in any one or more instances upon strict performance of any of the
provisions of this Note Guarantee or to take advantage of any of its rights
hereunder shall not be construed as a waiver of any such provisions or the
relinquishment of any such rights, but the same shall continue and remain in
full force and effect. Except as otherwise expressly limited in this
Guarantee, all remedies under this Note Guarantee shall be cumulative and in
addition to every other remedy provided for herein or by law.
SECTION 5.06. ENTIRE AGREEMENT. This Note Guarantee is intended by
the parties to be a final expression of their agreement in respect of the
subject matter contained herein and supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
SECTION 5.07. HEADINGS. The headings of the Articles and the
sections in this Note Guarantee are for convenience of reference only and shall
not be deemed to alter or affect the meaning or interpretation of any provisions
hereof.
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IN WITNESS WHEREOF, the Guarantor has duly executed this Note
Guarantee as of the date first above written.
[NAME OF GUARANTOR],
By
____________________________
Name:
Title:
Address: