EXHIBIT 4.1
EXECUTION COPY
____________________________________________________________________________
BURKE INDUSTRIES, INC.,
Issuer,
THE SUBSIDIARY GUARANTORS NAMED HEREIN
Subsidiary Guarantors
and
UNITED STATES TRUST COMPANY OF NEW YORK
Trustee
____________________
INDENTURE
Dated as of August 20, 1997
_____________________
$110,000,000
10% Senior Notes Due 2007
____________________________________________________________________________
D-2
BURKE INDUSTRIES, INC.
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT
OF 1939 AND INDENTURE, DATED AS OF AUGUST 20, 1997
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
Section 310(a)(1) ................................. 607
(a)(2) ................................. 607
(b) ................................. 608
Section 312(c) ................................. 701
Section 314(a) ................................. 703
(a)(4) ................................. 1008(a)
(c)(1) ................................. 103
(c)(2) ................................. 103
(e) ................................. 103
Section 315(b) ................................. 601
Section 316(a)(last
sentence) ................................. 101 ("Outstanding")
(a)(1)(A) ................................. 502, 512
(a)(1)(B) ................................. 513
(b) ................................. 508
(c) ................................. 105(d)
Section 317(a)(1) ................................. 503
(a)(2) ................................. 504
(b) ................................. 1003
Section 318(a) ................................. 111
TABLE OF CONTENTS
PAGE
PARTIES .............................................................. 1
RECITALS OF THE COMPANY ............................................... 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions ....................................... 2
Acquired Indebtedness ........................................... 2
Act ............................................................. 2
Additional Notes ................................................ 2
Affiliate ....................................................... 2
Applicable Premium .............................................. 3
Asset Sale ...................................................... 3
Attributable Debt ............................................... 3
Average Life .................................................... 3
Bank Credit Agreement ........................................... 4
Banks ........................................................... 4
Board of Directors .............................................. 4
Board Resolution ................................................ 4
Borrowing Base .................................................. 4
Business Day .................................................... 4
Capital Stock ................................................... 4
Capitalized Lease Obligation .................................... 5
Change of Control ............................................... 5
Closing Date .................................................... 6
Commission ...................................................... 6
Common Stock .................................................... 6
Company ......................................................... 6
Company Request or Company Order ................................ 6
Consolidated Adjusted Net Income ................................ 6
Consolidated EBITDA ............................................. 7
Consolidated Net Worth .......................................... 7
Corporate Trust Office .......................................... 7
____________________
Note: This table of contents shall not, for any purpose, be deemed
to be a part of the Indenture.
ii
PAGE
corporation ..................................................... 8
Default ......................................................... 8
Defaulted Interest .............................................. 8
Depositary ...................................................... 8
Disinterested Director .......................................... 8
Disqualified Stock .............................................. 8
Event of Default ................................................ 8
Exchange Act .................................................... 8
Exchange Offer .................................................. 8
Exchange Offer Registration Statement ........................... 9
Exchange Notes .................................................. 9
Federal Bankruptcy Code ......................................... 9
Fixed Charge Coverage Ratio ..................................... 9
Fixed Charges ................................................... 9
Generally Accepted Accounting Principles or GAAP ................ 9
Hedging Obligations ............................................. 9
Holder .......................................................... 9
Indebtedness .................................................... 9
Indenture ....................................................... 10
Indenture Obligations ........................................... 10
Initial Notes ................................................... 10
Interest Payment Date ........................................... 10
Investment ...................................................... 10
Lien ............................................................ 11
Maturity ........................................................ 11
Moody's ......................................................... 11
Net Cash Proceeds ............................................... 11
Non-U.S. Person ................................................. 12
Non-U.S. Restricted Subsidiary .................................. 12
Note Guarantee .................................................. 12
Notes ........................................................... 12
Offering ........................................................ 12
Officers' Certificate ........................................... 12
Opinion of Counsel .............................................. 12
Outstanding ..................................................... 12
Paying Agent .................................................... 13
Permitted Business .............................................. 13
Permitted Investments ........................................... 13
Person .......................................................... 14
Predecessor Note ................................................ 14
iii
PAGE
Preferred Stock ................................................. 15
Principals ...................................................... 15
Purchase Date ................................................... 15
Public Equity Offering .......................................... 15
Qualified Equity Interest ....................................... 15
QIB ............................................................. 15
Qualified Stock ................................................. 15
Redemption Date ................................................. 15
Redemption Price ................................................ 15
Register and Note Registrar ..................................... 15
Registrar ....................................................... 16
Registration Rights Agreement ................................... 16
Registration Statement .......................................... 16
Regular Record Date ............................................. 16
Regulation S .................................................... 16
Related Party ................................................... 16
Restricted Subsidiary ........................................... 16
Rule 144A ....................................................... 16
Sale and Leaseback Transaction .................................. 16
Securities Act .................................................. 16
Series A Preferred Stock ........................................ 16
Shelf Registration Statement .................................... 16
Significant Subsidiary .......................................... 17
S&P ............................................................. 17
Special Record Date ............................................. 17
Stated Maturity ................................................. 17
Subordinated Indebtedness ....................................... 17
Subsidiary ...................................................... 17
Subsidiary Guarantor ............................................ 17
Treasury Rate ................................................... 17
Trust Indenture Act or TIA ...................................... 18
Unrestricted Subsidiary ......................................... 18
Trustee ......................................................... 18
U.S. Restricted Subsidiary ...................................... 18
Voting Stock .................................................... 18
Wholly Owned Restricted Subsidiary .............................. 18
SECTION 102. Incorporation by Reference of Trust Indenture Act .. 18
SECTION 103. Compliance Certificates and Opinions ............... 19
SECTION 104. Form of Documents Delivered to Trustee ............. 20
SECTION 105. Acts of Holders .................................... 20
iv
PAGE
SECTION 106. Notices, Etc., to Trustee, Company and Subsidiary
Guarantors .................................... 22
SECTION 107. Notice to Holders; Waiver .......................... 22
SECTION 108. Effect of Headings and Table of Contents ........... 23
SECTION 109. Successors and Assigns ............................. 23
SECTION 110. Separability Clause ................................ 23
SECTION 111. Benefits of Indenture .............................. 23
SECTION 112. Governing Law ...................................... 23
SECTION 113. Legal Holidays ..................................... 24
SECTION 114. No Recourse Against Others ......................... 24
ARTICLE TWO
NOTE FORMS
SECTION 201. Forms Generally .................................... 24
SECTION 202. Restrictive Legends ................................ 25
ARTICLE THREE
THE NOTES
SECTION 301. Title and Terms .................................... 27
SECTION 302. Denominations ...................................... 28
SECTION 303. Execution, Authentication, Delivery and Dating ..... 28
SECTION 304. Temporary Notes .................................... 29
SECTION 305. Registration, Registration of Transfer and
Exchange .......................................... 30
SECTION 306. Book-Entry Provisions for Global Note .............. 31
SECTION 307. Special Transfer Provisions ........................ 32
SECTION 308. Mutilated, Destroyed, Lost and Stolen Notes ........ 34
SECTION 309. Payment of Interest; Interest Rights Preserved ..... 35
SECTION 310. Persons Deemed Owners .............................. 37
SECTION 311. Cancellation ....................................... 37
SECTION 312. Issuance of Additional Notes ....................... 37
SECTION 313. Computation of Interest ............................ 37
v
PAGE
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture ............ 38
SECTION 402. Application of Trust Money ......................... 39
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default ................................... 39
SECTION 502. Acceleration of Maturity; Rescission and Annulment .. 41
SECTION 503. Collection of Indebtedness and Suits for Enforcement
by Trustee ........................................ 42
SECTION 504. Trustee May File Proofs of Claim .................... 43
SECTION 505. Trustee May Enforce Claims Without Possession of
Notes ............................................. 44
SECTION 506. Application of Money Collected ...................... 44
SECTION 507. Limitation on Suits ................................. 44
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest .............................. 45
SECTION 509. Restoration of Rights and Remedies .................. 45
SECTION 510. Rights and Remedies Cumulative ...................... 45
SECTION 511. Delay or Omission Not Waiver ........................ 45
SECTION 512. Control by Holders .................................. 46
SECTION 513. Waiver of Past Defaults ............................. 46
SECTION 514. Waiver of Stay or Extension Laws .................... 46
ARTICLE SIX
THE TRUSTEE
SECTION 601. Notice of Defaults .................................. 47
SECTION 602. Certain Rights of Trustee ........................... 47
SECTION 603. Trustee Not Responsible for Recitals or Issuance
of Notes .......................................... 48
SECTION 604. May Hold Notes ...................................... 49
SECTION 605. Money Held in Trust ................................. 49
SECTION 606. Compensation and Reimbursement ...................... 49
SECTION 607. Corporate Trustee Required; Eligibility ............. 50
SECTION 608. Resignation and Removal; Appointment of Successor ... 50
vi
PAGE
SECTION 609. Acceptance of Appointment by Successor .............. 52
SECTION 610. Merger, Conversion, Consolidation or Succession to
Business .......................................... 52
ARTICLE SEVEN
HOLDERS LISTS AND REPORTS BY TRUSTEE, COMPANY
AND SUBSIDIARY GUARANTORS
SECTION 701. Disclosure of Names and Addresses of Holders ........ 53
SECTION 702. Reports by Trustee .................................. 53
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain
Terms ............................................. 53
SECTION 802. Successor Substituted ............................... 55
ARTICLE NINE
SUPPLEMENTS AND AMENDMENTS TO INDENTURE
AND NOTE GUARANTEES
SECTION 901. Without Consent of Holders .......................... 55
SECTION 902. With Consent of Holders ............................. 56
SECTION 903. Execution of Supplemental Indentures ................ 57
SECTION 904. Effect of Supplemental Indentures ................... 58
SECTION 905. Conformity with Trust Indenture Act ................. 58
SECTION 906. Reference in Notes to Supplemental Indentures ....... 58
SECTION 907. Notice of Supplemental Indentures ................... 58
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, if any, and
Interest ......................................... 59
SECTION 1002. Maintenance of Office or Agency .................... 59
SECTION 1003. Money for Note Payments to Be Held in Trust ........ 59
SECTION 1004. Corporate Existence ................................ 61
vii
PAGE
SECTION 1005. Payment of Taxes and Other Claims .................. 61
SECTION 1006. Maintenance of Properties .......................... 61
SECTION 1007. Insurance .......................................... 62
SECTION 1008. Statement by Officers As to Default ................ 62
SECTION 1009. [INTENTIONALLY OMITTED] ............................ 62
SECTION 1010. Limitation on Indebtedness of Issuance of
Disqualified Stock ............................... 62
SECTION 1011. Limitation on Restricted Payments .................. 65
SECTION 1012. Limitation on Issuances and Sales of Preferred
Stock of Restricted Subsidiaries ................. 70
SECTION 1013. Limitation on Transactions with Affiliates ......... 70
SECTION 1014. Limitation on Liens ................................ 71
SECTION 1015. Purchase of Notes upon a Change of Control ......... 73
SECTION 1016. Limitation on Certain Asset Sales .................. 75
SECTION 1017. Unrestricted Subsidiaries .......................... 78
SECTION 1018. Limitation on Dividends and Other Payment
Restrictions Affecting Restricted Subsidiaries ... 79
SECTION 1019. Waiver of Certain Covenants ........................ 80
SECTION 1020. Payment for Consent ................................ 80
SECTION 1021. Limitation on Guarantees of Indebtedness by
Restricted Subsidiaries .......................... 80
SECTION 1022. Line of Business ................................... 81
SECTION 1023. Reports ............................................ 81
ARTICLE ELEVEN
REDEMPTION OF NOTES
SECTION 1101. Right of Redemption ................................. 82
SECTION 1102. Applicability of Article ............................ 82
SECTION 1103. Election to Redeem; Notice to Trustee ............... 82
SECTION 1104. Selection by Trustee of Notes to Be Redeemed ........ 83
SECTION 1105. Notice of Redemption ................................ 83
SECTION 1106. Deposit of Redemption Price ......................... 84
SECTION 1107. Notes Payable on Redemption Date .................... 84
SECTION 1108. Notes Redeemed in Part .............................. 85
viii
PAGE
ARTICLE TWELVE
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1201. Company Option to Effect Defeasance or
Covenant Defeasance ............................... 85
SECTION 1202. Defeasance and Discharge ............................ 85
SECTION 1203. Covenant Defeasance ................................. 86
SECTION 1204. Conditions to Defeasance or Covenant Defeasance ..... 86
SECTION 1205. Deposited Money and U.S. Government Obligations to
Be Held in Trust; Other Miscellaneous Provisions .. 87
SECTION 1206. Reinstatement ....................................... 88
ARTICLE THIRTEEN
GUARANTEES
SECTION 1301. Note Guarantees ..................................... 88
SECTION 1302. Execution and Delivery of Note Guarantee ............ 90
SECTION 1303. Severability ........................................ 90
SECTION 1304. Seniority of Guarantees ............................. 90
SECTION 1305. Limitation of Subsidiary Guarantor's Liability ...... 91
SECTION 1306. Contribution ........................................ 91
SECTION 1307. Release of a Subsidiary Guarantor ................... 92
SECTION 1308. Subsidiary Guarantors May Consolidate, Etc.
on Certain Terms .................................. 92
SECTION 1309. Benefits Acknowledged ............................... 93
SECTION 1310. Issuance of Guarantees by Certain New Restricted
Subsidiaries ...................................... 93
Exhibit A - Form of Note...............................................A-1
Exhibit B - Form of Note Guarantee Exhibit
Exhibit C - Form of Letter to Be Delivered By Institutional Accredited
Investors
INDENTURE, dated as of August 20, 1997 among Burke Industries, Inc.,
a corporation duly organized and existing under the laws of the State of
California (herein called the "Company"), the Subsidiary Guarantors (as
hereinafter defined) and United States Trust Company of New York, a New York
banking corporation (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of and issue of 10%
Senior Notes Due 2007 (herein called the "Initial Notes"), and 10% Series B
Senior Notes Due 2007 (the "Exchange Notes" and, together with the Initial
Notes, the "Notes") of substantially the tenor and amount hereinafter set
forth, and to provide therefor the Company has duly authorized the execution
and delivery of this Indenture.
Each of the Subsidiary Guarantors has duly authorized its guarantee
of the Notes, and to provide therefor each of them has duly authorized the
execution and delivery of this Indenture.
Upon the issuance of the Exchange Notes, if any, or the
effectiveness of the Shelf Registration Statement (as defined herein), this
Indenture will be subject to the provisions of the Trust Indenture Act of
1939, as amended, that are required to be part of this Indenture and shall,
to the extent applicable, be governed by such provisions.
The Company has also duly authorized the creation of up to
$75,000,000 aggregate principal amount of additional Notes to be issued from
time to time having identical terms and conditions to the Notes offered
hereby.
All things necessary have been done to make the Notes, when executed
by the Company and authenticated and delivered hereunder and duly issued by
the Company, the valid obligations of the Company and to make this Indenture
a valid agreement of the Company and the Subsidiary Guarantors, each in
accordance with their respective terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Notes by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Notes, as follows:
2
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. DEFINITIONS.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein, and the terms "cash transaction" and
"self-liquidating paper", as used in TIA Section 311, shall have the meanings
assigned to them in the rules of the Commission adopted under the Trust
Indenture Act;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles; and
(d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Certain terms, used principally in Article Two, Eight, Ten and
Twelve are defined in that Article.
"Acquired Indebtedness" means Indebtedness of a person (a) existing
at the time such person is merged with or into the Company or becomes a
Subsidiary or (b) assumed in connection with the acquisition of assets from
such person.
"Act", when used with respect to any Holder, has the meaning
specified in Section 105.
"Additional Notes" has the meaning set forth in Section 312.
"Affiliate" means, with respect to any specified person, any other
person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified person or (b) any other person
that owns, directly or indirectly, 10% or more of such specified person's
Capital Stock or any executive officer or director of any
3
such specified person or other person or, with respect to any natural person,
any person having a relationship with such person by blood, marriage or
adoption not more remote than first cousin. For the purposes of this
definition, "control", when used with respect to any specified 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.
"Applicable Premium" will be defined, with respect to a Note, as the
greater of (i) 5% of the then outstanding principal amount of such Note and
(ii) the excess of (A) the present value of the remaining required interest
and principal payments due on such Note (exclusive of accrued and unpaid
interest), computed using a discount rate equal to the Treasury Rate plus 100
basis points, over (B) the then outstanding principal amount of such Note.
"Asset Sale" means (i) the sale, lease, conveyance or other
disposition of any assets (including, without limitation, by way of merger,
consolidation or Sale and Leaseback Transaction or similar arrangement)
(collectively, a "transfer") by the Company or any Restricted Subsidiary
other than in the ordinary course of business, whether in a single
transaction or a series of related transactions (a) that have a fair market
value in excess of $1.0 million or (b) for aggregate net proceeds in excess
of $1.0 million. For the purposes of this definition, the term "Asset Sale"
does not include (i) any transfer of properties or assets that is governed by
Article Eight, (ii) any transfer of properties or assets between or among the
Company and its Restricted Subsidiaries pursuant to transactions that do not
violate any other provision of the Indenture, (iii) any transfer of
properties or assets representing obsolete or permanently retired equipment
and facilities, (iv) a Restricted Payment or Permitted Investment that is
permitted by Section 1011 (including, without limitation, any formation of or
contribution of assets to a joint venture), (v) leases or subleases, in the
ordinary course of business, to third parties of real property owned in fee
or leased by the Company or its Subsidiaries, (vi) the sale of Permitted
Investments referred to in clause (a) of the definition thereof or (vii) any
exchange of like kind property pursuant to Section 1031 of the Internal
Revenue of 1986, as amended.
"Attributable Debt" in respect of a sale and leaseback transaction
means, at the time of determination, the present value (discounted at the
rate of interest implicit in such transaction, determined in accordance with
GAAP) of the obligation of the lessee for net rental payments during the
remainder of the lease included in such sale and leaseback transaction
(including any period for which such lease has been extended or may, at the
option of the lessor, be extended).
"Average Life" means, as of the date of determination with respect
to any Indebtedness or Disqualified Stock, the quotient obtained by dividing
(a) the sum of the
4
products of (i) the number of years from the date of determination to the
date or dates of each successive scheduled principal or liquidation value
payment of such Indebtedness or Disqualified Stock, respectively, multiplied
by (ii) the amount of each such principal or liquidation value payment by (b)
the sum of all such principal or liquidation value payments.
"Bank Credit Agreement" means the loan and security agreement to be
entered into among the Company, the Banks and NationsBank, N.A., as agent, on
or prior to August 20, 1997 as such agreement may be amended, restated,
supplemented, refinanced, replaced or otherwise modified from time to time
(including any such refinancing or replacement agent by a different
institution).
"Banks" means the banks and other financial institutions that from
time to time are lenders under the Bank Credit Agreement.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company or a Subsidiary Guarantor,
if the context so requires, to have been duly adopted by the Board of
Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Borrowing Base" means, as of any date, an amount equal to the sum
of (a) 85% of the face amount of all accounts receivable owned by the Company
and its Restricted Subsidiaries as of such date that are not more than 90
days past due, and (b) 60% of the book value of all inventory owned by the
Company and its Subsidiaries as of such date, all calculated on a
consolidated basis and in accordance with GAAP. To the extent that
information is not available as to the amount of accounts receivable or
inventory as of a specific date, the Company may utilize the most recent
available information provided to the Banks under the Bank Credit Agreement
for purpose of calculating the Borrowing Base.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in The City of New
York are authorized or obligated by law or executive order to close.
"Capital Stock" of any person means any and all shares, interests,
partnership interests, participations, rights in or other equivalents
(however designated) of such person's equity interest (however designated),
whether now outstanding or issued after the Closing Date.
5
"Capitalized Lease Obligation" means, with respect to any person, an
obligation incurred or assumed under or in connection with any capital lease
of real or personal property that, in accordance with GAAP, has been recorded
as a capitalized lease.
"Change of Control" means the occurrence of any of the following
events:
(a) the consummation of any transaction (including, without
limitation, any merger or consolidation) (i) prior to a Public Equity
Offering by the Company, the result of which is that the Principals and their
Related Parties become the "beneficial owner" (as such term is defined in
Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that a person shall
be deemed to have "beneficial ownership" of all securities that such person
has the right to acquire, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition) of less than
50% of the Voting Stock of the Company (measured by voting power rather than
the number of shares) or (ii) after a Public Equity Offering of the Company,
any "person" (as such term is used in Section 13(d)(3) of the Exchange Act),
other than the Principals and their Related Parties, becomes the beneficial
owner (as defined above), directly or indirectly, of 35% or more of the
Voting Stock of the Company and such person is or becomes, directly or
indirectly, the beneficial owner of a greater percentage of the voting power
of the Voting Stock of the Company, calculated on a fully diluted basis, than
the percentage beneficially owned by the Principals and their Related Parties;
(b) the Company, either individually or in conjunction with one or
more Subsidiaries, sells, assigns, conveys, transfers, leases or otherwise
disposes of, or the Subsidiaries sell, assign, convey, transfer, lease or
otherwise dispose of, all or substantially all of the properties of the
Company and the Subsidiaries, taken as a whole (either in one transaction or
a series of related transactions), including Capital Stock of the
Subsidiaries, to any person (other than the Company or a Restricted
Subsidiary);
(c) during any consecutive two-year period, individuals who at the
beginning of such period constituted the Board of Directors of the Company
(together with any new directors whose election by such Board of Directors or
whose nomination for election by the stockholders of the Company was approved
by a vote of a majority of the directors 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 of the Company then in office; or
(d) the Company is liquidated or dissolved or adopts a plan of
liquidation or dissolution, other than in a transaction that complies with
the Article Eight.
6
"Closing Date" means the date on which the Notes are originally
issued under this Indenture.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Notes Exchange Act of 1934, or,
if at any time after the execution of this Indenture such Commission is not
existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.
"Common Stock" means, with respect to any Person, any and all
shares, interests, participations and other equivalents (however designated,
whether voting or non-voting) of such Person's common stock, whether now
outstanding or issued after the date of this Indenture, and includes, without
limitation, all series and classes of such common stock.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture, until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by its Chairman, its President, any
Vice President, its Treasurer or an Assistant Treasurer, and delivered to the
Trustee.
"Consolidated Adjusted Net Income" means, for any period, the net
income (or net loss) of the Company and its Restricted Subsidiaries for such
period as determined on a consolidated basis in accordance with GAAP,
adjusted to the extent included in calculating such net income or loss by
excluding (a) any net after-tax extraordinary or non-recurring gains or
losses (less all fees and expenses relating thereto), (b) any net after-tax
gains or losses (less all fees and expenses relating thereto) attributable to
Asset Sales, (c) the portion of net income (or loss) of any person (other
than the Company or a Restricted Subsidiary), including Unrestricted
Subsidiaries, in which the Company or any Restricted Subsidiary has an
ownership interest, except to the extent of the amount of dividends or other
distributions actually paid to the Company or any Restricted Subsidiary in
cash during such period, (d) solely for purposes of Section 1011, the net
income (or loss) of any person combined with the Company or any Restricted
Subsidiary on a "pooling of interests" basis attributable to any period prior
to the date of combination, and (e) the net income (but not the net loss) of
any Restricted Subsidiary to the extent that the declaration or payment of
dividends or similar distributions by such Restricted Subsidiary is at the
date of determination restricted, directly or indirectly, except to the
extent that such net income is actually paid to the Company or a Restricted
Subsidiary thereof by loans, advances, intercompany transfers, principal
repayments or otherwise; PROVIDED that, if any Restricted Subsidiary is not a
Wholly Owned Restricted Subsidiary, Consolidated Adjusted Net Income will be
reduced (to the
7
extent not otherwise reduced in accordance with GAAP) by an amount equal to
(A) the amount of the Consolidated Adjusted Net Income otherwise attributable
to such Restricted Subsidiary multiplied by (B) the quotient of (1) the
number of shares of outstanding common stock of such Restricted Subsidiary
not owned on the last day of such period by the Company or any of its
Restricted Subsidiaries divided by (2) the total number of shares of
outstanding common stock of such Restricted Subsidiary on the last day of
such period.
"Consolidated EBITDA" means, for any period, the sum of, without
duplication, Consolidated Adjusted Net Income for such period, plus (or, in
the case of clause (d) below, plus or minus) the following items to the
extent included in computing Consolidated Adjusted Net Income for such period
(a) Fixed Charges for such period, plus (b) the provision for federal,
state, local and foreign taxes based on income or profits of the Company and
its Restricted Subsidiaries for such period, plus (c) the aggregate
depreciation and amortization expense of the Company and its Restricted
Subsidiaries for such period, plus (d) any other non-cash charges for such
period, and minus non-cash credits for such period, other than non-cash
charges or credits resulting from changes in prepaid assets or accrued
liabilities in the ordinary course of business; provided that fixed charges,
income tax expense, depreciation and amortization expense and non-cash
charges and credits of a Restricted Subsidiary will be included in
Consolidated EBITDA only to the extent (and in the same proportion) that the
net income of such Subsidiary was included in calculating Consolidated
Adjusted Net Income for such period.
"Consolidated Net Worth" means, at any date of determination,
stockholders' equity of the Company and its Restricted Subsidiaries as set
forth on the most recently available quarterly or annual consolidated balance
sheet of the Company and its Restricted Subsidiaries, less any amounts
attributable to Disqualified Stock or any equity security convertible into or
exchangeable for Indebtedness, the cost of treasury stock and the principal
amount of any promissory notes receivable from the sale of the Capital Stock
of the Company or any of its Restricted Subsidiaries and less to the extent
included in calculating such stockholders' equity of the Company and its
Restricted Subsidiaries, the stockholders' equity attributable to
Unrestricted Subsidiaries, each item to be determined in conformity with GAAP
(excluding the effects of foreign currency adjustments under Financial
Accounting Standards Board Statement of Financial Accounting Standards No.
52).
"Corporate Trust Office" means the principal corporate trust office
of the Trustee, at which at any particular time its corporate trust business
shall be administered, which office at the date of execution of this
Indenture is located at 114 West 47th St., New York, N.Y. 10036-1532,
Attention: Corporate Trust, except that with respect to presentation of
Notes for payment or for registration of transfer or exchange, such term
shall mean the office or agency of the Trustee at which, at any particular
time, its corporate trust and agency business shall be conducted.
8
"corporation" includes corporations, associations, companies and
business trusts.
"Default" means any event that is, or after notice or passage of
time or both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 309.
"Depositary" means The Depository Trust Company, its nominees and
successors.
"Disinterested Director" means, with respect to any transaction or
series of transactions in respect of which the Board of Directors is required
to deliver a resolution of the Board of Directors, to make a finding or
otherwise take action under the Indenture, a member of the Board of Directors
who does not derive any material direct or indirect financial benefit from
such transaction or series of transactions.
"Disqualified Stock" means any class or series of Capital Stock
that, either by its terms, by the terms of any security into which it is
convertible or exchangeable or by contract or otherwise (i) is or upon the
happening of an event or passage of time would be, required to be redeemed
prior to the final Stated Maturity of the Notes, (ii) is redeemable at the
option of the holder thereof, at any time prior to such final Stated Maturity
or (iii) at the option of the holder thereof is convertible into or
exchangeable for debt securities at any time prior to such final Stated
Maturity; provided that any Capital Stock that would not constitute
Disqualified Stock but for provisions therein giving holders thereof the
right to cause the issuer thereof to repurchase or redeem such Capital Stock
upon the occurrence of an "asset sale" or "change of control" occurring prior
to the Stated Maturity of the Notes will not constitute Disqualified Stock if
the "asset sale" or "change of control" provisions applicable to such Capital
Stock are no more favorable to the holders of such Capital Stock than the
provisions contained in Sections 1015 and 1016 and such Capital Stock
specifically provides that the issuer will not repurchase or redeem any such
stock pursuant to such provision prior to the Company's repurchase of such
Notes as are required to be repurchased pursuant to Sections 1015 and 1016.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended.
"Exchange Offer" means the exchange offer that may be effected
pursuant to the Registration Rights Agreement.
9
"Exchange Offer Registration Statement" means the Exchange Offer
Registration Statement as defined in the Registration Rights Agreement.
"Exchange Notes" has the meaning stated in the first recital of this
Indenture and refers to any Exchange Notes containing terms substantially
identical to the Initial Notes (except that such Exchange Notes shall not
contain terms with respect to the interest rate step-up provision and
transfer restrictions) that are issued and exchanged for the Initial Notes
pursuant to the Registration Right Agreement and this Indenture.
"Federal Bankruptcy Code" means the Bankruptcy Act of Title 11 of
the United States Code, as amended from time to time.
"Fixed Charge Coverage Ratio" means, for any period, the ratio of
Consolidated EBITDA for such period to Fixed Charges for such period.
"Fixed Charges" means, for any period, without duplication, the sum
of (a) the amount that, in conformity with GAAP, would be set forth opposite
the caption "interest expense" (or any like caption) on a consolidated
statement of operations of the Company and its Restricted Subsidiaries for
such period, including, without limitation, (i) amortization of debt
discount, (ii) the net cost of interest rate contracts (including
amortization of discounts), (iii) the interest portion of any deferred
payment obligation, (iv) amortization of debt issuance costs and (v) the
interest component of Capitalized Lease Obligations, plus (b) cash dividends
paid on Preferred Stock and Disqualified Stock by the Company and any
Restricted Subsidiary (to any person other than the Company and its
Restricted Subsidiaries), computed on a tax effected basis, plus (c) all
interest on any Indebtedness of any person guaranteed by the Company or any
of its Restricted Subsidiaries or secured by a lien on the assets of the
Company or any of its Restricted Subsidiaries; PROVIDED, HOWEVER, that Fixed
Charges will not include any gain or loss from extinguishment of debt,
including the write-off of debt issuance costs.
"Generally Accepted Accounting Principles" or "GAAP" means generally
accepted accounting principles in the United States, as in effect on the date
of the Indenture.
"Hedging Obligations" means the obligations of any person under (i)
interest rate swap agreements, interest rate cap agreements and interest rate
collar agreements and (ii) other agreements or arrangements designed to
protect such person against fluctuations in interest rates or the value of
foreign currencies.
"Holder" means a Person in whose name a Note is registered in the
Register.
"Indebtedness" means (without duplication), with respect to any
person, whether recourse is to all or a portion of the assets of such person
and whether or not
10
contingent, (a) every obligation of such person for money borrowed, (b) every
obligation of such person evidenced by bonds, debentures, notes or other
similar instruments, (c) every reimbursement obligation of such person with
respect to letters of credit, bankers' acceptances or similar facilities
issued for the account of such person, (d) every obligation of such person
issued or assumed as the deferred purchase price of property or services, (e)
the Attributable Debt in respect of every Capitalized Lease Obligation of
such person, (f) all Disqualified Stock of such person valued at its maximum
fixed repurchase price, plus accrued and unpaid dividends, (g) all
obligations of such person under or in respect of Hedging Obligations and (h)
every obligation of the type referred to in clauses (a) through (g) of
another person and all dividends of another person the payment of which, in
either case, such person has guaranteed. For purposes of this definition,
the "maximum fixed repurchase price" of any Disqualified Stock that does not
have a fixed repurchase price will be calculated in accordance with the terms
of such Disqualified Stock as if such Disqualified Stock were purchased on
any date on which Indebtedness is required to be determined pursuant to the
Indenture, and if such price is based upon, or measured by, the fair market
value of such Disqualified Stock, such fair market value will be determined
in good faith by the board of directors of the issuer of such Disqualified
Stock. Notwithstanding the foregoing, (i) trade accounts payable and accrued
liabilities arising in the ordinary course of business, (ii) any liability
for federal, state or local taxes or other taxes owed by such person and
(iii) obligations with respect to performance and surety bonds and completion
guarantees in the ordinary course of business will not be considered
Indebtedness for purposes of this definition.
"Indenture" means this instrument as originally executed and as it
may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Indenture Obligations" means the obligations of the Company and any
other obligor hereunder or under the Notes, including the Subsidiary
Guarantors to pay principal of (and premium, if any) and interest on the
Notes when due and payable at Maturity, and all other amounts due or to
become due under or in connection with this Indenture, the Notes and the
performance of all other obligations to the Trustee (including all amounts
due to the Trustee under Section 606 hereof) and the Holders under this
Indenture and the Notes, according to the terms hereof and thereof.
"Initial Notes" has the meaning stated in the first recital of this
Indenture.
"Interest Payment Date" means the Stated Maturity of an installment
of interest on the Notes.
"Investment" in any person means, (i) directly or indirectly, any
advance, loan or other extension of credit (including, without limitation, by
way of guarantee or similar
11
arrangement) or capital contribution to such person, the purchase or other
acquisition of any stock, bonds, notes, debentures or other securities issued
by such person, the acquisition (by purchase or otherwise) of all or
substantially all of the business or assets of such person, or the making of
any investment in such person, (ii) the designation of any Restricted
Subsidiary as an Unrestricted Subsidiary and (iii) the fair market value of
the Capital Stock (or any other Investment), held by the Company or any of
its Restricted Subsidiaries, of (or in) any person that has ceased to be a
Restricted Subsidiary. Investments exclude extensions of trade credit on
commercially reasonable terms in accordance with normal trade practices.
"Lien" means any mortgage, charge, pledge, lien (statutory or
otherwise), privilege, security interest, hypothecation, assignment for
security, claim, or preference or priority or other encumbrance upon or with
respect to any property of any kind, real or personal, movable or immovable,
now owned or hereafter acquired. A person will be deemed to own subject to a
Lien any property that such person has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement, PROVIDED that an operating lease
shall not constitute a Lien.
"Liquidated Damages" means all liquidated damages then owing
pursuant to Section 5(b) of the Registration Rights Agreement.
"Maturity", when used with respect to any Note, means the date on
which the principal of such Note or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or
by declaration of acceleration, notice of redemption or otherwise.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds thereof in the form of cash or cash equivalents, including payments
in respect of deferred payment obligations when received in the form of, or
stock or other assets when disposed for, cash or cash equivalents (except to
the extent that such obligations are financed or sold with recourse to the
Company or any Restricted Subsidiary), net of (a) brokerage commissions and
other fees and expenses (including fees and expenses of legal counsel and
investment banks) related to such Asset Sale, (b) provisions for all taxes
payable as a result of such Asset Sale, (c) payments made to retire or
otherwise prepay Indebtedness where such Indebtedness is secured by the
assets that are the subject of such Asset Sale or otherwise required to be
prepaid in connection therewith, (d) amounts required to be paid to any
person (other than the Company or any Restricted Subsidiary) owning a
beneficial interest (by way of Capital Stock of the Person owning such assets
or otherwise) in the assets that are subject to the Asset Sale and (e)
appropriate amounts to be provided by the Company or any Restricted
Subsidiary, as the case may be, as a reserve required in accordance with GAAP
against any liabilities associated with such Asset Sale and retained by the
seller
12
after such Asset Sale, including pension and other post-employment benefit
liabilities, liabilities related to environmental matters and liabilities
under any indemnification obligations associated with such Asset Sale.
"Non-U.S. Person" means a Person that is not a "U.S. Person" as
defined in Regulation S.
"Non-U.S. Restricted Subsidiary" means a Restricted Subsidiary that
is not a U.S. Restricted Subsidiary.
"Note Guarantee" means with respect to each Subsidiary Guarantor,
the unconditional guarantee by such Subsidiary Guarantor, pursuant to Article
Thirteen.
"Notes" has the meaning stated in the first recital of this
Indenture and more particularly means any Notes authenticated and delivered
under this Indenture. For all purposes of this Indenture, the term "Notes"
shall include any Exchange Notes to be issued and exchanged for any Notes
pursuant to the Registration Rights Agreement and this Indenture. From and
after the issuance of any Additional Notes pursuant to Section 312 (but, not
for purposes of determining whether such issuance is permitted hereunder),
"Notes" shall include such Additional Notes for purposes of this Indenture
and all Initial Notes, Exchange Notes and any such Additional Note, shall
vote together as one series of Notes under this Indenture.
"Offering" means the offering of the 10% Senior Notes due 2007 by
the Company.
"Officers' Certificate" means a certificate signed by the Chairman,
the President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary of the Company, and
delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, including an employee of the Company, and who shall
be reasonably acceptable to the Trustee.
"Outstanding", when used with respect to Notes, means, as of the
date of determination, all Notes theretofore authenticated and delivered
under this Indenture, except:
(a) Notes theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
(b) Notes, or portions thereof, for whose payment or redemption
money in the necessary amount has been theretofore deposited with the Trustee
or any Paying
13
Agent (other than the Company) in trust or set aside and segregated in trust
by the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Notes; PROVIDED that, if such Notes are to be redeemed,
notice of such redemption has been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee has been made; and
(c) Notes, except to the extent provided in Sections 1202 and 1203,
with respect to which the Company has effected defeasance and/or covenant
defeasance as provided in Article Twelve; and
(d) Notes which have been paid pursuant to Section 308 or in
exchange for or in lieu of which other Notes have been authenticated and
delivered pursuant to this Indenture, other than any such Notes in respect of
which there shall have been presented to the Trustee proof satisfactory to it
that such Notes are held by a bona fide purchaser in whose hands the Notes
are valid obligations of the Company;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of Outstanding Notes have given any request, demand,
authorization, direction, consent, notice or waiver hereunder, and for the
purpose of making the calculations required by TIA Section 313, Notes owned
by the Company or any other obligor upon the Notes or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be
protected in making such calculation or in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Notes which
the Trustee knows to be so owned shall be so disregarded. Notes so owned
which have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so
to act with respect to such Notes and that the pledgee is not the Company or
any other obligor upon the Notes or any Affiliate of the Company or such
other obligor.
"Paying Agent" means United States Trust Company of New York and any
successor (including the Company acting as Paying Agent) authorized by the
Company to pay the principal of (and premium, if any) or interest on any
Notes on behalf of the Company.
"Permitted Business" means any business in which the Company or a
Restricted Subsidiary is permitted to engage under Section 1022.
"Permitted Investments" means any of the following:
(a)Investments in (i) securities with a maturity at the time of
acquisition of one year or less issued or directly and fully guaranteed or
insured by the United States or any agency or instrumentality thereof
(provided that the full faith and credit of the United States is pledged in
support thereof); (ii) certificates of deposit,
14
Eurodollar deposits or bankers' acceptances with a maturity at the time of
acquisition of one year or less of any financial institution that is a member
of the Federal Reserve System having combined capital and surplus of not less
than $500,000,000; (iii) any shares of money market mutual or similar funds
having assets in excess of $500,000,000; and (iv) commercial paper with a
maturity at the time of acquisition of one year or less issued by a
corporation that is not an Affiliate of the Company and is organized under
the laws of any state of the United States or the District of Columbia and
having a rating (A) from Moody's Investors Service, Inc. of at least P-1 or
(B) from Standard & Poor's Ratings Services of at least A-1;
(b) Investments by the Company or any Restricted Subsidiary in
another person, if as a result of such Investment (i) such other person
becomes a Wholly Owned Restricted Subsidiary that is a Subsidiary Guarantor
or (ii) such other person is merged or consolidated with or into, or
transfers or conveys all or substantially all of its assets to, the Company
or a Restricted Subsidiary;
(c) Investments by the Company or a Restricted Subsidiary in the
Company or a Restricted Subsidiary that is a Subsidiary Guarantor;
(d) Investments in existence on the Closing Date;
(e) promissory notes received as a result of Asset Sales permitted
under Section 1016;
(f) any acquisition of assets solely in exchange for the issuance of
Qualified Equity Interests of the Company;
(g) stock, obligations or securities received in satisfaction of
judgments, in bankruptcy proceedings or in settlement of debts;
(h) Hedging Obligations otherwise permitted under the Indenture;
(i) loans or advances to officers or employees of the Company or any
of its Restricted Subsidiaries in the ordinary course of business not to
exceed $250,000 in the aggregate at any one time outstanding; and
(j) other Investments that do not exceed $4 million in the aggregate
at any time outstanding.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof.
15
"Predecessor Note" of any particular Note means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 308 in exchange for a mutilated
security or in lieu of a lost, destroyed or stolen Note shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Note.
"Preferred Stock" means, with respect to any person, any and all
shares, interests, partnership interests, participations, rights in or other
equivalents (however designated) of such person's preferred or preference
stock, whether now outstanding or issued after the Closing Date, and
including, without limitation, all classes and series of preferred or
preference stock of such person.
"Principals" means (i) Lehman, (ii) each Affiliate of Lehman as of
the Closing Date, (iii) JFLEI, and (iv) each officer or employee (including
their respective immediate family members) of Lehman as of the Closing Date.
"Purchase Date" means any Change of Control Payment Date or Excess
Proceeds Payment Date.
"Public Equity Offering" means an offer and sale of common stock
(which is Qualified Stock) of the Company pursuant to a registration
statement that has been declared effective by the Commission pursuant to the
Securities Act (other than a registration statement on Form S-8 or otherwise
relating to equity securities issuable under any employee benefit plan of the
Company).
"Qualified Equity Interest" means any Qualified Stock and all
warrants, options or other rights to acquire Qualified Stock (but excluding
any debt security that is convertible into or exchangeable for Capital Stock).
"QIB" means a "Qualified Institutional Buyer" under Rule 144A.
"Qualified Stock" of any person means any and all Capital Stock of
such person, other than Disqualified Stock.
"Redemption Date", when used with respect to any Note to be
redeemed, in whole or in part, means the date fixed for such redemption by or
pursuant to this Indenture.
"Redemption Price", when used with respect to any Note to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Register" and "Note Registrar" have the respective meanings
specified in Section 305.
16
"Registrar" means The United States Trust Company of New York and
any successor authorized by the Company to act as Registrar.
"Registration Rights Agreement" means the Registration Rights
Agreement between the Company, the Subsidiary Guarantors and the Initial
Purchasers named therein, dated as of August 20, 1997 relating to the Notes.
"Registration Statement" means the Registration Statement as defined
in the Registration Rights Agreement.
"Regular Record Date" for the interest payable on any Interest
Payment Date means the February 1 or August 1 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act.
"Related Party" with respect to any Principal means (A) any
controlling stockholder or 80% (or more) owned Subsidiary of such Principal
or (B) trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners, owners or Persons beneficially holding an 80% or more
controlling interest of which consist of such Principal and/or such other
Persons referred to in the immediately preceding clause (A).
"Restricted Subsidiary" means any Subsidiary other than an
Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
"Sale and Leaseback Transaction" means any transaction or series of
related transactions pursuant to which a person sells or transfers any
property or asset in connection with the leasing, or the resale against
installment payments, of such property or asset to the seller or transferor.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, and the rules and regulations thereunder.
"Series A Preferred Stock" means the Series A Cumulative Redeemable
Preferred Stock of the Company, par value $0.01 per share.
"Shelf Registration Statement" means the Shelf Registration
Statement as defined in the Registration Rights Agreement.
17
"Significant Subsidiary" means any Restricted Subsidiary of the
Company that together with its subsidiaries, (a) for the most recent fiscal
year of the Company, accounted for more than 10% of the consolidated net
sales of the Company and its Subsidiaries or (b) as of the end of such fiscal
year, was the owner of more than 10% of the consolidated assets of the
Company and its Restricted Subsidiaries, in the case of either (a) or (b), as
set forth on the most recently available consolidated financial statements of
the Company for such fiscal year or (c) was organized or acquired after the
beginning of such fiscal year and would have been a Significant Subsidiary if
it had been owned during such entire fiscal year.
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, and its successors.
"Special Record Date" for the payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 309.
"Stated Maturity" means, when used with respect to any Note or any
installment of interest thereon, the date specified in such Note as the fixed
date on which the principal of such Note or such installment of interest is
due and payable and, when used with respect to any other Indebtedness, means
the date specified in the instrument governing such Indebtedness as the fixed
date on which the principal of such Indebtedness or any installment of
interest thereon is due and payable.
"Subordinated Indebtedness" means Indebtedness of the Company or a
Subsidiary Guarantor that is subordinated in right of payment to the Notes or
the Note Guarantee issued by such Subsidiary Guarantor, as the case may be.
"Subsidiary" means any person a majority of the equity ownership or
Voting Stock of which is at the time owned, directly or indirectly, by the
Company and/or one or more other Subsidiaries of the Company.
"Subsidiary Guarantor" means any Restricted Subsidiary that is a
party to a Note Guarantee pursuant to the terms of this Indenture.
"Treasury Rate" will be defined as 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 date fixed for prepayment (or, if such Statistical Release
is no longer published, any publicly available source of similar market
data)) most nearly equal to the then remaining Average Life to Stated
Maturity of the Notes; PROVIDED, HOWEVER, that if the Average Life to Stated
Maturity of the Notes is not equal to the constant maturity of a United
States Treasury security for which a weekly average yield is given, the
Treasury Rate shall be obtained by linear interpolation (calculated
18
to the nearest one-twelfth of a year) from the weekly average yields of
United States Treasury securities for which such yields are given, except
that if the Average Life to Stated Maturity of the Notes 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.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939
as in force at the date as of which this Indenture was executed, except as
provided in Section 905.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Unrestricted Subsidiary" means (a) any Subsidiary that is
designated by the Board of Directors of the Company as an Unrestricted
Subsidiary in accordance with Section 1017 and (b) any Subsidiary of an
Unrestricted Subsidiary.
"U.S. Government Obligations" means direct obligations of,
obligations fully guaranteed by, or participations in pools consisting of or
obligations guaranteed by, the United States of America for the payment of
which guarantee or obligations the full faith and credit of the United States
of America is pledged and which are not callable or redeemable at the option
of the issuer thereof.
"U.S. Restricted Subsidiary" means a Restricted Subsidiary organized
under the laws of the United States of America or any State thereof or the
District of Columbia.
"Voting Stock" means any class or classes of Capital Stock pursuant
to which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors,
managers or trustees of any person (irrespective of whether or not, at the
time, stock of any other class or classes has, or might have, voting power by
reason of the happening of any contingency).
"Wholly Owned Restricted Subsidiary" means any Restricted
Subsidiary, all of the outstanding voting securities (other than directors'
qualifying shares or shares of foreign Restricted Subsidiaries required to be
owned by foreign nationals pursuant to applicable law) of which are owned,
directly or indirectly, by the Company.
SECTION 102. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the Trust Indenture
Act, the provision is incorporated by reference in and made a part of this
Indenture. The following Trust Indenture Act terms used in this Indenture
have the following meanings:
19
"indenture securities" means the Notes;
"indenture security holder" means a Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the indenture securities means the Company or any other
obligor on the Notes.
All other Trust Indenture Act terms used in this Indenture that are
defined by the Trust Indenture Act, defined by reference in the Trust
Indenture Act to another statute or defined by a rule of the Commission and
not otherwise defined herein shall have the meanings assigned to them therein.
SECTION 103. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company and the Subsidiary
Guarantors to the Trustee to take any action under any provision of this
Indenture, the Company and the Subsidiary Guarantors shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture (including any covenant compliance with
which constitutes a condition precedent) relating to the proposed action have
been complied with and an Opinion of Counsel stating that in the opinion of
such counsel all such conditions precedent, if any, have been complied with,
except that in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of
this Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than pursuant to
Section 1008(a)) shall include:
(a) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an
20
informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
The Company shall furnish to the Trustee from time to time an
Officers' Certificate listing all Significant Subsidiaries of the Company.
The Trustee may conclusively rely upon such Officers' Certificate until
another is provided.
SECTION 104. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such Person may
certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company and/or the
Subsidiary Guarantors may be based, insofar as it relates to legal matters,
upon a certificate or opinion of, or representations by, counsel, unless such
officer knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to the matters upon
which his certificate or opinion is based are erroneous. Any such
certificate or Opinion of Counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Company stating that the information with respect
to such factual matters is in the possession of the Company, unless such
counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 105. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in Person or by agents
duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Company.
21
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or
of a writing appointing any such agent shall be sufficient for any purpose of
this Indenture and conclusive in favor of the Trustee and the Company, if
made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the execution thereof.
Where such execution is by a signer acting in a capacity other than his
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of authority. The fact and date of the execution of any
such instrument or writing, or the authority of the Person executing the
same, may also be proved in any other manner that the Trustee deems
sufficient.
(c) The principal amount and serial numbers of Notes held by any
Person, and the date of holding the same, shall be proved by the Register.
(d) If the Company or any Subsidiary Guarantor shall solicit from
the Holders of Notes any request, demand, authorization, direction, notice,
consent, waiver or other Act, the Company or any such Subsidiary Guarantor
(as the case may be) may, at its option, by or pursuant to a Board
Resolution, fix in advance a record date for the determination of Holders
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company or any such Subsidiary
Guarantor (as the case may be) shall have no obligation to do so.
Notwithstanding TIA Section 316(c), such record date shall be the record date
specified in or pursuant to such Board Resolution, which shall be a date not
earlier than the date 30 days prior to the first solicitation of Holders
generally in connection therewith and not later than the date such
solicitation is completed. If such a record date is fixed, such request,
demand, authorization, direction, notice, consent, waiver or other Act may be
given before or after such record date, but only the Holders of record at the
close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
Outstanding Notes have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and
for that purpose the Outstanding Notes shall be computed as of such record
date; PROVIDED that no such authorization, agreement or consent by the
Holders on such record date shall be deemed effective unless it shall become
effective pursuant to the provisions of this Indenture not later than eleven
months after the record date.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Note shall bind every future Holder
of the same Note and
22
the Holder of every Note issued upon the registration of transfer thereof or
in exchange therefor or in lieu thereof in respect of anything done, omitted
or suffered to be done by the Trustee or the Company and/or the Subsidiary
Guarantors in reliance thereon, whether or not notation of such action is
made upon such Note.
SECTION 106. NOTICES, ETC., TO TRUSTEE, COMPANY AND SUBSIDIARY
GUARANTORS.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(a) the Trustee by any Holder, the Company or any Subsidiary
Guarantor shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Trustee at its Corporate Trust
Office, Attention: Corporate Trust, or
(b) the Company by the Trustee, any Holder or any Subsidiary
Guarantor shall be sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it at 2250 South Tenth Street, San Jose,
California 95112, or at any other address previously furnished in writing to
the Trustee or such Subsidiary Guarantor (as the case may be) by the Company.
SECTION 107. NOTICE TO HOLDERS; WAIVER.
Where this Indenture provides for notice of any event to Holders by
the Company or the Trustee, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each Holder affected by such event, at his address as it
appears in the Register, not later than the latest date, and not earlier than
the earliest date, prescribed for the giving of such notice. In any case
where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder
shall affect the sufficiency of such notice with respect to other Holders.
Any notice mailed to a Holder in the manner herein prescribed shall be
conclusively deemed to have been received by such Holder, whether or not such
Holder actually receives such notice. Where this Indenture provides for
notice in any manner, such notice may be waived in writing by the Person
entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
23
In case by reason of the suspension of or irregularities in regular
mail service or by reason of any other cause, it shall be impracticable to
mail notice of any event to Holders when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice for every purpose hereunder.
SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
SECTION 109. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company and
the Subsidiary Guarantors shall bind their respective successors and assigns,
whether so expressed or not.
SECTION 110. SEPARABILITY CLAUSE.
In case any provision in this Indenture or in the Notes 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.
SECTION 111. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Notes, express or implied, shall
give to any Person, other than the parties hereto, any Paying Agent, any Note
Registrar and their successors hereunder and the Holders any benefit or any
legal or equitable right, remedy or claim under this Indenture.
SECTION 112. GOVERNING LAW.
This Indenture and the Notes shall be governed by, and construed in
accordance with, the law of the State of New York. Upon the issuance of the
Exchange Notes, if any, or the effectiveness of the Shelf Registration
Statement, this Indenture shall be subject to the provisions of the Trust
Indenture Act of 1939, as amended, that are required to be part of this
Indenture and shall, to the extent applicable, be governed by such provisions.
24
SECTION 113. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date,
Purchase Date, date established for payment of Defaulted Interest pursuant to
Section 309, Stated Maturity or Maturity with respect to any Note shall not
be a Business Day, then (notwithstanding any other provision of this
Indenture or of the Notes) payment of principal (or premium, if any) or
interest need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the
Interest Payment Date, Redemption Date, Purchase Date, date established for
payment of Defaulted Interest pursuant to Section 309, Stated Maturity or
Maturity; PROVIDED that no interest shall accrue for the period from and
after such Interest Payment Date, Redemption Date, Purchase Date, date
established for payment of Defaulted Interest pursuant to Section 309, Stated
Maturity or Maturity, as the case may be, to the next succeeding Business Day.
SECTION 114. NO RECOURSE AGAINST OTHERS.
A director, officer, employee, incorporator or stockholder of the
Company, as such, shall not have any liability for any obligations of the
Company under the Notes, the Indenture or the Note Guarantees or for any
claim based on, in respect of, or by reason of, such obligations of their
creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the
issuance of the Notes.
ARTICLE TWO
NOTE FORMS
SECTION 201. FORMS GENERALLY.
The Initial Notes shall be known as the "10% Senior Notes due 2007"
and the Exchange Notes shall be known as the "10% Series B Senior Notes due
2007", in each case, of the Company. The Notes and the Trustee's certificate
of authentication shall be in substantially the form annexed hereto as
Exhibit A. The Notes may have such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by the
Indenture and may have letters, notations or other marks of identification
and such notations, legends or endorsements required by law, stock exchange
agreements to which the Company is subject or usage. Any portion of the text
of any Note may be set forth on the reverse thereof, with an appropriate
reference thereto on the face of the Note. The Company shall approve the
form of the Notes and any notation, legend or endorsement on the Notes. Each
Note shall be dated the date of its authentication.
25
The definitive Notes shall be printed, lithographed or engraved on
steel-engraved borders or may be produced in any other manner, all as
determined by the officers of the Company executing such Notes, as evidenced
by their execution of such Notes.
The terms and provisions contained in the form of the Notes annexed
hereto as Exhibit A shall constitute, and are hereby expressly made, a part
of this Indenture. To the extent applicable, the Company and the Trustee, by
their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
Initial Notes offered and sold in reliance on Rule 144A shall be
issued initially in the form of a permanent global Note substantially in the
form set forth in Exhibit A (the "Global Note") deposited with, or on behalf
of, the Depositary or with the Trustee, as custodian for the Depositary, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of the Global Note may from time to
time be increased or decreased by adjustments made on the records of the
Trustee, as custodian for the Depositary or its nominee, as hereinafter
provided.
Initial Notes offered and sold to "accredited investors" (as defined
in Rule 501(a)(1), (2), (3) and (7) under the Securities Act) who are not
qualified Institutional Buyers shall initially be issued in the form of
permanent certificated Notes ("Certificated Notes") in registered form in
substantially the form of Exhibit A hereto.
SECTION 202. RESTRICTIVE LEGENDS.
Unless and until (i) an Initial Note is sold under an effective
Registration Statement or (ii) an Initial Note is exchanged for an Exchange
Note in connection with an effective Registration Statement, in each case
pursuant to the Registration Rights Agreement, each certificate representing
a Note shall contain a legend substantially to the following effect (the
"Private Placement Legend") on the face thereof:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS NOTE 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, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF AGREES
TO OFFER, SELL OR OTHERWISE TRANSFER SUCH NOTE, PRIOR TO THE DATE WHICH
IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE
LAST DATE ON WHICH
26
BURKE INDUSTRIES, INC. (THE "COMPANY") OR ANY AFFILIATE OF THE COMPANY
WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF THIS NOTE) (THE "RESALE
RESTRICTION TERMINATION DATE") ONLY (A) TO THE COMPANY, (B) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES
IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A 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 TO
NON-U.S. PERSONS 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 SUBPARAGRAPH (A)(1), (2), (3)
OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE NOTE
FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
"ACCREDITED INVESTOR", FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR
FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF
THE SECURITIES ACT, (F) PURSUANT TO THE EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (G)
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 (i) PURSUANT TO CLAUSES (E),
(F) OR (G) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (ii) IN EACH OF
THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THIS NOTE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO
THE TRANSFER AGENT, THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
Each Global Note, whether or not an Initial Note, shall also bear the
following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE
27
NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY
(AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN SECTIONS 306 AND 307 OF THE INDENTURE.
ARTICLE THREE
THE NOTES
SECTION 301. TITLE AND TERMS.
The aggregate principal amount of Notes which may be authenticated
and delivered under this Indenture is limited to $110,000,000, except for
Notes authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Notes pursuant to Section 304, 305, 306,
307, 308, 906, 1015, 1016 or 1108, pursuant to an Exchange Offer or pursuant
to Section 312.
The Initial Notes shall be known and designated as the "10% Senior
Notes Due 2007" and the Exchange Notes shall be known and designated as the
"10% Series B Senior Notes Due 2007" of the Company. The Stated Maturity of
the Notes shall be August 15, 2007, and the Notes shall bear interest at the
rate of 10% per annum from August 20, 1997, or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, payable
semiannually on February 15 and August 15 in each year, commencing February
15, 1998, until the principal thereof is paid or duly provided for, to the
Person in whose name the Note (or any predecessor Note) is registered at the
close of business on the February 1 or August 1 next preceding such Interest
Payment Date.
The principal of (and premium, if any) and interest on the Notes
shall be payable, and the Notes shall be exchangeable and transferable, at
the office or agency of the
28
Company in The City of New York maintained for such purposes (which initially
shall be the office of the Trustee located at 114 West 47th St., New York,
N.Y. 10036-1532, Attention: Corporate Trust) or, at the option of the
Company, interest may be paid by check mailed to the address of the Person
entitled thereto as such address shall appear on the Register; PROVIDED that
all payments with respect to the Global Note and the Certificated Notes the
Holders of which have given wire transfer instructions to the Company will be
required to be made by wire transfer of immediately available funds to the
accounts specified by the Holders thereof.
Notes that remain outstanding after the consummation of the Exchange
Offer and Exchange Notes issued in connection with the Exchange Offer will be
treated as a single class of securities under this Indenture.
The Notes shall be redeemable as provided in Article Eleven.
SECTION 302. DENOMINATIONS.
The Notes shall be issuable only in registered form without coupons
and only in denominations of $1,000 and any integral multiple thereof.
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Notes shall be executed on behalf of the Company by its
Chairman, its President, a Vice President or an Assistant Vice President,
under its corporate seal reproduced thereon and attested by its Secretary or
an Assistant Secretary. The signature of any of these officers on the Notes
may be manual or facsimile signatures of the present or any future such
authorized officer and may be imprinted or otherwise reproduced on the Notes.
Notes bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not
hold such offices at the date of such Notes.
At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Initial Notes executed by the
Company to the Trustee for authentication, together with a Company Order for
the authentication and delivery of such Initial Notes directing the Trustee
to authenticate the Notes and certifying that all conditions precedent to the
issuance of Notes contained herein have been fully complied with, and the
Trustee in accordance with such Company Order shall authenticate and deliver
such Initial Notes. On Company Order, the Trustee shall authenticate for
original issue Exchange Notes in an aggregate principal amount not to exceed
the sum of $110,000,000 plus the aggregate
29
principal amount of any Additional Notes issued; PROVIDED that such Exchange
Notes shall be issuable only upon the valid surrender for cancellation of
Initial Notes of a like aggregate principal amount in accordance with an
Exchange Offer pursuant to the Registration Rights Agreement. In each case,
the Trustee shall be entitled to receive an Officers' Certificate and an
Opinion of Counsel of the Company that it may reasonably request in
connection with such authentication of Notes. Such order shall specify the
amount of Notes to be authenticated and the date on which the original issue
of Initial Notes or Exchange Notes is to be authenticated.
Each Note shall be dated the date of its authentication.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Note a
certificate of authentication substantially in the form provided for in
Exhibit A duly executed by the Trustee by manual signature of an authorized
officer, and such certificate upon any Note shall be conclusive evidence, and
the only evidence, that such Note has been duly authenticated and delivered
hereunder and is entitled to the benefits of this Indenture.
In case the Company, pursuant to Article Eight, shall be
consolidated or merged with or into any other Person or shall convey,
transfer, lease or otherwise dispose of its properties and assets
substantially as an entirety to any Person, and the successor Person
resulting from such consolidation, or surviving such merger, or into which
the Company shall have been merged, or the Person which shall have received a
conveyance, transfer, lease or other disposition as aforesaid, shall have
executed an indenture supplemental hereto with the Trustee pursuant to
Article Eight, any of the Notes authenticated or delivered prior to such
consolidation, merger, conveyance, transfer, lease or other disposition may,
from time to time, at the request of the successor Person, be exchanged for
other Notes executed in the name of the successor Person with such changes in
phraseology and form as may be appropriate, but otherwise in substance of
like tenor as the Notes surrendered for such exchange and of like principal
amount; and the Trustee, upon Company Request of the successor Person, shall
authenticate and deliver Notes as specified in such request for the purpose
of such exchange. If Notes shall at any time be authenticated and delivered
in any new name of a successor Person pursuant to this Section in exchange or
substitution for or upon registration of transfer of any Notes, such
successor Person, at the option of the Holders but without expense to them,
shall provide for the exchange of all Notes at the time Outstanding for Notes
authenticated and delivered in such new name.
SECTION 304. TEMPORARY NOTES.
Pending the preparation of definitive Notes, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Notes which are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized
30
denomination, substantially of the tenor of the definitive Notes in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Notes may
determine, as conclusively evidenced by their execution of such Notes.
If temporary Notes are issued, the Company will cause definitive
Notes to be prepared without unreasonable delay. After the preparation of
definitive Notes, the temporary Notes shall be exchangeable for definitive
Notes upon surrender of the temporary Notes at the office or agency of the
Company designated for such purpose pursuant to Section 1002, without charge
to the Holder. Upon surrender for cancellation of any one or more temporary
Notes, the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a like principal amount of definitive Notes of
authorized denominations. Until so exchanged, the temporary Notes shall in
all respects be entitled to the same benefits under this Indenture as
definitive Notes.
SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any
other office or agency designated pursuant to Section 1002 being herein
sometimes referred to as the "Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the
registration of Notes and of transfers of Notes. The Register shall be in
written form or any other form capable of being converted into written form
within a reasonable time. At all reasonable times, the Register shall be
open to inspection by the Trustee. The Trustee is hereby initially appointed
as security registrar (the "Note Registrar") for the purpose of registering
Notes and transfers of Notes as herein provided.
Upon surrender for registration of transfer of any Note at the
office or agency of the Company designated pursuant to Section 1002, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Notes of
any authorized denomination or denominations of a like aggregate principal
amount.
At the option of the Holder, Notes may be exchanged for other Notes
of any authorized denomination and of a like aggregate principal amount, upon
surrender of the Notes to be exchanged at such office or agency. Whenever
any Notes are so surrendered for exchange (including an exchange of Initial
Notes for Exchange Notes), the Company shall execute, and the Trustee shall
authenticate and deliver, the Notes which the Holder making the exchange is
entitled to receive; PROVIDED that no exchange of Initial Notes for Exchange
Notes shall occur until an Exchange Offer Registration Statement shall have
been declared effective by the Commission and that the Initial Notes to be
exchanged for the Exchange Notes shall be cancelled by the Trustee.
31
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Notes
surrendered upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Note Registrar) be
duly endorsed, or be accompanied by a written instrument of transfer, in form
satisfactory to the Company and the Note Registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange or redemption of Notes, but the Company may require payment in
certain circumstances of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration
of transfer or exchange of Notes, other than exchanges pursuant to Section
304, 906, 1015, 1016 or 1108 not involving any transfer.
The Company shall not be required (i) to issue, register the
transfer of or exchange any Note during a period beginning at the opening of
business 15 days before the selection of Notes to be redeemed under Sections
1104, 1015 and 1016 and ending at the close of business on the day of such
mailing of the relevant notice of redemption, or (ii) to register the
transfer of or exchange any Note so selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part.
SECTION 306. BOOK-ENTRY PROVISIONS FOR GLOBAL NOTE.
(a) The Global Note initially shall (i) be registered in the name
of Cede & Co., as nominee of the Depositary (such nominee being referred to
herein as the "Global Note Holder"), (ii) be deposited with, or on behalf of,
the Depositary or with the Trustee, as custodian for such Depositary, and
(iii) bear legends as set forth in Section 202.
Members of, or participants in, the Depositary ("Agent Members")
shall have no rights under this Indenture with respect to any Global Note
held on their behalf by the Depositary, or the Trustee as its custodian, or
under the Global Note, and the Depositary may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the absolute owner of
such Global Note 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 Depositary or shall impair, as
between the Depositary and its Agent Members, the operation of customary
practices governing the exercise of the rights of a holder of any Note.
32
(b) Transfers of the Global Note shall be limited to transfers of
such Global Note in whole, but not in part, to the Depositary, its successors
or their respective nominees. Interests of beneficial owners in the Global
Note may be transferred in accordance with the rules and procedures of the
Depositary and the provisions of Section 307. Beneficial owners may obtain
Certificated Notes in exchange for their beneficial interests in the Global
Note upon request in accordance with the Depositary's and the Registrar's
procedures. In addition, if (i) the Company notifies the Trustee in writing
that the Depositary is no longer willing or able to act as a depositary and
the Company is unable to locate a qualified successor within 90 days or (ii)
the Company, at its option, notifies the Trustee in writing that it elects to
cause the issuance of Notes in the form of Certificated Securities under the
Indenture then, upon surrender by the Global Note Holder of its Global Note,
Certificated Notes will be issued to each person that the Global Note Holder
and the Depositary identify as being the beneficial owner of the related
Notes.
(c) In connection with any transfer of a portion of the
beneficial interest in the Global Note to beneficial owners pursuant to
subsection (b) of this Section, the Note Registrar shall reflect on its books
and records the date and a decrease in the principal amount of the Global
Note in an amount equal to the principal amount of the beneficial interest in
the Global Note to be transferred, and the Company shall execute, and the
Trustee shall authenticate and deliver, one or more Certificated Notes of
like tenor and amount.
(d) Any Certificated Note delivered in exchange for an interest
in the Global Note pursuant to subsection (c) or subsection (d) of this
Section shall, except as otherwise provided by paragraph (a)(i)(x) of Section
307, bear the applicable legend regarding transfer restrictions applicable to
the Certificated Note set forth in Section 202.
(e) The Holder of the Global Note may grant proxies and otherwise
authorize any person, including Agent Members and persons that may hold
interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Notes.
SECTION 307. SPECIAL TRANSFER PROVISIONS.
Unless and until (i) an Initial Note is sold under an effective
Registration Statement, or (ii) an Initial Note is exchanged for an Exchange
Note in connection with an effective Registration Statement, in each case
pursuant to the Registration Rights Agreement, the following provisions shall
apply:
(a) TRANSFERS TO NON-QIB INSTITUTIONAL ACCREDITED INVESTORS. The
following provisions shall apply with respect to the registration of any
proposed transfer of an Initial Note to any institutional "accredited
investor" (as defined in Rule 501(a)(1),
33
(2), (3) or (7) of Regulation D under the Securities Act) which is not a
QIB (excluding Non-U.S. Persons):
(i) The Registrar shall register the transfer of any Initial
Note, whether or not such Initial Note bears the Private Placement
Legend, if (x) the requested transfer is at least two years after the
original issue date of the Initial Notes or (y) the proposed transferee
has delivered to the Registrar a certificate substantially in the form
of Exhibit C hereto.
(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in the Global Note, upon receipt by the Registrar of
(x) the documents, if any, required by paragraph (i) and (y)
instructions given in accordance with the Depositary's and the
Registrar's procedures therefor, the Registrar shall reflect on its
books and records the date and a decrease in the principal amount of the
Global Note in an amount equal to the principal amount of the beneficial
interest in the Global Note to be transferred, and the Company shall
execute, and the Trustee shall authenticate and deliver, one or more
Certificated Notes of like tenor and amount.
(b) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of an Initial Note to a
QIB (excluding Non-U.S. Persons):
(i) If the Note to be transferred consists of Certificated Notes,
the Registrar shall register the transfer if such transfer is being made
by a proposed transferor who has checked the box provided for on the
form of Initial Note, stating, or has otherwise advised the Company and
the Registrar in writing, that the sale has been made in compliance with
the provisions of Rule 144A to a transferee who has signed the
certification provided for on the form of Initial Note, stating, or has
otherwise advised the Company and the Registrar in writing, that it is
purchasing the Initial Note for its own account or an account with
respect to which it exercises sole investment discretion and that it, or
the Person on whose behalf it is acting with respect to any such
account, is a QIB within the meaning of Rule 144A, and is aware that the
sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such information regarding the Company as it has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon its
foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
(ii) If the proposed transferee is an Agent Member, and the
Initial Note to be transferred consists of Certificated Notes, upon
receipt by the
34
Registrar of instructions given in accordance with the Depositary's
and the Registrar's procedures therefor, the Registrar shall reflect
on its books and records the date and an increase in the principal
amount of the Global Note in an amount equal to the principal amount
of the Certificated Notes, as the case may be, to be transferred, and
the Trustee shall cancel the Certificated Note so transferred.
(c) Private Placement Legend. Upon the transfer, exchange or
replacement of Notes not bearing the Private Placement Legend, the
Registrar shall deliver Notes that do not bear the Private Placement
Legend. Upon the transfer, exchange or replacement of Notes bearing the
Private Placement Legend, the Registrar shall deliver only Notes that
bear the Private Placement Legend unless either (i) the circumstances
contemplated by paragraph (a)(i)(x) of this Section 307 exist or (ii)
there is delivered to the Registrar an Opinion of Counsel reasonably
satisfactory to the Company and the Trustee to the effect that neither
such legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act.
(d) General. By its acceptance of any Note bearing the Private
Placement Legend, each Holder of such a Note acknowledges the
restrictions on transfer of such Note set forth in this Indenture and in
the Private Placement Legend and agrees that it will transfer such Note
only as provided in this Indenture.
The Registrar shall retain until such time as no Notes remain
Outstanding copies of all letters, notices and other written communications
received pursuant to Section 306 or this Section 307. The Company shall have
the right to inspect and make copies of all such letters, notices or other
written communications at any reasonable time upon the giving of reasonable
written notice to the Registrar.
SECTION 308. MUTILATED, DESTROYED, LOST AND STOLEN NOTES.
If (i) any mutilated Note is surrendered to the Trustee or the
Registrar, or (ii) the Company and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Note, and there is
delivered to the Company and the Trustee such security or indemnity as may be
required by them to save each of them harmless, then, in the absence of
notice to the Company or the Trustee that such Note has been acquired by a
bona fide purchaser, the Company shall execute, and upon Company Order the
Trustee shall authenticate and deliver, in exchange for any such mutilated
Note or in lieu of any such destroyed, lost or stolen Note, a new Note of
like tenor and principal amount, bearing a number not contemporaneously
outstanding.
35
In case any such mutilated, destroyed, lost or stolen Note has
become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Note, pay such Note.
Upon the issuance of any new Note under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Note issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Company, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 309. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Interest on any Note which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person
in whose name such Note (or one or more Predecessor Notes) is registered at
the close of business on the Regular Record Date for such interest at the
office or agency of the Company in The City of New York maintained for such
purposes (which initially shall be the office of the Trustee located at 114
West 47th St., New York, N.Y. 10036-1532, Attention: Corporate Trust)
pursuant to Section 1002 or, at the option of the Company, interest may be
paid by check mailed to the address of the Person entitled thereto pursuant
to Section 310 as such address appears in the Register; PROVIDED that all
payments with respect to the Global Note and Certificated Notes the holders
of which have given wire transfer instructions to the Trustee (or other
Paying Agent) by the Regular Record Date shall be required to be made by wire
transfer of immediately available funds to the accounts specified by the
holders thereof.
Any interest on any Note which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date shall forthwith cease
to be payable to the Holder on the Regular Record Date by virtue of having
been such Holder, and such defaulted interest and (to the extent lawful)
interest on such defaulted interest at the rate borne by the Notes (such
defaulted interest and interest thereon herein collectively called "Defaulted
Interest") may be paid by the Company, at its election in each case, as
provided in clause (a) or (b) below:
36
(a) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Notes (or their respective
Predecessor Notes) are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be
fixed in the following manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
Note and the date of the proposed payment, and at the same time the
Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such
deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this clause provided. Thereupon the
Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not less
than 10 days prior to the date of the proposed payment and not less than
10 days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special
Record Date, and, in the name and at the expense of the Company, shall
cause notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor to be given in the manner provided for in
Section 107, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so given, such Defaulted
Interest shall be paid to the Persons in whose names the Notes (or their
respective Predecessor Notes) are registered at the close of business on
such Special Record Date and shall no longer be payable pursuant to the
following clause (b).
(b) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such
notice as may be required by such exchange, if, after notice given by
the Company to the Trustee of the proposed payment pursuant to this
clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Note shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Note.
If the Company shall be required to pay any additional interest
pursuant to the terms of the Registration Rights Agreement, it shall deliver
an Officer's Certificate to the Trustee setting forth the new interest rate
and the period for which such rate is applicable.
37
SECTION 310. PERSONS DEEMED OWNERS.
Prior to the due presentment of a Note for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name such Note is registered as the owner of such
Note for the purpose of receiving payment of principal of (and premium, if
any) and (subject to Sections 305 and 309) interest on such Note and for all
other purposes whatsoever, whether or not such Note be overdue, and none of
the Company, the Trustee or any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 311. CANCELLATION.
All Notes surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and shall be promptly cancelled by it.
The Company may at any time deliver to the Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and may deliver to the Trustee (or to any
other Person for delivery to the Trustee) for cancellation any Notes
previously authenticated hereunder which the Company has not issued and sold,
and all Notes so delivered shall be promptly cancelled by the Trustee. If
the Company shall so acquire any of the Notes, however, such acquisition
shall not operate as a redemption or satisfaction of the indebtedness
represented by such Notes unless and until the same are surrendered to the
Trustee for cancellation. No Notes shall be authenticated in lieu of or in
exchange for any Notes cancelled as provided in this Section, except as
expressly permitted by this Indenture. All cancelled Notes held by the
Trustee shall be disposed of by the Trustee in accordance with its customary
procedures and certification of their disposal delivered to the Company
unless by Company Order the Company shall direct that cancelled Notes be
returned to it.
SECTION 312. ISSUANCE OF ADDITIONAL NOTES.
The Company may, subject to Article Ten of this Indenture, issue up
to $75,000,000 aggregate principal amount of additional Notes having
identical terms and conditions to the Notes offered hereby (the "Additional
Notes"). Any Additional Notes will be part of the same issue as the Notes
offered hereby and will vote on all matters with the Notes offered hereby.
SECTION 313. COMPUTATION OF INTEREST.
Interest on the Notes shall be computed on the basis of a 360-day
year of twelve 30-day months.
38
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE.
Upon the request of the Company, the Indenture will cease to be of
further effect (except as to surviving rights of registration of transfer or
exchange of the Notes, as expressly provided for herein or pursuant hereto),
the Company and the Subsidiary Guarantors will be discharged from their
obligations under the Notes and the Note Guarantees, and the Trustee, at the
expense of the Company, will execute proper instruments acknowledging
satisfaction and discharge of the Indenture when:
(a) either (i) all the Notes theretofore authenticated and
delivered (other than mutilated, destroyed, lost or stolen Notes that
have been replaced or paid and Notes that have been subject to
defeasance under Article Twelve) have been delivered to the Trustee for
cancellation or (ii) all Notes not theretofore delivered to the Trustee
for cancellation (A) have become due and payable, (B) will become due
and payable at maturity within one year or (C) are to be called for
redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the Trustee in the
name, and at the expense, of the Company, and the Company, in the case
of (A), (B) or (C) above, has irrevocably deposited or caused to be
deposited with the Trustee funds in trust for the purpose in an amount
sufficient to pay and discharge, without the need to reinvest any
proceeds thereof, the entire Indebtedness on such Notes not theretofore
delivered to the Trustee for cancellation, for principal (and premium,
if any, on) and interest on the Notes to the date of such deposit (in
the case of Notes that have become due and payable) or to the Stated
Maturity or redemption date, as the case may be;
(b) the Company has paid or caused to be paid all sums payable
under the Indenture by the Company; and
(c) the Company has delivered to the Trustee an officers'
certificate and an opinion of counsel, each stating that all conditions
precedent provided in the Indenture relating to the satisfaction and
discharge of the Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 606 and, if
money shall have been deposited with the Trustee pursuant to subclause
(ii) of clause (a) of this Section, the obligations of the Trustee under
Section 402 and the last paragraph of Section 1003 shall survive.
39
SECTION 402. APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in
trust and applied by it, in accordance with the provisions of the Notes and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee; but such money need not be segregated from other funds except to the
extent required by law. All money deposited pursuant to Section 401
remaining after all payments to be made pursuant to this Article Four have
been made shall be returned to the Company or its designee.
ARTICLE FIVE
REMEDIES
SECTION 501. EVENTS OF DEFAULT.
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether
it shall be voluntary or involuntary or be 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):
(1) default in the payment of any interest or Liquidated Damages,
if any, on any Note when it becomes due and payable, and continuance of
such default for a period of 30 days;
(2) default in the payment of the principal of (or premium, if
any, on) any Note when due;
(3) failure to perform or comply with Article Eight and Sections
1010 and 1011 or failure to make a Change of Control Offer or an Excess
Proceeds Offer, in each case, within the time periods specified in the
Indenture;
(4) default in the performance, or breach, of any covenant or
agreement of the Company or any Subsidiary Guarantor contained in the
Indenture or any Note Guarantee (other than a default in the
performance, or breach, of a covenant or agreement that is specifically
dealt with elsewhere herein), and continuance of such default or breach
for a period of 60 days after written notice has been given to the
40
Company by the Trustee or to the Company and the Trustee by the holders
of at least 25% in aggregate principal amount of the Notes then
outstanding;
(5) (i) an event of default has occurred under any mortgage,
bond, indenture, loan agreement or other document evidencing an issue of
Indebtedness of the Company or any Restricted Subsidiary, which issue
has an aggregate outstanding principal amount of not less than
$5,000,000
41
("Specified Indebtedness"), and such default has resulted in such
Indebtedness becoming, whether by declaration or otherwise, due and
payable prior to the date on which it would otherwise become due and
payable or (ii) a default in any payment when due at final maturity of
any such Specified Indebtedness;
42
(6) failure by the Company or any of its Restricted Subsidiaries
to pay one or more final judgments the uninsured portion of which
exceeds in the aggregate $5,000,000, which judgment or judgments are not
paid, discharged or stayed for a period of 60 days;
(7) any Note Guarantee ceases to be in full force and effect or
is declared null and void or any such Subsidiary Guarantor denies that
it has any further liability under any Note Guarantee, or gives notice
to such effect (other than by reason of the termination of the Indenture
or the release of any such Note Guarantee in accordance with the
Indenture);
(8) the entry of a decree or order by a court having jurisdiction
in the premises adjudging the Company or any Significant Subsidiary a
bankrupt or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustments or composition of or in respect
of the Company or any Significant Subsidiary under the Federal
Bankruptcy Code or any other applicable federal or state law, or
appointing a receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of the Company or any Significant Subsidiary or
of any substantial part of its property, or ordering the winding-up or
liquidation of its affairs, and the continuance of any such decree or
order unstayed and in effect for a period of 90 consecutive days; or
(9) the institution by the Company or any Significant Subsidiary
of proceedings to be adjudicated a bankrupt or insolvent, or the consent
by it to the institution of bankruptcy or insolvency proceedings against
it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under the Federal Bankruptcy Code or any other
applicable federal or state law, or the consent by it to the filing of
any such petition or to the appointment of a receiver, liquidator,
43
assignee, trustee, sequestrator (or other similar official) of the
Company or any Significant Subsidiary or of any substantial part of its
property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due.
If an Event of Default has occurred and is continuing, the Trustee
shall exercise such rights and powers vested in it under the Indenture and
use the same degree of care and skill in its exercise as a prudent person
would exercise under the circumstances in the conduct of such person's own
affairs.
SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default (other than as specified in clauses (8) and
(9) above) occurs and is continuing, the Trustee or the holders of not less
than 25% in aggregate principal amount of the Notes then outstanding may, and
the Trustee at the request of such holders will, declare the principal of and
accrued interest and Liquidated Damages, if any, on all of the outstanding
Notes immediately due and payable and, upon any such declaration, such
principal and such interest will become due and payable immediately.
If an Event of Default specified in clauses (8) and (9) above occurs
and is continuing, then the principal of and accrued interest and Liquidated
Damages, if any, on all of the outstanding Notes will IPSO FACTO become and
be immediately due and payable without any declaration or other act on the
part of the Trustee or any holder of Notes.
At any time after a declaration of acceleration under the Indenture,
but before a judgment or decree for payment of the money due has been
obtained by the Trustee, the holders of a majority in aggregate principal
amount of the outstanding Notes, by written notice to the Company and the
Trustee, may rescind such declaration and its consequences if (i) the Company
has paid or deposited with the Trustee a sum sufficient to pay (A) all
overdue interest on all Notes, (B) all unpaid principal of (and premium, if
any, on) any outstanding Notes that has become due otherwise than by such
declaration of acceleration and interest thereon at the rate borne by the
Notes, (C) to the extent that payment of such interest is lawful, interest
upon overdue interest and overdue principal at the rate borne by the Notes
and (D) all sums paid or advanced by the Trustee under the Indenture and the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel; and (ii) all Events of Default, other than the
non-payment of amounts of principal of (or premium, if any, on) or interest
on the Notes that have become due solely by such declaration of acceleration,
have been cured or waived. No such rescission will affect any subsequent
default or impair any right consequent thereon.
Notwithstanding the preceding paragraph, in the event of a
declaration of acceleration in respect of the Notes because of an Event of
Default specified in
44
Section 501(5) shall have occurred and be continuing, such declaration of
acceleration shall be automatically annulled if the Indebtedness that is the
subject of such Event of Default has been discharged or the holders thereof
have rescinded their declaration of acceleration in respect of such
Indebtedness, and written notice of such discharge or rescission, as the case
may be, shall have been given to the Trustee by the Company and countersigned
by the holders of such Indebtedness or a trustee, fiduciary or agent for such
holders, within 30 days after such declaration of acceleration in respect of
the Notes, and no other Event of Default has occurred during such 30-day
period which has not been cured or waived during such period.
SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT
BY TRUSTEE.
The Company and each of the Subsidiary Guarantors covenant that if
(a) default is made in the payment of any installment of interest
on any Note when such interest becomes due and payable and such default
continues for a period of 30 days, or
(b) default is made in the payment of the principal of (or
premium, if any, on) any Note at the Maturity thereof,
the Company and each Subsidiary Guarantor will, upon demand of the Trustee,
pay to the Trustee for the benefit of the Holders of such Notes, the whole
amount then due and payable on such Notes for principal (and premium, if any)
and interest, and interest on any overdue principal (and premium, if any)
and, to the extent that payment of such interest shall be legally
enforceable, upon any overdue installment of interest, at the rate borne by
the Notes, and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
If the Company or any Subsidiary Guarantor, as the case may be,
fails to pay such amounts forthwith upon such demand, the Trustee, in its own
name as trustee of an express trust, may institute a judicial proceeding for
the collection of the sums so due and unpaid, may prosecute such proceeding
to judgment or final decree and may enforce the same against the Company,
such Subsidiary Guarantor or any other obligor upon the Notes and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company, such Subsidiary Guarantor or any other obligor
upon the Notes, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of
the Holders by such
45
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition
or other judicial proceeding relative to the Company or any other obligor
upon the Notes (including the Subsidiary Guarantors) or the property of the
Company or of such other obligor or their creditors, the Trustee
(irrespective of whether the principal of the Notes shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective
of whether the Trustee shall have made any demand on the Company for the
payment of overdue principal, premium, if any, or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of principal
(and premium, if any) and interest owing and unpaid in respect of the
Notes and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel) and of the Holders
allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders,
to pay the Trustee any amount due it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel,
and any other amounts due the Trustee under Section 606.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the Notes
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
46
SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF NOTES.
All rights of action and claims under this Indenture or the Notes
may be prosecuted and enforced by the Trustee without the possession of any
of the Notes or the production thereof in any proceeding relating thereto,
and any such proceeding instituted by the Trustee shall be brought in its own
name and as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Notes in respect of which such judgment
has been recovered.
SECTION 506. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal (or
premium, if any) or interest, upon presentation of the Notes and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
606;
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Notes in respect
of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Notes for principal (and premium, if
any) and interest, respectively; and
THIRD: The balance, if any, to the Company, its successors and
assigns or the Person or Persons legally entitled thereto.
SECTION 507. LIMITATION ON SUITS.
No holder of any of the Notes has any right to institute any
proceeding with respect to the Indenture or any remedy thereunder, unless the
holders of at least 25% in aggregate principal amount of the outstanding
Notes have made written request, and offered reasonable indemnity, to the
Trustee to institute such proceeding within 60 days after receipt of such
notice and the Trustee, within such 60-day period, has not received
directions inconsistent with such written request by holders of a majority in
aggregate principal amount of the outstanding Notes. Such limitations do not
apply, however, to a suit instituted by a holder of a Note for the
enforcement of the payment of the principal of, premium, if any, or interest
on such Note on or after the respective due dates expressed in such Note.
47
SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
PREMIUM AND INTEREST.
Notwithstanding any other provision in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to
receive payment, as provided herein (including, if applicable, Article
Twelve) and in such Note of the principal of (and premium, if any) and
(subject to Section 309) interest on such Note on the respective Stated
Maturities expressed in such Note (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such
payment, and such rights shall not be impaired without the consent of such
Holder.
SECTION 509. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Subsidiary Guarantors, the
Trustee and the Holders shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
SECTION 510. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes in the last paragraph
of Section 308, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.
SECTION 511. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Note to
exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default
or an acquiescence therein. Every right and remedy given by this Article or
by law to the Trustee or to the Holders may be exercised from time to time,
and as often as may be deemed expedient, by the Trustee or by the Holders, as
the case may be.
48
SECTION 512. CONTROL BY HOLDERS.
The Holders of not less than a majority in principal amount of the
Outstanding Notes shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, PROVIDED that
(a) such direction shall not be in conflict with any rule of law
or with this Indenture,
(b) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(c) the Trustee need not take any action which might involve it in
personal liability or be unjustly prejudicial to the Holders not
consenting.
SECTION 513. WAIVER OF PAST DEFAULTS.
The holders of not less than a majority in aggregate principal
amount of the outstanding Notes may, on behalf of the holders of all of the
Notes, waive any past defaults under the Indenture, except a default in the
payment of the principal of (and premium, if any) or interest on any Note, or
in respect of a covenant or provision that under the Indenture cannot be
modified or amended without the consent of the holder of each Note
outstanding.
Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right
consequent thereon.
SECTION 514. WAIVER OF STAY OR EXTENSION LAWS.
The Company and each Subsidiary Guarantor covenants (to the extent
that it may lawfully do so) that it will 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 and each Subsidiary Guarantor (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law and covenants that it will not hinder, delay or impede the execution of
any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
49
ARTICLE SIX
THE TRUSTEE
SECTION 601. NOTICE OF DEFAULTS.
If a Default or an Event of Default occurs and is continuing and is
known to the Trustee, the Trustee shall mail to each holder of the Notes
notice of the Default or Event of Default within 90 days after the occurrence
thereof. However, except in the case of a Default or an Event of Default in
payment of principal of (and premium, if any, on) or interest on any Notes,
the Trustee may withhold the notice to the holders of the Notes if a
committee of its trust officers in good faith determines that withholding
such notice is in the interests of the holders of the Notes.
SECTION 602. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of TIA Sections 315(a) through 315(d):
(a) the Trustee may conclusively rely and shall be protected in
acting or refraining from acting, pursuant to the terms of this
Indenture or otherwise, upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
with sufficient detail as may be requested by the Trustee and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers Certificate and/or an
Opinion of Counsel;
(d) the Trustee may consult with counsel and the written advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
50
(e) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities (including fees
and expenses of its agents and counsel) which might be incurred by it in
compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation
into, and may conclusively rely upon, the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the Trustee shall determine
to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company, personally or by
agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents
or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due
care by it hereunder;
(h) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Indenture; and
(i) except during the continuance of an Event of Default, the
Trustee need perform only those duties as are specifically set forth in
this Indenture.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur any 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 for believing that repayment of such
funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
SECTION 603. TRUSTEE NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
NOTES.
The recitals contained herein and in the Notes, except for the
Trustee's certificates of authentication, shall be taken as the statements of
the Company and the Subsidiary Guarantors, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations
as to the validity or sufficiency of this Indenture, the Notes or any Note
Guarantee, except that the Trustee represents that it is duly authorized to
execute and deliver this Indenture, authenticate the Notes and perform its
obligations hereunder and,
51
upon the effectiveness of the Registration Statement, that the statements
made by it in a Statement of Eligibility on Form T-1 supplied to the Company
are true and accurate, subject to the qualifications set forth therein. The
Trustee shall not be accountable for the use or application by the Company of
the Notes or the proceeds thereof.
SECTION 604. MAY HOLD NOTES.
The Trustee, any Paying Agent, any Note Registrar or any other agent
of the Company or of the Trustee, in its individual or any other capacity,
may become the owner or pledgee of Notes and, subject to TIA Sections 310(b)
and 311, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Paying Agent, Note Registrar or such other agent.
SECTION 605. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except
as otherwise agreed with the Company or any Subsidiary Guarantor, as the case
may be.
SECTION 606. COMPENSATION AND REIMBURSEMENT.
The Company agrees:
(a) to pay to the Trustee (in its capacity as Trustee, Paying
Agent and Registrar) from time to time such reasonable compensation for
all services rendered by it hereunder as may be separately agreed in
writing (which compensation shall not be limited by any provision of law
in regard to the compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Trustee in accordance with any
provision of this Indenture (including the reasonable compensation and
the expenses and disbursements of its agents and counsel), except any
such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(c) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of this trust, including the costs and
expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or
duties hereunder.
52
The obligations of the Company under this Section to compensate the
Trustee, to pay or reimburse the Trustee for expenses, disbursements and
advances and to indemnify and hold harmless the Trustee shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture. As security for the performance of such
obligations of the Company, the Trustee shall have a claim prior to the Notes
upon all property and funds held or collected by the Trustee as such, except
funds held in trust for the payment of principal of (and premium, if any) or
interest on particular Notes.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 501(8) or (9), the expenses
(including the reasonable charges and expenses of its counsel) of and the
compensation for such services are intended to constitute expenses of
administration under any applicable Federal or State bankruptcy, insolvency
or other similar law.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 607. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY
There shall be at all times a Trustee hereunder which shall be
eligible to act as Trustee under TIA Section 310(a)(1) and shall have a
combined capital and surplus of at least $50,000,000. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of Federal, State, territorial or District of Columbia
supervising or examining authority, then for the purposes of this Section,
the combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
SECTION 608. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment
of a successor Trustee pursuant to this Article shall become effective until
the acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 609.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If the instrument of acceptance by a successor
Trustee required by Section 609 shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
53
(c) The Trustee may be removed at any time by Act of the Holders
of not less than a majority in principal amount of the Outstanding Notes,
delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Note for at least six
months, except when the Trustee's duty to resign is stayed in accordance
with the provisions of TIA Section 310(b), or
(2) the Trustee shall cease to be eligible under Section 607 and
shall fail to resign after written request therefor by the Company or by
any Holder who has been a bona fide Holder of a Note for at least six
months, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company, by a Board Resolution, may remove
the Trustee, or (ii) subject to TIA Section 315(e), any Holder who has been a
bona fide Holder of a Note for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable
of acting, or if a vacancy shall occur in the office of Trustee for any
cause, the Company, by a Board Resolution, shall promptly appoint a successor
Trustee. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Notes delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee and supersede the successor Trustee
appointed by the Company. If no successor Trustee shall have been so
appointed by the Company or the Holders and accepted appointment in the
manner hereinafter provided subject to TIA Section 315(e), any Holder who has
been a bona fide Holder of a Note for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee.
54
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to the
Holders of Notes in the manner provided for in Section 107. Each notice
shall include the name of the successor Trustee and the address of its
Corporate Trust Office.
SECTION 609. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested
with all the rights, powers, trusts and duties of the retiring Trustee; but,
on request of the Company or the successor Trustee, such retiring Trustee
shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of
the retiring Trustee and shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee
hereunder subject to the retiring Trustee's rights as provided under the last
sentence of Section 606. Upon request of any such successor Trustee, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers
and trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
SECTION 610. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under
this Article, without the execution or filing of any paper or any further act
on the part of any of the parties hereto. In case any Notes shall have been
authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating
Trustee may adopt such authentication and deliver the Notes so authenticated
with the same effect as if such successor Trustee had itself authenticated
such Notes. In case at that time any of the Notes shall not have been
authenticated, any successor Trustee may authenticate such Notes either in
the name of any predecessor hereunder or in the name of the successor
Trustee. In all such cases such certificates shall have the full force and
effect which this Indenture provides that the certificate of authentication
of the Trustee shall have for the certificate of authentication of the
Trustee shall have; PROVIDED, HOWEVER, that the
55
right to adopt the certificate of authentication of any predecessor Trustee
or to authenticate Notes in the name of any predecessor Trustee shall apply
only to its successor or successors by merger, conversion or consolidation.
ARTICLE SEVEN
HOLDERS LISTS AND REPORTS BY TRUSTEE, COMPANY
AND SUBSIDIARY GUARANTORS
SECTION 701. DISCLOSURE OF NAMES AND ADDRESSES OF HOLDERS.
Every Holder of Notes, by receiving and holding the same, agrees
with the Company, the Subsidiary Guarantors and the Trustee that none of the
Company, the Subsidiary Guarantors or the Trustee or any agent of either of
them shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Holders in accordance with
TIA Section 312, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of
mailing any material pursuant to a request made under TIA Section 312(b).
SECTION 702. REPORTS BY TRUSTEE.
Within 60 days after May 15 of each year commencing with the first
May 15 after the first issuance of Notes, the Trustee shall transmit to the
Holders, in the manner and to the extent provided in TIA Section 313(c), a
brief report dated as of such May 15 if required by TIA Section 313(a).
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE
SECTION 801. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company may not, in a single transaction or series of related
transactions, consolidate or merge with or into (other than the consolidation
or merger of a Restricted Subsidiary with another Restricted Subsidiary or
into the Company) (whether or not the Company or such Restricted Subsidiary
is the surviving corporation), or directly and/or indirectly through its
Restricted Subsidiaries, sell, assign, transfer, lease, convey or otherwise
dispose of all or substantially all of its properties or assets (determined
on a consolidated basis for the Company and its Restricted Subsidiaries taken
as a whole) in one
56
or more related transactions to, another corporation, person or entity or
permit any of its Restricted Subsidiaries to enter into any such transaction
or series of transactions if such transaction or series of transactions, in
the aggregate, would result in the sale, assignment, transfer, lease,
conveyance or other disposition of all or substantially all of the properties
or assets of the Company and its Restricted Subsidiaries (determined on a
consolidated basis for the Company and its Restricted Subsidiaries taken as a
whole) unless:
(a) either (i) the Company, in the case of a transaction involving
the Company, or such Restricted Subsidiary, in the case of a transaction
involving a Restricted Subsidiary, is the surviving corporation or (ii)
in the case of a transaction involving the Company, the entity or the
person formed by or surviving any such consolidation or merger (if other
than the Company) or to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made (the "Surviving
Entity") is a corporation organized or existing under the laws of the
United States, any state thereof or the District of Columbia and assumes
all the obligations of the Company under the Notes and the Indenture
pursuant to a supplemental indenture in a form reasonably satisfactory
to the Trustee;
(b) immediately after giving effect to such transaction and treating
any obligation of the Company or a Restricted Subsidiary in connection
with or as a result of such transaction as having been incurred as of
the time of such transaction, no Default or Event of Default has
occurred and is continuing;
(c) the Company (or the Surviving Entity if the Company is not the
continuing obligor under the Indenture) could, at the time of such
transaction and after giving pro forma effect thereto as if such
transaction had occurred at the beginning of the applicable four-quarter
period, incur at least $1.00 of additional Indebtedness (other than
Permitted Indebtedness) pursuant to the first paragraph of Section 1010;
(d) if the Company is not the continuing obligor under the
Indenture, each Subsidiary Guarantor, unless it is the other party to
the transaction described above, has by supplemental indenture confirmed
that its Note Guarantee applies to the Surviving Entity's obligations
under the Indenture and the Notes;
(e) if any of the property or assets of the Company or any of its
Restricted Subsidiaries would thereupon become subject to any Lien, the
provisions of Section 1014 are complied with;
(f) immediately after giving effect to such transaction on a pro
forma basis, the Consolidated Net Worth of the Company (or of the
Surviving Entity if the Company is not the continuing obligor under the
Indenture) is equal to or greater than
57
the Consolidated Net Worth of the Company immediately prior to such
transaction; and
(g) the Company delivers, or causes to be delivered, to the Trustee,
in form and substance reasonably satisfactory to the Trustee, an
officers' certificate and an opinion of counsel, each stating that such
transaction complies with the requirements of this Indenture.
For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise, in a single transaction or series of transactions) of all
or substantially all of the properties or assets of one or more Restricted
Subsidiaries the Capital Stock of which constitutes all or substantially all
of the properties and assets of the Company, shall be deemed to be the
transfer of all or substantially all of the properties and assets of the
Company.
SECTION 802. SUCCESSOR SUBSTITUTED.
In the event of any transaction described in and complying with the
conditions listed in Section 801 in which the Company is not the continuing
obligor under the Indenture, the Surviving Entity will succeed to, and be
substituted for, and may exercise every right and power of, the Company under
the Indenture, and thereafter the Company will, except in the case of a
lease, be discharged from all its obligations and covenants under the
Indenture and Notes.
ARTICLE NINE
SUPPLEMENTS AND AMENDMENTS TO INDENTURE AND NOTE GUARANTEES
SECTION 901. WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company and any affected
Subsidiary Guarantor, each when authorized by a Board Resolution, and the
Trustee may amend or supplement this Indenture, the Notes or any Note
Guarantee without the consent of any Holder of a Note:
(a) to evidence the succession of another person to the Company or
any Subsidiary Guarantor and the assumption by any such successor of the
covenants of the Company or any Subsidiary Guarantor in the Indenture
and in the Notes; or
58
(b) to add to the covenants of the Company or any Subsidiary
Guarantor for the benefit of the Holders or to surrender any right or
power herein conferred upon the Company; or
(c) to add any additional Events of Default; or
(d) to provide for uncertificated Notes in addition to or in place
of the certificated Notes; or
(e) to evidence and provide for the acceptance of appointment under
the Indenture by a successor Trustee; or
(f) to secure the Notes or any Note Guarantee; or
(g) to cure any ambiguity, to correct or supplement any provision
in the Indenture that may be defective or inconsistent with any other
provision in the Indenture, or to make any other provisions with respect
to matters or questions arising under the Indenture, PROVIDED that such
actions pursuant to this clause do not adversely affect the interests of
the holders in any material respect; or
(h) to comply with any requirements of the Commission in order to
effect and maintain the qualification of the Indenture under the Trust
Indenture Act; or
(i) to release any Subsidiary Guarantor from its Note Guarantee in
accordance with the provisions of the Indenture (including in connection
with a sale of all of the Capital Stock of such Subsidiary Guarantor).
Upon the request of the Company accompanied by a Board Resolution
authorizing the execution of any such amended or supplemental Indenture, Note
or Note Guarantee, and upon receipt by the Trustee of the documents described
in Section 602(b) hereof, the Trustee shall join with the Company or the
affected Subsidiary Guarantor in the execution of any amended or supplemental
Indenture or Note Guarantee authorized or permitted by the terms of this
Indenture and to make any further appropriate agreements and stipulations
that may be therein contained, but the Trustee shall not be obligated to
enter into such amended or supplemental Indenture or Note Guarantee that
adversely affects its own rights, duties or immunities under this Indenture
or otherwise.
SECTION 902. WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in
aggregate Outstanding principal amount of the Notes, by Act of said Holders
delivered to the Company, any affected Subsidiary Guarantor and the Trustee,
the Company and the
59
Subsidiary Guarantor, each when authorized by a Board Resolution, and the
Trustee may amend or supplement in any manner this Indenture or any Note
Guarantee or modify in any manner the rights of the Holders under this
Indenture or any Note Guarantee; PROVIDED, HOWEVER, that no such supplement,
amendment or modification may, without the consent of the Holder of each
Outstanding Note affected thereby:
(a) change the Stated Maturity of the principal of, or any
installment of interest on, any Note, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the
redemption thereof, or change the coin or currency in which any Note or
any premium or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment after the Stated
Maturity thereof (or, in the case of redemption, on or after the
redemption date);
(b) reduce the percentage in principal amount of outstanding Notes,
the consent of whose holders is required for any waiver of compliance
with certain provisions of, or certain defaults and their consequences
provided for under, the Indenture;
(c) waive a default in the payment of principal of, or premium, if
any, or interest on the Notes; or
(d) release any Subsidiary Guarantor that is a Significant
Subsidiary from any of its obligations under its Note Guarantee or the
Indenture other than in accordance with the terms of the Indenture.
It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby
of the trusts created by this Indenture, the Trustee shall be entitled to
receive, and shall be fully protected in relying upon, an Opinion of Counsel
stating that the execution of such supplemental indenture is authorized or
permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture which affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise.
60
SECTION 904. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Notes theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.
SECTION 905. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to the Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES.
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so
determine, new Notes so modified as to conform, in the opinion of the Trustee
and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Notes.
SECTION 907. NOTICE OF SUPPLEMENTAL INDENTURES.
Promptly after the execution by the Company, any affected Subsidiary
Guarantor and the Trustee of any supplemental indenture or Note Guarantee
pursuant to the provisions of Section 902, the Company shall give notice
thereof to the Holders of each Outstanding Note affected, in the manner
provided for in Section 107, setting forth in general terms the substance of
such supplemental indenture or Note Guarantee. Any failed attempt to effect
such notice, or any defect therein shall not, however, in any way impair or
affect the validity of any such amended or supplemental indenture or Note
Guarantee; PROVIDED that the Company has acted reasonably and in good faith.
61
ARTICLE TEN
COVENANTS
SECTION 1001. PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST.
The Company covenants and agrees for the benefit of the Holders that
it will duly and punctually pay the principal of (and premium, if any) and
interest on the Notes in accordance with the terms of the Notes and this
Indenture.
SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in The City of New York, an office or
agency where Notes may be presented or surrendered for payment, where Notes
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Company in respect of the Notes and this Indenture
may be served. The Corporate Trust Office located at 114 West 47th St., New
York, NY 10036-1532 of the Trustee shall be such office or agency of the
Company, unless the Company shall designate and maintain some other office or
agency for one or more of such purposes. The Company will give prompt
written notice to the Trustee of any change in the location of any such
office or agency. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be
made or served at the Corporate Trust Office of the Trustee, and the Company
hereby appoints the Trustee as its agent to receive all such presentations,
surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the Notes
may be presented or surrendered for any or all such purposes and may from
time to time rescind any such designation; PROVIDED, HOWEVER, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in The City of New York for such
purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and any change in the location of any such
other office or agency.
SECTION 1003. MONEY FOR NOTE PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent, it
will, on or before each due date of the principal of (or premium, if any) or
interest on any of the Notes, segregate and hold in trust for the benefit of
the Persons entitled thereto a sum sufficient to pay the principal of (or
premium, if any) or interest so becoming due until such sums shall
62
be paid to such Persons or otherwise disposed of as herein provided and will
promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for the
Notes, it will, on or before each due date of the principal of (or premium,
if any) or interest on any Notes, deposit with a Paying Agent a sum
sufficient to pay the principal (and premium, if any) or interest so becoming
due, such sum to be held in trust for the benefit of the Persons entitled to
such principal, premium or interest, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of such action or any
failure so to act.
The Company will cause each Paying Agent (other than the Trustee) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(a) hold all sums held by it for the payment of the principal of
(and premium, if any) or interest on Notes in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(b) give the Trustee notice of any default by the Company (or any
other obligor upon the Notes) in the making of any payment of principal (and
premium, if any) or interest; and
(c) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held
in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay,
or by Company Order direct any Paying Agent to pay, to the Trustee all sums
held in trust by the Company or such Paying Agent, such sums to be held by
the Trustee upon the same trusts as those upon which such sums were held by
the Company or such Paying Agent; and, upon such payment by any Paying Agent
to the Trustee, such Paying Agent shall be released from all further
liability with respect to such sums.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of (or
premium, if any) or interest on any Note and remaining unclaimed for two
years after such principal (and premium, if any) or interest has become due
and payable shall be paid to the Company on Company Request, or (if then held
by the Company) shall be discharged from such trust; and the Holder of such
Note shall thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such
63
trust money, and all liability of the Company as trustee thereof, shall
thereupon cease; PROVIDED, HOWEVER, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general
circulation in the Borough of Manhattan, The City of New York, notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
SECTION 1004. CORPORATE EXISTENCE.
Subject to Article Eight, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect the
corporate existence, rights (charter and statutory) and franchises of the
Company and each Restricted Subsidiary; PROVIDED, HOWEVER, that the Company
shall not be required to preserve any such right or franchise if the Board of
Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Restricted
Subsidiaries as a whole and that the loss thereof is not disadvantageous in
any material respect to the Holders.
SECTION 1005. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Restricted
Subsidiary or upon the income, profits or property of the Company or any
Restricted Subsidiary and (b) all lawful claims for labor, materials and
supplies, which, if unpaid, might by law become a lien upon the property of
the Company or any Restricted Subsidiary; PROVIDED, HOWEVER, that the Company
shall not be required to pay or discharge or cause to be paid or discharged
any such tax, assessment, charge or claim whose amount, applicability or
validity is being contested in good faith by appropriate proceedings.
SECTION 1006. MAINTENANCE OF PROPERTIES.
The Company will cause all properties owned by the Company or any
Restricted Subsidiary or used or held for use in the conduct of its business
or the business of any Restricted Subsidiary to be maintained and kept in
good condition, repair and working order (ordinary wear and tear excepted)
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all to the extent in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times;
PROVIDED, HOWEVER, that nothing in this Section shall prevent the Company
from discontinuing the maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable
64
in the conduct of its business or the business of any Subsidiary and not
disadvantageous in any material respect to the Holders.
SECTION 1007. INSURANCE.
The Company will at all times keep all of its and its Restricted
Subsidiaries' material properties which are of an insurable nature insured
with insurers, believed by the Company to be responsible, against loss or
damage to the extent that property of similar character is usually so insured
by corporations similarly situated and owning like properties.
SECTION 1008. STATEMENT BY OFFICERS AS TO DEFAULT.
(a) The Company and each Subsidiary Guarantor will deliver to the
Trustee, within 120 days after the end of each fiscal year, a brief
certificate from the principal executive officer, principal financial officer
or principal accounting officer as to his or her knowledge of compliance by
the Company and such Subsidiary Guarantor with all conditions and covenants
under this Indenture. For purposes of this Section 1008(a), such compliance
shall be determined without regard to any period of grace or requirement of
notice under this Indenture.
(b) When any Default has occurred and is continuing under this
Indenture, or if the trustee for or the holder of any other evidence of
Indebtedness of the Company or any Subsidiary gives any notice or takes any
other action with respect to a claimed default (other than with respect to
Indebtedness in the principal amount of less than $2,000,000), the Company
shall deliver to the Trustee by registered or certified mail or by telegram,
telex or facsimile transmission an officers certificate specifying such
event, notice or other action within five Business Days of its occurrence.
SECTION 1009. [INTENTIONALLY OMITTED]
SECTION 1010. LIMITATION ON INDEBTEDNESS OF ISSUANCE OF DISQUALIFIED
STOCK
The Company shall not, and shall not permit any Restricted
Subsidiary to, create, issue, assume, guarantee or in any manner become
directly or indirectly liable for the payment of, or otherwise incur
(collectively, "incur"), any Indebtedness (including Acquired Indebtedness
and the issuance of Disqualified Stock), except that the Company or any
Subsidiary Guarantor may incur Indebtedness if, at the time of such event,
the Fixed Charge Coverage Ratio for the immediately preceding four full
fiscal quarters for which internal financial statements are available, taken
as one accounting period, would have been equal to at least 2.00 to 1.0.
65
In making the foregoing calculation for any four-quarter period that
includes the Closing Date, pro forma effect shall be given to the Offering
and the Recapitalization, as if such transactions had occurred at the
beginning of such four-quarter period. In addition (but without
duplication), in making the foregoing calculation, pro forma effect shall be
given to: (i) the incurrence of such Indebtedness and (if applicable) the
application of the net proceeds therefrom, including to refinance other
Indebtedness, as if such Indebtedness was incurred and the application of
such proceeds occurred at the beginning of such four-quarter period, (ii) the
incurrence, repayment or retirement of any other Indebtedness by the Company
or its Restricted Subsidiaries since the first day of such four-quarter
period as if such Indebtedness was incurred, repaid or retired at the
beginning of such four-quarter period and (iii) the acquisition (whether by
purchase, merger or otherwise) or disposition (whether by sale, merger or
otherwise) of any company, entity or business acquired or disposed of by the
Company or its Restricted Subsidiaries, as the case may be, since the first
day of such four-quarter period, in each case as if such acquisition or
disposition (and the reduction or increase of any associated Fixed Charge
obligations and the change in Consolidated EBITDA resulting therefrom) had
occurred at the beginning of such four-quarter period. 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
acquisition (whether by purchase, merger or otherwise) or disposition that
would have required adjustment pursuant to this definition, then the Fixed
Charge Coverage Ratio shall be calculated giving PRO FORMA effect thereto as
if such acquisition or disposition had occurred at the beginning of the
applicable four-quarter period. In making a computation under the foregoing
clause (i) or (ii), (A) the amount of Indebtedness under a revolving credit
facility shall be computed based on the average daily balance of such
Indebtedness during such four-quarter period, (B) if such Indebtedness bears,
at the option of the Company, a fixed or floating rate of interest, interest
thereon shall be computed by applying, at the option of the Company, either
the fixed or floating rate and (C) the amount of any Indebtedness that bears
interest at a floating rate will 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 Hedging Obligations applicable to such Indebtedness
if such Hedging Obligations have a remaining term at the date of
determination in excess of 12 months). For purposes of this definition,
whenever PRO FORMA effect is to be given to a transaction, the PRO FORMA
calculations shall be made in good faith by the chief financial officer of
the Company.
Notwithstanding the foregoing, the Company may, and may permit its
Restricted Subsidiaries to, incur the following Indebtedness ("Permitted
Indebtedness"):
(i) Indebtedness of the Company or any Restricted Subsidiary under
the Bank Credit Agreement or one or more other credit facilities (and
the incurrence by any Restricted Subsidiary of guarantees thereof) in an
aggregate principal amount at any one time outstanding not to exceed the
greater of (x) $15 million or (y) the
66
amount of the Borrowing Base, less any amounts applied to the permanent
reduction of such credit facilities pursuant to Section 1016;
(ii) Indebtedness of the Company or any Restricted Subsidiary
outstanding on the Closing Date and listed on a schedule to the
Indenture (other than Indebtedness described under clause (i) above);
(iii) Indebtedness owed by the Company to any Wholly Owned
Restricted Subsidiary or owed by any Restricted Subsidiary to the
Company or a Wholly Owned Restricted Subsidiary (provided that such
Indebtedness is held by the Company or such Restricted Subsidiary);
PROVIDED, HOWEVER, that any Indebtedness of the Company owing to any
such Restricted Subsidiary is unsecured and subordinated in right of
payment from and after such time as the Notes shall become due and
payable (whether at Stated Maturity, acceleration, or otherwise) to the
payment and performance of the Company's obligations under the Notes;
(iv) Indebtedness represented by the Notes (other than the
Additional Notes) and the Note Guarantees (including any Note Guarantees
issued pursuant to Section 1021);
(v) Indebtedness of the Company or any Restricted Subsidiary under
Hedging Obligations incurred in the ordinary course of business;
(vi) Indebtedness of the Company or any Restricted Subsidiary
consisting of guarantees, indemnities or obligations in respect of
purchase price adjustments in connection with the acquisition or
disposition of assets, including, without limitation, shares of Capital
Stock;
(vii) either (A) Capitalized Lease Obligations of the Company or any
Restricted Subsidiary or (B) Indebtedness under purchase money mortgages
or secured by purchase money security interests, in each case incurred
for the purpose of financing or refinancing all or any part of the
purchase price or cost of construction or improvement of any property
(real or personal) or other assets that are used or useful in the
business of the Company or such Restricted Subsidiary (whether through
the direct purchase of assets or the Capital Stock of any Person owning
such assets and whether such Indebtedness is owed to the seller or
Person carrying out such construction or improvement or to any third
party), so long as (x) such Indebtedness is not secured by any property
or assets of the Company or any Restricted Subsidiary other than the
property and assets so acquired, constructed or improved and (y) such
Indebtedness is created within 90 days of the acquisition or completion
of construction or improvement of the related property; provided that
the aggregate amount of
67
Indebtedness under clauses (A) and (B) does not exceed $7,500,000
million at any one time outstanding;
(viii) Indebtedness of the Company or any Restricted Subsidiary not
permitted by any other clause of this definition, in an aggregate
principal amount not to exceed $10 million at any one time outstanding;
(ix) Indebtedness under (or constituting reimbursement obligations
with respect) to letters of credit issued in the ordinary course of
business, including without limitation letters of credit in respect of
workers' compensation claims or self-insurance, or other Indebtedness
with respect to reimbursement type obligations regarding workers'
compensation claims; PROVIDED, HOWEVER, that upon the drawing of such
letters of credit or other obligations, such obligations are reimbursed
within five days following such drawing; and
(x) any renewals, extensions, substitutions, refinancings or
replacements (each, for purposes of this clause, a "refinancing") of any
outstanding Indebtedness, other than Indebtedness incurred pursuant to
clause (i), (iii), (v), (vi), (vii), (viii) or (ix) of this definition,
including any successive refinancings thereof, so long as (A) any such
new Indebtedness is in a principal amount that does not exceed the
principal amount so refinanced, plus the amount of any premium required
to be paid in connection with such refinancing pursuant to the terms of
the Indebtedness refinanced or the amount of any premium reasonably
determined by the Company as necessary to accomplish such refinancing,
plus the amount of the expenses of the Company incurred in connection
with such refinancing, (B) in the case of any refinancing of
Subordinated Indebtedness, such new Indebtedness is made subordinate to
the Notes at least to the same extent as the Indebtedness being
refinanced and (C) such refinancing Indebtedness does not have an
Average Life less than the Average Life of the Indebtedness being
refinanced and does not have a final scheduled maturity earlier than the
final scheduled maturity, or permit redemption at the option of the
holder earlier than the earliest date of redemption at the option of the
holder, of the Indebtedness being refinanced.
SECTION 1011. LIMITATION ON RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, take any of the following actions:
(a) declare or pay any dividend or make any other payment or
distribution on account of the Company's or any of its Restricted
Subsidiaries' Capital Stock (including, without limitation any payment
in connection with any merger or consolidation involving the Company) or
to the direct or indirect holders of the
68
Company's or any of its Restricted Subsidiaries' Capital Stock in their
capacity as such, other than (i) dividends, payments or distributions
payable solely in Qualified Equity Interests, (ii) dividends, payments
or distributions by a Restricted Subsidiary payments payable to the
Company or another Restricted Subsidiary or (iii) pro rata dividends,
payments or distributions on common stock of Restricted Subsidiaries
held by minority stockholders, provided that such dividends, payments or
distributions do not in the aggregate exceed the minority stockholders'
pro rata share of such Restricted Subsidiaries' net income from the
first day of the Company's fiscal quarter during which the Closing Date
occurs;
(b) purchase, redeem or otherwise acquire or retire for value,
directly or indirectly, any shares of Capital Stock, or any options,
warrants or other rights to acquire such shares of Capital Stock of (i)
the Company or (ii) any Restricted Subsidiary held by any Affiliate of
the Company (other than, in either case, any such Capital Stock owned by
the Company or any of its Restricted Subsidiaries);
(c) make any principal payment on, or repurchase, redeem, defease or
otherwise acquire or retire for value, prior to any scheduled principal
payment, sinking fund payment or maturity, any Subordinated
Indebtedness; and
(d) make any Investment (other than a Permitted Investment) in any
person (such payments or other actions described in (but not excluded from)
clauses (a) through (d) being referred to as "Restricted Payments"), unless
at the time of, and immediately after giving effect to, the proposed
Restricted Payment:
(i) no Default or Event of Default has occurred and is continuing,
(ii) the Company could incur at least $1.00 of additional
Indebtedness pursuant to the first paragraph of Section 1010 and
(iii) the aggregate amount of all Restricted Payments made after the
Closing Date does not exceed the sum of:
(A) 50% of the aggregate Consolidated Adjusted Net Income of
the Company during the period (taken as one accounting period) from the
first day of the Company's first fiscal quarter commencing after the
Closing Date to the last day of the Company's most recently ended fiscal
quarter for which internal financial statements are available at the
time of such proposed Restricted Payment (or, if such aggregate
cumulative Consolidated Adjusted Net Income is a loss, minus 100% of
such amount), plus
69
(B) 100% of the aggregate net cash proceeds received by the
Company after the Closing Date from (x) the issuance or sale (other than
to a Restricted Subsidiary) of either (1) Qualified Equity Interests of
the Company or (2) Indebtedness (other than the Series A Preferred
Stock and any refinancings thereof) or Disqualified Stock that has been
converted into or exchanged for Qualified Equity Interests of the
Company, together with the aggregate net cash proceeds received by the
Company at the time of such conversion or exchange or (y) cash capital
contributions received by the Company after the Closing Date with
respect to Qualified Equity Interests, plus
(C) $3 million.
Notwithstanding the foregoing, the Company and its Restricted
Subsidiaries may take the following actions, so long as (other than with
respect to the action described in clause (a) below) no Default or Event of
Default has occurred and is continuing or would occur:
(a) the payment of any dividend within 60 days after the date of
declaration thereof, if at the declaration date such payment would not
have been prohibited by the foregoing provisions;
(b) the repurchase, redemption or other acquisition or retirement
for value of any shares of Capital Stock of the Company, in exchange
for, or out of the net cash proceeds of a substantially concurrent
issuance and sale (other than to a Subsidiary) of, Qualified Equity
Interests of the Company;
(c) the purchase, redemption, defeasance or other acquisition or
retirement for value of any Subordinated Indebtedness in exchange for,
or out of the net cash proceeds of a substantially concurrent issuance
and sale (other than to a Subsidiary) of, shares of Qualified Equity
Interests of the Company;
(d) the purchase, redemption, defeasance or other acquisition or
retirement for value of Subordinated Indebtedness in exchange for, or
out of the net cash proceeds of a substantially concurrent issuance or
sale (other than to a Restricted Subsidiary) of, Subordinated
Indebtedness, so long as the Company or a Restricted Subsidiary would be
permitted to refinance such original Subordinated Indebtedness with such
new Subordinated Indebtedness pursuant to clause (x) of the definition
of Permitted Indebtedness;
(e) the purchase, redemption, acquisition, cancellation or other
retirement for value of shares of Capital Stock of the Company, options
or warrants to acquire
70
any such shares or related stock appreciation rights held by officers,
directors or employees of the Company or its Subsidiaries or former
officers, directors or employees (or their respective estates or
beneficiaries under their estates) of the Company or its Subsidiaries or
by any plan for their benefit, in each case, upon death, disability,
retirement or termination of employment or pursuant to the terms of any
benefit plan or any other agreement under which such shares of stock or
options, warrants or rights were issued; provided that the aggregate
cash consideration paid for such purchase, redemption, acquisition,
cancellation or other retirement of such shares of Capital Stock or
options, warrants or rights after the Closing Date does not exceed in
any fiscal year the sum of (i) $500,000, (ii) the cash proceeds received
by the Company after the Closing Date from the sale of Qualified Equity
Interests to employees, directors or officers of the Company and its
Subsidiaries that occurs in such fiscal year and (iii) amounts referred
to in clauses (i) through (ii) that remain unused from the immediately
preceding fiscal year; and
(f) (i) the payment of any regular quarterly dividends in respect of
the Series A Preferred Stock in the form of additional shares of Series
A Preferred Stock having the terms and conditions set forth in the
Certificate of Determination for the Series A Preferred Stock as in
effect on the Closing Date; and (ii) commencing October 15, 2000, the
payment of regular quarterly cash dividends (in the amount no greater
than that provided for in the Certificate of Determination for the
Series A Preferred Stock as in effect on the Closing Date), out of funds
legally available therefor, on any of the shares of Series A Preferred
Stock issued and outstanding on the Closing Date and on any shares of
Series A Preferred Stock issued in payment of dividends made or
subsequently issued in payment of dividends thereon in respect of such
shares of Series A Preferred Stock outstanding on the Closing Date,
PROVIDED that, at the time of and immediately after giving effect to the
payment of such cash dividend, the Fixed Charge Coverage Ratio, giving
pro forma effect to the payment of such dividend as if it had occurred
at the beginning of the four full fiscal quarters immediately preceding
the date on which the dividend is to be paid, would have been equal to
at least 2.25 to 1.0.
The actions described in clauses (b), (c), (e) and (f)(ii) of this paragraph
shall be Restricted Payments that will be permitted to be taken in accordance
with this paragraph but will be considered Restricted Payments for purposes
of clause (iii) of the first paragraph of this Section 1011 and the actions
described in clauses (a), (d) and (f)(i) of this paragraph shall be
Restricted Payments that shall be permitted to be taken in accordance with
this paragraph but will not be considered Restricted Payments for purposes of
clause (iii) of the first paragraph of this Section 1011.
For the purpose of making any calculations under the Indenture (i)
if a Restricted Subsidiary is designated an Unrestricted Subsidiary, the
Company shall be deemed
71
to have made an Investment in an amount equal to the fair market value of the
net assets of such Restricted Subsidiary at the time of such designation as
determined by the Board of Directors of the Company, whose good faith
determination shall be conclusive, (ii) any property transferred to or from
an Unrestricted Subsidiary shall be valued at fair market value at the time
of such transfer, as determined by the Board of Directors of the Company,
whose good faith determination shall be conclusive and (iii) subject to the
foregoing, the amount of any Restricted Payment, if other than cash, shall be
determined by the Board of Directors of the Company, whose good faith
determination shall be conclusive.
If the aggregate amount of all Restricted Payments calculated under
the foregoing provision includes an Investment (other than a Permitted
Investment) in an Unrestricted Subsidiary or other person that thereafter
becomes a Restricted Subsidiary, the aggregate amount of all Restricted
Payments calculated under the foregoing provision shall be reduced by the
lesser of (x) the net asset value of such Subsidiary at the time it becomes a
Restricted Subsidiary and (y) the initial amount of such Restricted Payment.
If an Investment resulted in the making of a Restricted Payment, the
aggregate amount of all Restricted Payments calculated under the foregoing
provision shall be reduced by the amount of any net reduction in such
Investment (resulting from the payment of interest or dividends, loan
repayment, transfer of assets or otherwise), to the extent such net reduction
is not included in the Company's Consolidated Adjusted Net Income; provided
that the total amount by which the aggregate amount of all Restricted
Payments may be reduced may not exceed the lesser of (x) the cash proceeds
received by the Company and its Restricted Subsidiaries in connection with
such net reduction and (y) the initial amount of such Restricted Payment.
In computing the Consolidated Adjusted Net Income of the Company for
purposes of the foregoing clause (iii)(A), (i) the Company may use audited
financial statements for the portions of the relevant period for which
audited financial statements are available on the date of determination and
unaudited financial statements and other current financial data based on the
books and records of the Company for the remaining portion of such period and
(ii) the Company shall be permitted to rely in good faith on the financial
statements and other financial data derived from its books and records that
are available on the date of determination. If the Company makes a
Restricted Payment that, at the time of the making of such Restricted
Payment, would in the good faith determination of the Company be permitted
under the requirements of the Indenture, such Restricted Payment shall be
deemed to have been made in compliance with the Indenture notwithstanding any
subsequent adjustments made in good faith to the Company's financial
statements affecting Consolidated Adjusted Net Income of the Company for any
period.
72
SECTION 1012. LIMITATION ON ISSUANCES AND SALES OF PREFERRED STOCK OF
RESTRICTED SUBSIDIARIES.
The Company shall not permit any Restricted Subsidiary to issue any
Preferred Stock.
SECTION 1013. LIMITATION ON TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, enter into or suffer to exist any
transaction with, or for the benefit of, any Affiliate of the Company or any
beneficial owner of 10% or more of any class of the Capital Stock of the
Company at any time outstanding ("Interested Persons"), unless (a) such
transaction is on terms that are no less favorable to the Company or such
Restricted Subsidiary, as the case may be, than those that could have been
obtained in an arm's length transaction with third parties who are not
Interested Persons and (b) the Company delivers to the Trustee (i) with
respect to any transaction or series of related transactions entered into
after the Closing Date involving aggregate payments in excess of $1.0
million, a resolution of the Board of Directors of the Company set forth in
an officers' certificate certifying that such transaction or transactions
complies with clause (a) above and that such transaction or transactions have
been approved by the Board of Directors (including a majority of the
Disinterested Directors) of the Company and (ii) with respect to a
transaction or series of related transactions involving aggregate payments
equal to or greater than $5 million, a written opinion as to the fairness to
the Company or such Restricted Subsidiary of such transaction or series of
transactions from a financial point of view issued by an independent
investment banking, accounting or valuation firm of national standing.
The foregoing covenant shall not restrict
(A) transactions among the Company and/or its Restricted
Subsidiaries;
(B) transactions (including Permitted Investments) permitted by
Section 1011;
(C) employment agreements on customary terms and the payment of
regular and customary compensation to employees, officers or directors
in the ordinary course of business;
(D) the payment to the Principals or their Related Parties and
Affiliates, of annual management and advisory fees and related expenses,
PROVIDED that the amount of any such fees and expenses shall not exceed
$500,000 per fiscal year, PROVIDED FURTHER that any such fees shall only
commence accruing on October 1, 1998 and shall be payable in arrears on
a quarterly basis commencing on January 1, 1999;
73
(E) loans or advances to officers or employees of the Company or any
of its Restricted Subsidiaries in the ordinary course of business not to
exceed $250,000 in the aggregate at any one time outstanding;
(F) the payment of all fees and expenses related to the
Recapitalization; and
(G) any agreement to which the Company or any Restricted Subsidiary
is a party as in effect as of the date of the Indenture as set forth in
Schedule A hereto or any amendment thereto (as long as any such
amendment is not disadvantageous to the Holders in any material respect)
or any transaction contemplated thereby.
SECTION 1014. LIMITATION ON LIENS.
The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create, incur, assume or suffer to
exist any Lien of any kind on or with respect to any of its property or
assets, including any shares of stock or debt of any Restricted Subsidiary,
whether owned at the Closing Date or thereafter acquired, or any income,
profits or proceeds therefrom, or assign or otherwise convey any right to
receive income thereon, unless (a) in the case of any Lien securing
Subordinated Indebtedness, the Notes are secured by a Lien on such property,
assets or proceeds that is senior in priority to such Lien and (b) in the
case of any other Lien, the Notes are equally and ratably secured with the
obligation or liability secured by such Lien.
Notwithstanding the foregoing, the Company may, and may permit any
Subsidiary to, incur the following Liens ("Permitted Liens"):
(i) Liens (other than Liens securing Indebtedness under the Bank
Credit Agreement) existing as of the Closing Date;
(ii) Liens on property or assets of the Company or any Restricted
Subsidiary securing Indebtedness under the Bank Credit Agreement or one
or more other credit facilities in a principal amount not to exceed the
principal amount of the outstanding Indebtedness permitted by clause (i)
of the definition of "Permitted Indebtedness";
(iii) Liens on any property or assets of a Restricted Subsidiary
granted in favor of the Company or any Wholly Owned Restricted
Subsidiary;
(iv) Liens securing the Notes or any Note Guarantee;
74
(v) any interest or title of a lessor under any Capitalized Lease
Obligation or Sale and Leaseback Transaction that was not entered into
in violation of Section 1010;
(vi) Liens securing Acquired Indebtedness created prior to (and not
in connection with or in contemplation of) the incurrence of such
Indebtedness by the Company or any Restricted Subsidiary; provided that
such Lien does not extend to any property or assets of the Company or
any Restricted Subsidiary other than the property and assets acquired in
connection with the incurrence of such Acquired Indebtedness;
(vii) Liens securing Hedging Obligations permitted to be incurred
pursuant to clause (v) of the definition of "Permitted Indebtedness";
(viii) Liens securing Indebtedness permitted to be incurred under
paragraph (vii) of the definition of "Permitted Indebtedness" in Section
1010;
(ix) statutory Liens or landlords', carriers', warehouseman's,
mechanics', suppliers', materialmen's, repairmen's or other like Liens
arising in the ordinary course of business and with respect to amounts
not yet delinquent or being contested in good faith by appropriate
proceedings and, if required by GAAP, a reserve or other appropriate
provision has been made therefor;
(x) Liens for taxes, assessments, government charges or claims that
are not yet delinquent or being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted and, if
required by GAAP, a reserve or other appropriate provision has been made
therefor;
(xi) Liens incurred or deposits made to secure the performance of
tenders, bids, leases, statutory obligations, surety and appeal bonds,
government contracts, performance bonds and other obligations of a like
nature incurred in the ordinary course of business (other than contracts
for the payment of money);
(xii) easements, rights-of-way, restrictions and other similar
charges or encumbrances not interfering in any material respect with the
business of the Company or any Restricted Subsidiary incurred in the
ordinary course of business;
(xiii) Liens arising by reason of any judgment, decree or order of
any court, so long as such Lien is adequately bonded and any appropriate
legal proceedings that may have been duly initiated for the review of
such judgment, decree or order have not been finally terminated or the
period within which such proceedings may be initiated has not expired;
75
(xiv) Liens securing reimbursement obligations with respect to
letters of credit that encumber documents and other property relating to
such letters of credit and the products and proceeds thereof;
(xv) Liens upon specific items of inventory or other goods and
proceeds of the Company or any Restricted Subsidiary securing its
obligations in respect of bankers' acceptances issued or created for the
account of any person to facilitate the purchase, shipment or storage of
such inventory or other goods;
(xvi) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(xvii) Liens incurred in the ordinary course of business of the
Company or any Restricted Subsidiary of the Company with respect to
obligations that do not exceed $500,000 at any one time outstanding and
that (a) are not incurred in connection with the borrowing of money or
the obtaining of advances or credit (other than trade credit in the
ordinary course of business) and (b) do not in the aggregate materially
detract from the value of the property or materially impair the use
thereof in the operation of the businesses of the Company or such
Restricted Subsidiary;
(xviii) leases or subleases to third parties;
(xix) Liens in connection with workers' compensation obligations of
the Company and its Restricted Subsidiaries incurred in the ordinary
course; and
(xx) any extension, renewal or replacement, in whole or in part, of
any Lien described in the foregoing clauses (i) through (xix); provided
that any such extension, renewal or replacement is no more restrictive in
any material respect than the Lien so extended, renewed or replaced and
does not extend to any additional property or assets.
SECTION 1015. PURCHASE OF NOTES UPON A CHANGE OF CONTROL.
(a) If a Change of Control occurs at any time, then, unless
irrevocable notice of redemption for all of the Notes is given within 30 days
after the occurrence of such Change of Control in accordance with the
provisions of Article Eleven, each holder of Notes or Additional Notes shall
have the right to require that the Company purchase such holder's Notes or
Additional Notes, as applicable, in whole or in part in integral multiples of
$1,000, at a purchase price in cash equal to 101% of the principal amount of
such Notes or Additional Notes, plus accrued and unpaid interest, if any, and
Liquidated Damages, if any, to the date of purchase, pursuant to the offer
described below (the "Change of Control Offer").
76
(b) Within 30 days following any Change of Control, the Company
shall notify the Trustee thereof and give written notice of such Change of
Control to each holder of Notes or Additional Notes by first-class mail,
postage prepaid, at its address appearing in the security register, stating:
(i) that a Change of Control has occurred, that the Change of
Control Offer is being made pursuant to this Section 1015 and that all
Notes validly tendered will be accepted for payment;
(ii) the purchase price and the purchase date, which shall be a
Business Day no earlier than 30 days nor later than 60 days from the
date such notice is mailed or such later date as is necessary to comply
with requirements under the Exchange Act (the "Change of Control Payment
Date");
(iii) that any Note or Additional Note not tendered shall continue
to accrue interest;
(iv) that, unless the Company defaults in the payment of the
purchase price, any Notes or Additional Notes accepted for payment
pursuant to the Change of Control Offer shall cease to accrue interest
after the Change of Control Payment Date;
(v) certain other procedures that a holder of Notes or Additional
Notes must follow to accept a Change of Control Offer or to withdraw
such acceptance;
(vi) that Holders electing to have any Note purchased pursuant to
the Change of Control Offer will be required to surrender such Note,
together with the form entitled "Option of the Holder to Elect Purchase"
on the reverse side of such Note completed, to the Paying Agent at the
address specified in the notice prior to the close of business on the
Business Day immediately preceding the Change of Control Payment Date;
(vii) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than the close of business on the
third Business Day immediately preceding the Change of Control Payment
Date, a telegram, telex, facsimile transmission or letter setting forth
the name of such Holder, the principal amount of Notes delivered for
purchase and a statement that such Holder is withdrawing his election to
have such Notes purchased; and
(viii) that Holders whose Notes are being purchased only in part
will be issued new Notes equal in principal amount to the unpurchased
portion of the Notes
77
surrendered; PROVIDED that each Note purchased and each new Note issued
shall be in a principal amount of $1,000 or integral multiples thereof.
(c) On the Change of Control Payment Date, the Company shall:
(i) accept for payment Notes or portions thereof tendered pursuant
to the Change of Control Offer;
(ii) deposit one day prior to the Change of Control purchase date
with the Paying Agent money sufficient to pay the purchase price of all
Notes or portions thereof so accepted; and
(iii) deliver, or cause to be delivered, to the Trustee, all Notes
or portions thereof so accepted together with an Officers' Certificate
specifying the Notes or portions thereof accepted for payment by the
Company.
The Paying Agent shall promptly mail, to the Holders of Notes so
accepted, payment in an amount equal to the purchase price, and the Trustee
shall promptly authenticate and mail to such Holders a new Note or Notes
equal in principal amount to any unpurchased portion of the Notes
surrendered; PROVIDED that each Note purchased and each new Note issued shall
be in a principal amount of $1,000 or integral multiples thereof. The
Company will publicly announce the results of the Change of Control Offer on
or as soon as practicable after the Change of Control purchase date. For
purposes of this Section 1015, the Trustee shall act as Paying Agent. All
Notes or portions thereof purchased pursuant to this Section 1015 will be
cancelled by the Trustee.
(d) The Company shall comply with the applicable tender offer rules
including Rule-14e under the Exchange Act, and any other applicable
securities laws and regulations in connection with a Change of Control Offer.
To the extent that provisions of any applicable securities laws or
regulations conflict with provisions of this Section 1015, the Company shall
comply with such securities laws and regulations and shall not be deemed to
have breached its obligations under this Section 1015 by virtue thereof.
SECTION 1016. LIMITATION ON CERTAIN ASSET SALES.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, engage in any Asset Sale unless (i) the consideration received
by the Company or such Restricted Subsidiary for such Asset Sale is not less
than the fair market value of the assets sold (as determined by the Board of
Directors of the Company, whose good faith determination shall be conclusive)
and (ii) the consideration received by the Company or the relevant Restricted
Subsidiary in respect of such Asset Sale consists of at least 75% cash or
cash equivalents (including, for purposes of this clause (ii), the principal
amount of any
78
Indebtedness for money borrowed (as reflected on the Company's consolidated
balance sheet) of the Company or any Restricted Subsidiary that (x) is
assumed by any transferee of any such assets or other property in such Asset
Sale or (y) with respect to the sale or other disposition of all of the
Capital Stock of any Restricted Subsidiary, remains the liability of such
Subsidiary subsequent to such sale or other disposition, but only to the
extent that such assumption, sale or other disposition, as the case may be,
is effected on a basis under which there is no further recourse to the
Company or any of its Restricted Subsidiaries with respect to such
liability).
(b) If the Company or any Restricted Subsidiary engages in an Asset
Sale, the Company may, at its option, within 12 months after such Asset Sale,
(i) apply all or a portion of the Net Cash Proceeds to the reduction of
amounts outstanding under the Bank Credit Agreement or to the permanent
repayment of other senior Indebtedness of the Company or a Restricted
Subsidiary, or (ii) invest (or enter into a legally binding agreement to
invest) all or a portion of such Net Cash Proceeds in the making of capital
expenditures, the acquisition of a controlling interest in a Permitted
Business or acquisition of other long-term assets, in each case, that shall
be used or useful in the Permitted Businesses of the Company or its
Restricted Subsidiaries, as the case may be. Pending the final application
of any such Net Cash Proceeds, the Company may temporarily reduce revolving
credit Indebtedness to the extent not prohibited by the Indenture. If any
such legally binding agreement to invest such Net Cash Proceeds is
terminated, the Company may, within 90 days of such termination or within 12
months of such Asset Sale, whichever is later, invest such Net Cash Proceeds
as provided in clause (i) or (ii) (without regard to the parenthetical
contained in such clause (ii)) above. The amount of such Net Cash Proceeds
not so used as set forth above in this paragraph (b) constitutes "Excess
Proceeds".
(c) When the aggregate amount of Excess Proceeds exceeds $5 million,
the Company shall, within 30 days thereafter, make an offer (an "Excess
Proceeds Offer") to purchase from all holders of Notes and Additional Notes,
on a pro rata basis, the maximum principal amount (expressed as a multiple of
$1,000) of Notes and Additional Notes that may be purchased with the Excess
Proceeds, at a purchase price in cash equal to 100% of the principal amount
thereof, plus accrued interest, if any, and Liquidated Damages, if any, to
the date such offer to purchase is consummated. To the extent that the
aggregate principal amount of Notes and Additional Notes tendered pursuant to
such offer to purchase is less than the Excess Proceeds, the Company or its
Restricted Subsidiaries may use such deficiency for general corporate
purposes. If the aggregate principal amount of Notes and Additional Notes
validly tendered and not withdrawn by holders thereof exceeds the Excess
Proceeds, the Notes and Additional Notes to be purchased shall be selected on
a pro rata basis. Upon completion of such offer to purchase, the amount of
Excess Proceeds shall be reset to zero.
79
(d) The Company shall commence an Excess Proceeds Offer by mailing a
notice to the Trustee and each Holder as of such record date as the Company
shall establish (and delivering such notice to the Trustee at least five days
prior thereto) stating:
(i) that the Excess Proceeds Offer is being made pursuant to this
Section 1016 and that all Notes validly tendered will be accepted for
payment on a PRO RATA basis;
(ii) the purchase price and the date of purchase (which shall be a
Business Day no earlier than 30 days nor later than 60 days from the
date such notice is mailed) (the "Excess Proceeds Payment Date");
(iii) that any Note not tendered will continue to accrue interest;
(iv) that, unless the Company defaults in the payment of the Excess
Proceeds Payment, any Note accepted for payment pursuant to the Excess
Proceeds Offer shall cease to accrue interest on and after the Excess
Proceeds Payment Date;
(v) that Holders electing to have any Note purchased pursuant to the
Excess Proceeds Offer will be required to surrender such Note, together
with the form entitled "Option of the Holder to Elect Purchase" on the
reverse side of the Note completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the Business
Day immediately preceding the Excess Proceeds Payment Date;
(vi) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the close of business on the third
Business Day immediately preceding the Excess Proceeds Payment Date, a
telegram, telex, facsimile transmission or letter setting forth the name
of such Holder, the principal amount of Notes delivered for purchase and
a statement that such Holder is withdrawing his election to have such
Notes purchased; and
(vii) that Holders whose Notes are being purchased only in part will
be issued new Notes equal in principal amount to the unpurchased portion
of the Notes surrendered; PROVIDED that each Note purchased and each new
Note issued shall be in a principal amount of $1,000 or integral
multiples thereof.
At least five days prior to the date notice is mailed to each
Holder, the Company shall furnish the Trustee with an Officers' Certificate
stating the amount of the Excess Proceeds Payment.
(e) On the Excess Proceeds Payment Date, the Company shall:
80
(i) accept for payment on a pro rata basis Notes or portions thereof
tendered pursuant to the Excess Proceeds Offer;
(ii) deposit one day prior to the Excess Proceeds Payment Date with
the Paying Agent money sufficient to pay the purchase price of all Notes
or portions thereof so accepted; and
(iii) deliver; or cause to be delivered, to the Trustee, all Notes
or portions thereof so accepted, together with an Officers' Certificate
specifying the Notes or portions thereof accepted for payment by the
Company.
The Paying Agent shall promptly mail to the Holders of Notes so
accepted payment in an amount equal to the purchase price, and the Trustee
shall promptly authenticate and mail to such Holders a new Note equal in
principal amount to any unpurchased portion of the Note surrendered; PROVIDED
that each Note purchased and each new Note issued shall be in a principal
amount of $1,000 or integral multiples thereof.
The Company will publicly announce the results of the Excess
Proceeds Offer as soon as practicable after the Excess Proceeds Payment Date.
For purposes of this Section 1016, the Trustee shall act as the Paying Agent.
All Notes or portions thereof purchased pursuant to this Section 1016
will be cancelled by the Trustee.
(f) The Company shall comply with the applicable tender offer rules
including Rule-14e under the Exchange Act, and any other applicable
securities laws and regulations in connection with an offer made pursuant to
clause (c) above. To the extent that provisions of any applicable securities
laws or regulations conflict with provisions of this Section 1016, the
Company shall comply with such securities laws and regulations and shall not
be deemed to have breached its obligations under this Section 1016 by virtue
thereof.
SECTION 1017. UNRESTRICTED SUBSIDIARIES.
(a) The Board of Directors of the Company may designate any
Subsidiary (including any newly acquired or newly formed Subsidiary) to be an
Unrestricted Subsidiary so long as (i) neither the Company nor any Restricted
Subsidiary is directly or indirectly liable for any Indebtedness of such
Subsidiary, (ii) no default with respect to any Indebtedness of such
Subsidiary would permit (upon notice, lapse of time or otherwise) any holder
of any other Indebtedness of the Company or any Restricted Subsidiary to
declare a default on such other Indebtedness or cause the payment thereof to
be accelerated or payable prior to its stated maturity, (iii) any Investment
in such Subsidiary made as a result of designating such Subsidiary an
Unrestricted Subsidiary will not violate the provisions of Section 1011, (iv)
neither the Company nor any Restricted Subsidiary has a contract, agreement,
arrangement, understanding or obligation of any kind, whether written or
oral,
81
with such Subsidiary other than those that might be obtained at the time from
persons who are not Affiliates of the Company and (v) neither the Company nor
any Restricted Subsidiary has any obligation to subscribe for additional
shares of Capital Stock or other equity interest in such Subsidiary, or to
maintain or preserve such Subsidiary's financial condition or to cause such
Subsidiary to achieve certain levels of operating results.
(b) The Board of Directors of the Company may designate any
Unrestricted Subsidiary as a Restricted Subsidiary; PROVIDED that (i) no
Default or Event of Default has occurred and is continuing following such
designation and (ii) the Company could incur at least $1.00 of additional
Debt (other than Permitted Debt) pursuant to the first paragraph of Section
1010 (treating any Debt of such Unrestricted Subsidiary as the incurrence of
Debt by a Restricted Subsidiary).
SECTION 1018. LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS
AFFECTING RESTRICTED SUBSIDIARIES.
The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction of any
kind on the ability of any Restricted Subsidiary to (a) pay dividends, in
cash or otherwise, or make any other distributions on or in respect of its
Capital Stock, (b) pay any Indebtedness owed to the Company or any other
Restricted Subsidiary, (c) make loans or advances to the Company or any other
Restricted Subsidiary or (d) transfer any of its properties or assets to the
Company or any other Restricted Subsidiary, except for such encumbrances or
restrictions existing under or by reason of:
(i) any agreement in effect on the Closing Date;
(ii) any agreement or other instrument of a person acquired by the
Company or any Restricted Subsidiary in existence at the time of such
acquisition (but not created in contemplation thereof), which
encumbrance or restriction is not applicable to any person, or the
properties or assets of any person, other than the person, or the
property or assets of the person, so acquired;
(iii) any security or pledge agreements or leases (or similar
agreements) containing customary restrictions on transfers of the assets
encumbered thereby or leased or on the leasehold interest represented
thereby;
(iv) any contracts for the sale of assets, including, without
limitation, 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 of the Capital Stock or assets
of such Restricted Subsidiary, pending the closing of such sale or
82
disposition, PROVIDED that any such restriction relates solely to the
assets that are the subject of such agreement;
(v) restrictions on cash or other deposits or net worth imposed by
leases entered into in the ordinary course of business; and
(vi) any encumbrances or restrictions imposed by any amendments,
modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings of the contracts, instruments
or obligations referred to in clauses (i) and (ii), PROVIDED that any
encumbrances or restrictions imposed by such amendments, modifications,
restatements, renewals, increases, supplements, refunding, replacements
or refinancings are not materially more restrictive than those contained
in the contract, instrument or obligation prior to such amendment,
modification, restatement, renewal, increase, supplement, refunding,
replacement or refinancing.
SECTION 1019. WAIVER OF CERTAIN COVENANTS.
The Company or any Subsidiary Guarantor may omit in any particular
instance to comply with any term, provision or condition set forth in Article
Eight or Sections 1004 through 1023, inclusive, if before or after the time
for such compliance the Holders of at least a majority in principal amount of
the Outstanding Notes, by Act of such Holders, waive such compliance in such
instance with such term, provision or condition, but no such waiver shall
extend to or affect such term, provision or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the
obligations of the Company and the duties of the Trustee in respect of any
such term, provision or condition shall remain in full force and effect.
SECTION 1020. PAYMENT FOR CONSENT.
Neither the Company nor any of its Restricted Subsidiaries shall,
directly or indirectly, pay or cause to be paid any consideration, whether by
way of interest, fee or otherwise, to any Holder of any Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or
provisions of the Indenture or the Notes unless such consideration is offered
to be paid or is paid to all Holders of the Notes that consent, waive or
agree to amend in the time frame set forth in the solicitation documents
relating to such consent, waiver or agreement.
83
SECTION 1021. LIMITATION ON GUARANTEES OF INDEBTEDNESS BY RESTRICTED
SUBSIDIARIES.
The Company shall not permit any Restricted Subsidiary that is not a
Subsidiary Guarantor, directly or indirectly, to guarantee, assume or in any
other manner become liable for the payment of any Indebtedness of the Company
or any Indebtedness of any other Restricted Subsidiary, unless (a) such
Restricted Subsidiary simultaneously executes and delivers a supplemental
indenture and a Note Guarantee providing for a guarantee of payment of the
Notes by such Restricted Subsidiary and (b) with respect to any guarantee of
Subordinated Indebtedness by a Restricted Subsidiary, any such guarantee is
subordinated to such Restricted Subsidiary's guarantee with respect to the
Notes at least to the same extent as such Subordinated Indebtedness is
subordinated to the Notes.
SECTION 1022. LINE OF BUSINESS.
The Company shall not and shall not cause or permit any of its
Restricted Subsidiaries to engage in any businesses other than the businesses
in which the Company is engaged on the Closing Date and any businesses
reasonably related or complimentary to one or more of its businesses on the
Closing Date (as determined in good faith by the Company's Board of
Directors).
SECTION 1023. REPORTS.
At all times from and after the earlier of (i) the date of the
commencement of an Exchange Offer or the effectiveness of the Shelf
Registration Statement (the "Registration") and (ii) the date 120 days after
the Closing Date, in either case, whether or not the Company is then required
to file reports with the Commission, the Company shall file with the
Commission (to the extent accepted by the Commission) all such annual
reports, quarterly reports and other documents that the Company would be
required to file if it were subject to Sections 13(a) or 15(d) under the
Exchange Act.
The Company shall also (a) supply to the Trustee and each holder of
Notes, or supply to the Trustee for forwarding to each such holder, without
cost to such holder, copies of such reports and other documents within 15
days after the date on which the Company files such reports and documents
with the Commission or the date on which the Company would be required to
file such reports and documents if the Company were so required and (b) if
filing such reports and documents with the Commission is not accepted by the
Commission or is prohibited under the Exchange Act, to supply at the
Company's cost copies of such reports and documents to any prospective holder
of Notes promptly upon written request. In addition, at all times prior to
the earlier of the date of the Registration and the date 120 days after the
Closing Date, the Company will, at its cost, deliver to each holder of the
Notes quarterly and annual reports substantially equivalent to those that
would be
84
required by the Exchange Act. Furthermore, at all times prior to the date of
Registration, the Company will supply at the Company's cost copies of such
reports and documents to any prospective holder of Notes promptly upon
written request.
ARTICLE ELEVEN
REDEMPTION OF NOTES
SECTION 1101. RIGHT OF REDEMPTION.
(a) The Notes may be redeemed at the option of the Company, as a
whole or from time to time in part, at any time on or after August 15, 2002,
subject to the conditions and at the Redemption Prices specified in the form
of Note, together with accrued interest, if any, to the Redemption Date.
(b) In addition, at any time or from time to time prior to August
15, 2000, the Company may redeem up to 35% of the sum of (i) the initial
aggregate principal amount of the Notes and (ii) the initial aggregate
principal amount of any Additional Notes on one or more occasions with the
net proceeds of one or more Public Equity Offerings at a redemption price
equal to 110% of the principal amount thereof, plus accrued interest, if any,
and Liquidated Damages, if any, to the redemption date (subject to the right
of holders of record on the relevant record date to receive interest due on
an interest payment date); PROVIDED that, immediately after giving effect to
such redemption, at least 65% of the sum of (x) the initial aggregate
principal amount of the Notes and (y) the initial aggregate principal amount
of any Additional Notes remains outstanding; PROVIDED FURTHER that such
redemptions shall occur within 45 days of the date of closing of each Public
Equity Offering.
(c) Upon the occurrence of a Change of Control prior to August
15, 2002, the Notes will be redeemable, in whole or in part, at the option of
the Company, upon not less than 30 nor more than 60 days prior notice to each
holder of Notes to be redeemed, at a redemption price equal to the sum of (i)
the then outstanding principal amount thereof plus (ii) accrued and unpaid
interest thereon, and Liquidated Damages, if any, to the redemption date plus
(iii) the Applicable Premium.
SECTION 1102. APPLICABILITY OF ARTICLE.
Redemption of Notes at the election of the Company or otherwise, as
permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article.
85
SECTION 1103. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Notes pursuant to Section
1101 shall be evidenced by a Board Resolution. In case of any redemption at
the election of the Company, the Company shall, at least 45 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and
of the principal amount of Notes to be redeemed, and Liquidated Damages, if
any, and shall deliver to the Trustee such documentation and records as shall
enable the Trustee to select the Notes to be redeemed pursuant to Section
1104.
SECTION 1104. SELECTION BY TRUSTEE OF NOTES TO BE REDEEMED.
If less than all the Notes are to be redeemed, the particular Notes
to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Notes not previously
called for redemption, pro rata or by lot or by such other method as the
Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions of the principal of Notes; PROVIDED,
HOWEVER, that no such partial redemption shall reduce the portion of the
principal amount of a Note not redeemed to less than $1,000.
The Trustee shall promptly notify the Company in writing of the
Notes selected for redemption and, in the case of any Notes selected for
partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Notes shall relate, in the
case of any Note redeemed or to be redeemed only in part, to the portion of
the principal amount of such Note which has been or is to be redeemed.
SECTION 1105. NOTICE OF REDEMPTION.
Notice of redemption shall be given in the manner provided for in
Section 107 not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Notes to be redeemed.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price and the amount of accrued interest to
the Redemption Date payable as provided in Section 1107, if any,
86
(3) if less than all Outstanding Notes are to be redeemed, the
identification (and, in the case of a partial redemption, the principal
amounts) of the particular Notes to be redeemed,
(4) in case any Note is to be redeemed in part only, the notice
which relates to such Note shall state that on and after the Redemption
Date, upon surrender of such Note, the holder will receive, without
charge, a new Note or Notes of authorized denominations for the
principal amount thereof remaining unredeemed,
(5) that on the Redemption Date the Redemption Price (and accrued
interest, if any, to the Redemption Date payable as provided in Section
1107) will become due and payable upon each such Note, or the portion
thereof, to be redeemed, and that interest thereon will cease to accrue
on and after said date,
(6) the place or places where such Notes are to be surrendered
for payment of the Redemption Price and accrued interest, if any, and
(7) the CUSIP number.
Notice of redemption of Notes to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1106. DEPOSIT OF REDEMPTION PRICE.
Prior to any Redemption Date, the Company shall 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 as provided in Section 1003) an
amount of money sufficient to pay the Redemption Price of, and accrued
interest on, all the Notes which are to be redeemed on that date.
SECTION 1107. NOTES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the Notes so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified (together with accrued interest, if any,
to the Redemption Date), and from and after such date (unless the Company
shall default in the payment of the Redemption Price and accrued interest)
such Notes shall cease to bear interest. Upon surrender of any such Note for
redemption in accordance with said notice, such Note shall be paid by the
Company at the Redemption Price, together with accrued interest, if any, to
the Redemption Date; PROVIDED, HOWEVER, that installments of interest whose
Stated Maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Notes, or one or more
87
Predecessor Notes, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
309.
If any Note called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Notes.
SECTION 1108. NOTES REDEEMED IN PART.
Any Note which is to be redeemed only in part shall be surrendered
at the office or agency of the Company maintained for such purpose pursuant
to Section 1002 (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or such
Holder's attorney duly authorized in writing), and the Company shall execute,
and the Trustee shall authenticate and deliver to the Holder of such Note
without service charge, a new Note or Notes, of any authorized denomination
as requested by such Holder, in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Note so
surrendered.
ARTICLE TWELVE
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1201. COMPANY OPTION TO EFFECT DEFEASANCE OR COVENANT
DEFEASANCE.
The Company may, at its option and at any time, with respect to the
Notes, elect to have either Section 1202 or Section 1203 be applied to all
Outstanding Notes upon compliance with the conditions set forth below in this
Article Twelve.
SECTION 1202. DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 1201 of the option
applicable to this Section 1202, the Company and the Subsidiary Guarantors
shall be deemed to have been discharged from its obligations with respect to
all Outstanding Notes and the Note Guarantees on the date the conditions set
forth in Section 1204 are satisfied (hereinafter, "defeasance"). For this
purpose, such defeasance means that the Company shall be deemed to have paid
and discharged the entire indebtedness represented by the Outstanding Notes
and the Note Guarantees, which shall thereafter be deemed to be "Outstanding"
only for the purposes of Section 1205 and the other Sections of this
Indenture referred to in (A) and (B) below, and to have satisfied all its
other obligations under such Notes and the Note Guarantees and this
88
Indenture insofar as such Notes and Note Guarantees are concerned (and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following which shall survive until
otherwise terminated or discharged hereunder: (A) the rights of holders of
outstanding Notes to receive payments in respect of the principal of (and
premium, if any, on) and interest and Liquidated Damages, if any, on such
Notes when such payments are due, (B) the Company's obligations to issue
temporary Notes, register the transfer or exchange of any Notes, replace
mutilated, destroyed, lost or stolen Notes, maintain an office or agency for
payments in respect of the Notes and segregate and hold such payments in
trust, (C) the rights, powers, trusts, duties and immunities of the Trustee
and (D) this Article Twelve. Subject to compliance with this Article Twelve,
the Company may exercise its option under this Section 1202 notwithstanding
the prior exercise of its option under Section 1203 with respect to the Notes.
SECTION 1203. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 1201 of the option
applicable to this Section 1203, the Company and any Subsidiary Guarantor
shall be released from its obligations under any covenant contained in
Section 801 and Section 802 and in Sections 1007 through 1023 with respect to
the Outstanding Notes on and after the date the conditions set forth below
are satisfied (hereinafter, "covenant defeasance"), and the Notes shall
thereafter be deemed not to be "Outstanding" for the purposes of any
direction, waiver, consent or declaration or Act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "Outstanding" for all other purposes hereunder. For
this purpose, such covenant defeasance means that, with respect to the
Outstanding Notes, the Company and any Subsidiary Guarantor may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or by reason of
any reference in any such covenant to any other provision herein or in any
other document and such omission to comply shall not constitute a Default or
an Event of Default under Sections 501(3) and 501(4), but, except as
specified above, the remainder of this Indenture and such Notes shall be
unaffected thereby.
SECTION 1204. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to application of either
Section 1202 or Section 1203 to the Outstanding Notes:
(1) the Company must irrevocably deposit or cause to be deposited
with the Trustee, as trust funds in trust, specifically pledged as
security for, and dedicated solely to, the benefit of the holders of the
Notes, money in an amount, or U.S. Government Obligations (as defined in
the Indenture) that through the scheduled payment of principal and
interest and Liquidated Damages, if any, thereon will,
89
without the need for reinvestment of the proceeds thereof, provide money
in an amount, or a combination thereof, sufficient, in the opinion of a
nationally recognized firm of independent public accountants, to pay and
discharge the principal of (and premium, if any, on) and interest on the
outstanding Notes at maturity (or upon redemption, if applicable) of
such principal or installment of interest or Liquidated Damages, if any;
(2) no Default or Event of Default has occurred and is continuing
on the date of such deposit or, insofar as an event of bankruptcy under
Sections 501(8) or (9) above is concerned, at any time during the period
ending on the 91st day after the date of such deposit;
(3) such defeasance or covenant defeasance may not result in a
breach or violation of, or constitute a default under, the Indenture
(other than a violation of Section 1010 or 1014 as a result of
incurrence of Indebtedness to finance the deposit referred to in clause
(1) above) or any material agreement or instrument to which the Company
or any Subsidiary Guarantor is a party or by which it is bound;
(4) in the case of defeasance, the Company must deliver to the
Trustee an opinion of counsel stating that the Company has received
from, or there has been published by, the Internal Revenue Service a
ruling, or since the date hereof, there has been a change in applicable
federal income tax law, to the effect, and based thereon such opinion
must confirm that, the holders of the outstanding Notes will not
recognize income, gain or loss for federal income tax purposes as a
result of such defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as would have
been the case if such defeasance had not occurred; and
(5) the Company must have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the defeasance or the covenant
defeasance, as the case may be, have been complied with.
SECTION 1205. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE
HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to the provisions of the last paragraph of Section 1003, all
money and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee (or other qualifying trustee, collectively for
purposes of this Section 1205, the "Trustee") pursuant to Section 1204 in
respect of the Outstanding Notes shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Notes and this Indenture,
to the payment, either directly or through any Paying Agent (including the
Company acting as its own Paying Agent) as the Trustee may determine, to the
Holders of such Notes of all
90
sums due and to become due thereon in respect of principal (and premium, if
any) and interest, but such money need not be segregated from other funds
except to the extent required by law.
The Company shall pay and indemnify and hold harmless the Trustee
against any tax, fee or other charge imposed on or assessed against the U.S.
Governmental Obligations deposited pursuant to Section 1204 or the principal
and interest received in respect thereof other than any such tax, fee or
other charge which by law is for the account of the Holders of the
Outstanding Notes.
Anything in this Article Twelve to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 1204 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would
then be required to be deposited to effect an equivalent Defeasance or
Covenant Defeasance, as applicable, in accordance with this Article.
SECTION 1206. REINSTATEMENT.
If the Trustee or any Paying Agent is unable to apply any money in
accordance with Section 1205 by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company obligations under this Indenture and the
Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Section 1202 or 1203, as the case may be, until such time as the
Trustee or Paying Agent is permitted to apply all such money in accordance
with Section 1205; PROVIDED, HOWEVER, that if the Company makes any payment
of principal of (or premium, if any) or interest on any Note following the
reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Notes to receive such payment from the money
held by the Trustee or Paying Agent.
ARTICLE THIRTEEN
GUARANTEES
SECTION 1301. NOTE GUARANTEES.
Each Subsidiary Guarantor hereby jointly and severally, absolutely,
unconditionally and irrevocably guarantees the Notes and obligations of the
Company hereunder and thereunder, and guarantees to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee on behalf of
such Holder, that: (a) the principal
91
of (and premium, if any) and interest on the Notes will be paid in full when
due, whether at Stated Maturity, by acceleration, call for redemption or
otherwise (including, without limitation, the amount that would become due
but for the operation of the automatic stay under Section 362(a) of the
Federal Bankruptcy Code to the extent permitted by law), together with
interest on the overdue principal, if any, and interest on any overdue
interest, to the extent lawful, and all other obligations of the Company to
the Holders or the Trustee hereunder or thereunder will be paid in full or
performed, all in accordance with the terms hereof and thereof; and (b) in
case of any extension of time of payment or renewal of any Notes or of any
such other obligations, the same will be paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at Stated
Maturity, by acceleration or otherwise, subject, however, in the case of
clauses (a) and (b) above, to the limitations set forth in Section 1306
hereof.
Each Subsidiary Guarantor hereby agrees that its obligations
hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Notes with
respect to any provisions hereof or thereof, the recovery of any judgment
against the Company, any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of
a guarantor.
Each Subsidiary Guarantor hereby waives the benefits of diligence,
presentment, demand for payment, filing of claims with a court in the event
of insolvency or bankruptcy of the Company, any right to require a proceeding
first against the Company or any other Person, protest, notice and all
demands whatsoever and covenants that the Note Guarantee of such Subsidiary
Guarantor will not be discharged as to any Note except by complete
performance of the obligations contained in such Note and such Note
Guarantee. Each of the Subsidiary Guarantors hereby agrees that, in the
event of a default in payment of principal (or premium, if any) or interest
on such Note, whether at its Stated Maturity, by acceleration, call for
redemption, purchase or otherwise, legal proceedings may be instituted by the
Trustee on behalf of, or by, the Holder of such Note, subject to the terms
and conditions set forth in this Indenture, directly against each of the
Subsidiary Guarantors to enforce such Subsidiary Guarantor's Note Guarantee
without first proceeding against the Company or any other Subsidiary
Guarantor. Each Subsidiary Guarantor agrees that if, after the occurrence
and during the continuance of an Event of Default, the Trustee or any of the
Holders are prevented by applicable law from exercising their respective
rights to accelerate the maturity of the Notes, to collect interest on the
Notes, or to enforce or exercise any other right or remedy with respect to
the Notes, such Subsidiary Guarantor will pay to the Trustee for the account
of the Holders, upon demand therefor, the amount that would otherwise have
been due and payable had such rights and remedies been permitted to be
exercised by the Trustee or any of the Holders.
92
If any Holder or the Trustee is required by any court or otherwise
to return to the Company or any Subsidiary Guarantor, or any custodian,
trustee, liquidator or other similar official acting in relation to either
the Company or any Subsidiary Guarantor, any amount paid by any of them to
the Trustee or such Holder, the Note Guarantee of each of the Subsidiary
Guarantors, to the extent theretofore discharged, shall be reinstated in full
force and effect. Each Subsidiary Guarantor further agrees that, as between
each Subsidiary 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 as provided in Article Five hereof for the purposes of the
Note Guarantee of such Subsidiary Guarantor, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of
the obligations guaranteed hereby, and (y) in the event of any acceleration
of such obligations as provided in Article Five hereof, such obligations
(whether or not due and payable) shall forthwith become due and payable by
each Subsidiary Guarantor for the purpose of the Note Guarantee of such
Subsidiary Guarantor.
SECTION 1302. EXECUTION AND DELIVERY OF NOTE GUARANTEE.
To further evidence the Note Guarantee set forth in Section 1301,
each Subsidiary Guarantor hereby agrees that a notation of such Note
Guarantee, substantially in the form included in Exhibit B of this Indenture,
shall be endorsed on each Note authenticated and delivered by the Trustee.
Such Note Guarantee shall be executed on behalf of each Subsidiary Guarantor
by its Chairman, any Vice Chairman, its President, a Vice President or an
Assistant Vice President and attested by its Secretary or Assistant
Secretary, and shall have been duly authorized by all requisite corporate
action. Such signature may be in facsimile form. The validity and
enforceability of any Note Guarantee shall not be affected by the fact that
it is not affixed to any particular Note.
Each Subsidiary Guarantor hereby agrees that its respective Note
Guarantee set forth in Section 1301 shall remain in full force and effect
notwithstanding any failure to endorse on each note a notation of such Note
Guarantee.
The delivery of any Note by the Note Trustee, after the
authentication thereof hereunder, shall constitute due delivery of any Note
Guarantee set forth in this Indenture on behalf of the Subsidiary Guarantors.
SECTION 1303. Severability.
In case any provision of any 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.
93
SECTION 1304. SENIORITY OF GUARANTEES.
The obligations of each Subsidiary Guarantor to the Holders of Notes
and to the Trustee pursuant to such Subsidiary Guarantor's Note Guarantee and
this Indenture are senior unsecured obligations of such Subsidiary Guarantor
ranking pari passu in right of payment with all existing and future senior
obligations of such Subsidiary Guarantor.
SECTION 1305. LIMITATION OF SUBSIDIARY GUARANTOR'S LIABILITY.
Each Subsidiary Guarantor and by its acceptance hereof each Holder
confirms that it is the intention of all such parties that the guarantee by
each Subsidiary Guarantor pursuant to its Note Guarantee not constitute a
fraudulent transfer or conveyance for purposes of the Federal Bankruptcy
Code, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer
Act or any similar federal or state law or the provisions of its local law
relating to fraudulent transfer or conveyance. To effectuate the foregoing
intention, the Holders and such Subsidiary Guarantor hereby irrevocably agree
that the obligations of such Subsidiary Guarantor under its Note Guarantee
shall be limited to the maximum amount that will not, after giving effect to
all other contingent and fixed liabilities of such Subsidiary Guarantor and
after giving effect to any collections from or payments made by or on behalf
of any other Subsidiary Guarantor in respect of the obligations of such other
Subsidiary Guarantor under its Note Guarantee or pursuant to Section 1305
hereof, result in the obligations of such Subsidiary Guarantor under its Note
Guarantee constituting such fraudulent transfer or conveyance.
SECTION 1306. CONTRIBUTION.
In order to provide for just and equitable contribution among the
Subsidiary Guarantors, the Subsidiary Guarantors agree, INTER SE, that in the
event any payment or distribution is made by any Subsidiary Guarantor (a
"Funding Subsidiary Guarantor") under a Guarantee, such Funding Subsidiary
Guarantor shall be entitled to a contribution from all other Subsidiary
Guarantors in a pro rata amount based on the Adjusted Net Assets of each
Subsidiary Guarantor (including the Funding Subsidiary Guarantor) for all
payments, damages and expenses incurred by that Funding Subsidiary Guarantor
in discharging the Company's obligations with respect to the Notes or any
other Subsidiary Guarantor's obligations with respect to the Guarantee of
such Subsidiary Guarantor. "Adjusted Net Assets" of such Subsidiary
Guarantor at any date shall mean the lesser of (x) the amount by which the
fair value of the property of such Subsidiary Guarantor exceeds the total
amount of liabilities, including, without limitation, contingent liabilities
(after giving effect to all other fixed and contingent liabilities incurred
or assumed on such date), but excluding liabilities under the Guarantee of
such Subsidiary Guarantor at such date and (y) the amount by which the
present fair salable value of the assets of such Subsidiary Guarantor at such
date exceeds the amount that will be required to pay the probable liability
of such Subsidiary Guarantor on
94
its debts (after giving effect to all other fixed and contingent liabilities
incurred or assumed on such date), excluding debt in respect of the Guarantee
of such Subsidiary Guarantor, as they become absolute and matured.
SECTION 1307. RELEASE OF A SUBSIDIARY GUARANTOR.
(a) In the event of any sale, exchange or transfer to any person
not an Affiliate of the Company of all of the Company's and the Restricted
Subsidiaries' Capital Stock in, or all or substantially all the assets of,
such Restricted Subsidiary (which sale, exchange or transfer is not
prohibited by Section 801), then such Subsidiary Guarantor will be deemed
automatically and unconditionally released and discharged from all of its
obligations under its Note Guarantee without any further action on the part
of the Trustee or any holder of the Notes; PROVIDED that the Net Proceeds of
such sale, transfer or other disposition are applied in accordance with
Section 1016 to the extent required thereby.
(b) Any Subsidiary Guarantor that is designated by the Board of
Directors of the Company as an Unrestricted Subsidiary in accordance with the
terms of this Indenture may, at such time, at the option of the Board of
Directors, be released and relieved of its obligations under its Note
Guarantee. The Trustee shall deliver an appropriate instrument evidencing
such release upon receipt of a Company Request accompanied by an Officers'
Certificate certifying as to the compliance with this Section 1307. Any
Subsidiary Guarantor not so released shall remain liable for the full amount
of principal of and interest on the Notes as provided in its Note Guarantee.
(c) Any Non-U.S. Restricted Subsidiary that is or becomes a
Subsidiary Guarantor shall be released and relieved of its obligations under
its Note Guarantee at the time such Subsidiary no longer guarantees any
Indebtedness (other than the Notes) of the Company or any U.S. Restricted
Subsidiary (other than as a result of payment thereof). The Trustee shall
deliver an appropriate instrument evidencing such release upon receipt of a
Company Request accompanied by an Officers' Certificate certifying as to the
compliance with this Section 1308.
(d) Concurrently with the defeasance of the Notes under Section
1202 hereof, or the covenant defeasance of the Notes under Section 1203
hereof, the Subsidiary Guarantors shall be released from all their
obligations under their Note Guarantees under this Article Thirteen.
SECTION 1308. SUBSIDIARY GUARANTORS MAY CONSOLIDATE, ETC. ON CERTAIN
TERMS.
No Subsidiary Guarantor may consolidate with or merge with or into
any other person or convey, sell, assign, transfer, lease or otherwise
dispose of its properties and assets
95
substantially as an entirety to any other person (other than the Company or
another Subsidiary Guarantor) unless: (a) such Subsidiary Guarantor is
released from its Note Guarantee pursuant to Section 1307 or (b)(i), the
person formed by or surviving such consolidation or merger (if other than
such Subsidiary Guarantor) or to which such properties and assets are
transferred assumes all of the obligations of such Subsidiary Guarantor under
the Indenture and its Note Guarantee, pursuant to a supplemental indenture in
form and substance satisfactory to the Trustee and (ii) immediately after
giving effect to such transaction, no Default or Event of Default has
occurred and is continuing.
SECTION 1309. BENEFITS ACKNOWLEDGED.
Each Subsidiary Guarantor acknowledges that it will receive direct
and indirect benefits from the financing arrangements contemplated by this
Indenture and that its guarantee and waivers pursuant to its Guarantee are
knowingly made in contemplation of such benefits.
SECTION 1310. ISSUANCE OF GUARANTEES BY CERTAIN NEW RESTRICTED
SUBSIDIARIES.
The Company shall provide to the Trustee, on the date that any
Person becomes a Restricted Subsidiary, a supplemental indenture to the
Indenture, executed by such new Restricted Subsidiary, providing for a full
and unconditional guarantee on a senior basis by such new Restricted
Subsidiary of the Company's obligations under the Notes and the Indenture to
the same extent as that set forth in the Indenture, PROVIDED that any such
Restricted Subsidiary that is organized outside the United States shall not
be required to provide a Note Guarantee so long as such Restricted Subsidiary
has not guaranteed any other Indebtedness of the Company or any other
Restricted Subsidiary.
* * * *
This Indenture may be signed in any number of counterparts each of
which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Indenture.
1
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals, if any, to be
hereunto affixed and attested, all as of the day and year first above written.
BURKE INDUSTRIES, INC.
By
-------------------------------
Name:
Title:
Attest:
----------------------------
Title:
UNITED STATES TRUST COMPANY
OF NEW YORK
By
-------------------------------
Authorized Signatory
BURKE FLOORING PRODUCTS, INC.
BURKE CUSTOM PROCESSING, INC.
BURKE RUBBER COMPANY, INC.
Each, a Subsidiary Guarantor
By
-------------------------------
Name:
Title:
Attest:
----------------------------
Title:
EXHIBIT A
[FACE OF NOTE]
BURKE INDUSTRIES, INC.
10% [Series B]** Senior Note Due 2007
CUSIP _________
No. _______ $ _________________
BURKE INDUSTRIES, INC., a California corporation (the "Company",
which term includes any successor under the Indenture hereinafter referred
to), for value received, promises to pay to ___________, or its registered
assigns, the principal sum of ________________________________ ($___________),
on August 15, 2007.
Interest Rate: 10% per annum.
Interest Payment Dates: February 15 and August 15 of each
year commencing February 15, 1998.
Regular Record Dates: February 1 and August 1 of each
year.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
Date: BURKE INDUSTRIES, INC.
-----------------------
By:
-------------------------------
Title:
Attest:
----------------------
Title:
(Form of Trustee's Certificate of Authentication)
This is one of the 10% [Series B] Senior Notes due 2007 described in the
within-mentioned Indenture.
UNITED STATES TRUST COMPANY OF
NEW YORK,
as Trustee
By:
---------------------------
Authorized Signatory
[REVERSE SIDE OF NOTE]
BURKE INDUSTRIES, INC.
10% [Series B] Senior Note due 2007
1. PRINCIPAL AND INTEREST.
The Stated Maturity of the Notes shall be August 15, 2007, and the
Notes shall bear interest at the rate of 10% per annum from August 20, 1997,
or from the most recent Interest Payment Date to which interest has been paid
or duly provided for, payable semiannually on February 15 and August 15 in
each year, commencing February 15, 1998, until the principal thereof is paid
or duly provided for, to the Person in whose name the Note (or any
predecessor Note) is registered at the close of business on the February 1 or
August 1 next preceding such Interest Payment Date.
[If (a) the Company fails to file any of the Registration Statements
required by the Registration Rights Agreement on or before the date specified
for such filing, (b) any of such Registration Statements is not declared
effective by the Commission on or prior to the date specified in the
Registration Rights Agreement (the "Effectiveness Target Date"), or (c) the
Company fails to consummate the Exchange Offer within 30 business days of the
Effectiveness Target Date with respect to the Exchange Offer Registration
Statement, or (d) the Shelf Registration Statement or the Exchange Offer
Registration Statement is declared effective but thereafter ceases to be
effective or usable in connection with resales of Notes during the periods
specified in the Registration Rights Agreement (each such event referred to in
clauses (a) through (d) above a "Registration Default"), then the Company will
pay liquidated damages ("Liquidated Damages") to each Holder of Notes, with
respect to the first 90-day period immediately following the occurrence of such
Registration Default in an amount equal to $0.05 per week per $1,000 principal
amount of Notes held by such Holder. The amount of the Liquidated Damages will
increase by an additional $0.05 per week per $1,000 principal amount of Notes
with respect to each subsequent 90-day period until all Registration Defaults
have been cured, up to a maximum amount of Liquidated Damages of $.30 per week
per $1,000 principal amount of Notes. Upon the filing of the Exchange Offer
Registration Statement, the consummation of the Exchange Offer or the
effectiveness of a Shelf Registration Statement, as the case may be, Liquidated
Damages will cease to accrue from the date of such filing, consummation or
effectiveness, as the case may be; PROVIDED, HOWEVER, that, if after the date
such Liquidated Damages cease to accrue, a different event specified in clause
(a), (b), (c) or (d) above occurs, Liquidated Damages may again commence
accruing pursuant to the foregoing provisions.]
The Company shall pay interest on overdue principal and premium, if
any, and interest on overdue installments of interest, to the extent lawful,
at a rate per annum equal to the rate of interest applicable to the Notes.
2. METHOD OF PAYMENT.
The Company will pay interest (except defaulted interest) on the
principal amount of the Notes on each Interest Payment Date to the persons
who are Holders (as reflected in the Register at the close of business on the
Regular Record Date immediately preceding the Interest Payment Date), in each
case, even if the Note is cancelled on registration of transfer or
registration of exchange after such record date; PROVIDED that, with respect
to the payment of principal, the Company will make payment to the Holder that
surrenders this Note to any Paying Agent on or after August 15, 2007.
The principal of (and premium, if any), and interest on the Notes
shall be payable, and the Notes shall be exchangeable and transferable, at
the office or agency of the Company in The City of New York maintained for
such purposes, (which initially shall be the office of the Trustee located at
114 West 47th St., New York, N.Y. 10036-1532, Attention: Corporate Trust) or,
at the option of the Company, interest may be paid by check mailed to the
address of the Person entitled thereto as such address shall appear on the
Register; PROVIDED that all payments with respect to the Global Note and the
Certificated Notes the Holder of which have given wire transfer instructions
to the Company will be required to be made by wire transfer of immediately
available funds to the accounts specified by the Holders thereof.
3. PAYING AGENT AND REGISTRAR.
Initially, the Trustee will act as Paying Agent and Registrar. The
Company may change any Paying Agent or Registrar upon written notice thereto
and without notice to any Holder. The Company, any Subsidiary or any
Affiliate of any of them may act as Paying Agent, Registrar or co-registrar.
4. INDENTURE; LIMITATIONS.
The Company issued the Notes under an Indenture dated as of August
20, 1997 (the "Indenture"), between the Company, the Subsidiary Guarantors
and United States Trust Company of New York (the "Trustee"). Capitalized
terms herein are used as defined in the Indenture unless otherwise indicated.
The terms of the Notes include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act. The Notes are
subject to all such terms, and Holders are referred to the Indenture and the
Trust Indenture Act for a statement of all such terms. To the extent
permitted by applicable
law, in the event of any inconsistency between the terms of this Note and the
terms of the Indenture, the terms of the Indenture shall control.
The Notes are general unsecured obligations of the Company.
5. REDEMPTION.
OPTIONAL REDEMPTION. The Notes may be redeemed at the option of
the Company, in whole or in part, at any time and from time to time on or
after August 15, 2002, at the following Redemption Prices (expressed in
percentages of principal amount), plus accrued and unpaid interest, if any,
to the Redemption Date (subject to the right of Holders of record on the
relevant Regular Record Date to receive interest due on an Interest Payment
Date that is on or prior to the Redemption Date), if redeemed during the
12-month period beginning August 15 of each of the years set forth below:
Redemption
YEAR
PRICE
2002 . . . . . . . . . . . . . . . . . . . 105.000%
2003 . . . . . . . . . . . . . . . . . . . 103.333%
2004 . . . . . . . . . . . . . . . . . . . 101.667%
and thereafter at 100% of the principal amount, together with accrued
interest, if any, to the redemption date.
In addition, at any time or from time to time prior to August 15,
2000, the Company may redeem up to 35% of the sum of (i) the initial
aggregate principal amount of the Notes and (ii) the initial aggregate
principal amount of any Additional Notes on one or more occasions with the
net proceeds of one or more Public Equity Offerings at a redemption price
equal to 110% of the principal amount thereof, 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 an interest payment date);
PROVIDED that, immediately after giving effect to such redemption, at least
65% of the sum of (x) the initial aggregate principal amount of the Notes and
(y) the initial aggregate principal amount of any Additional Notes remains
outstanding; PROVIDED FURTHER that such redemptions shall occur within 45
days of the date of closing of each Public Equity Offering.
Upon the occurrence of a Change of Control prior to August 15, 2002,
the Notes will be redeemable, in whole or in part, at the option of the
Company, upon not less than 30 nor more than 60 days' prior notice to each
holder of Notes to be redeemed, at a redemption price equal to the sum of (i)
the then outstanding principal amount thereof plus
(ii) accrued and unpaid interest thereon, to the redemption date plus (iii)
the Applicable Premium.
Notice of a redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each Holder to be redeemed at such
Holder's last address as it appears in the Register. Notes in original
denominations larger than $1,000 may be redeemed in part in integral
multiples of $1,000. On and after the Redemption Date, interest ceases to
accrue on Notes or portions of Notes called for redemption, unless the
Company defaults in the payment of the Redemption Price.
6. REPURCHASE UPON A CHANGE IN CONTROL AND ASSET SALES.
(a) If a Change of Control occurs at any time, then, unless
irrevocable notice of redemption for all of the Notes is given within 30 days
after the occurrence of such Change of Control in accordance with the
provisions of Section 1015 of the Indenture, each holder of Notes shall have
the right to require that the Company purchase such holder's Notes or
Additional Notes, as applicable, in whole or in part in integral multiples of
$1,000, at a purchase price in cash equal to 101% of the principal amount of
such Notes or Additional Notes, plus accrued and unpaid interest, if any, to
the date of purchase, pursuant to the offer described below (the "Change of
Control Offer") and (b) upon Asset Sales, the Company may be obligated to
make offers to purchase Notes with a portion of the Net Cash Proceeds of such
Asset Sales at a redemption price of 100% of the principal amount thereof
plus accrued and unpaid interest, if any, to the date of purchase.
7. DENOMINATIONS; TRANSFER; EXCHANGE.
The Notes are in registered form without coupons, in denominations
of $1,000 and multiples of $1,000 in excess thereof. A Holder may register
the transfer or exchange of Notes in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not register the
transfer or exchange of any Notes selected for redemption (except the
unredeemed portion of any Note being redeemed in part). Also, it need not
register the transfer or exchange of any Notes for a period of 15 days before
a selection of Notes to be redeemed is made.
8. PERSONS DEEMED OWNERS.
A Holder may be treated as the owner of a Note for all purposes.
9. UNCLAIMED MONEY.
If money for the payment of principal, premium, if any, or interest
remains unclaimed for two years, the Trustee and the Paying Agent will pay
the money back to the Company at its request. After that, Holders entitled
to the money must look to the Company for payment, unless an abandoned
property law designates another Person, and all liability of the Trustee and
such Paying Agent with respect to such money shall cease.
10. DISCHARGE PRIOR TO REDEMPTION OR MATURITY.
If the Company irrevocably deposits, or causes to be deposited, with
the Trustee money or U.S. Government Obligations sufficient to pay the then
outstanding principal of, premium, if any, and accrued interest on the Notes
(a) to redemption or maturity, the Company will be discharged from the
Indenture, the Notes and the Note Guarantees, except in certain circumstances
for certain sections thereof, and (b) to the Stated Maturity, the Company
will be discharged from certain covenants set forth in the Indenture.
11. AMENDMENT; SUPPLEMENT; WAIVER.
Subject to certain exceptions, the Indenture or the Notes may be
amended or supplemented with the consent of the Holders of at least a
majority in aggregate principal amount of the Notes then outstanding, and any
existing default or compliance with any provision may be waived with the
consent of the Holders of a majority in aggregate principal amount of the
Notes then outstanding. Without notice to or the consent of any Holder, the
parties thereto may amend or supplement the Indenture or the Notes to, among
other things, cure any ambiguity, defect or inconsistency.
12. RESTRICTIVE COVENANTS.
The Indenture contains certain covenants, including, without
limitation, covenants with respect to the following matters: (i)
Indebtedness; (ii) Restricted Payments; (iii) issuances and sales of
preferred stock of Restricted Subsidiaries; (iv) transactions with
Affiliates; (v) Liens; (vi) certain Asset Sales; (vii) dividends and other
payment restrictions affecting Restricted Subsidiaries; (viii) mergers and
certain transfers of assets. Within 120 days after the end of each fiscal
year, the Company must report to the Trustee on compliance with such
limitations.
13. SUCCESSOR PERSONS.
When a successor person or other entity assumes all the obligations
of its predecessor under the Notes and the Indenture, the predecessor person
will be released from those obligations.
14. REMEDIES FOR EVENTS OF DEFAULT.
If an Event of Default, as defined in the Indenture, occurs and is
continuing, the Trustee or the Holders of not less than 25% in principal
amount of the Notes then outstanding may declare all the Notes to be
immediately due and payable. If a bankruptcy or insolvency default with
respect to the Company or any of its Significant Subsidiaries occurs and is
continuing, the Notes automatically become immediately due and payable.
Holders may not enforce the Indenture or the Notes except as provided in the
Indenture. The Trustee may require indemnity satisfactory to it before it
enforces the Indenture or the Notes. Subject to certain limitations, Holders
of at least a majority in principal amount of the Notes then outstanding may
direct the Trustee in its exercise of any trust or power.
15. TRUSTEE DEALINGS WITH COMPANY.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Notes and may make loans to,
accept deposits from, perform services for, and otherwise deal with, the
Company and its Affiliates as if it were not the Trustee.
16. AUTHENTICATION.
This Note shall not be valid until the Trustee signs the certificate
of authentication on the other side of this Note.
17. GOVERNING LAW.
The Notes shall be governed by, and construed in accordance with,
the law of the State of New York.
18. ABBREVIATIONS.
Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors
Act).
19. NO RECOURSE AGAINST OTHERS.
A director, officer, employee, incorporator or stockholder of the
Company, as such, shall not have any liability for any obligations of the
Company under the Notes, the Indenture or the Note Guarantees or for any
claim based on, in respect of, or by reason of, such obligations of their
creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the
issuance of the Notes.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to Burke
Industries, Inc., 2250 South Tenth Street, San Jose, California 95112,
Attention: Chief Executive Officer.
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
INSERT TAXPAYER IDENTIFICATION NO.
(Please print or typewrite name and address including zip code of assignee)
the within Note and all rights thereunder, hereby irrevocably constituting
and appointing
attorney to transfer such Note on the books of the Company with full power of
substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED ON ALL CERTIFICATES]
In connection with any transfer of this Note occurring prior to the
date which is the earlier of the date of an effective Registration Statement
or ____________, the undersigned confirms that, without utilizing any general
solicitation or general advertising that:
[CHECK ONE]
[ ] (a) this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933, as amended, provided by
Rule 144A thereunder.
OR
[ ] (b) this Note is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Note and the Indenture.
If none of the foregoing boxes is checked, the Trustee or other Registrar
shall not be obligated to register this Note in the name of any Person other
than the Holder hereof unless and until the conditions to any such transfer
of registration set forth herein and in Section 307 of the Indenture shall
have been satisfied.
Date: NOTICE: The signature to this
assignment must correspond with the name
as written upon the face of the
within-mentioned instrument in every
particular, without alteration or any
change whatsoever.
Signature Guarantee:
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
of 1933, as amended, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Company as the undersigned has requested pursuant to Rule 144A
or has determined not to request such information and that it is aware that
the transferor is relying upon the undersigned's foregoing representations in
order to claim the exemption from registration provided by Rule 144A.
Dated: NOTICE: To be executed by an
executive officer
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to
Section 1015 or Section 1016 of the Indenture, check the Box: [ ].
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 1015 or Section 1016 of the Indenture, state the amount
(in original principal amount) below:
$____________________.
Date:
Your Signature:
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee:
Tax ID #: __________________
EXHIBIT B
FORM OF SUBSIDIARY GUARANTEE
Each Subsidiary Guarantor hereby jointly and severally, absolutely,
unconditionally and irrevocably guarantees the Notes and obligations of the
Company hereunder and thereunder, and guarantees to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee on behalf of
such Holder, that: (a) the principal of (and premium, if any) and interest on
the Notes will be paid in full when due, whether at Stated Maturity, by
acceleration, call for redemption or otherwise (including, without
limitation, the amount that would become due but for the operation of the
automatic stay under Section 362(a) of the Federal Bankruptcy Code), together
with interest on the overdue principal, if any, and interest on any overdue
interest, to the extent lawful, and all other obligations of the Company to
the Holders or the Trustee hereunder or thereunder will be paid in full or
performed, all in accordance with the terms hereof and thereof; and (b) in
case of any extension of time of payment or renewal of any Notes or of any
such other obligations, the same will be paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at Stated
Maturity, by acceleration or otherwise, subject, however, in the case of
clauses (a) and (b) above, to the limitations set forth in Section 1306 of
the Indenture.
The obligations of the Subsidiary Guarantors to the Holders of the
Notes and to the Trustee pursuant to this Note Guarantee and the Indenture
are expressly set forth in Article 13 of the Indenture, and reference is
hereby made to such Indenture for the precise terms of this Note Guarantee.
The terms of Article 13 of the Indenture are incorporated herein by reference.
This is a continuing Note Guarantee and shall remain in full force
and effect and shall be binding upon each Subsidiary Guarantor and its
respective successors and assigns to the extent set forth in the Indenture
until full and final payment of all of the Company's obligations under the
Notes and the Indenture and shall inure to the benefit of the successors and
assigns of the Trustee and the Holders of Notes and, in the event of any
transfer or assignment of rights by any Holder of Notes or the Trustee, the
rights and privileges herein conferred upon that party shall automatically
extend to and be vested in such transferee or assignee, all subject to the
terms and conditions hereof. This is a Note Guarantee of payment and not a
guarantee of collection.
In certain circumstances more fully described in the Indenture, any
Subsidiary Guarantor may be released from its liability under this Subsidiary
Guarantee, and any such release will be effective whether or not noted herein.
This Subsidiary Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Senior Subordinated
Note upon which this
B-2
Subsidiary Guarantee is noted shall have been executed by the Trustee under
the Indenture by the manual signature of one of its authorized officers.
Capitalized terms used herein have the same meanings given in the
Indenture unless otherwise indicated.
BURKE FLOORING PRODUCTS, INC.
BURKE CUSTOM PROCESSING, INC.
BURKE RUBBER COMPANY, INC.
Each, a Subsidiary Guarantor
By:
-----------------------------
Name:
Title:
Attest:
--------------------------
Title:
EXHIBIT C
FORM OF LETTER TO BE DELIVERED BY ACCREDITED INVESTORS
, 1997
NationsBanc Capital Markets, Inc.
NationsBank Corporate Center
100 North Tryon Street, NCI-007-01
Charlotte, North Carolina 28255
Burke Industries, Inc.
2250 South Tenth Street
San Jose, California 95112
Re: Purchase of $110,000,000 principal amount of 10% Senior Notes due
2007 (the "Senior Notes") of Burke Industries, Inc., a Delaware
corporation (the "Company")
Ladies and Gentlemen:
In connection with our purchase of the Senior Notes we confirm that:
1. We understand that the Senior Notes are not being and will not
be registered under the Securities Act of 1933, as amended (the "Securities
Act"), and are being sold to us in a transaction that is exempt from the
registration requirements of the Securities Act.
2. We acknowledge that (a) neither the Company, nor the Initial
Purchaser (as defined in the Offering Memorandum dated _____, 1997 relating
to the Senior Notes (the "Final Memorandum")) nor any persons acting on
behalf of the Company or the Initial Purchaser has made any representation to
us with respect to the Company or the offer or sale of any Senior Notes and
(b) any information we desire concerning the Company and the Senior Notes or
any other matter relevant to our decision to purchase the Senior Notes
(including a copy of the Final Memorandum) is or has been made available to
us.
3. We have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of an investment
in the Senior Notes, and we are (or any account for which we are purchasing
under paragraph 5 below is) an Institutional "accredited investor" (within
the meaning of Rule 501(a)(1), (2), (3), or (7) of
C-2
Regulation D under the Securities Act) (an "IAI") able to bear the economic
risk of investment in the Senior Notes.
4. We understand that the minimum principal amount of Senior Notes
that may be purchased by an IAI is $250,000.
5. We are acquiring the Senior Notes for our own account (or for
accounts as to which we exercise sole investment discretion and have
authority to make, and do make, the statements contained in this letter) and
not with a view to any distribution of the Senior Notes, subject,
nevertheless, to the understanding that the disposition of our property will
at all times be and remain within our control.
6. We understand that the Senior Notes will be in registered form
only and that any certificates delivered to us in respect of the Senior Notes
will bear a legend substantially to the following effect:
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, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH BURKE
INDUSTRIES, INC. (THE "COMPANY") OR ANY AFFILIATE OF THE COMPANY WAS
THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) (THE
"RESALE RESTRICTION TERMINATION DATE") ONLY (A) TO THE COMPANY, (B)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A), TO A
PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A 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 TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED
STATES WITHIN THE
C-3
MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH
(a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH
AN INSTITUTIONAL "ACCREDITED INVESTOR", FOR INVESTMENT PURPOSES AND
NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (F) PURSUANT TO THE
EXEMPTION FROM REGISTRATION UNDER SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (G) 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 (I) PURSUANT TO CLAUSES (E), (F) OR (G) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR
OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (II) IN EACH OF
THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE
FORM APPEARING ON THIS SECURITY IS COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE TRANSFER AGENT, THIS LEGEND WILL BE REMOVED UPON
THE REQUEST OF A HOLDER AFTER THE RESALE RESTRICTION TERMINATION
DATE.
7. We agree that in the event that at some future time we wish to
dispose of any of the Senior Notes, we will not do so unless such disposition
is made in accordance with any applicable securities laws of any state of the
United States and:
(a) the Senior Notes are sold in compliance with Rule 144(k) under
the Securities Act or
(b) the Senior Notes are sold in compliance with Rule 144A under the
Securities Act or
(c) the Senior Notes are sold in compliance with Regulation S under
the Securities Act or
(d) the Senior Notes are sold pursuant to an effective registration
statement under the Securities Act or
(e) the Senior Notes are sold to the Company or an affiliate (as
defined in Rule 501(b) of Regulation D) of the Company or
C-4
(f) the Senior Notes are disposed of in any other transaction that
does not require registration under the Securities Act, and prior to such
disposition we have furnished to the Company or its designee an opinion of
counsel experienced in securities law matters to such effect or such other
documentation as the Company or its designee may reasonably request.
8. We understand that NationsBanc Capital Markets, Inc., as the
Initial Purchase, the Company and other persons will rely upon the truth and
accuracy of the statements set forth herein, and we agree that if any such
statements are no longer true or accurate we will promptly so notify the
Company and the Initial Purchase in writing.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
---------------------------------
(Name of Purchaser)
By:
---------------------------------
Name:
Title:
Address:
Upon transfer, the Notes should be registered in the name of the new
beneficial owner as follows:
Name:
Address:
Taxpayer ID Number: