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EXECUTION COPY
Katz Media Corporation
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SERIES A AND SERIES B
10 1/2% SENIOR SUBORDINATED NOTES DUE 2007
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INDENTURE
DATED AS OF DECEMBER 19, 1996
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AMERICAN STOCK TRANSFER & TRUST COMPANY
Trustee
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CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310 (a)(1)..................................................... 7.10
(a)(2)..................................................... 7.10
(a)(3) .................................................... N.A.
(a)(4)..................................................... N.A.
(a)(5)..................................................... 7.10
(b) ....................................................... 7.10
(c) ....................................................... N.A.
311 (a) ....................................................... 7.11
(b) ....................................................... 7.11
(c) ....................................................... N.A.
312 (a) ....................................................... 2.05
(b) ....................................................... 11.03
(c) ....................................................... 11.03
313 (a) ....................................................... 7.06
(b)(1) .................................................... 10.03
(b)(2) .................................................... 7.07
(c) ....................................................... 7.06, 11.02
(d) ....................................................... 7.06
314 (a) ....................................................... 4.04, 11.02
(b) ....................................................... 10.02
(c)(1) .................................................... 11.04
(c)(2) .................................................... 11.04
(c)(3) .................................................... N.A.
(d) ....................................................... 10.03, 10.04
(e) ...................................................... 11.07
(f) ....................................................... N.A.
315 (a) ....................................................... 7.01
(b) ....................................................... 7.05, 11.02
(c) ...................................................... 7.01
(d) ....................................................... 7.01
(e) ....................................................... 6.11
316 (a)(last sentence) ........................................ 2.09
(a)(1)(A) ................................................. 6.05
(a)(1)(B) ................................................. 6.04
(a)(2) .................................................... N.A.
(b) ....................................................... 6.07
(c) ....................................................... 2.12
317 (a)(1) .................................................... 6.08
(a)(2)..................................................... 6.09
(b) ....................................................... 2.04
318 (a) ....................................................... 11.01
(b) ....................................................... N.A.
(c) ....................................................... 11.01
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions................................................. 1
Section 1.02. Other Definitions........................................... 12
Section 1.03. Incorporation by Reference of Trust Indenture Act........... 12
Section 1.04. Rules of Construction....................................... 12
ARTICLE 2
THE NOTES
Section 2.01. Form and Dating............................................. 12
Section 2.02. Execution and Authentication................................ 14
Section 2.03. Registrar and Paying Agent.................................. 14
Section 2.04. Paying Agent to Hold Money in Trust......................... 15
Section 2.05. Holder Lists................................................ 15
Section 2.06. Transfer and Exchange....................................... 15
Section 2.07. Replacement Notes........................................... 21
Section 2.08. Outstanding Notes........................................... 21
Section 2.09. Treasury Notes.............................................. 21
Section 2.10. Temporary Notes............................................. 22
Section 2.11. Cancellation................................................ 22
Section 2.12. Defaulted Interest.......................................... 22
Section 2.13. Record Date................................................. 23
Section 2.14. CUSIP Number................................................ 23
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee.......................................... 23
Section 3.02. Selection of Notes to be Redeemed or Purchased.............. 23
Section 3.03. Notice of Redemption........................................ 24
Section 3.04. Effect of Notice of Redemption.............................. 24
Section 3.05. Deposit of Redemption Price................................. 25
Section 3.06. Notes Redeemed in Part...................................... 25
Section 3.07. Optional Redemption Provisions.............................. 25
Section 3.08. Mandatory Purchase Provisions............................... 25
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes............................................ 27
Section 4.02. Reports..................................................... 27
Section 4.03. Compliance Certificate...................................... 27
Section 4.04. Stay, Extension and Usury Laws.............................. 28
Section 4.05. Restricted Payments......................................... 28
Section 4.06. Corporate Existence......................................... 30
Section 4.07. Incurrence of Indebtedness and Issuance of Preferred Stock.. 30
Section 4.08. Transactions With Affiliates................................ 31
Section 4.09. Liens....................................................... 32
Section 4.10. Compliance With Laws, Taxes................................. 32
Section 4.11. Dividend and Other Payment Restrictions Affecting
Subsidiaries............................................... 32
Section 4.12. Maintenance of Office or Agencies........................... 33
Section 4.13. Change of Control........................................... 33
Section 4.14. Asset Sales................................................. 33
Section 4.15. Additional Guarantees....................................... 34
Section 4.16. Activities of the Company................................... 34
Section 4.17. No Senior Subordinated Debt................................. 34
ARTICLE 5
SUCCESSORS
Section 5.01. Merger, Consolidation or Sale of Assets.................... 35
Section 5.02. Successor Corporation Substituted........................... 35
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default........................................... 35
Section 6.02. Acceleration................................................ 37
Section 6.03. Other Remedies.............................................. 37
Section 6.04. Waiver of Past Defaults..................................... 37
Section 6.05. Control by Majority......................................... 37
Section 6.06. Limitation on Suits......................................... 38
Section 6.07. Rights of Holders to Receive Payment........................ 38
Section 6.08. Collection Suit by Trustee.................................. 38
Section 6.09. Trustee May File Proofs of Claim............................ 38
Section 6.10. Priorities.................................................. 38
Section 6.11. Undertaking for Costs....................................... 39
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee........................................... 39
Section 7.02. Rights of Trustee........................................... 40
Section 7.03. Individual Rights of Trustee................................ 40
Section 7.04. Trustee's Disclaimer........................................ 40
Section 7.05. Notice to Holders of Defaults and Events of Default......... 40
Section 7.06. Reports by Trustee to Holders............................... 41
Section 7.07. Compensation and Indemnity.................................. 41
Section 7.08. Replacement of Trustee...................................... 41
Section 7.09. Successor Trustee by Merger, Etc............................ 42
Section 7.10. Eligibility; Disqualification............................... 42
Section 7.11. Preferential Collection of Claims Against the Company....... 42
ii
ARTICLE 8
FEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.... 42
Section 8.02. Legal Defeasance and Discharge.............................. 43
Section 8.03. Covenant Defeasance......................................... 43
Section 8.04. Conditions to Legal or Covenant Defeasance.................. 43
Section 8.05. Deposited Money and Government Securities to be Held in
Trust; Other Miscellaneous Provisions...................... 45
Section 8.06. Repayment to The Company.................................... 45
Section 8.07. Reinstatement............................................... 45
ARTICLE 9
AMENDMENTS
Section 9.01. Amendments and Supplements Permitted Without Consent of
Holders.................................................... 46
Section 9.02. Amendments and Supplements Requiring Consent of Holders..... 46
Section 9.03. Compliance with TIA......................................... 47
Section 9.04. Revocation and Effect of Consents........................... 47
Section 9.05. Notation on or Exchange of Notes............................ 47
Section 9.06. Trustee Protected........................................... 47
ARTICLE 10
SUBORDINATION
Section 10.01. Agreement to Subordinate.................................... 48
Section 10.02. Liquidation; Dissolution; Bankruptcy........................ 48
Section 10.03. Default on Designated Senior Debt........................... 48
Section 10.04. Acceleration of Notes....................................... 49
Section 10.05. When Distribution Must Be Paid Over......................... 49
Section 10.06. Notice by Company........................................... 49
Section 10.07. Subrogation................................................. 49
Section 10.08. Relative Rights............................................. 49
Section 10.09. Subordination May Not Be Impaired by Company................ 50
Section 10.10. Distribution or Notice to Representative.................... 50
Section 10.11. Rights of Trustee and Paying Agent.......................... 50
Section 10.12. Authorization to Effect Subordination....................... 50
Section 10.13. Amendments.................................................. 51
ARTICLE 11
GUARANTEE OF NOTES
Section 11.01. Subsidiary Guarantees....................................... 51
Section 11.02. Execution and Delivery of Subsidiary Guarantee.............. 51
Section 11.03. Guarantors May Consolidate, Etc., On Certain Terms.......... 52
Section 11.04. Releases.................................................... 52
Section 11.05. Additional Guarantors....................................... 53
Section 11.06. Limitation on Guarantor Liability........................... 53
Section 11.07. "Trustee" to Include Paying Agent........................... 53
Section 11.08. Subordination of Subsidiary Guarantee....................... 53
iii
ARTICLE 12
MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls............................... 53
Section 12.02. Notices.................................................... 54
Section 12.03. Communication by Holders with Other Holders................ 54
Section 12.04. Certificate and Opinion as to Conditions Precedent......... 55
Section 12.05. Statements Required in Certificate or Opinion.............. 55
Section 12.06. Rules by Trustee and Agents................................ 55
Section 12.07. Legal Holidays............................................. 55
Section 12.08. No Recourse Against Others................................. 55
Section 12.09. Counterparts............................................... 55
Section 12.10. Variable Provisions........................................ 56
Section 12.11. Governing Law.............................................. 56
Section 12.12. No Adverse Interpretation of Other Agreements.............. 56
Section 12.13. Successors................................................. 56
Section 12.14. Severability............................................... 56
Section 12.15 Table of Contents, Headings, Etc........................... 56
Exhibit A-1 Form of Note .............................................. A-1
Exhibit A-2 Form of Regulation S Temporary Global Note ................ A-2
Exhibit B-1 Form of Certificate of Exchange or Registration of
Transfer From Rule 144A Global Note to Regulation
S Global Note .............................................B-1
Exhibit B-2 Form of Certificate of Exchange or Registration of
Transfer From Regulation S Global Note to Rule
144A Global Note ..........................................B-2
Exhibit B-3 Form of Certificate of Exchange or Registration of
Transfer of Certificated Notes ............................B-3
Exhibit B-4 Form of Certificate of Exchange or Registration of
Transfer From Rule 144A Global Note or Regulation
S Permanent Global Note to Definitive Note.................B-4
Exhibit C Certificate of Institutional Accredited Investor.............C
Exhibit D Certificate of Guarantee ....................................D
Exhibit E Form of Supplemental Indenture...............................E
iv
This Indenture, dated as of December 19, 1996, is among Katz Media
Corporation, a Delaware corporation (the "Company"), Katz Communications, Inc.,
a Delaware corporation, Katz Millennium Marketing Inc., a Delaware corporation,
Banner Radio Sales, Inc., a Delaware corporation, Christal Radio Sales, Inc., a
Delaware corporation, Eastman Radio Sales, Inc., a Delaware corporation, Seltel
Inc., a Delaware corporation, Katz Cable Corporation, a Delaware corporation and
The National Payroll Corporation, Inc., a Delaware corporation (the
"Guarantors") and American Stock Transfer & Trust Company, a New York trust
corporation, as trustee (the "Trustee").
Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the holders of the Company's 10 1/2% Series
A Senior Subordinated Notes due 2007 (the "Series A Notes") and the Company's 10
1/2% Series B Senior Subordinated Notes due 2007 (the "Series B Notes" and,
together with the Series A Notes, the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Acquired Debt" means, with respect to any specified Person,
Indebtedness of any other Person existing at the time such other Person merges
with or into or becomes a Subsidiary of such specified Person, including
Indebtedness incurred in connection with, or in contemplation of, such other
Person merging with or into or becoming a Subsidiary of such specified Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Agent Members" means any members of, or participants in, the
Depositary.
"Asset Sale" means (i) the sale, lease, conveyance or other
disposition of any assets other than Marketable Securities (including, without
limitation, by way of a sale and leaseback) other than in the ordinary course of
business and other than any Contract Buy Out or sub-lease of real property
(provided that the sale, lease, conveyance or other disposition of all or
substantially all of the assets of the Company and its Subsidiaries taken as a
whole will be governed by Section 4.13 and/or Section 5.01 hereof and not by the
provisions of Section 4.14 hereof), and (ii) the issue or sale by the Company or
any of its Restricted Subsidiaries of Equity Interests of any of the Company's
Restricted Subsidiaries, in the case of either clause (i) or (ii), whether in a
single transaction or a series of related transactions (a) that have a fair
market value in excess of $2.0 million or (b) for net proceeds in excess of $2.0
million; provided that with respect to Contract Buy Outs of the station
representation contracts of the Company and its Restricted Subsidiaries, if, as
of any Buy Out Proceeds Determination Date after the date hereof, the Buy Out
Proceeds Amount exceeds $6.0 million, the Buy Out Proceeds Amount will be deemed
to be Net Proceeds in respect of an Asset Sale as of such date and shall be
applied in accordance with Section 4.14(b) hereof. Notwithstanding the
foregoing: (i) a transfer of assets by the Company to a Restricted Subsidiary or
by a Restricted Subsidiary to the Company or to another Restricted Subsidiary,
(ii) an issuance or sale of Equity Interests by a Restricted Subsidiary to the
Company or to another Restricted Subsidiary or any such issuance or sale in a
manner that does not reduce the percentage ownership of the Equity Interests of
such Restricted Subsidiary by the Company or any Restricted Subsidiary, and
(iii) a Restricted Payment that is permitted by Section 4.05 hereof will not be
deemed to be an Asset Sale.
1
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Board of Directors" means, with respect to any Person, the Company's
board of directors or any authorized committee of such board of directors (or
similar governing body) of such Person.
"Business Day" means any day other than a Legal Holiday.
"Buy Out Proceeds Amount" means an amount equal to (a) the aggregate
amount of cash consideration actually received by the Company and its Restricted
Subsidiaries in connection with Contract Buy Outs during a fiscal year (whether
or not a Contract Buy Out pursuant to which any such consideration was received
occurred during such fiscal year), minus (b) the aggregate amount of cash
consideration actually paid by the Company and its Restricted Subsidiaries in
connection with Contract Buy Outs during a fiscal year (whether or not a
Contract Buy Out pursuant to which any such consideration was paid occurred
during such fiscal year). On each Buy Out Proceeds Determination Date, the Buy
Out Proceeds Amount will be reset at zero.
"Buy Out Proceeds Determination Date" means the last day of each
fiscal year of the Company.
"Capital Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital lease
that would at such time be so required to be capitalized on the balance sheet in
accordance with GAAP.
"Capital Stock" means, (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
interests (whether general or limited) and (iv) any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
"Change of Control" means the occurrence of any of the following: (i)
all or substantially all of the assets of the Company, KMG or KMSI are sold as
an entirety to any Person or group (within the meaning of Rule 13d-5 under the
Exchange Act and Sections 13(d) and 14(d) of the Exchange Act (a "Group") other
than a Group including the Principals or their Related Parties); (ii) the
stockholders of the Company, KMG or KMSI approve a plan of liquidation or
dissolution (other than in connection with a merger of KMG or KMSI with or into
each other or the Company); or (iii) any Person or Group (other than the
Principals or their Related Parties) becomes, directly or indirectly, the
"beneficial owner," as defined in Rule 13d-3 under the Exchange Act (in a single
transaction or in a related series of transactions, by way of merger,
consolidation or other business combination or otherwise) of greater than (A)
40% of the total voting power entitled to vote in the election of directors of
the Company, KMG or KMSI or such other person surviving the transaction and (B)
the total voting power entitled to vote in the election of directors of the
Company, KMG or KMSI beneficially owned by the Principals or their Related
Parties.
2
"Company" means Katz Media Corporation, a Delaware corporation.
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person and its Restricted
Subsidiaries for such period, plus, to the extent deducted in computing
Consolidated Net Income, (a) provision for taxes based on income or profits of
such Person and its Restricted Subsidiaries for such period, (b) Consolidated
Interest Expense of such Person and its Restricted Subsidiaries for such period,
(c) depreciation and amortization (including amortization of goodwill and other
intangibles) and all other non-cash items (whether positive or negative)
(including, without limitation, Non-Cash Rent Expense) of such Person and its
Restricted Subsidiaries for such period and (d) an amount equal to any
extraordinary loss and any net loss realized in connection with any Asset Sale,
in each case, on a consolidated basis determined in accordance with GAAP.
Notwithstanding the foregoing, the provision for taxes based on the income or
profits of, and the depreciation and amortization of, a Subsidiary of a Person
shall be added to Consolidated Net Income to compute Consolidated Cash Flow only
to the extent (and in the same proportion) that the Net Income of such
Subsidiary was included in calculating the Consolidated Net Income of such
Person and only if a corresponding amount would be permitted at the date of
determination to be dividended to the Company by such Subsidiary without prior
approval (that has not been obtained), pursuant to the terms of its charter and
all agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to that Subsidiary or its stockholders.
"Consolidated Cash Interest Expense" means, with respect to any Person
for any period, the Consolidated Interest Expense of such Person and its
Restricted Subsidiaries for such period, less all non-cash charges of such
Person included in Consolidated Interest Expense for such period.
"Consolidated Interest Expense" means, with respect to any Person for
any period, the interest expense (net of interest income) of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP (including amortization of original issue discount and
deferred financing costs, commissions, discounts, fees and charges, non-cash
interest payments, the interest component of all payments associated with
Capital Lease Obligations and net payments (if any) pursuant to Hedging
Obligations).
3
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided, however, that (a) the Net Income of any Person that is not
a Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions actually paid in that period to the referent Person or a Wholly
Owned Restricted Subsidiary thereof, (b) the Net Income of any Person acquired
in a pooling of interests transaction for any period prior to the date of such
acquisition shall be excluded, (c) the cumulative effect of a change in
accounting principles shall be excluded, and (d) the Net Income of any
Unrestricted Subsidiary shall be excluded, whether or not distributed to the
Company or one of its Subsidiaries except as set forth in (a) above.
"Consolidated Net Worth" means, with respect to any Person as of any
date, the sum of (i) the consolidated equity of the common stockholders of such
Person and its consolidated Subsidiaries as of such date plus (ii) the
respective amounts reported on such Person's balance sheet as of such date with
respect to any series of preferred stock (other than Disqualified Stock) that by
its terms is not entitled to the payment of dividends unless such dividends may
be declared and paid only out of net earnings in respect of the year of such
declaration and payment, but only to the extent of any cash received by such
Person upon issuance of such preferred stock, less (x) all write-ups (other than
write-ups resulting from foreign currency translations and write-ups of tangible
assets of a going concern business made within 12 months after the acquisition
of such business) subsequent to the date hereof in the book value of any asset
owned by such Person or a consolidated Subsidiary of such Person, (y) all
investments as of such date in unconsolidated Subsidiaries and in Persons that
are not Subsidiaries (except, in each case, Permitted Investments), and (z) all
unamortized debt discount and expense and unamortized deferred charges as of
such date, all of the foregoing determined in accordance with GAAP.
"Contract Buy Out" means the involuntary disposition or termination
(including, without limitation, pursuant to a buy out) of a contract between a
media representation company and a client station.
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"Definitive Notes" means Notes that are in the form of Exhibit A
attached hereto (but without including the text referred to in footnotes 1 and 2
thereto).
"Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depositary with respect to the Notes, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depositary" shall mean or include such successor.
"Designated Senior Debt" means any Indebtedness outstanding under (i)
the New Credit Agreement and (ii) any other Senior Debt permitted under this
Indenture, the principal amount of which is $20.0 million or more and that has
been designated by the Company as "Designated Senior Debt."
"Disqualified Stock" means any Capital Stock which, by its terms (or
by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to date on
which the Notes mature.
4
"DLJ" means Donaldson, Lufkin and Jenrette Securities Corporation.
"DLJMB" means DLJ Merchant Banking Partners, L.P. and related
investors.
"Eligible Institution" means a commercial banking institution that has
combined capital and surplus of not less than $100.0 million or its equivalent
in foreign currency, whose short-term debt is rated "A-2" (or higher) according
to S&P or "P-2" or higher according to Moody's or carrying an equivalent rating
by a nationally recognized rating agency if both of the two named rating
agencies cease publishing ratings of investments.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for Capital Stock).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" means the offer by the Company to Holders to exchange
Series B Notes for Series A Notes.
"Existing Indebtedness" means up to $24.5 million in aggregate
principal amount of Katz Notes in existence and not repaid on the date hereof
pursuant to the Tender Offer, the Katz Notes being repaid pursuant to the Tender
Offer until the closing of the Tender Offer and up to $5.0 million of
Indebtedness of the Company and its Restricted Subsidiaries (other than
Indebtedness under the Old Credit Agreement and the New Credit Agreement), in
existence on the date hereof until such amounts are repaid.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect on the date hereof.
"Global Notes" means, individually and collectively, the Regulation S
Temporary Global Note, the Regulation S Permanent Global Note and the Rule 144A
Global Note.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America or any agency or instrumentality
thereof for the payment of which guarantee or obligations the full faith and
credit of the United States is pledged.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Guarantors" means each of (i) Katz Communications, Inc., Katz
Millennium Marketing Inc., Banner Radio Sales, Inc., Christal Radio Sales, Inc.,
Eastman Radio Sales, Inc., Seltel Inc., Katz Cable Corporation and The National
Payroll Company, Inc. and (ii) any other subsidiary that executes a Subsidiary
Guarantee in accordance with the provisions of Section 4.15 and Article 11
hereof, and their respective successors and assigns.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (a) currency exchange or interest rate swap
agreements, currency exchange or interest rate cap agreements and currency
exchange or interest rate collar agreements and (b) other agreements or
arrangements designed to protect such person against fluctuations in currency
exchange rates or interest rates.
"Holder" means a Person in whose name a Note is registered.
"Indebtedness" means, with respect to any Person, any indebtedness of
such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
5
credit (or reimbursement agreements in respect thereof) or bankers' acceptances
or representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or representing any Hedging Obligations,
except any such balance that constitutes an accrued expense or trade payable or
liabilities in respect of representation contracts payable, if and to the extent
any of the foregoing indebtedness (other than letters of credit and Hedging
Obligations) would appear as a liability upon a balance sheet of such Person
prepared in accordance with GAAP, as well as all indebtedness of others secured
by a Lien on any asset of such Person (whether or not such indebtedness is
assumed by such Person) and, to the extent not otherwise included, the Guarantee
by such Person of any indebtedness of any other Person. The amount of
indebtedness of any Person at any date shall be the outstanding balance at such
date of all unconditional obligations as described above and the maximum
liability of any guarantees at such date; provided that for purposes of
calculating the amount of any non-interest bearing or other discount security,
such Indebtedness shall be deemed to be the principal amount thereof that would
be shown on the balance sheet of the issuer dated such date prepared in
accordance with GAAP but that such security shall be deemed to have been
incurred only on the date of the original issuance thereof.
"Indebtedness to Cash Flow Ratio" means, with respect to any Person,
the ratio of (a) the aggregate principal amount of all outstanding Indebtedness
of such Person and its Restricted Subsidiaries as of such date on a consolidated
basis, plus the aggregate liquidation preference or redemption amount of all
Disqualified Stock of the Company and its Restricted Subsidiaries (excluding any
such Disqualified Stock held by the Company or its Wholly Owned Restricted
Subsidiaries), to (b) such Person's Consolidated Cash Flow for the most recently
ended four full fiscal quarters for which internal financial statements are
available immediately preceding the date on which such event for which such
calculation is being made shall occur; provided that any Indebtedness incurred
or retired by the Company or any of its Restricted Subsidiaries during the
fiscal quarter in which the date of determination occurs shall be calculated as
if such Indebtedness was so incurred or retired on the first day of the fiscal
quarter in which the date of determination occurs; and provided, further, that
(x) if the transaction giving rise to the need to calculate the Indebtedness to
Cash Flow Ratio would have the effect of increasing or decreasing Indebtedness
or Consolidated Cash Flow in the future, Indebtedness or Consolidated Cash Flow
shall be calculated on a pro forma basis as if such transaction had occurred on
the first day of such four fiscal quarter period preceding the date of
determination, and (y) if during such four fiscal quarter period, the Company or
any of its Restricted Subsidiaries shall have engaged in any Asset Sale,
Consolidated Cash Flow for such period shall be reduced by an amount equal to
the Consolidated Cash Flow (if positive), or increased by an amount equal to the
Consolidated Cash Flow (if negative), directly attributable to the assets which
are the subject of such Asset Sale and any related retirement of Indebtedness as
if such Asset Sale and related retirement of Indebtedness had occurred on the
first day of such four fiscal quarter period or (z) if during such four fiscal
quarter period the Company or any of its Restricted Subsidiaries shall have
acquired any material assets outside the ordinary course of business,
Consolidated Cash Flow shall be calculated on a pro forma basis as if such asset
acquisition and related financing had occurred on the first day of such four
fiscal quarter period.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Initial Purchaser" means Donaldson, Lufkin & Jenrette Securities
Corporation.
"Insolvency or Liquidation Proceeding" means (i) any insolvency or
bankruptcy or similar case or proceeding, or any reorganization, receivership,
liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary, or (ii) any assignment for the benefit of creditors or any other
marshalling of assets and liabilities of the Company.
6
"Interim Credit Facility" means that certain credit facility of KMSI
providing up to $5.6 million of credit borrowings, including any related notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended, modified, renewed, refunded,
replaced or refinanced from time to time.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including Subsidiary Guarantees), advances or capital
contributions (excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, and all other items that are or would be classified as investments
on a balance sheet prepared in accordance with GAAP. If the Company or any
Subsidiary of the Company sells or otherwise disposes of any Equity Interests of
any direct or indirect Restricted Subsidiary of the Company such that, after
giving effect to any such sale or disposition, such Person is no longer a
Subsidiary of the Company, the Company shall be deemed to have made an
Investment on the date of any such sale or disposition equal to the fair market
value of the Equity Interests of such Subsidiary not sold or disposed of in an
amount determined as provided in Section 4.05(d) hereof.
"Katz Notes" means the Company's $100.0 million original principal
amount ($97.8 million principal amount outstanding prior to the Tender Offer) of
12 3/4% Senior Subordinated Notes due 2002.
"KCC Merger" means the merger between the Company and the company
formerly known as Katz Media Corporation, the survivor of which is the Company.
"KMG" means Katz Media Group, Inc., a Delaware corporation, and
indirect corporate parent of the Company.
"KMSI" means Katz Media Services, Inc., a Delaware corporation, and
direct corporate parent of the Company.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in The City of New York, the city in which the principal corporate
trust office of the Trustee is located or at a place of payment are authorized
by law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
"Liquidated Damages" means all liquidated damages then owing pursuant
to Section 5 of the Registration Rights Agreement.
7
"Marketable Securities" means (a) Government Securities, (b) any
certificate of deposit maturing not more than 270 days after the date of
acquisition issued by, or time deposit of, an Eligible Institution, (c)
commercial paper maturing not more than 270 days after the date of acquisition
of an issuer (other than an Affiliate of the Company) with a rating, at the time
as of which any investment therein is made, of "A-2" (or higher) according to
S&P or "P-2" (or higher) according to Moody's or carrying an equivalent rating
by a nationally recognized rating agency if both of the two named rating
agencies cease publishing ratings of investments, (d) any bankers acceptances or
money market deposit accounts issued by an Eligible Institution, (e) any fund
investing exclusively in investments of the types described in clauses (a)
through (d) above, and (f) any repurchase obligations with a term of not more
than seven days for underlying securities of the types described in clauses (a),
(b) and (d) above entered into with any domestic commercial bank having capital
and surplus in excess of $500 million and a Keefe Bank Watch Rating of "B" or
better.
"Media Representation Venture" means any entity principally engaged in
the business of media representation.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"NCC" means National Cable Communications, L.P., a Delaware limited
partnership.
"Net Income" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain (but not
loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions) or (b) the
disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries and (ii) any extraordinary or nonrecurring gain (but
not loss), together with any related provision for taxes on such extraordinary
or nonrecurring gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale (including, without limitation,
legal, accounting and investment banking fees and sales commissions) and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), amounts required to be applied to
the repayment of Indebtedness secured by a Lien on the asset or assets that are
the subject of such Asset Sale and any reserve for adjustment in respect of the
sale price of such asset or assets established in accordance with GAAP.
8
"New Credit Agreement" means that certain secured credit facility by
and among the Company, as borrower, all of the Company's domestic Subsidiaries,
as guarantors, the lenders party thereto, The First National Bank of Boston, as
administrative agent, and DLJ Capital Funding, Inc., as syndication agent,
providing up to $180 million of revolving credit and term borrowings, including
any related notes, guarantees, collateral documents, instruments and agreements
executed in connection therewith, and in each case as amended, modified,
renewed, extended, refunded, replaced or refinanced from time to time.
"Non-Cash Rent Expense" means an amount equal to the difference
between rent expense recorded pursuant to SFAS No. 13 and the portion of rent
expense requiring the use of current corporate resources.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the
Company nor any of its Restricted Subsidiaries (a) provides credit support of
any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable (as a guarantor
or otherwise) or (c) constitutes the lender; (ii) no default with respect to
which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any of its Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity; and (iii) as to which the lenders have been notified in
writing that they will not have any recourse to the stock or assets of the
Company or any of its Restricted Subsidiaries.
"Note Custodian" means the Trustee, as custodian for the Depository
with respect to the Notes in global form, or any successor entity thereto.
"Notes" means the Series A Notes and the Series B Notes.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, costs, expenses, damages and other liabilities
payable under the documentation governing any Indebtedness.
"Offering" means the offer and sale of the Notes as contemplated by
the Offering Memorandum.
"Offering Memorandum" means the Offering Memorandum, dated December
13, 1996, relating to the offering and placement of the Series A Notes.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Principal Accounting Officer, the Treasurer,
any Assistant Treasurer, the Controller, the Secretary or any Vice-President of
such Person.
"Officers' Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the Chief Executive
Officer, the Chief Financial Officer, the Treasurer or the Principal Accounting
Officer of the Company, that meets the requirements of Section 12.04 hereof.
9
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, which opinion meets the requirements of
Section 12.05 hereof. The counsel may be an employee of or counsel to the
Company, any Subsidiary of the Company or the Trustee.
"Permitted Business" means the business of media representation, sale
of advertising and such other activities as are incidental or similar or related
thereto.
"Permitted Investments" means (a) Investments in the Company or in a
Restricted Subsidiary of the Company, (b) Investments in cash and Marketable
Securities, (c) Investments by the Company or any Restricted Subsidiary of the
Company in a Person if, as a result of such Investment, (i) such person becomes
a Restricted Subsidiary of the Company or (ii) such Person is merged,
consolidated or amalgamated with or into, or transfers or conveys substantially
all of its assets to, or is liquidated into, the Company or a Restricted
Subsidiary of the Company, (d) Investments in accounts and notes receivable
acquired in the ordinary course of business, (e) all Investments received in
settlement of debts or as a result of bankruptcy or insolvency proceedings or
upon foreclosure of a lien securing such Obligations, (f) notes from employees
issued to the Company representing payment of the exercise price of options to
purchase Capital Stock of the Company or KMG, (g) any securities received in
connection with an Asset Sale that complies with Section 4.14, (h) endorsements
of negotiable instruments and deposits, (i) Hedging Obligations to the extent
permitted under the clause (vii) of Section 4.07(b) and (j) other Investments in
any Unrestricted Subsidiary of the Company or any other Person (whether or not a
Subsidiary; provided that such Person otherwise at all times satisfies the
requirements of clauses (a)-(d) of the definition of "Unrestricted Subsidiary")
that do not exceed $10.0 million at any time outstanding; provided that to the
extent any such Investments are not made in cash, the amount of such Investment
shall be the fair value of such Investment as determined in good faith by the
Board of Directors of the Company.
"Permitted Junior Securities" means (i) equity securities of KMG,
KMSI, the Company or a successor entity and (ii) debt securities of the Company
that are unsecured and subordinated at least to the same extent as the Notes to
Senior Debt of the Company and guarantees of any such debt by any Guarantor that
are unsecured and subordinated at least to the same extent as the Subsidiary
Guarantee of such Guarantor to the Senior Debt of such Guarantor, as the case
may be, and has a final maturity date at least as late as the final maturity
date of, and has a Weighted Average Life to Maturity equal to or greater than
the Weighted Average Life to Maturity of, the Notes.
"Permitted Liens" means (a) Liens in favor of the Company or any
Restricted Subsidiary, (b) Liens on property of a Person existing at the time
such Person is merged into or consolidated with the Company or any Restricted
Subsidiary of the Company, provided, that such Liens were not incurred in
connection with, or in contemplation of, such merger or consolidation and do not
extend to any assets other than those of the Person merged into or consolidated
with the Company or such Restricted Subsidiary; (c) Liens on property existing
at the time of acquisition thereof by the Company or any Restricted Subsidiary
of the Company; provided that such Liens were not incurred in connection with,
or in contemplation of, such acquisition and do not extend to any assets of the
Company or any of its Restricted Subsidiaries other than the property so
acquired; (d) Liens to secure the performance of statutory obligations, surety
or appeal bonds or performance bonds, or landlords', carriers', warehousemen's,
mechanics', suppliers', materialmen's or other like Liens, in any case incurred
in the ordinary course of business and with respect to amounts not yet
delinquent or being contested in good faith by appropriate process of law, if a
reserve or other appropriate provision, if any, as is required by GAAP shall
have been made therefor; (e) Liens for taxes, assessments or governmental
charges or claims that are not yet delinquent or that are being contested in
good faith by appropriate proceedings promptly instituted and diligently
concluded; provided that any reserve or other appropriate provision as shall be
required in conformity with GAAP shall have been made therefor; (f) Liens to
secure Indebtedness (including Capital Lease Obligations) permitted by Section
10
4.07(b)(iii) covering only the assets acquired with such Indebtedness and
accessions, modifications and products thereof; (g) Liens securing Indebtedness
incurred to refinance or replace Indebtedness that has been secured by a Lien
permitted under this Indenture; provided that (x) any such Lien shall not extend
to or cover any assets or property not securing the Indebtedness so refinanced
or replaced and (y) the refinancing Indebtedness secured by such Lien shall have
been permitted to be incurred under Section 4.07; (h) Liens existing on the date
hereof; (i) charges or levies (other than any Lien imposed by the Employee
Retirement Income Security Act of 1974, as amended) that are not yet subject to
penalties for non-payment or are being contested in good faith by appropriate
proceedings and for which adequate reserves, if required, have been established
or other provisions have been made in accordance with GAAP; (j) Liens (other
than any Lien under the Employee Retirement Income Security Act of 1974, as
amended) incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types of
social security; (k) Liens incurred or deposits made to secure the performance
of tenders, bids, leases, statutory or regulatory obligations, bankers'
acceptances, surety and appeal bonds, government contracts, performance and
return of money bonds and other obligations of a similar nature incurred in the
ordinary course of business (exclusive of obligations for the payment of
borrowed money); (l) Liens incurred in the ordinary course of business of the
Company or any Subsidiary of the Company with respect to obligations that do not
exceed $2.0 million in principal amount in the aggregate at any one time
outstanding and (m) Liens in favor of the Trustee pursuant to Sections 6.09 and
7.07 hereof.
"Permitted Refinancing Debt" means any Indebtedness of the Company or
any of its Restricted Subsidiaries issued in exchange for, or the net proceeds
of which are used to extend, refinance, renew, replace, defease or refund other
Indebtedness of the Company or any of its Restricted Subsidiaries; provided
that: (i) the principal amount (or accreted amount, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal amount (or
accreted amount, if applicable) of the Indebtedness so extended, refinanced,
renewed, replaced, defeased or refunded (plus the amount of premiums,
prepayments, penalties, charges and reasonable expenses incurred in connection
therewith); (ii) such Permitted Refinancing Indebtedness has a final maturity
date later than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of, the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; (iii) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to the Notes
and such Permitted Refinancing Indebtedness is subordinated in right of payment
to the Notes on terms at least as favorable to the Holders of Notes as those
contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; and (iv) such Indebtedness
is incurred either by the Company or by the Restricted Subsidiary who is the
obligor on the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded.
"Person" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Principals" means the initial shareholders party to the Shareholders
Agreement.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of December 19, 1996, by and among the Company, the
Guarantors and the Initial Purchaser.
"Regulation S" means Regulation S promulgated under the Securities
Act.
"Regulation S Global Note" means a Regulation S Temporary Global Note
or Regulation S Permanent Global Note, as appropriate.
"Regulation S Permanent Global Note" means a permanent global note
that is deposited with and registered in the name of the Depositary or its
nominee, representing a series of Notes sold in reliance on Regulation S.
"Regulation S Temporary Global Note" means a single temporary global
note that is deposited with and registered in the name of the Depositary or its
nominee, representing a series of Notes sold in reliance on Regulation S.
11
"Related Party" means, with respect to any Principal, (A) any
controlling stockholder, 80% (or more) owned Subsidiary, or spouse or immediate
family member (in the case of any individual) of such Principal, or (B) any
partner of such Principal as of the date hereof, or (C) any employee of such
Principal or any of its Affiliates, or (D) any 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 clauses (A), (B) or (C), or (E) any Affiliate of DLJMB.
"Representative" means the indenture trustee or other trustee, agent
or representative for any Senior Debt.
"Responsible Officer," when used with respect to the Trustee, means
any officer within the Corporate Trust Administration Office of the Trustee (or
any successor group of the Trustee) or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his or her
knowledge of and familiarity with the particular subject.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 144A Global Note" means a permanent global note that is
deposited with and registered in the name of the Depositary or its nominee,
representing a series of Notes sold in reliance on Rule 144A or another
exemption from the registration requirements of the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Debt" of any Person means (i) all Obligations (including
without limitation interest accruing after filing of a petition in bankruptcy
whether or not such interest is an allowable claim in such proceeding) of the
Company or its Subsidiaries, including without limitation any Guarantees of such
Obligations pursuant to the New Credit Agreement and (ii) any other Indebtedness
permitted to be incurred by the Company or the Guarantors under Section 4.07
hereof, unless the instrument under which such Indebtedness is incurred
expressly provides that it is on a parity with or subordinated in right of
payment to the Notes. Notwithstanding anything to the contrary in the foregoing,
Senior Debt will not include (w) any liability for federal, state, local or
other taxes owed or owing by the Company, (x) any Indebtedness of the Company to
any of its Restricted Subsidiaries or other Affiliates (other than Indebtedness
arising under the New Credit Agreement), (y) any trade payables or (z) any
Indebtedness that is incurred in violation of this Indenture.
"Series A Notes" means the Company's 10 1/2% Series A Senior
Subordinated Notes due 2007.
"Series B Notes" means the Company's 10 1/2% Series B Senior
Subordinated Notes due 2007.
"SFAS No. 13" means Statement of Financial Accounting Standards No.
13.
12
"Shareholders Agreement" means that agreement dated August 12, 1994 by
and among DLJMB, DLJ International Partners, C.V., DLJ Offshore Partners, C.V.,
DLJ Merchant Banking Funding, Inc., KHC Investors, L.P., Bob Marbut, James
Beloyianis, Stuart Olds, Thomas Olson, L. Donald Robinson, William Fortenbaugh,
Paul Amzen, Martin Ozer, John Higgins, Robert McCurdy, Carl Butrum, Raymond
Johns, Harvey Fenster, Michael Chires, Michael Hugger, Jacob Friesel, Michael
Moran, Lucille Luongo, Michael Agovino, Mitch Kline, Michael Speisman, Steven
Shaw, Carl Mathis, A.J. Aurichio, Steven Moskowitz, John Orr, Jeff Hodge and AJ
Seethaler.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.
"S&P" means Standard & Poor's Ratings Group and its successors.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).
"Tender Offer" means the Offer to Purchase for Cash and Solicitation
of Consents to Amendments to the Related Indenture, dated November 14, 1996, as
amended or supplemented, with respect to the Katz Notes.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code ss.ss.
77aaa-77bbbb), as amended, as in effect on the date of original issuance of the
Notes.
"Transfer Restricted Notes" means securities that bear or are required
to bear the legend set forth in Section 2.06 hereof.
"Trustee" means American Stock Transfer & Trust Company until a
successor replaces it in accordance with the applicable provisions of Article 7
hereof, and thereafter means the successor.
"Unrestricted Subsidiary" means (i) any Subsidiary that is designated
by the Board of Directors as an Unrestricted Subsidiary pursuant to a board
resolution; but only to the extent that such Subsidiary: (a) has no Indebtedness
other than Non-Recourse Debt; (b) is not party to any agreement, contract,
arrangement or understanding with the Company or any Restricted Subsidiary of
the Company unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Company or such Restricted Subsidiary
than those that might be obtained at the time from Persons who are not
Affiliates of the Company; (c) is a Person with respect to which neither the
Company nor any of its Restricted Subsidiaries has any direct or indirect
obligation (x) to subscribe for additional Equity Interests or (y) to maintain
or preserve such Person's financial condition or to cause such Person to achieve
any specified levels of operating results; and (d) has not guaranteed or
otherwise directly or indirectly provided credit support for any Indebtedness of
the Company or any of its Restricted Subsidiaries. Any such designation by the
Board of Directors shall be evidenced to the Trustee by filing with the Trustee
a certified copy of the board resolution giving effect to such designation and
13
an Officers' Certificate certifying that such designation complied with the
foregoing conditions and was permitted by Section 4.05 hereof. If, at any time,
any Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date (and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.07 hereof, the Company shall be in
default of such covenant). The Board of Directors of the Company may at any time
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided
that such designation shall be deemed to be an incurrence of Indebtedness by a
Restricted Subsidiary of the Company of any outstanding Indebtedness of such
Unrestricted Subsidiary and such designation shall only be permitted if (i) such
Indebtedness is permitted under Section 4.07 hereof and (ii) no Default or Event
of Default would be in existence following such designation. Until otherwise
designated by the Board of Directors of the Company, NCC shall be an
Unrestricted Subsidiary.
"U.S. Government Obligations" means direct obligations of the Untied
States of America for the payment of which the full faith and credit of the
United States of America is pledged, provided that no U.S. Government Obligation
shall be callable at the issuer's option.
"U.S. Person" has the meaning specified in Regulation S.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding principal amount of such Indebtedness into (b) the total of the
product obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned by such Person or by one or more Wholly Owned Restricted
Subsidiaries of such Person.
14
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
"Acceleration Notice"...............................................6.02
"Affiliate Transaction".............................................4.08
"Asset Sale Payment"................................................3.08
"Cedel Bank"........................................................2.01
"covenant defeasance option"........................................8.01
"Change of Control Payment".........................................4.13
"Custodian".........................................................6.01
"DTC"...............................................................2.03
"Euroclear".........................................................2.01
"Event of Default"..................................................6.01
"Excess Proceeds"...................................................4.14
"Incur".............................................................4.07
"legal defeasance option"...........................................8.01
"Offer".............................................................3.08
"Paying Agent"......................................................2.03
"Payment Blockage Notice"..........................................10.03
"Payment Date"......................................................3.08
"Purchase Date".....................................................3.01
"Registrar".........................................................2.03
"Restricted Payments"...............................................4.05
"Trustee Expenses"..................................................6.08
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in, and made a part of, this Indenture.
Any terms incorporated by reference in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule under
the TIA have the meanings so assigned to them therein.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it herein;
(2) an accounting term not otherwise defined herein has the meaning
assigned to it under GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular; and
(5) provisions apply to successive events and transactions.
ARTICLE 2
THE NOTES
SECTION 2.01. FORM AND DATING.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibits A-1 and A-2 attached hereto. The Notes may
have notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication. The Notes shall
be issued in minimum denominations of $1,000 and integral multiples of $1,000 in
excess thereof. The terms and provisions contained in the Notes shall
constitute, and are hereby expressly made, a part of this Indenture and 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.
15
(a) Global Notes. Series A Notes offered and sold to (i) qualified
institutional buyers as defined in Rule 144A ("QIBs") in reliance on Rule 144A,
(ii) institutional accredited investors as defined in Rule 501(a)(1), (2), (3)
or (7) under the Securities Act ("Institutional Accredited Investors") that are
not QIBs, and (iii) accredited investors as defined in Rule 501(a)(4), (5) or
(6) under the Securities Act ("Accredited Investors"), shall be issued initially
in the form of the Rule 144A Global Note which, in each case, shall be deposited
on behalf of the purchasers of the Series A Notes represented thereby with the
Depositary or its nominee at its New York office, and registered in the name of
the Depositary or a nominee of the Depositary (the "Global Note Holder"), duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of the Rule 144A Global Notes may from
time to time be increased or decreased by adjustments made on the records of the
Trustee and the Depositary or its nominee, as the case may be, in connection
with transfers of interest as hereinafter provided.
Series A Notes offered and sold in reliance on Regulation S as
provided in the Purchase Agreement shall be issued initially in the form of the
Regulation S Temporary Global Note and shall be deposited on behalf of the
purchasers of the Notes represented thereby with the Trustee, at its New York
office, as custodian for the Depositary, and registered in the name of the
Depositary or the nominee of the Depositary for the accounts of designated
agents holding on behalf of Euroclear System ("Euroclear") or Cedel Bank,
societe anonyme ("Cedel Bank") duly executed by the Company and authenticated by
the Trustee as hereinafter provided. The "40-day restricted period" (as defined
in Regulation S) shall be terminated upon the receipt by the Trustee of (i) a
written certificate from the Depositary, together with copies of certificates
from Euroclear and Cedel Bank certifying that they have received certification
of non-United States beneficial ownership of 100% of the aggregate principal
amount of the Regulation S Temporary Global Note (except to the extent of any
beneficial owners thereof who acquired an interest therein pursuant to another
exemption from registration under the Securities Act and who will take delivery
of a beneficial ownership interest in a Rule 144A Global Note, all as
contemplated by Section 2.06(a)(ii) hereof), and (ii) an Officers' Certificate
from the Company. Following the termination of the 40-day restricted period,
beneficial interests in the Regulation S Temporary Global Note shall be
exchanged for beneficial interests in Regulation S Permanent Global Notes.
Simultaneously with the authentication of Regulation S Permanent Global Notes,
the Trustee shall cancel the Regulation S Temporary Global Note. The aggregate
principal amount of the Regulation S Temporary Global Note and the Regulation S
Permanent Global Notes may from time to time be increased or decreased by
adjustments made on the records of the Trustee and the Depositary or its
nominee, as the case may be, in connection with the transfer of interest as
hereinafter provided.
Each Global Note shall represent such of the outstanding Notes as
shall be specified therein and each shall provide that it shall represent the
aggregate amount of outstanding Notes from time to time endorsed thereon and
that the aggregate amount of outstanding Notes represented thereby may from time
to time be reduced or increased, as appropriate, to reflect exchanges,
redemptions and transfers of interest. Any endorsement of a Global Note to
reflect the amount of any increase or decrease in the amount of outstanding
Notes represented thereby shall be made by the Trustee or the Note Custodian, at
the direction of the Trustee, in accordance with instructions given by the
Holder thereof as required by Section 2.06 hereof.
The provisions of the "Operating Procedures of the Euroclear System"
and "Terms and Conditions Governing Use of Euroclear" and the "General Terms and
Conditions of Cedel Bank" and "Customer Handbook" of Cedel Bank shall be
applicable to interests in the Regulation S Temporary Global Note and the
Regulation S Permanent Global Notes that are held by the Agent Members through
Euroclear or Cedel Bank.
Except as set forth in Section 2.06 hereof, the Global Notes may be
transferred, in whole and not in part, only to another nominee of the Depositary
or to a successor of the Depositary or its nominee.
(b) Book-Entry Provisions. This Section 2.01(b) shall apply only to
Rule 144A Global Notes and the Regulation S Permanent Global Notes deposited
with or on behalf of the Depositary.
16
The Company shall execute and the Trustee shall, in accordance with
this Section 2.01(b), authenticate and deliver the Global Notes that (i) shall
be registered in the name of the Depositary or the nominee of the Depositary and
(ii) shall be delivered by the Trustee to the Depositary or pursuant to the
Depositary's instructions or held by the Trustee as custodian for the
Depositary.
Agent Members shall have no rights either under this Indenture with
respect to any Global Note held on their behalf by the Depositary or by the
Trustee as custodian for the Depositary or under such 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 impair, as between the Depositary and its Agent Members, the
operation of customary practices of such Depositary governing the exercise of
the rights of an owner of a beneficial interest in any Global Note.
(c) Definitive Notes. Notes issued in certificated form shall be
substantially in the form of Exhibit A-1 attached hereto (but without including
the text referred to in footnotes 1 and 2 thereto).
SECTION 2.02. EXECUTION AND AUTHENTICATION.
One Officer shall sign the Notes for the Company by manual or
facsimile signature. The Company's seal shall be reproduced on the Notes and may
be in facsimile form.
If an Officer whose signature is on a Note no longer holds that office
at the time a Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature
of an authorized signatory of the Trustee, and the Trustee's signature shall be
conclusive evidence that the Note has been authenticated under this Indenture.
The form of Trustee's certificate of authentication to be borne by the Notes
shall be substantially as set forth in Exhibit A hereto.
The Trustee shall, upon a written order of the Company signed by two
Officers directing the Trustee to authenticate the Notes and certifying that all
conditions precedent to the issuance of the Notes contained herein have been
complied with, authenticate Notes for original issuance up to an aggregate
principal amount stated in paragraph 4 of the Notes (the aggregate principal
amount of outstanding Notes may not exceed that amount at any time, except as
provided in Section 2.07 hereof).
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. Unless limited by the terms of such appointment,
an authenticating agent may authenticate Notes whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as an
Agent to deal with the Company or an Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency (the "Registrar") where
Notes may be presented for registration of transfer or for exchange and an
office or agency (the "Paying Agent") where Notes may be presented for payment.
The Registrar shall keep a register of the Notes and of their transfer and
exchange. The Company may appoint one or more co-registrars and one or more
additional paying agents. The term "Registrar" includes any co-registrar, and
the term "Paying Agent" includes any additional paying agent. The Company may
change any Paying Agent or Registrar without prior notice to any Holder. The
Company shall notify in writing the Trustee and the Trustee shall notify the
Holders in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company shall
enter into an appropriate agency agreement with any Agent not a party to this
Indenture, and such agreement shall incorporate the TIA's provisions and
implement the provisions of this Indenture that relate to such Agent.
17
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee as the Registrar and Paying
Agent and to act as Note Custodian with respect to the Global Notes. The Company
initially appoints the Trustee to act as the Registrar and Paying Agent with
respect to the Certificated Notes.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the Holders'
benefit or the Trustee all money the Paying Agent holds for redemption or
purchase of the Notes or for the payment of principal of, or premium, if any, or
interest on, or Liquidated Damages, if any, with respect to the Notes, and will
promptly notify the Trustee of any Default by the Company in providing the
Paying Agent with sufficient funds to (i) purchase Notes tendered pursuant to an
Offer arising under Section 4.13 hereof, (ii) redeem Notes called for
redemption, or (iii) make any payment of principal, premium, interest or
Liquidated Damages, if any, due on the Notes. While any such Default continues,
the Trustee may require the Paying Agent to pay all money it holds to the
Trustee and to account for any funds disbursed. The Company at any time may
require the Paying Agent to pay all money it holds to the Trustee and to account
for any funds disbursed. Upon payment over to the Trustee, the Paying Agent (if
other than the Company or any of its Subsidiaries) shall have no further
liability for the money it delivered to the Trustee. If the Company or any of
its Subsidiaries acts as Paying Agent, it shall segregate and hold in a separate
trust fund for the Holders' benefit or the Trustee all money it holds as Paying
Agent.
SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA ss. 312(a). If the Trustee is
not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require that sets forth the names and addresses of, and
the aggregate principal amount of Notes held by, each Holder, and the Company
shall otherwise comply with Section 312(a) of the TIA.
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Global Notes. The transfer and exchange
of Global Notes or beneficial interests therein shall be effected through the
Depositary, in accordance with this Indenture and the procedures of the
Depositary therefor, which shall include restrictions on transfer comparable to
those set forth herein to the extent required by the Securities Act. The Trustee
shall have no obligation to ascertain the Depositary's compliance with such
restrictions on transfer. Beneficial interests in a Global Note may be
transferred to Persons who take delivery thereof in the form of a beneficial
interest in the same Global Note in accordance with the transfer restrictions
set forth in the legend in subsection (g) of this Section 2.06. Transfers of
beneficial interests in the Global Notes to Persons required or permitted to
take delivery thereof in the form of an interest in another Global Note shall be
permitted as follows:
(i) Rule 144A Global Note to Regulation S Global Note. If, at
any time, an owner of a beneficial interest in a Rule 144A
Global Note deposited with the Depositary (or the Trustee as
custodian for the Depositary) wishes to transfer its
beneficial interest in such Rule 144A Global Note to a
Person who is required or permitted to take delivery thereof
in the form of an interest in a Regulation S Global Note,
such owner shall, subject to the Applicable Procedures,
exchange or cause the exchange of such interest for an
equivalent beneficial interest in a Regulation S Global Note
as provided in this Section 2.06(a)(i). Upon receipt by the
Trustee of (1) instructions given in accordance with the
Applicable Procedures from an Agent Member directing the
Trustee, as Registrar, to credit or cause to be credited a
beneficial interest in the Regulation S Global Note in an
amount equal to the beneficial interest in the Rule 144A
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Global Note to be exchanged or transferred, (2) a written
order given in accordance with the Applicable Procedures
containing information regarding the participant account of
the Depositary and the Euroclear or Cedel Bank account to be
credited with such increase and (3) a certificate in the
form of Exhibit B-1 hereto given by the owner of such
beneficial interest stating that the transfer of such
interest has been made in compliance with the transfer
restrictions applicable to the Global Notes and pursuant to
and in accordance with Rule 903 or Rule 904 of Regulation S,
then the Trustee, as Registrar, shall instruct the
Depositary to reduce or cause to be reduced the aggregate
principal amount of the Rule 144A Global Note and to
increase or cause to be increased the aggregate principal
amount at maturity of the Regulation S Global Note by the
principal amount at maturity of the beneficial interest in
the Rule 144A Global Note to be exchanged or transferred, to
credit or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the
Regulation S Global Note equal to the reduction in the
aggregate principal amount of the Rule 144A Global Note, and
to debit, or cause to be debited, from the account of the
Person making such exchange or transfer the beneficial
interest in the Rule 144A Global Note that is being
exchanged or transferred.
(ii) Regulation S Global Note to Rule 144A Global Note. If, at
any time, an owner of a beneficial interest in a Regulation
S Global Note deposited with the Depositary (or with the
Trustee as custodian for the Depositary) wishes to transfer
its beneficial interest in such Regulation S Global Note to
a Person who is required or permitted to take delivery
thereof in the form of an interest in a Rule 144A Global
Note, such owner shall, subject to the Applicable
Procedures, exchange or cause the exchange of such interest
for an equivalent beneficial interest in a Rule 144A Global
Note as provided in this Section 2.06(a)(ii). Upon receipt
by the Trustee of (1) instructions from Euroclear or Cedel
Bank, if applicable, and the Depositary, directing the
Trustee, as Registrar, to credit or cause to be credited a
beneficial interest in the Rule 144A Global Note in an
amount equal to the beneficial interest in the Regulation S
Global Note to be exchanged or transferred, such
instructions to contain information regarding the
participant account with the Depositary to be credited with
such increase, (2) a written order given in accordance with
the Applicable Procedures containing information regarding
the participant account of the Depositary and (3) a
certificate in the form of Exhibit B-2 attached hereto given
by the owner of such beneficial interest stating (A) if the
transfer is pursuant to Rule 144A, that the Person
transferring such interest in a Regulation S Global Note
reasonably believes that the Person acquiring such interest
in a Rule 144A Global Note is a QIB and is obtaining such
beneficial interest in a transaction meeting the
requirements of Rule 144A and any applicable blue sky or
securities laws of any state of the United States, (B) that
the transfer complies with the requirements of Rule 144
under the Securities Act and any applicable blue sky or
securities laws of any state of the United States or (C) if
the transfer is pursuant to any other exemption from the
registration requirements of the Securities Act, that the
transfer of such interest has been made in compliance with
the transfer restrictions applicable to the Global Notes and
pursuant to and in accordance with the requirements of the
exemption claimed, such statement to be supported by an
19
opinion of counsel from the transferee or the transferor in
form reasonably acceptable to the Company and to the
Registrar, then the Trustee, as Registrar, shall instruct
the Depositary to reduce or cause to be reduced the
aggregate principal amount of such Regulation S Global Note
and to increase or cause to be increased the aggregate
principal amount of the Rule 144A Global Note by the
principal amount of the beneficial interest in the
Regulation S Global Note to be exchanged or transferred, and
the Trustee, as Registrar, shall instruct the Depositary,
concurrently with such reduction, to credit or cause to be
credited to the account of the Person specified in such
instructions a beneficial interest in the applicable Rule
144A Global Note equal to the reduction in the aggregate
principal amount at maturity of such Regulation S Global
Note and to debit or cause to be debited from the account of
the Person making such transfer the beneficial interest in
the Regulation S Global Note that is being exchanged or
transferred.
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(b) Transfer and Exchange of Definitive Notes. When Definitive Notes
are presented by a Holder to the Registrar with a request:
(x) to register the transfer of the Definitive Notes; or
(y) to exchange such Definitive Notes for an equal principal
amount of Definitive Notes of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested;
provided, however, that the Definitive Notes presented or surrendered for
registration of transfer or exchange:
(i) shall be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the
Registrar duly executed by such Holder or by his attorney,
duly authorized in writing; and
(ii) in the case of a Definitive Note that is a Transfer
Restricted Note, such request shall be accompanied by the
following additional information and documents, as
applicable:
(A) if such Transfer Restricted Note is being delivered to
the Registrar by a Holder for registration in the name
of such Holder, without transfer, or such Transfer
Restricted Note is being transferred to the Company, a
certification to that effect from such Holder (in
substantially the form of Exhibit B-3 hereto);
(B) if such Transfer Restricted Note is being transferred
to a QIB in accordance with Rule 144A under the
Securities Act or pursuant to an exemption from
registration in accordance with Rule 144 under the
Securities Act or pursuant to an effective registration
statement under the Securities Act, a certification to
that effect from such Holder (in substantially the form
of Exhibit B-3 hereto); or
(C) if such Transfer Restricted Note is being transferred
in reliance on any other exemption from the
registration requirements of the Securities Act, a
certification to that effect from such Holder (in
substantially the form of Exhibit B-3 hereto) and an
opinion of counsel from such Holder or the transferee
reasonably acceptable to the Company and to the
Registrar to the effect that such transfer is in
compliance with the Securities Act.
(c) Transfer of a Beneficial Interest in a Rule 144A Global Note or
Regulation S Permanent Global Note for a Definitive Note.
(i) Any Person having a beneficial interest in a Rule 144A
Global Note or Regulation S Permanent Global Note may upon
request, subject to the Applicable Procedures, exchange such
beneficial interest for a Definitive Note. Upon receipt by
the Trustee of written instructions or such other form of
instructions as is customary for the Depositary (or
Euroclear or Cedel Bank, if applicable), from the Depositary
or its nominee on behalf of any Person having a beneficial
interest in a Rule 144A Global Note or Regulation S
Permanent Global Note, and, in the case of a Transfer
Restricted Note, the following additional information and
documents (all of which may be submitted by facsimile):
(A) if such beneficial interest is being transferred to the
Person designated by the Depositary as being the
beneficial owner, a certification to that effect from
such Person (in substantially the form of Exhibit B-4
hereto);
(B) if such beneficial interest is being transferred to a
QIB in accordance with Rule 144A under the Securities
Act or pursuant to an exemption from registration in
21
accordance with Rule 144 under the Securities Act or
pursuant to an effective registration statement under
the Securities Act, a certification to that effect from
the transferor (in substantially the form of Exhibit
B-4 hereto); or
(C) if such beneficial interest is being transferred to an
institutional "accredited investor," within the meaning
of Rule 501(a)(1), (2), (3) or (7) under the Securities
Act pursuant to a private placement exemption from the
registration requirements of the Securities Act (and
based on an opinion of counsel if the Company so
requests), a certification to that effect from such
Holder (in substantially the form of Exhibit B hereto)
and a certification from the applicable transferee (in
substantially the form of Exhibit C hereto);
(D) if such beneficial interest is being transferred in
reliance on any other exemption from the registration
requirements of the Securities Act, a certification to
that effect from the transferor (in substantially the
form of Exhibit B-4 hereto) and an opinion of counsel
from the transferee or the transferor reasonably
acceptable to the Company and to the Registrar to the
effect that such transfer is in compliance with the
Securities Act, in which case the Trustee shall, in
accordance with the standing instructions and
procedures existing between the Depositary and the
Trustee, cause the aggregate principal amount of Rule
144A Global Notes or Regulation S Permanent Global
Notes, as applicable, to be reduced accordingly and,
following such reduction, the Company shall execute
and, the Trustee shall authenticate and deliver to the
transferee a Definitive Note in the appropriate
principal amount.
(ii) Definitive Notes issued in exchange for a beneficial
interest in a Rule 144A Global Note or Regulation S Permanent
Global Note, as applicable, pursuant to this Section 2.06(c)
shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions from
its direct or indirect participants or otherwise, shall instruct
the Trustee. The Trustee shall deliver such Definitive Notes to
the Persons in whose names such Notes are so registered.
Following any such issuance of Definitive Notes, the Trustee, as
Registrar, shall instruct the Depositary to reduce or cause to be
reduced the aggregate principal amount at maturity of the
applicable Global Note to reflect the transfer.
(d) Restrictions on Transfer and Exchange of Global Notes.
Notwithstanding any other provision of this Indenture (other than the provisions
set forth in subsection (f) of this Section 2.06), a Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary or
a nominee of such successor Depositary.
(e) Transfer and Exchange of a Definitive Note for a Beneficial
Interest in a Global Note. A Definitive Note may not be transferred or exchanged
for a beneficial interest in a Global Note.
(f) Authentication of Definitive Notes in Absence of Depositary. If at
any time:
(i) the Depositary for the Notes notifies the Company that the
Depositary is unwilling or unable to continue as Depositary
for the Global Notes and a successor Depositary for the
Global Notes is not appointed by the Company within 90 days
after delivery of such notice; or
(ii) the Company delivers to the Trustee an Officers' Certificate
or an order signed by two Officers of the Company notifying
the Trustee that it elects to cause the issuance of
Definitive Notes under this Indenture,
22
then the Company shall execute, and the Trustee shall, upon receipt of an
authentication order in accordance with Section 2.02 hereof, authenticate and
deliver, Definitive Notes in an aggregate principal amount equal to the
principal amount of the Global Notes in exchange for such Global Notes.
(g) Legends.
(i) Except as permitted by the following paragraphs (ii), (iii)
and (iv), each Note certificate evidencing Global Notes and
Definitive Notes (and all Notes issued in exchange therefor
or substitution thereof) shall bear a legend in
substantially the following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933
(THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY
IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES
ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE
SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE
ISSUER THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (1)(a) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN
PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904
UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND, IN THE CASE OF CLAUSE (b), (c) or (d),
BASED UPON AN OPINION OF COUNSEL IF THE ISSUER SO REQUESTS),
(2) TO THE ISSUER OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH
ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED
HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
(ii) Upon any sale or transfer of a Transfer Restricted Note
(including any Transfer Restricted Note represented by a Global
Note) pursuant to Rule 144 under the Securities Act or pursuant
to an effective registration statement under the Securities Act:
(A) in the case of any Transfer Restricted Note that is a
Definitive Note, the Registrar shall permit the Holder
thereof to exchange such Transfer Restricted Note for a
Definitive Note that does not bear the legend set forth
in (i) above and rescind any restriction on the
transfer of such Transfer Restricted Note upon receipt
of a certification from the transferring Holder
substantially in the form of Exhibit B-4 hereto; and
(B) in the case of any Transfer Restricted Note represented
by a Global Note, such Transfer Restricted Note shall
not be required to bear the legend set forth in (i)
above, but shall continue to be subject to the
provisions of Section 2.06(a) and (b) hereof; provided,
however, that with respect to any request for an
exchange of a Transfer Restricted Note that is
represented by a Global Note for a Definitive Note that
does not bear the legend set forth in (i) above, which
23
request is made in reliance upon Rule 144, the Holder
thereof shall certify in writing to the Registrar that
such request is being made pursuant to Rule 144 (such
certification to be substantially in the form of
Exhibit B-4 hereto).
(iii)Upon any sale or transfer of a Transfer Restricted Note
(including any Transfer Restricted Note represented by a
Global Note) in reliance on any exemption from the
registration requirements of the Securities Act (other than
exemptions pursuant to Rule 144A or Rule 144 under the
Securities Act) in which the Holder or the transferee
provides an opinion of counsel to the Company and the
Registrar in form and substance reasonably acceptable to the
Company and the Registrar (which opinion of counsel shall
also state that the transfer restrictions contained in the
legend are no longer applicable):
(A) in the case of any Transfer Restricted Note that is a
Definitive Note, the Registrar shall permit the Holder
thereof to exchange such Transfer Restricted Note for a
Definitive Note that does not bear the legend set forth
in (i) above and rescind any restriction on the
transfer of such Transfer Restricted Note; and
(B) in the case of any Transfer Restricted Note represented
by a Global Note, such Transfer Restricted Note shall
not be required to bear the legend set forth in (i)
above, but shall continue to be subject to the
provisions of Section 2.06(a) and (b) hereof.
(iv) Notwithstanding the foregoing, upon consummation of the
Exchange Offer in accordance with the Registration Rights
Agreement, the Company shall issue and, upon receipt of an
authentication order in accordance with Section 2.02 hereof, the
Trustee shall authenticate the Series B Notes in exchange for
Series A Notes accepted for exchange in the Exchange Offer, which
Series B Notes shall not bear the legend set forth in (i) above,
and the Registrar shall rescind any restriction on the transfer
of such Series B Notes, in each case unless the Holder of such
Series A Notes is either (A) a broker-dealer, (B) a Person
participating in the distribution of the Series A Notes or (C) a
Person who is an affiliate (as defined in Rule 144A) of the
Company.
(h) Cancellation and/or Adjustment of Global Notes. At such time as
all beneficial interests in Global Notes have been exchanged for Definitive
Notes, redeemed, repurchased or cancelled, all Global Notes shall be returned to
or retained and cancelled by the Trustee in accordance with Section 2.11 hereof.
At any time prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for an interest in another Global Note or for Definitive
Notes, redeemed, repurchased or cancelled, the principal amount of Notes
represented by such Global Note shall be reduced accordingly and an endorsement
shall be made on such Global Note, by the Trustee or the Note Custodian, at the
direction of the Trustee, to reflect such reduction.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate
Definitive Notes and Global Notes at the Registrar's
request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any transfer
tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or similar
governmental charge payable upon exchange or transfer
pursuant to Sections 3.07, 3.08, 4.13, 4.14 and 9.05
hereof).
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(iii)The Registrar shall not be required to register the
transfer of or exchange any Note selected for redemption in
whole or in part, except the unredeemed portion of any Note
being redeemed in part.
(iv) All Definitive Notes and Global Notes issued upon any
registration of transfer or exchange of Definitive Notes or
Global Notes shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits
under this Indenture, as the Definitive Notes or Global
Notes surrendered upon such registration of transfer or
exchange.
(v) The Company shall not be required:
(A) to issue, to register the transfer of or to exchange
Notes during a period beginning at the opening of
business 15 days before the day of any selection of
Notes for redemption under Section 3.02 hereof and
ending at the close of business on the day of
selection; or
(B) to register the transfer of or to exchange a Note
between a record date and the next succeeding interest
payment date.
25
(vi) Prior to due presentment for the registration of a transfer
of any Note, the Trustee, any Agent and the Company may deem
and treat the Person in whose name any Note is registered as
the absolute owner of such Note for the purpose of receiving
payment of principal of and interest on such Note, and
neither the Trustee, any Agent nor the Company shall be
affected by notice to the contrary.
(vii)The Trustee shall authenticate Definitive Notes and Global
Notes in accordance with the provisions of Section 2.02
hereof.
SECTION 2.07. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee or the
Company, and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Note, the Company shall issue and the Trustee,
upon the receipt of an Officers' Certificate, shall authenticate a replacement
Note if the Trustee's requirements are met. If the Trustee or the Company
requires it, the Holder must supply an indemnity bond that is sufficient in the
judgment of the Trustee and the Company to protect the Company, the Trustee, any
Agent or any authenticating agent from any loss that any of them may suffer if a
Note is replaced. The Company and the Trustee may charge for their expenses in
replacing a Note. Every replacement Note is an additional Obligation of the
Company.
SECTION 2.08. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes the Trustee has
authenticated except for those it has cancelled, those delivered to it for
cancellation, those representing reductions in the interest in a Global Note
effected by the Trustee in accordance with the provisions hereof, and those
described in this Section 2.08 as not outstanding.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that a bona
fide purchaser holds the replaced Note.
If the entire principal of, and premium, if any, and accrued interest
on, and Liquidated Damages, if any, with respect to any Note is considered paid
under Section 4.01 hereof, it ceases to be outstanding and interest and
Liquidated Damages, if any, on it cease to accrue.
Subject to Section 2.09 hereof, a Note does not cease to be
outstanding because the Company or an Affiliate holds the Note.
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company or an Affiliate (other than DLJ) shall be considered as though not
outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes that a Responsible Officer of the Trustee knows are so owned shall be so
26
disregarded. Notwithstanding the foregoing, Notes that the Company or an
Affiliate offers to purchase or acquires pursuant to an Offer, exchange offer,
tender offer or otherwise shall not be deemed to be owned by the Company or an
Affiliate until legal title to such Notes passes to the Company or such
Affiliate, as the case may be.
SECTION 2.10. TEMPORARY NOTES.
Until Definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of Definitive Notes but may have variations that the
Company considers appropriate for temporary Notes. Without unreasonable delay,
the Company shall prepare and the Trustee, upon receipt of the Company's written
order signed by two Officers which shall specify the amount of temporary Notes
to be authenticated and the date on which the temporary Notes are to be
authenticated, shall authenticate Definitive Notes and deliver them in exchange
for temporary Notes. Until such exchange, Holders of temporary Notes shall be
entitled to the same rights, benefits and privileges as Definitive Notes.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Notes surrendered to them for registration of transfer, exchange,
replacement, payment (including all Notes called for redemption and all Notes
accepted for payment pursuant to an Offer) or cancellation, and the Trustee
shall cancel all such Notes and shall destroy all cancelled Notes (subject to
the Exchange Act's record retention requirements) and deliver a certificate of
their destruction to the Company unless by written order, signed by two Officers
of the Company, the Company shall direct that cancelled Notes be returned to it.
The Company may not issue new Notes to replace any Notes that have been
cancelled by the Trustee or that have been delivered to the Trustee for
cancellation. If the Company or an Affiliate acquires any Notes (other than by
redemption or pursuant to an Offer), such acquisition shall not operate as a
redemption or satisfaction of the Indebtedness represented by such Notes unless
and until such Notes are delivered to the Trustee for cancellation.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes, it
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to Holders on a subsequent
special record date, in each case at the rate provided in the Notes and in
Section 4.01 hereof. The Company shall fix or cause to be fixed each such
special record date and payment date. As early as practicable prior to the
special record date, the Company (or the Trustee, in the name of and at the
expense of the Company) shall mail a notice that states the special record date,
the related payment date and the amount of interest to be paid. SECTION 2.13.
RECORD DATE.
The record date for purposes of determining the identity of Holders of
Notes entitled to vote or consent to any action by vote or consent authorized or
permitted under this Indenture shall be determined as provided for in section
316(c) of the TIA.
SECTION 2.14. CUSIP NUMBER.
A "CUSIP" number shall be printed on the Notes, and the Trustee shall
use the CUSIP number in notices of redemption, purchase or exchange as a
convenience to Holders, provided that any such notice may state that no
representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Notes and that reliance may be placed only on
the other identification numbers printed on the Notes. The Company shall
promptly notify the Trustee of any change in the CUSIP number.
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ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to Section 3.07 hereof,
it shall furnish to the Trustee, at least 35 days prior to the redemption date
and at least 5 days prior to the date that notice of the redemption is to be
mailed by the Company to Holders (or such shorter time as may be acceptable to
the Trustee), an Officers' Certificate stating that the Company has elected to
redeem Notes pursuant to Section 3.07(a) or 3.07(b) hereof, as the case may be,
the date notice of redemption is to be mailed to Holders, the redemption date,
the aggregate principal amount of Notes to be redeemed, the redemption price for
such Notes and the amount of accrued and unpaid interest on and Liquidated
Damages, if any, with respect to such Notes as of the redemption date. If the
Trustee is not the Registrar, the Company shall, concurrently with delivery of
its notice to the Trustee of a redemption, cause the Registrar to deliver to the
Trustee a certificate (upon which the Trustee may rely) setting forth the name
of, and the aggregate principal amount of Notes held by, each Holder.
If the Company is required to offer to purchase Notes pursuant to
Section 4.13 or 4.14 hereof, it shall furnish to the Trustee, at least two
Business Days before notice of the Offer is to be mailed to Holders (or such
shorter time as may be acceptable to the Trustee), an Officers' Certificate
setting forth that the Offer is being made pursuant to Section 4.13 or 4.14
hereof, as the case may be, the date upon which such purchase will occur ("the
Purchase Date"), the maximum principal amount of Notes the Company is offering
to purchase pursuant to the Offer, the purchase price for such Notes, and the
amount of accrued and unpaid interest on and Liquidated Damages, if any, with
respect to such Notes as of the Purchase Date.
The Company will also provide the Trustee with any additional
information that the Trustee reasonably requests in connection with any
redemption or Offer.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED OR PURCHASED.
If less than all outstanding Notes are to be redeemed or if less than
all Notes tendered pursuant to an Offer are to be accepted at any time,
selection of Notes for redemption or acceptance shall be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which the Notes are listed or, if the Notes are not so listed, on a
pro rata basis, by lot or by such other method as the Trustee deems fair and
appropriate, provided that no Notes with a principal amount of $1,000 or less
shall be redeemed in part. Notices of redemption shall be mailed by first class
mail at least 30 but not more than 60 days before the redemption date to each
Holder of Notes to be redeemed at its registered address. If any Note is to be
redeemed in part only, the notice of redemption that relates to such Note shall
state the portion of the principal amount thereof to be redeemed. A new Note in
principal amount equal to the unredeemed portion thereof shall be issued in the
name of the Holder thereof upon cancellation of the original Note. On and after
the redemption date, interest shall cease to accrue on Notes or portions thereof
called for redemption.
SECTION 3.03. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail a notice of redemption to each Holder of Notes or
portions thereof that are to be redeemed.
The notice shall identify the Notes or portions thereof to be redeemed
and shall state:
(1) the redemption date;
(2) the redemption price for the Notes and separately
stating the amount of unpaid and accrued interest on,
and Liquidated Damages, if any, with respect to, such
Notes as of the date of redemption;
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(3) if any Note is being redeemed in part, the portion of
the principal amount of such Notes to be redeemed and
that, after the redemption date, upon surrender of such
Note, a new Note or Notes in principal amount equal to
the unredeemed portion will be issued;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price for,
and any accrued and unpaid interest on, and Liquidated
Damages, if any, with respect to such Notes;
(6) that, unless the Company defaults in making such
redemption payment, interest (including Liquidated
Damages, if any) on Notes called for redemption ceases
to accrue on and after the redemption date;
(7) the paragraph of the Notes and section of this
Indenture pursuant to which the Notes called for
redemption are being redeemed; and
(8) the CUSIP number; provided that no representation is
made as to the correctness or accuracy of the CUSIP
number listed in such notice and printed on the Notes.
At the Company's request, the Trustee shall (at the Company's expense)
give the notice of redemption in the Company's name at least 30 but not more
than 60 days before a redemption; provided, however, that the Company shall
deliver to the Trustee, at least 45 days prior to the redemption date and at
least 10 days prior to the date that notice of the redemption is to be mailed to
Holders, an Officers' Certificate that (i) requests the Trustee to give notice
of the redemption to Holders (or such shorter time as may be acceptable to the
Trustee), (ii) sets forth the information to be provided to Holders in the
notice of redemption, as set forth in the preceding paragraph, (iii) states that
the Company has elected to redeem Notes pursuant to Section 3.07(a) or 3.07(b)
hereof, as the case may be, and (iv) sets forth the aggregate principal amount
of Notes to be redeemed and the amount of accrued and unpaid interest and
Liquidated Damages, if any, thereon as of the redemption date. If the Trustee is
not the Registrar, the Company shall, concurrently with any such request, cause
the Registrar to deliver to the Trustee a certificate (upon which the Trustee
may rely) setting forth the name of, the address of, and the aggregate principal
amount of Notes held by, each Holder.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed, Notes called for redemption
become due and payable on the redemption date at the price set forth in the
Note. Upon surrender to the Trustee or Paying Agent, such Notes called for
redemption shall be paid at the redemption price (which shall include accrued
interest thereon and Liquidated Damages, if any, to the redemption date) but
installments of interest, the maturity of which is on or prior to the redemption
date, shall be payable to Holders of record at the close of business on the
relevant record dates.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
On or prior to any redemption date, the Company shall deposit with the
Trustee or with the Paying Agent money sufficient to pay the redemption price
of, and accrued interest on, and Liquidated Damages, if any, with respect to all
Notes to be redeemed on that date. The Trustee or the Paying Agent shall return
to the Company any money that the Company deposited with the Trustee or the
Paying Agent in excess of the amounts necessary to pay the redemption price of,
and accrued interest on, and Liquidated Damages, if any, with respect to all
Notes to be redeemed.
If the Company complies with the preceding paragraph, interest and
Liquidated Damages, if any, on the Notes to be redeemed will cease to accrue on
such Notes on the applicable redemption date, whether or not such Notes are
presented for payment. If a Note is redeemed on or after an interest record date
but on or prior to the related interest payment date, then any accrued and
unpaid interest and Liquidated Damages, if any, shall be paid to the Person in
whose name such Note was registered at the close of business on such record
29
date. If any Note called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding
paragraph, interest will be paid on the unpaid principal, premium, if any,
interest and Liquidated Damages, if any, from the redemption date until such
principal, premium, interest and Liquidated Damages, if any, is paid, at the
rate of interest provided in the Notes and Section 4.01 hereof.
SECTION 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company shall
issue and the Trustee shall authenticate for the Holder at the Company's expense
a new Note equal in principal amount to the unredeemed portion of the Note
surrendered.
SECTION 3.07. OPTIONAL REDEMPTION PROVISIONS.
(a) Except as provided in Section 3.07(b) hereof, the Notes will not
be redeemable at the Company's option prior to January 15, 2002. Thereafter, the
Notes will be subject to redemption at the option of the Company, in whole or in
part, upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest and Liquidated Damages, if any, thereon to the
applicable redemption date, if redeemed during the twelve-month period beginning
on January 15 of the years indicated below:
Year Percentage
2003................................................................105.250%
2003................................................................103.938%
2004................................................................102.625%
2005................................................................101.313%
2006 and thereafter.................................................100.000%
(b) Notwithstanding the foregoing, at any time prior to January 15,
2000, the Company may redeem up to 35% in aggregate principal amount of the
Notes with the net proceeds of (i) one or more offerings of Equity Interests
(other than Disqualified Stock) of the Company or (ii) one or more offerings of
Equity Interests or other securities of KMG or KMSI, to the extent the net
proceeds thereof are contributed or advanced to the Company as a capital
contribution to common equity, in each case, at a redemption price equal to
109.5% of the principal amount thereof, plus accrued and unpaid interest and
Liquidated Damages, if any, to the redemption date; provided that at least 65%
in aggregate principal amount of the Notes originally issued remain outstanding
immediately after the occurrence of any such redemption; and provided, further,
that each such redemption will occur within 90 days of the date of the closing
of such offering.
SECTION 3.08. MANDATORY PURCHASE PROVISIONS.
(a) Subject to Section 4.13 hereof, within 30 days after any Change of
Control or upon the Company's obligation to make an Asset Sale Offer pursuant to
Section 4.14 (b) hereof, the Company shall mail a notice to each Holder at such
Holder's registered address stating (i) that a Change of Control Offer or an
Asset Sale Offer (each, an "Offer") is being made pursuant to Section 4.13 or
Section 4.14 hereof, as the case may be, and that all Notes tendered will be
accepted for payment pursuant to such Offer; (ii) the purchase price for the
Notes (as set forth in Section 4.13 or 4.14 hereof, as the case may be), the
amount of accrued and unpaid interest on, and Liquidated Damages thereon, if
any, and the purchase date which shall be no earlier than 30 days nor later than
60 days from the date such notice is mailed (the "Payment Date"); (iii) that any
Notes not properly tendered will continue to accrue interest and Liquidated
Damages, if any, in accordance with the terms of this Indenture; (iv) that,
unless the Company defaults in the payment of the Change of Control Payment, all
Notes accepted for payment pursuant to the Offer, shall cease to accrue interest
after the Payment Date; (v) that Holders electing to have any Notes purchased
pursuant to an Offer will be required to surrender the Notes, with a form
entitled "Option of Holder to Elect Purchase" on the reverse of the Notes
completed, or transfer by book-entry, to the Paying Agent at the address
specified in the notice prior to the close of business on the fourth Business
30
Day preceding the 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 preceding the Payment Date, a telegram,
telex, facsimile transmission or letter setting forth the name of the 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,
which unpurchased portion must be equal to $1,000 in principal amount or an
integral multiple thereof.
(b) On the Payment Date, the Company shall, to the extent lawful, (i)
in the case of a Change of Control Offer, accept for payment all Notes or
portions thereof properly tendered pursuant to such Offer and, in the case of an
Asset Sale Offer, accept for payment the maximum principal amount of Notes or
portions thereof tendered pursuant to such Offer that can be purchased out of
Excess Proceeds from the date of such Asset Sale, (ii) deposit with the Paying
Agent in the case of a Change of Control Offer, an amount equal to the Change of
Control Payment in respect of all Notes or portions thereof so accepted and, in
the case of an Asset Sale Offer, the aggregate purchase price of all Notes or
portions thereof accepted for payment and any accrued and unpaid interest and
Liquidated Damages, if any, on such Notes as of the Payment Date (an "Asset Sale
Payment"), and (iii) deliver or cause to be delivered to the Trustee the Notes
so accepted together with an Officers' Certificate stating the aggregate
principal amount of Notes or portions thereof being purchased by the Company.
(c) The Paying Agent shall promptly mail to each Holder of Notes so
tendered either the Change of Control Payment or the Asset Sale Payment,
whichever the case may be, for such Notes, and the Trustee will promptly
authenticate and mail (or cause to be transferred by book entry) to each Holder
a new Note equal in principal amount to any unpurchased portion of the Notes
surrendered, if any; provided that each such new Note will be in a principal
amount of $1,000 or an integral multiple thereof. The Company will publicly
announce the results of the Offer on or as soon as practicable after the Payment
Date.
(d) The Company will publicly announce the results of the Offer on or
as soon as practicable after the Payment Date.
(e) The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of the Notes in connection with a Change of Control or Asset Sale.
(f) With respect to any Offer, if the Company deposits prior to 12:00
noon New York City time with the Paying Agent on the Payment Date an amount in
available funds sufficient to purchase all Notes accepted for payment, interest
shall cease to accrue on such Notes after the Payment Date; provided, however,
that if the Company fails to deposit such amount on the Payment Date, interest
shall continue to accrue on such Notes until such deposit is made.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
The Company shall pay the principal of, and premium, if any, and
accrued and unpaid interest on and Liquidated Damages, if any, with respect to
the Notes on the dates and in the manner provided in the Notes. Holders of Notes
must surrender their Notes to the Paying Agent to collect principal payments.
Principal of, premium, if any, and accrued and unpaid interest, and Liquidated
Damages, if any, shall be considered paid on the date due if the Paying Agent
(other than the Company or any of its Subsidiaries), the Global Note Holder or
each Holder that has specified an account, holds, as of 12:00 noon New York City
time, money the Company deposited in immediately available funds designated for
and sufficient to pay in cash all principal, premium, if any, and accrued and
unpaid interest on, and Liquidated Damages, if any, then due; provided that, to
the extent that the Holders have not specified accounts, such amounts shall be
considered paid on the date due if the Company mails a check for such amounts on
such date. The Paying Agent shall return to the Company, no later than five days
following the date of payment, any money (including accrued interest) that
exceeds the amount of principal, premium, if any, accrued and unpaid interest,
and Liquidated Damages, if any, paid on the Notes. The Company shall pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
31
set forth in the Registration Rights Agreement. If any Liquidated Damages become
payable, the Company shall not later than 3 Business Days prior to the date that
any payment of Liquidated Damages is due (i) deliver an Officers' Certificate to
the Trustee setting forth the amount of Liquidated Damages payable to Holders
and (ii) instruct the Paying Agent to pay such amount of Liquidated Damages to
Holders entitled to receive such Liquidated Damages.
To the extent lawful, the Company shall pay interest (including
post-petition interest) on (i) overdue principal and premium at the rate equal
to 1% per annum in excess of the then applicable interest rate on the Notes,
compounded semiannually and (ii) overdue installments of interest and Liquidated
Damages (without regard to any applicable grace period) at the same rate as set
forth in clause (i), compounded semiannually.
SECTION 4.02. REPORTS.
Whether or not required by the rules and regulations of the SEC, so
long as any Notes are outstanding, the Company shall furnish to the Holders of
Notes (i) all quarterly and annual financial information that would be required
to be contained in a filing with the SEC on Forms 10-Q and 10-K (excluding
exhibits) if the Company were required to file such Forms, including a
"Management's Discussion and Analysis of Results of Operations and Financial
Condition" that describes the financial condition and results of operations of
the Company and its Restricted Subsidiaries and, with respect to the annual
information only, a report thereon by the Company's certified public accountants
and (ii) all current reports that would be required to be filed with the SEC on
Form 8-K if the Company were required to file such reports. In addition, whether
or not required by the rules and regulations of the SEC, the Company shall file
a copy of all such information and reports with the SEC for public availability
(unless the SEC will not accept such filing) and make such information available
to securities analysts and prospective investors who request it in writing. In
addition, for a period of three years, the Company and the Guarantors shall
furnish to the Holders and to securities analysts and prospective investors,
upon their request, the information required to be delivered pursuant to Rule
144(d)(4) under the Securities Act.
The financial information to be distributed to Holders of Notes shall
be filed with the Trustee and mailed to the Holders at their addresses appearing
in the register of Notes maintained by the Registrar, within 120 days after the
end of the Company's fiscal years and within 60 days after the end of each of
the first three fiscal quarters of each such fiscal year.
The Company shall provide the Trustee with a sufficient number of
copies of all reports and other documents and information that the Trustee may
be required to deliver to the Holders under this Section 4.02.
SECTION 4.03. COMPLIANCE CERTIFICATE.
The Company shall deliver to the Trustee, within 120 days after the
end of each fiscal year of the Company, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that, to the best of
his or her knowledge, the Company has, in all material respects, kept, observed,
performed and fulfilled each and every covenant contained in this Indenture and
is not in default in the performance or observance of any of the terms,
provisions and conditions hereof (or, if a Default or Event of Default shall
have occurred, describing all such Defaults or Events of Default of which he or
she may have knowledge and what action the Company has taken or proposes to take
with respect thereto) and that, to the best of his or her knowledge, no event
has occurred and remains in existence by reason of which payments on account of
the principal of, premium, if any, and accrued and unpaid interest on, and
Liquidated Damages, if any, with respect to the Notes are prohibited or if such
event has occurred, a description of the event and what action the Company is
taking or proposes to take with respect thereto.
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So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the financial statements
delivered pursuant to Section 4.02 hereof shall be accompanied by a written
statement of the Company's independent public accountants (who shall be a firm
of established national reputation reasonably satisfactory to the Trustee) that
in making the examination necessary for certification of such financial
statements nothing has come to their attention that would lead them to believe
that the Company has violated Section 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11,
4.13, 4.14, 4.17 or any provisions of Article 5 hereof or, if any such violation
has occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.
SECTION 4.04. STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that might affect the covenants
or the performance of this Indenture; and the Company (to the extent it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not, by resort to any such law, hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law has been
enacted.
SECTION 4.05. RESTRICTED PAYMENTS.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make
any other payment or distribution on account of any Equity Interests of the
Company or any of its Restricted Subsidiaries (other than dividends or
distributions payable in Equity Interests (other than Disqualified Stock) of the
Company or such Restricted Subsidiary or dividends or distributions payable to
the Company or any Restricted Subsidiary) or to the direct or indirect holders
of the Company's Equity Interests in their capacity as such; (ii) purchase,
redeem or otherwise acquire or retire for value any Equity Interests of the
Company, any of its Restricted Subsidiaries or any other Affiliate of the
Company (other than any such Equity Interests owned by the Company or any Wholly
Owned Restricted Subsidiary); (iii) purchase, redeem, defease or otherwise
acquire or retire for value any Indebtedness that is subordinated in right of
payment to the Notes, except in accordance with the scheduled mandatory
redemption or repayment provisions set forth in the original documentation
governing such Indebtedness; or (iv) make any Restricted Investment (all such
payments and other actions set forth in clauses (i) through (iv) above being
collectively referred to as "Restricted Payments"), unless, at the time of and
after giving effect to such Restricted Payment:
(A) no Default or Event of Default shall have occurred and
be continuing or shall occur as a consequence thereof;
and
33
(B) such Restricted Payment, together with the aggregate of
all other Restricted Payments made by the Company and
its Restricted Subsidiaries after the date hereof
(excluding Restricted Payments permitted by clauses
(ii), (iii) and (vi) through (xii) of the next
succeeding paragraph), is less than the sum of (1) an
amount equal to the Consolidated Cash Flow of the
Company for the period (taken as one accounting period)
from the beginning of the first fiscal quarter
commencing after the date hereof to the end of the
Company's most recently ended fiscal quarter for which
internal financial statements are available at the time
of such Restricted Payments, less two times the
Consolidated Cash Interest Expense of the Company for
the period (taken as one accounting period) from the
beginning of the first fiscal quarter commencing after
the date hereof to the end of the Company's most
recently ended fiscal quarter for which internal
financial statements are available at the time of such
Restricted Payment, plus (2) 100% of the aggregate net
cash proceeds received by the Company from
contributions of capital or the issue or sale since the
date hereof of Equity Interests of the Company or of
debt securities of the Company that have been converted
into such Equity Interests (other than Equity Interests
(or convertible debt securities) sold to a Subsidiary
of the Company and other than Disqualified Stock or
debt securities that have been converted into
Disqualified Stock), plus (3) 100% of all cash
distributions and cash payments received by the Company
or a Restricted Subsidiary after the date hereof from
an Unrestricted Subsidiary of the Company, plus (4) to
the extent that any Restricted Investment that was made
after the date hereof is sold for cash or otherwise
liquidated or repaid for cash, the net cash proceeds
from such Restricted Investment to the extent not
otherwise included in the Consolidated Cash Flow of the
Company for such period.
(b) The provisions of Section 4.05(a) hereof will not prohibit: (i)
the payment of any dividend within 60 days after the date of declaration
thereof, if at such date of declaration such payment would have complied with
the provisions of this Indenture; (ii) the redemption, repurchase, retirement or
other acquisition of any Equity Interests of the Company in exchange for, or out
of the net proceeds of, the substantially concurrent sale (other than to a
Restricted Subsidiary of the Company) of other Equity Interests of the Company
(other than any Disqualified Stock); provided that the amount of any such net
cash proceeds that are utilized for any such redemption, repurchase, retirement
or other acquisition shall be excluded from Section 4.05(a)(B)(2); (iii) the
defeasance, redemption or repurchase of subordinated Indebtedness with the net
cash proceeds from an incurrence of Permitted Refinancing Debt or the
substantially concurrent sale (other than to a Subsidiary of the Company) of
Equity Interests of the Company (other than Disqualified Stock), provided that
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the amount of any such net cash proceeds that are utilized for any such
redemption, repurchase, retirement or other acquisition shall be excluded from
Section 4.05(a)(B)(2); (iv) the repurchase, redemption or other acquisition or
retirement for value of any Equity Interests of the Company, KMG or any
Restricted Subsidiary of the Company held by any member of the Company's (or any
of its Restricted Subsidiaries') management pursuant to any shareholders
agreement, management equity subscription agreement or stock option agreement;
provided that the aggregate price paid for any such repurchased, redeemed,
acquired or retired Equity Interests shall not exceed $2.0 million in any
twelve-month period plus the aggregate cash proceeds received by the Company
during such twelve-month period from any reissuance of Equity Interests by the
Company to members of management of the Company and its Restricted Subsidiaries;
and no Default or Event of Default shall have occurred and be continuing
immediately after such transaction; (v) the payment of additional dividends by
the Company to KMG or KMSI not to exceed $500,000 in any fiscal year; (vi) the
defeasance, redemption or repurchase of the Katz Notes; (vii) the contribution
or loan to KMG or an Affiliate of KMG in the amount of up to $20.0 million for
the repurchase of Capital Stock of KMG or related purposes;(viii) the
contribution or loan to KMG to effect repayment of Indebtedness under the
Interim Credit Facility; (ix) Investments in Media Representation Ventures;
provided that, immediately after giving effect to any such Investment, the
Company would be able to incur at least $1.00 of additional Indebtedness
pursuant to the Indebtedness to Cash Flow Ratio test set forth in Section
4.07(a) hereof; (x) Investments in NCC after the date hereof in an aggregate
amount not to exceed $10.0 million at any one time outstanding under this clause
(x); (xi) Investments in clients or prospective clients (or any of their
Affiliates) of the Company or any of its Restricted Subsidiaries made in
connection with or as a condition to the obtaining of a contract right to
provide media representation or related services to such clients in an aggregate
amount not to exceed $10.0 million at any one time outstanding under this clause
(xi); and (xii) the payment of dividends by a Restricted Subsidiary of the
Company on its common stock if such dividends are paid pro rata to all holders
of such common stock.
(c) The Board of Directors may designate any Restricted Subsidiary to
be an Unrestricted Subsidiary if such designation would not cause a Default. For
purposes of making such determination, all outstanding Investments by the
Company and its Restricted Subsidiaries (except to the extent repaid in cash) in
the Subsidiary so designated will be deemed to be Restricted Payments at the
time of such designation and will reduce the amount available for Restricted
Payments under the first paragraph of this covenant. Such designation will only
be permitted if such Restricted Payment would be permitted at such time and if
such Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary and has no Indebtedness other than Non-Recourse Debt. If an
Unrestricted Subsidiary is redesignated a Restricted Subsidiary, the amount
available for Restricted Payments will be increased by an amount equal to the
amount of the Investment previously deemed to have been made in such
Unrestricted Subsidiary, to the extent such amount is not otherwise included in
the Consolidated Cash Flow of the Company.
(d) The amount of all Restricted Payments (other than cash) shall be
the fair market value (evidenced by a resolution of the Board of Directors set
forth in an Officers' Certificate delivered to the Trustee) on the date of the
Restricted Payment of the asset(s) proposed to be transferred by the Company or
such Subsidiary, as the case may be, pursuant to the Restricted Payment. Not
later than five Business Days after the date of making any Restricted Payment
(other than Restricted Payments permitted pursuant to clauses (ii), (iii) and
(vi) through (viii) and (xii) of the second paragraph of this covenant), the
Company shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this Section 4.05 hereof were computed, which
calculations shall be based upon the Company's latest available financial
statements.
SECTION 4.06. CORPORATE EXISTENCE.
Subject to Section 4.14 and Article 5 hereof, the Company shall do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence and the corporate, partnership or other existence
of each of its Restricted Subsidiaries in accordance with the respective
35
organizational documents of each of its Restricted Subsidiaries and the rights
(charter and statutory), licenses and franchises of the Company and each of its
Restricted Subsidiaries; provided, however, that the Company shall not be
required to preserve any such right, license or franchise, or the corporate,
partnership or other existence of any Restricted Subsidiary, if the Board of
Directors shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company and its Restricted Subsidiaries
taken as a whole, and that the loss thereof is not adverse in any material
respect to the Holders.
SECTION 4.07. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guaranty
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt) and that the Company will not issue any Disqualified Stock and will not
permit any of the Company's Restricted Subsidiaries to issue any shares of
preferred stock; provided, however, that (i) the Company may incur Indebtedness
or issue shares of Disqualified Stock and (ii) any Guarantor may incur
Indebtedness or issue shares of preferred stock if, after giving effect to the
incurrence of such Indebtedness or the issuance of such Disqualified Stock or
such preferred stock and the application of the proceeds thereof, the Company's
Indebtedness to Cash Flow Ratio for the Company's most recently ended four full
fiscal quarters would not have exceeded 5.5 to 1 prior to January 15, 1999 or
5.0 to 1 thereon or thereafter, in each case, determined on a pro forma basis
(including a pro forma application of the net proceeds therefrom), as if the
additional Indebtedness had been incurred, or the Disqualified Stock or
preferred stock had been issued, as the case may be, at the beginning of such
four-quarter period.
(b) The provisions of Section 4.07(a) hereof shall not apply to: (i)
the incurrence by the Company and its Restricted Subsidiaries of Indebtedness
(including any subsidiary Guarantees of such Indebtedness) and letters of credit
pursuant to the New Credit Agreement (with letters of credit being deemed to
have a principal amount equal to the maximum potential liability of the Company
and its Restricted Subsidiaries thereunder), in a maximum principal amount not
to exceed $161.0 million, less the aggregate amount of all Net Proceeds of Asset
Sales applied to permanently reduce such Indebtedness (and, in the case of
revolving Indebtedness, commitments with respect thereto) pursuant to Section
4.14 hereof; (ii) the incurrence by the Company and the Guarantors of
Indebtedness represented by the Notes and the Subsidiary Guarantees,
respectively; (iii) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage
financings or purchase money obligations, in each case incurred for the purpose
of financing all or any part of the purchase price or cost of construction or
improvement of property used in the business of the Company or such Restricted
Subsidiary, in an aggregate principal amount not to exceed $10.0 million at any
time outstanding; (iv) the incurrence by the Company or any of its Restricted
Subsidiaries of Existing Indebtedness; (v) the incurrence by the Company or any
of its Restricted Subsidiaries of Permitted Refinancing Debt in exchange for, or
the net proceeds or which are used to extend, refinance, renew, replace, defease
or refund, Indebtedness that was permitted by this Section 4.07 to be incurred;
(vi) the incurrence by the Company or any of its Restricted Subsidiaries of
intercompany Indebtedness between or among the Company and any of its Restricted
Subsidiaries; provided, however, that (i) if the Company is the obligor on such
Indebtedness, such Indebtedness is expressly subordinated to the prior payment
in full in cash of all Obligations with respect to the Notes and (ii)(A) any
subsequent issuance or transfer of Equity Interests that results in any such
Indebtedness being held by a Person other than the Company or a Restricted
Subsidiary and (B) any sale or other transfer of any such Indebtedness to a
Person that is not either the Company or one of its Restricted Subsidiaries
shall be deemed, in each case, to constitute an incurrence of such Indebtedness
by the Company or such Subsidiary, as the case may be; (vii) the incurrence by
the Company or any of its Restricted Subsidiaries of Hedging Obligations that
are incurred for the purpose of fixing or hedging currency exchange rate risk or
interest rate risk with respect to any floating rate Indebtedness that is
permitted by this Section 4.07 to be outstanding; (viii) the issuance by a
Restricted Subsidiary of the Company of preferred stock to the Company or a
Restricted Subsidiary of the Company; (ix) the incurrence by the Company or any
Restricted Subsidiary of Indebtedness in the form of reimbursement obligations
for letters of credit, bankers' acceptances and similar facilities entered into
in the ordinary course of business; (x) the incurrence by the Company or any
36
Restricted Subsidiary of Indebtedness with respect to performance, surety and
appeal bonds in the ordinary course of business; and (xi) the incurrence by the
Company or any of its Restricted Subsidiaries of Indebtedness (in addition to
Indebtedness permitted by any other clause of this paragraph) in an aggregate
principal amount at any time outstanding not to exceed the sum of $15.0 million.
(c) For purposes of determining compliance with this Section 4.07, in
the event that an item of Indebtedness meets the criteria of more than one of
the categories described in Section 4.07(b) hereof or is entitled to be incurred
pursuant to Section 4.07(a) hereof, the Company shall, in its sole discretion,
classify such item of Indebtedness in any manner that complies with this Section
4.07 and such item of Indebtedness will be treated as having been incurred
pursuant to only one of such clauses or pursuant to the first paragraph hereof.
SECTION 4.08. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any contract, agreement,
understanding, loan, advance or guarantee with, or for the benefit of, any
Affiliate (each of the foregoing, an "Affiliate Transaction"), unless (i) such
Affiliate Transaction is in the ordinary course of business and on fair and
reasonable terms that are at least as favorable to the Company or such
Restricted Subsidiary than those that would have been obtained in a comparable
arm's-length transaction by the Company or such Restricted Subsidiary with an
unrelated Person; and (ii) with respect to any Affiliate Transaction that
involves aggregate consideration in excess of $5.0 million, the Company delivers
to the Trustee a resolution of the Board of Directors of the Company set forth
in an Officers' Certificate certifying that such Affiliate Transaction complies
with clause (i) above and such Affiliate Transaction has been approved by a
majority of the disinterested members of the Board of Directors of the Company;
provided, however, that (a) any employment agreement entered into by the Company
or any of its Restricted Subsidiaries in the ordinary course of business and
consistent with the past practice of the Company or such Restricted Subsidiary,
(b) the payment of employee benefits, including bonuses, retirement plans and
stock options, and director fees in the ordinary course of business, (c)
transactions between or among the Company and/or its Restricted Subsidiaries,
(d) transactions between the Company or its Restricted Subsidiaries on the one
hand, and the Initial Purchaser or its Affiliates on the other hand, involving
the provision of financial or consulting services by the Initial Purchaser or
its Affiliates, provided that the fees payable to the Initial Purchaser or its
Affiliates do not exceed the usual and customary fees of the Initial Purchaser
and its Affiliates for similar services, (e) transactions existing on the date
hereof or contemplated by the arrangements described in the documents
incorporated by reference in the Offering Memorandum as set forth in the
Offering Memorandum under the caption "Information Incorporated by Reference,"
(f) reasonable and customary directors' fees, (g) loans to officers or directors
of the Company in the ordinary course of business, (h) transactions among the
Company or any of its Restricted Subsidiaries and DLJ and its Affiliates in
connection with the Refinancing as contemplated by the Offering Memorandum,
including those in connection with the Tender Offer and the New Credit
Agreement, (i) the repurchase of a station representation contract from KMSI in
connection with the termination of the Interim Credit Facility and (j)
transactions permitted by Section 4.05 hereof, in each case, shall not be deemed
Affiliate Transactions.
SECTION 4.09. LIENS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien of any kind (other than Permitted Liens) to secure Indebtedness
other than Senior Debt on any property or asset now owned or hereafter acquired,
or on any income or profits therefrom or assign or convey any right to receive
income therefrom, unless all payments due under this Indenture and the Notes are
secured on an equal and ratable basis with the Obligations so secured until such
time as such Obligations are no longer secured by a Lien.
SECTION 4.10. COMPLIANCE WITH LAWS, TAXES.
The Company shall, and shall cause each of its Restricted Subsidiaries
to, comply with all statutes, laws, ordinances, or government rules and
regulations to which it is subject, the non-compliance with which would
materially adversely affect the business, earnings, properties, assets or
condition, financial or otherwise, of the Company and its Restricted
Subsidiaries taken as a whole.
37
The Company shall, and shall cause each of its Restricted Subsidiaries
to, pay prior to delinquency all material taxes, assessments and governmental
levies, except those contested in good faith by appropriate proceedings.
SECTION 4.11. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective, any encumbrance or restriction on the ability of any
Restricted Subsidiary to (i)(a) pay dividends or make any other distributions to
the Company or any of its Restricted Subsidiaries on its Capital Stock or (b)
pay any Indebtedness owed to the Company or any of its Restricted Subsidiaries;
(ii) make loans or advances to the Company or any of its Restricted
Subsidiaries; or (iii) transfer any of its properties or assets to the Company
or any of its Restricted Subsidiaries, except for such encumbrances or
restrictions existing under or by reasons of (a) Existing Indebtedness as in
effect on the date hereof, and any amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or refinancings
thereof, provided that such amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacement or refinancings are no more
restrictive in the aggregate in terms of such encumbrances or restrictions than
those in effect on the date hereof; (b) the New Credit Agreement as in effect on
the date hereof, and any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings thereof,
provided that such amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacement or refinancings are no more restrictive in
the aggregate in terms of such encumbrances or restrictions than those contained
in the New Credit Agreement as in effect on the date hereof; (c) this Indenture,
the Notes and the Subsidiary Guarantees; (d) applicable law; (e) any agreement
relating to the purchase, sale or lease of assets, or any instrument governing
Indebtedness or Capital Stock of a Person acquired by the Company or any of its
Restricted Subsidiaries as in effect at the time of acquisition (except to the
extent such Indebtedness or such restriction was incurred in connection with, or
in contemplation of, such acquisition), in each case, 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, provided that the Consolidated Cash Flow of such Person is not taken
into account in determining whether such acquisition was permitted by the terms
contained herein; (f) by reason of customary non-assignment provisions in leases
and licenses entered into in the ordinary course of business and consistent with
past practices; (g) purchase money or capitalized lease obligations for property
acquired in the ordinary course of business that impose restrictions of the
nature described in this Section 4.11(iii) hereof on the property so acquired;
(h) Permitted Refinancing Debt, provided that the restrictions contained in the
agreements governing such Permitted Refinancing Debt are no more restrictive in
the aggregate than those contained in the agreements governing the Indebtedness
being refinanced; (i) other Indebtedness permitted by Section 4.07 hereof, so
long as any such encumbrances or restrictions set forth in such Indebtedness are
no more restrictive in the aggregate than those contained in this Indenture or
the New Credit Agreement; or (j) any instrument governing the sale of assets of
the Company or any of its Restricted Subsidiaries, which encumbrance or
restriction applies solely to the assets of the Company or such Restricted
Subsidiary, being sold in such transaction.
SECTION 4.12. MAINTENANCE OF OFFICE OR AGENCIES.
The Company shall maintain in The City of New York an office or an
agency (which may be an office of any Agent) 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
Company shall give prompt written notice to the Trustee of any change in the
location of such office or agency. If at any time the Company 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.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any matter relieve the
Company of its obligation to maintain an office or agency in The City of New
York for such purposes. The Company shall give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location
of any such other office or agency.
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The Company hereby designates the Corporate Trust Office of the
Trustee located at 6201 15th Avenue, Brooklyn, New York 11219 as one such office
or agency of the Company in accordance with Section 2.03 hereof.
SECTION 4.13. CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each Holder of Notes
will have the right to require the Company to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of such Holder's Notes pursuant to
the offer described below (the "Change of Control Offer") at a purchase price in
cash equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages, if any, thereon to the date of purchase
(the "Change of Control Payment").
(b) In the event a Change of Control occurs at a time when the Company
is prohibited from purchasing Notes under the terms of any Senior Debt, then
prior to mailing the notice to the Holders of the Notes pursuant to Section
3.08(a) hereof, but in any event within 30 days following any Change of Control,
the Company shall obtain the requisite consents, if any, under all agreements
governing such Senior Debt to the purchase of Notes pursuant to the Change of
Control Offer or repay the Senior Debt containing such a prohibition.
(c) The Company will not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control Offer in
the manner, at the times and otherwise in compliance with the requirements set
forth in this Section 4.13 and in Article 3 hereof applicable to a Change of
Control Offer made by the Company (including any requirement to repay in full
any Senior Debt or obtain the consents of such lenders to such Change of Control
Offer as set forth in this Section 4.13 (b) hereof) and purchases all Notes
validly tendered and not withdrawn under such Change of Control Offer.
SECTION 4.14. ASSET SALES.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in an Asset Sale unless (i) the Company (or the
Restricted Subsidiary, as the case may be) receives consideration at the time of
such Asset Sale at least equal to the fair market value (evidenced by a
resolution of the Board of Directors of the Company) of the assets or Equity
Interests issued or sold or otherwise disposed of and (ii) at least 75% of the
consideration therefor received by the Company or such Restricted Subsidiary is
in the form of cash or Marketable Securities; provided that the amount of (x)
any liabilities (as shown on the Company's or such Restricted Subsidiary's most
recent balance sheet or in the notes thereto) of the Company or any Restricted
Subsidiary (other than liabilities that are by their terms subordinated to the
Notes or the Subsidiary Guarantees) that are assumed by the transferee of any
such assets and (y) any notes or other obligations or securities received by the
Company or any such Restricted Subsidiary from such transferee that are promptly
(within 90 days) converted by the Company or such Restricted Subsidiary into
cash (to the extent of the cash or Marketable Securities received), will be
deemed to be cash for purposes of the foregoing clauses (i) and (ii); provided
further, however, that the 75% limitation referred to above shall not apply to
any sale, transfer or other disposition of assets in which the cash portion of
the consideration received therefor, determined in accordance with the foregoing
proviso, is equal to or greater than what the after-tax net proceeds would have
been had such transaction complied with the aforementioned 75% limitation.
(b) Within 360 days after the receipt of any Net Proceeds from an
Asset Sale, the Company may apply such Net Proceeds, at its option, (i) to
permanently reduce Senior Debt of the Company or any Guarantor (and, in the case
of revolving Indebtedness, to permanently reduce the commitments with respect
thereto), (ii) to cash collateralize letters of credit under the New Credit
Agreement, provided that any such cash collateral released to the Company or its
Restricted Subsidiaries upon the expiration of such letters of credit shall
again be deemed to be Net Proceeds received on the date of such release, or
(iii) to an Investment in another business, the making of a capital expenditure
or the acquisition of other assets (including the acquisition of media
representation contracts), in each case, in a Permitted Business. Any Net
Proceeds from Asset Sales that are not applied or invested as provided in this
Section 4.14 (b) will be deemed to constitute "Excess Proceeds." When the
aggregate amount of Excess Proceeds exceeds $10.0 million, the Company shall
make an offer to all Holders of Notes (an "Asset Sale Offer") to purchase the
maximum principal amount of Notes that may be purchased out of the Excess
Proceeds, at an offer price in cash in an amount equal to 100% of the aggregate
principal amount thereof plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the date of purchase, in accordance with the
procedures set forth in Article 3 hereof. To the extent that the aggregate
39
amount of Notes tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Company may use any remaining Excess Proceeds for general
corporate purposes. If the aggregate principal amount of Notes surrendered by
Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select
the Notes to be purchased on a pro rata basis.
(c) Upon completion of an Asset Sale Offer, the amount of Excess
Proceeds shall be reset at zero.
SECTION 4.15. ADDITIONAL GUARANTEES.
If the Company or any of its Subsidiaries shall acquire or create
another Subsidiary after the date hereof and such Subsidiary executes and
delivers a Guarantee with respect to the New Credit Agreement, then such newly
acquired or created Subsidiary shall execute a Subsidiary Guarantee and deliver
an opinion of counsel, in accordance with the terms of Article 11 hereof. If any
additional Guarantor is subsequently released from its Guarantee of the
Company's obligations under the New Credit Agreement, such additional
Guarantor's Subsidiary Guarantee will also be released.
SECTION 4.16. ACTIVITIES OF THE COMPANY.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, engage in any business other than a
Permitted Business.
SECTION 4.17. NO SENIOR SUBORDINATED DEBT.
(a) The Company shall not incur any Indebtedness that is subordinate
or junior in right of payment to any Senior Debt and senior in any respect in
right of payment to the Notes.
(b) No Guarantor shall incur any Indebtedness that is subordinate or
junior in right of payment to any Senior Debt of such Guarantor and senior in
any respect in right of payment to any Subsidiary Guarantee.
ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION OR SALE OF ASSETS.
The Company shall not consolidate or merge with or into (whether or
not the Company is the surviving entity), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions to, another corporation, Person or
entity (other than the KCC Merger) unless (i) the Company is the surviving
corporation or 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 is a corporation organized or existing under the laws of the United States,
any state thereof or the District of Columbia; (ii) the entity or Person formed
by or surviving any such consolidation or merger (if other than the Company) or
the entity or Person to which such sale, assignment, transfer, lease, conveyance
or other disposition will have been made assumes all the obligations of the
Company under the Notes and this Indenture pursuant to a supplemental indenture
in form reasonably satisfactory to the Trustee; (iii) immediately after such
transaction, no Default or Event of Default exists; and (iv) except in the case
of a merger of the Company with or into a Wholly Owned Subsidiary of the
Company, the Company or the entity or 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 (A) will have Consolidated Net Worth immediately after the transaction
equal to or greater than the Consolidated Net Worth of the Company immediately
preceding the transaction and (B) will, 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, be permitted to incur at least
$1.00 of additional Indebtedness pursuant to the Indebtedness to Cash Flow Ratio
test set forth in Section 4.07(a) hereof.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
40
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with Section 5.01 hereof, the successor corporation
formed by such consolidation or with which or into the Company is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor has been named as the Company herein; provided, however, that neither
the Company nor any such successor corporation shall be released from its
Obligation to pay the principal of, premium, if any, and accrued and unpaid
interest on, and Liquidated Damages, if any, with respect to the Notes.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
(a) An Event of Default is:
(i) default for 30 days in the payment when due of interest on,
or Liquidated Damages, if any, with respect to the Notes
whether or not prohibited by Article 10 hereof;
(ii) default in payment when due of principal or premium, if any,
on the Notes at maturity, upon redemption or otherwise
whether or not prohibited by Article 10 hereof;
(iii)failure by the Company for 30 days after receipt of written
notice from the Trustee or Holders of at least 25% in
principal amount of the Notes then outstanding to comply
with the provisions described under Sections 4.13, 4.14,
4.05, 4.07 or Article 5 hereof;
(iv) failure by the Company for 60 days after written notice from
the Trustee or the Holders of at least 25% in principal
amount of the Notes then outstanding to comply with its
other agreements in this Indenture or the Notes;
(v) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured
or evidenced any Indebtedness for money borrowed by the
Company or any of its Restricted Subsidiaries (or the
payment of which is guaranteed by the Company or any of its
Restricted Subsidiaries) whether such Indebtedness or
Guarantee now exists, or is created after the date hereof,
which default (A)(i) is caused by a failure to pay when due
at final stated maturity (giving effect to any grace period
related thereto) the principal of such Indebtedness (a
"Payment Default") or (ii) results in the acceleration of
such Indebtedness prior to its express maturity and (B) in
each case, the principal amount of any such Indebtedness due
to be paid, together with the principal amount of any other
such Indebtedness under which there has been a Payment
Default or the maturity of which has been so accelerated,
aggregates $10.0 million or more;
(vi) failure by the Company or any of its Subsidiaries to pay
non-appealable final judgments (other than any judgment as
to which a reputable insurance company has accepted full
liability) aggregating in excess of $10.0 million, which
judgments are not stayed, bonded, discharged or vacated
within 60 days after their entry;
(vii)except as permitted by this Indenture, if any Subsidiary
Guarantee that is a Significant Subsidiary shall be held in
any judicial proceeding to be unenforceable or invalid or
shall cease for any reason to be in full force and effect or
any Guarantor that is a Significant Subsidiary, or any
Person acting on behalf of any Guarantor that is a
Significant Subsidiary, shall deny or disaffirm its
obligations under its Subsidiary Guarantee;
(viii) in existence when the Company or any Significant
Subsidiary pursuant to or within the meaning of any
Bankruptcy Law:
41
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it
in an involuntary case,
(C) consents to the appointment of a Custodian of it or for
all or substantially all of its property, or
(D) makes a general assignment for the benefit of its
creditors; and
(ix) in existence when a court of competent jurisdiction enters
an order or decree under any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case,
(B) appoints a Custodian of the Company or any Significant
Subsidiary or for all or substantially all of the
property of the Company or any Significant Subsidiary,
or
(C) orders the liquidation of the Company or any
Significant Subsidiary,
and any such order or decree remains unstayed and in effect for 60
days.
The term "Custodian" means any receiver, trustee, assignee, liquidator
or similar official under any Bankruptcy Law.
SECTION 6.02. ACCELERATION.
(a) If any Event of Default occurs and is continuing (other than an
Event of Default under Section 6.01(a)(viii) or (ix) hereof), the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes may
declare all the Notes to be due and payable by notice in writing to the Company
and the Trustee specifying the respective Event of Default and that it is a
"notice of acceleration" (the "Acceleration Notice"), and the same (i) shall
become immediately due and payable or (ii) if there are any amounts outstanding
under the New Credit Agreement, shall become immediately due and payable upon
the first to occur of an acceleration under the New Credit Agreement or five
Business Days after receipt by the Company and the Representative under the New
Credit Agreement of such Acceleration Notice but only if such Event of Default
is then continuing. Notwithstanding the foregoing, in the case of an Event of
Default arising from Section 6.01(a)(viii) or (ix) hereof, all outstanding Notes
will become due and payable without further action or notice.
(b) In the event of a declaration of acceleration of the Notes because
an Event of Default has occurred and is continuing as a result of the
acceleration of any Indebtedness described in Section 6.01 (a)(v) hereof, the
declaration of acceleration of the Notes shall be automatically annulled if the
holders of any Indebtedness described in Section 6.01 (a)(v) hereof have
rescinded the declaration of acceleration in respect of such Indebtedness within
30 days of the date of such declaration and if (i) the annulment of the
acceleration of the Notes would not conflict with any judgment or decree of a
court of competent jurisdiction, and (ii) all existing Events of Default, except
nonpayment of principal or interest on the Notes that became due solely because
of the acceleration of the Notes, have been cured or waived.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal of, premium, if
any, or any accrued and unpaid interest on, or Liquidated Damages, if any, with
respect to the Notes or to enforce the performance of any provision of the Notes
or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
42
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. All remedies are cumulative
to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
The holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of all Holders of all of
the Notes waive any existing Default or Event of Default and its consequences
under this Indenture, except a continuing Default or Event of Default in the
payment of the principal of, premium, if any, and interest on, and Liquidated
Damages, if any, with respect to such Notes, which may only be waived with the
consent of each Holder of Notes affected. Upon any such waiver, such Default
shall cease to exist, and any Event of Default arising therefrom shall be deemed
to have been cured for every purpose of this Indenture; provided that no such
waiver shall extend to any subsequent or other Default or impair any right
consequent thereon. The Trustee may withhold from Holders of the Notes notice of
any continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in such Holders' interest.
SECTION 6.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding
Notes may direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on it
by this Indenture. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture, that the Trustee determines may be unduly
prejudicial to the rights of other Holders or would involve the Trustee in
personal liability.
SECTION 6.06. LIMITATION ON SUITS.
A Holder may pursue a remedy with respect to this Indenture or the
Notes only if (i) the Holder gives to the Trustee notice of a continuing Event
of Default; (ii) the Holders of at least 25% in principal amount of the then
outstanding Notes make a request to the Trustee to pursue the remedy; (iii) such
Holder or Holders offer and, if requested, provide to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense; (iv) the
Trustee does not comply with the request within 60 days after receipt of the
request and the offer of indemnity; and (v) during such 60-day period the
Holders of a majority in principal amount of the then outstanding Notes do not
give the Trustee a direction inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder.
Holders of the Notes may not enforce this Indenture, except as
provided herein.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of principal of, premium, if any, and any accrued
and unpaid interest on, and Liquidated Damages, if any, with respect to a Note,
on or after a respective due date expressed in the Note, or to bring suit for
the enforcement of any such payment on or after such respective date, shall not
be impaired or affected without the consent of the Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a)(i) or (ii) hereof
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Company for (i) the
principal, premium and Liquidated Damages, if any, and interest remaining unpaid
on the Notes, (ii) interest on overdue principal and premium, if any, and, to
the extent lawful, interest, and (iii) 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 ("Trustee Expenses").
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
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The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable to have the claims of the Trustee
(including any claim for Trustee Expenses) and the Holders allowed in any
Insolvency or Liquidation Proceeding or other judicial proceeding relative to
the Company (or any other obligor upon the Notes), its creditors or its property
and shall be entitled and empowered to collect, receive and distribute to
Holders any money or other property payable or deliverable on any such claims
and each Holder authorizes any Custodian in any such Insolvency or Liquidation
Proceeding or other judicial proceeding to make such payments to the Trustee,
and if the Trustee shall consent to the making of such payments directly to the
Holders any such Custodian is hereby authorized to make such payments directly
to the Holders, and to pay to the Trustee any amount due to it hereunder for
Trustee Expenses, and any other amounts due the Trustee under Section 7.07
hereof. To the extent that the payment of any such Trustee Expenses, and any
other amounts due the Trustee under Section 7.07 hereof out of the estate in any
such proceeding, shall be denied for any reason, payment of the same shall be
secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties which the Holders may be
entitled to receive in such proceeding, whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any Insolvency or
Liquidation Proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07 hereof;
Second: to Holders for amounts due and unpaid on the Notes for
principal, premium and Liquidated Damages, if any, and interest, ratably,
without preference or priority of any kind, according to the amounts due and
payable on the Notes for principal, premium and Liquidated Damages, if any, and
interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default occurs (and has not been cured) the Trustee
shall (i) exercise the rights and powers vested in it by this Indenture, and
(ii) use the same degree of care and skill in exercising such rights and powers
as a prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee's duties shall be determined solely by the
express provisions of this Indenture and the Trustee need
44
perform only those duties that are specifically set forth in
this Indenture and no others, and no implied covenants or
obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to
determine whether they conform to this Indenture's
requirements.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own wilful
misconduct, except that:
(i) this paragraph does not limit the effect of Section 7.01(b)
hereof;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is
proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(iii)the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a
direction it receives pursuant to Section 6.05 hereof.
(d) Whether or not expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b), (c) and (e) of this Section.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders unless such Holders shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money it
receives except as the Trustee may agree in writing with the Company. Money the
Trustee holds in trust need not be segregated from other funds except to the
extent required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may rely on any document it believes to be genuine and
to have been signed or presented by the proper Person. The Trustee shall not be
obligated to investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may reasonably
require an Officers' Certificate or an Opinion of Counsel, or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may
consult with counsel and 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.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any Agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take, except to the extent that such action or omission to act constitutes
negligence or wilful misconduct on the part of the Trustee.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
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The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or an
Affiliate with the same rights it would have if it were not Trustee. However, if
the Trustee acquires any conflicting interest it must eliminate such conflict
within 90 days, apply to the SEC for permission to continue as Trustee or
resign. Any Agent may do the same with like rights. The Trustee is also subject
to Sections 7.10 and 7.11 hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or for any
money paid to the Company or upon the Company's direction under any provisions
hereof, it shall not be responsible for the use or application of any money any
Paying Agent other than the Trustee receives, and it shall not be responsible
for any statement or recital herein or any statement in the Notes or any other
document furnished or issued in connection with the sale of the Notes or
pursuant to this Indenture, other than its certificate of authentication.
SECTION 7.05. NOTICE TO HOLDERS OF DEFAULTS AND EVENTS OF DEFAULT.
If a Default or Event of Default occurs and is continuing and if it is
actually known to the Trustee, the Trustee shall mail to Holders a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment on any Note (including any failure
to redeem Notes called for redemption or any failure to purchase Notes tendered
pursuant to an Offer that are required to be purchased by the terms of this
Indenture), the Trustee may withhold the notice if and so long as a committee of
its Trust Officers in good faith determines that withholding the notice is in
the Holders' interests.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each August 1 beginning with August 1, 1997, the
Trustee shall mail to Holders a brief report dated as of such reporting date
that complies with section 313(a) of the TIA (but if no event described in
section 313(a) of the TIA has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also shall comply
with section 313(b)(2) of the TIA. The Trustee shall also transmit by mail all
reports as required by section 313(c) of the TIA.
Commencing at the time this Indenture is qualified under the TIA, a
copy of each report at the time of its mailing to Holders shall be filed with
the SEC and each national securities exchange on which the Notes are listed. The
Company shall notify the Trustee when and if the Notes are listed on any
national securities exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee (in its capacities as Trustee,
Paying Agent and/or Registrar) from time to time reasonable compensation for its
services hereunder. The Trustee's compensation shall not be limited by any law
on compensation of a trustee of an express trust. The Company shall reimburse
the Trustee upon request for all reasonable disbursements, advances, fees and
expenses it incurs or makes in addition to the compensation for its services.
Such expenses shall include the reasonable compensation, disbursements and
expenses of the Trustee's agents and counsel.
The Company shall indemnify and hold harmless the Trustee (in its
capacities as Trustee, Paying Agent and/or Registrar) against any and all
losses, liabilities or expenses the Trustee incurs arising out of or in
connection with the acceptance or administration of its duties under this
Indenture, except as set forth below. The Trustee shall notify the Company
promptly of any claim for which it may seek indemnity. Failure by the Trustee to
so notify the Company shall not relieve the Company of its Obligations
hereunder. The Company shall defend the claim and the Trustee shall reasonably
cooperate in the defense. The Trustee may have one separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent, which consent shall
not be unreasonably withheld.
46
The Company's Obligations under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture.
The Company need not reimburse any expense or indemnify against any
loss or liability the Trustee incurs through negligence or bad faith or willful
misconduct.
To secure the Company's payment of its Obligations in this Section
7.07, the Trustee shall have a Lien prior to the Notes on all money or property
the Trustee holds or collects, except such money or property held in trust to
pay principal of, premium, if any, and any accrued and unpaid interest on, and
Liquidated Damages, if any, with respect to particular Notes. Such Lien shall
survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(a)(viii) or (ix) hereof occurs, the expenses
and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute administrative expenses under any
Bankruptcy Law.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.
The Trustee may resign and be discharged from the trust hereby created
by so notifying the Company. The Holders of a majority in principal amount of
the then outstanding Notes may remove the Trustee by so notifying the Trustee
and the Company. The Company may remove the Trustee if:
(i) the Trustee fails to comply with Section 7.10 hereof;
(ii) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy Law;
(iii) a Custodian or public officer takes charge of the Trustee or its
property; or
(iv) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee, provided that the Holders of a majority in principal amount of the then
outstanding Notes may appoint a successor Trustee to replace any successor
Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the then outstanding Notes may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10 hereof, any Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
appointment to Holders. The retiring Trustee shall promptly transfer all
property it holds as Trustee to the successor Trustee, provided all sums owing
to the retiring Trustee hereunder have been paid and subject to the Lien
provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee
pursuant to this Section 7.08, the Company's obligations under Section 7.07
hereof shall continue for the retiring Trustee's benefit with respect to
expenses and liabilities it incurred prior to being replaced.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
47
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
The Trustee shall at all times (i) be a corporation organized and
doing business under the laws of the United States of America, of any state
thereof, or the District of Columbia authorized under such laws to exercise
corporate trustee power, (ii) be subject to supervision or examination by
federal or state authority, (iii) have a combined capital and surplus of at
least $10,000,000 as set forth in its most recent published annual report of
condition, and (iv) satisfy the requirements of sections 310(a)(1), (2) and (5)
of the TIA. The Trustee is subject to section 310(b) of the TIA.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Trustee is subject to section 311(a) of the TIA, excluding any
creditor relationship listed in section 311(b) of the TIA. A Trustee who has
resigned or been removed shall be subject to section 311(a) of the TIA to the
extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors evidenced by
a resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes and
Subsidiary Guarantees upon compliance with the conditions set forth below in
this Article 8.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company and each Guarantor shall, subject
to the satisfaction of the conditions set forth in Section 8.04 hereof, be
deemed to have been discharged from its obligations with respect to all
outstanding Notes and Subsidiary Guarantees on the date the conditions set forth
below are satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal
Defeasance means that the Company and each Guarantor shall be deemed to have
paid and discharged the entire Indebtedness represented by the outstanding Notes
and Subsidiary Guarantees, which shall thereafter be deemed to be "outstanding"
only for the purposes of Section 8.05 hereof and the other Sections of this
Indenture referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Notes and Subsidiary Guarantees and this Indenture (and
the Trustee, on demand of and at the expense of the Company, shall execute
proper instruments acknowledging the same), except for the following provisions
which shall survive until otherwise terminated or discharged hereunder: (a) the
rights of Holders of outstanding Notes to receive payments in respect of the
principal of, premium, if any, and interest and Liquidated Damages, if any, on
such Notes when such payments are due or on the redemption date, as the case may
be, from the trust referred to in Section 8.04(a), (b) the Company's obligations
with respect to such Notes under Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07,
2.10 and 4.12 hereof, (c) the rights, powers, trusts, duties and immunities of
the Trustee including without limitation thereunder Section 7.07, 8.05 and 8.07
hereunder and the Company's obligations in connection therewith, (d) the
Company's rights to redeem Notes under Section 3.07 hereof and (e) the
provisions of this Article 8. Subject to compliance with this Article 8, the
Company may exercise its option under this Section 8.02 notwithstanding the
prior exercise of its option under Section 8.03 hereof.
SECTION 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company and each Guarantor shall, subject
to the satisfaction of the conditions set forth in Section 8.04 hereof, be
released from its obligations under the covenants contained in Sections 3.08,
4.02, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.13, 4.14, 4.15, 4.16, 4.17,
48
5.01 and 11.01 hereof and any future covenant added to this Indenture with
respect to the outstanding Notes and Subsidiary Guarantees on and after the date
the conditions set forth below are satisfied (hereinafter, "Covenant
Defeasance"), and the Notes and Subsidiary Guarantees shall thereafter be deemed
not "outstanding" for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder (it being understood that such Notes and
Subsidiary Guarantees shall not be deemed outstanding for accounting purposes).
For this purpose, Covenant Defeasance means that, with respect to the
outstanding Notes and Subsidiary Guarantees, the Company, its Subsidiaries or
any 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 Section 6.01 hereof, but,
except as specified above, the remainder of this Indenture and such Notes and
Subsidiary Guarantees shall be unaffected thereby. In addition, upon the
Company's exercise under Section 8.01 hereof of the option applicable to this
Section 8.03 hereof, subject to the satisfaction of the conditions set forth in
Section 8.04 hereof, Sections 6.01(a)(i) through 6.01(a)(vii) hereof shall not
constitute Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
Section 8.02 or 8.03 hereof to the outstanding Notes and Subsidiary Guarantees:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders of the Notes, (i) cash in United
States dollars, (ii) non-callable Government Securities which
through the scheduled payment of principal, premium, if any,
interest and liquidated damages, if any, in respect thereof in
accordance with their terms will provide, not later than one day
before the due date of payment, cash in United States dollars in
an amount, or (iii) a combination thereof, in such amounts as
shall be sufficient, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and
discharge the principal of, premium, if any, and interest and
Liquidated Damages, if any, on the outstanding Notes on the
stated maturity or on the applicable redemption date, as the case
may be, and the Company must specify whether the Notes are being
defeased to maturity or to a particular redemption date;
(b) in the case of an election under Section 8.02 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming
that (A) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since
the date hereof, there has been a change in the applicable
federal income tax law, in either case to the effect that, and
based thereon such Opinion of Counsel shall confirm that, the
Holders of the outstanding Notes shall not recognize income, gain
or loss for federal income tax purposes as a result of such Legal
Defeasance and shall be subject to federal income tax on the same
amounts, in the same manner and at the same time as would have
been the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming
that the Holders of the outstanding Notes shall not recognize
income, gain or loss for federal income tax purposes as a result
of such Covenant Defeasance and shall be subject to federal
income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Covenant
Defeasance had not occurred;
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(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or insofar as Sections
6.01(a)(viii) and (ix) hereof are concerned, at any time in the
period ending on the 91st day after the date of deposit (it being
understood that this condition shall not be deemed satisfied
until the expiration of such period);
(e) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under any
material agreement or instrument including, without limitation,
the New Credit Agreement (other than this Indenture) to which the
Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that after the 91st day following the
deposit, the trust funds shall not be subject to the effect of
any applicable bankruptcy, insolvency, reorganization or similar
laws affecting creditors' rights generally;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company
with the intent of preferring the Holders of Notes over the other
creditors of the Company with the intent of defeating, hindering,
delaying or defrauding any other creditors of the Company or
others;
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to the Legal
Defeasance or the Covenant Defeasance have been complied with;
and
(i) the Trustee shall have received such other documents and
assurances as the Trustee shall have reasonably required.
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding 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 Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, interest and
Liquidated Damages, if any, but such money need not be segregated from other
funds except to the extent required by applicable law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.04 hereof or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the written
request of the Company and be relieved of all liability with respect to any
money or non-callable Government Securities held by it as provided in Section
8.04 hereof which, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to the
Trustee (which may be the opinion delivered under Section 8.04(a) hereof), are
in excess of the amount thereof that would then be required to be deposited to
effect an equivalent Legal Defeasance or Covenant Defeasance.
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SECTION 8.06. REPAYMENT TO THE COMPANY.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium, if any,
interest or Liquidated Damages, if any, on any Note and remaining unclaimed for
one year after such principal, and premium, if any, or interest or Liquidated
Damages, if any, has become due and payable shall be paid to the Company on its
written request or (if then held by the Company) shall be discharged from such
trust; and the Holder of such 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 trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in the
New York Times and The Wall Street Journal (national edition), notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining shall be repaid to the Company.
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the obligations of the Company and the Guarantors under this
Indenture, the Notes and the Subsidiary Guarantees shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03
hereof until such time as the Trustee or Paying Agent is permitted to apply all
such money in accordance with Section 8.02 or 8.03 hereof, as the case may be;
provided, however, that, if the Company or any Guarantor makes any payment of
principal of, premium, if any, interest or Liquidated Damages, if any, on any
Note following the reinstatement of its obligations, the Company or any
Guarantor 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 9
AMENDMENTS
SECTION 9.01. AMENDMENTS AND SUPPLEMENTS PERMITTED WITHOUT CONSENT OF HOLDERS.
Notwithstanding Section 9.02 hereof, the Company, the Guarantors and
the Trustee may amend or supplement this Indenture or the Notes without the
consent of any Holder (a) to cure any ambiguity, defect or inconsistency; (b) to
provide for uncertificated Notes in addition to or in place of certificated
Notes; (c) to provide for the assumption by a successor corporation of the
Company's Obligations to the Holders in the event of a disposition pursuant to
Article 5; (d) to comply with SEC's requirements to effect or maintain the
qualification of this Indenture under the TIA; (e) to provide for additional
Subsidiary Guarantees with respect to the Notes; (f) to make any change that
does not materially adversely affect any Holder's legal rights under this
Indenture, (g) to evidence and provide for a successor Trustee; (h) to add
additional covenants or Events of Default; or (i) to secure the Notes .
No amendment may be made to any provision of Article 10 that would
adversely affect the rights of any holder of Senior Debt then outstanding unless
the holders of such Senior Debt (or their Representative) consent to such
change.
Upon the Company's request, after receipt by the Trustee of a
resolution of the Board of Directors authorizing the execution of any amended or
supplemental indenture and the documents described in Section 9.06 hereof, the
Trustee shall join with the Company and the Guarantors in the execution of any
amended or supplemental indenture authorized or permitted by the terms of this
Indenture and to make any further appropriate agreements and stipulations that
may be contained in any such amended or supplemental indenture, but the Trustee
shall not be obligated to enter into an amended or supplemental indenture that
affects its own rights, duties or immunities under this Indenture or otherwise.
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SECTION 9.02. AMENDMENTS AND SUPPLEMENTS REQUIRING CONSENT OF HOLDERS.
Subject to Section 6.07 hereof and Section 10.13, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture or the Notes
with the consent of the holders of at least a majority in principal amount of
the Notes then outstanding (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for Notes), and
any existing Default or Event of Default (other than a payment Default) or
compliance with any provision of the Indenture or the Notes may be waived with
the consent of the holders of a majority in principal amount of the then
outstanding Notes (including consents obtained in connection with a tender offer
or exchange offer for Notes).
Upon the Company's request and after receipt by the Trustee of a
resolution of the Board of Directors authorizing the execution of any
supplemental indenture, evidence of the Holders' consent, and the documents
described in Section 9.06 hereof, the Trustee shall join with the Company and
the Guarantors in the execution of such amended or supplemental indenture unless
such amended or supplemental indenture affects the Trustee's own rights, duties
or immunities under this Indenture or otherwise, in which case the Trustee may
in its discretion, but not be obligated to, enter into such amended or
supplemental indenture.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment or waiver,
but it shall be sufficient if such consent approves the substance thereof. After
an amendment or waiver under this Section 9.02 becomes effective, the Company
shall mail to each Holder affected thereby a notice briefly describing the
amendment, supplement or waiver. Any failure of the Company to mail such notice,
or any defect therein, shall not, however, in any way impair or affect the
validity of any such amended or supplemental indenture or waiver.
Subject to Sections 6.02, 6.04 and 6.07 hereof, the Holders of a
majority in aggregate principal amount of the Notes then outstanding may waive
compliance in a particular instance by the Company or the Guarantors with any
provision of this Indenture, the Notes or the Subsidiary Guarantees. However,
without the consent of each Holder affected, an amendment, supplement or waiver
may not (with respect to any Note or Subsidiary Guarantee held by a
non-consenting Holder): (i) reduce the principal amount of Notes whose holders
must consent to an amendment, supplement or waiver, (ii) reduce the principal of
or change the fixed maturity of any Note or alter the provisions with respect to
the redemption of the Notes (other than provisions relating to Sections 4.13 and
4.14 hereof), in a manner adverse to Holders, (iii) reduce the rate of or change
the time for payment of interest on any Note, (iv) waive a Default or Event of
Default in the payment of principal of or premium, if any, or interest on the
Notes (except a rescission of acceleration of the Notes by the holders of at
least a majority in aggregate principal amount of the Notes and a waiver of the
payment default that resulted from such acceleration), (v) make any Note payable
in money other than that stated in the Notes, (vi) make any change in the
provisions of the Indenture relating to waivers of past Defaults or the rights
of holders of Notes to receive payments of principal of or premium, if any, or
interest on the Notes, (vii) waive a redemption payment with respect to any Note
(other than a payment required by either of Sections 4.13 or 4.14 hereof) or
(viii) make any change in the foregoing amendment and waiver provisions. In
addition, any amendment to the provisions of Article 10 or Section 11.08 hereof
will require the consent of the holders of at least 75% in aggregate principal
amount of the Notes then outstanding if such amendment would adversely affect
the rights of holders of Notes.
SECTION 9.03. COMPLIANCE WITH TIA.
Every amendment or supplement to this Indenture or the Notes shall be
set forth in an amendment or supplemental indenture that complies with the TIA
as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder and every
subsequent Holder of a Note or portion of a Note that evidences the same
Indebtedness as the consenting Holder's Note, even if notation of the consent is
not made on any Note. However, any such Holder or subsequent Holder may revoke
the consent as to his or her Note or portion of a Note if the Trustee receives
the notice of revocation before the date on which the Trustee receives an
Officers' Certificate certifying that the Holders of the requisite principal
amount of Notes have consented to the amendment or waiver.
52
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders of Notes entitled to consent to any
amendment or waiver. If a record date is fixed, then, notwithstanding the
provisions of the immediately preceding paragraph, those Persons who were
Holders of Notes at such record date (or their duly designated proxies), and
only those Persons, shall be entitled to consent to such amendment or waiver or
to revoke any consent previously given, whether or not such Persons continue to
be Holders of Notes after such record date. No consent shall be valid or
effective for more than 90 days after such record date unless consents from
Holders of the principal amount of Notes required hereunder for such amendment
or waiver to be effective shall have also been given and not revoked within such
90-day period.
After an amendment or waiver becomes effective it shall bind every
Holder, unless it is of the type described in any of clauses (1) through (6) of
Section 9.02 hereof. In such case, the amendment or waiver shall bind each
Holder who has consented to it and every subsequent Holder of a Note that
evidences the same debt as the consenting Holder's Note.
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may (at the Company's expense) place an appropriate
notation about an amendment, supplement or waiver on any Note thereafter
authenticated. The Company in exchange for all Notes may issue and the Trustee
shall authenticate new Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.06. TRUSTEE PROTECTED.
The Trustee shall sign any amendment or supplemental indenture
authorized pursuant to this Article 9 if the amendment does not adversely affect
the rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may, but need not, sign it. In signing such amendment or supplemental
indenture, the Trustee shall be entitled to receive and, subject to Section 7.01
hereof, shall be fully protected in relying upon, an Officers' Certificate and
Opinion of Counsel as conclusive evidence that such amendment or supplemental
indenture is authorized or permitted by this Indenture, that it is not
inconsistent herewith, and that it will be valid and binding upon the Company in
accordance with its terms. The Company may not sign an amendment or supplemental
indenture until the Board of Directors approves it.
ARTICLE 10
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE.
The Company and the Guarantors agree, and each Holder by accepting a
Note agrees, that the payment of principal of, premium, interest and Liquidated
Damages, if any, on the Notes shall be subordinated in right of payment, to the
extent and in the manner provided in this Article 10 and Article 11, to the
prior payment in full in cash or Marketable Securities of all Senior Debt,
whether outstanding on the date hereof or thereafter incurred.
SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, an
assignment for the benefit of creditors or any marshalling of the Company's
assets and liabilities:
(a) the holders of Senior Debt will be entitled to receive payment in
full in cash or Marketable Securities of all Obligations due in respect of such
Senior Debt (including interest after the commencement of any such proceeding at
the rate specified in the applicable Senior Debt, whether or not such interest
is allowable as a claim in any such proceeding) before the Holders of Notes will
be entitled to receive any payment with respect to the Notes (except that
Holders of Notes may receive (i) Permitted Junior Securities and any other
53
Permitted Junior Securities issued in exchange for any Permitted Junior
Securities and (ii) payments and other distributions made from the defeasance
trust created pursuant to Article 8 hereof); and
(b) until all Obligations with respect to Senior Debt are paid in full
in cash or Marketable Securities, any distribution to which the Holders of Notes
would be entitled shall be made to the holders of Senior Debt (except that
Holders of Notes may receive (i) Permitted Junior Securities and any other
Permitted Junior Securities issued in exchange for any Permitted Junior
Securities and any securities issued in exchange for Senior Debt and (ii)
payments and other distributions made from the defeasance trust created pursuant
to Article 8 hereof).
SECTION 10.03. DEFAULT ON DESIGNATED SENIOR DEBT.
The Company also may not make any payment upon or in respect of the
Notes (except that Holders of Notes may receive (i) Permitted Junior Securities
and any other Permitted Junior Securities issued in exchange for any Permitted
Junior Securities and (ii) payments and other distributions made from the
defeasance trust created pursuant to Article 8 hereof) if:
(i) a default in the payment of the principal of, premium, if
any, or interest on Senior Debt occurs and is continuing; or
(ii) any other default occurs and is continuing with respect to
Designated Senior Debt that permits holders of the
Designated Senior Debt as to which such default relates to
accelerate its maturity and the Trustee receives a notice of
such default (a "Payment Blockage Notice") from a Person who
may give it pursuant to Section 10.11 hereof. If the Trustee
receives any such Payment Blockage Notice, no subsequent
payment blockage period shall be commenced for purposes of
this Section 10.03 unless and until (x) 360 days have
elapsed since the commencement of the immediately prior
payment blockage period and (y) all scheduled payments of
principal, premium, if any, interest and Liquidated Damages,
if any, on the Notes that have come due have been paid in
full in cash. No nonpayment default that existed or was
continuing on the date of delivery of any Payment Blockage
Notice to the Trustee shall be, or be made, the basis for a
subsequent Payment Blockage Notice.
The Company may and shall resume payments on the Notes:
(a) in the case of a payment default described in clause
(i) above, upon the date on which such default is cured
or waived, and
(b) in case of a nonpayment default described in clause
(ii) above, the earlier of the date on which such
nonpayment default is cured or waived or 179 days after
the date on which the applicable Payment Blockage
Notice is received, unless a payment default on Senior
Debt then exists.
SECTION 10.04. ACCELERATION OF NOTES.
If payment of the Notes is accelerated because of an Event of Default,
the Trustee shall promptly notify the Representative of any Senior Debt of the
acceleration.
SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder receives any payment of
any Obligations with respect to the Notes at a time when the Trustee has actual
knowledge that such payment is prohibited by Section 10.03 hereof, such payment
shall be held by the Trustee or such Holder, in trust for the benefit of, and
shall be paid forthwith over and delivered, upon written request to, the holders
of Senior Debt as their interest may appear or their Representative under the
indenture or other agreement (if any) pursuant to which Senior Debt may have
been issued, as their interest may appear, for application to the payment of all
54
Obligations with respect to Senior Debt remaining unpaid to the extent necessary
to pay such Obligations in full in accordance with their terms, after giving
effect to any concurrent payment or distribution to or for the holders of Senior
Debt.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are specifically set
forth in this Article 10, and no implied covenants or obligations with respect
to the holders of Senior Debt shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders or the Company
or any other Person money or assets to which any holders of Senior Debt shall be
entitled by virtue of this Article 10, except if such payment is made as a
result of the willful misconduct or bad faith of the Trustee.
SECTION 10.06. NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying Agent of
any facts known to the Company that would cause a payment of any Obligations
with respect to the Notes to violate this Article 10, but failure to give such
notice shall not affect the subordination of the Notes to the Senior Debt as
provided in this Article 10.
SECTION 10.07. SUBROGATION.
After all Senior Debt is paid in full in cash or Marketable Securities
and until the Notes are paid in full, Holders shall be subrogated (equally and
ratably with all other Indebtedness pari passu with the Notes) to the rights of
holders of Senior Debt to receive distributions applicable to Senior Debt to the
extent that distributions otherwise payable to the Holders have been applied to
the payment of Senior Debt. A distribution made under this Article 10 to holders
of Senior Debt that otherwise would have been made to Holders is not, as between
the Company and Holders, a payment by the Company on the Senior Debt.
SECTION 10.08. RELATIVE RIGHTS.
This Article 10 defines the relative rights of the Holders and holders
of Senior Debt. Nothing in this Indenture shall:
(i) impair, as between the Company and the Holders, the
obligation of the Company, which is absolute and
unconditional, to pay principal of, premium, if any,
interest and Liquidated Damages, if any, on the Notes in
accordance with their terms;
(ii) affect the relative rights of Holders and creditors of the
Company other than their rights in relation to holders of
Senior Debt; or
(iii)prevent the Trustee or any Holder from exercising its
available remedies upon a Default or an Event of Default,
subject to the rights of holders and owners of Senior Debt
to receive distribu- tions and payments otherwise payable to
Holders.
If the Company fails because of this Article 10 to pay principal of,
premium, if any, interest or Liquidated Damages, if any, on a Note on the due
date, the failure is nevertheless a Default or an Event of Default.
SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Debt to enforce the subordination of
the Indebtedness evidenced by the Notes shall be prejudiced or impaired by any
act or failure to act by the Company or any Holder or by the failure of the
Company or any Holder to comply with this Indenture.
Without in any way limiting the generality of the foregoing paragraph,
the holders of the Senior Debt may, at any time and from time to time, without
the consent of or notice to the Trustee or the Holders, without incurring
responsibility to the Holders and without impairing or releasing the
subordination provided in this Article or the obligations hereunder of the
Holders to the holders of Senior Debt, do any one or more of the following: (a)
change the manner, place or terms of payment or extend the time or payment of,
55
or renew or alter, Senior Debt or any instrument evidencing the same or any
agreement under which Senior Debt is outstanding; provided, however, that any
such alteration shall not (A) increase the amount of Senior Debt outstanding in
a manner prohibited by this Indenture or (B) otherwise violate Section 4.07
hereof; (b) sell, exchange, release or otherwise deal with any property pledged,
mortgaged or otherwise securing Senior Debt; (c) release any Person liable in
any manner for the collection of Senior Debt; provided, however, that any such
sale, exchange, release or other transaction shall not violate Section 4.09
hereof; and (d) exercise or refrain from exercising any rights against the
Company or any other Person; provided, however, that in no event shall any such
actions limit the right of the Holder to take any action to accelerate the
maturity of the Notes in accordance with the provisions set forth in Article 6
or to pursue any rights or remedies against the parties to the Indenture under
the Indenture or under applicable laws if the taking of such action does not
otherwise violate the terms of this Article.
SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company referred to
in this Article 10, the Trustee and the Holders shall be entitled to rely upon
any order or decree made by any court of competent jurisdiction or upon any
certificate of such Representative or of the liquidating trustee or agent or
other Person making any distribution to the Trustee or to the Holders for the
purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Debt and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 10.
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee shall have received at its
Corporate Trust Office at least five Business Days prior to the date of such
payment written notice that the payment of any Obligations with respect to the
Notes would violate this Article 10. Only the Company or a Representative may
give the notice. Nothing in this Article 10 shall impair the claims of, or
payments to, the Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee. Any Agent may do
the same with like rights.
SECTION 10.12. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of a Note by the Holder's acceptance thereof authorizes
and directs the Trustee on the Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 10, and appoints the Trustee to act as the Holder's attorney-in-fact for
any and all such purposes. If the Trustee does not file a proper proof of claim
or proof of debt in the form required in any proceeding referred to in Section
6.09 hereof at least 30 days before the expiration of the time to file such
claim, a Representative of Designated Senior Debt is hereby authorized to file
an appropriate claim for and on behalf of the Holders of the Notes.
SECTION 10.13. AMENDMENTS.
Any amendment to the provisions of this Article 10 shall require the
consent of the Holders of at least 75% in aggregate amount of Notes then
outstanding if such amendment would adversely affect the rights of the Holders
of Notes.
ARTICLE 11
GUARANTEE OF NOTES
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SECTION 11.01. SUBSIDIARY GUARANTEES.
Each Guarantor hereby, jointly and severally, unconditionally
guarantees to each Holder of a Note authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns, irrespective of the validity
and enforceability of this Indenture, the Notes and the Obligations of the
Company hereunder and thereunder, that: (a) the principal of, premium, if any,
interest and Liquidated Damages, if any, on the Notes will be promptly paid in
full when due, subject to any applicable grace period, whether at maturity, by
acceleration, redemption or otherwise, and interest on the overdue principal,
premium, if any, (to the extent permitted by law) interest on any interest, if
any, and Liquidated Damages, if any, on the Notes, and all other payment
Obligations of the Company to the Holders or the Trustee hereunder or thereunder
will be promptly paid in full and 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 any of such other Obligations, the same will be promptly
paid in full when due or performed in accordance with the terms of the extension
or renewal, subject to any applicable grace period, whether at stated maturity,
by acceleration, redemption or otherwise. Failing payment when so due of any
amount so guaranteed or any performance so guaranteed for whatever reason the
Guarantors will be jointly and severally obligated to pay the same immediately.
An Event of Default under this Indenture or the Notes shall constitute an event
of default under the Subsidiary Guarantees, and shall entitle the Holders to
accelerate the Obligations of the Guarantors hereunder in the same manner and to
the same extent as the Obligations of the Company. The Guarantors hereby agree
that their 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
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 Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against the Company,
protest, notice and all demands whatsoever and covenants that this Subsidiary
Guarantee will not be discharged except by complete performance of the
Obligations contained in the Notes and this Indenture. If any Holder or the
Trustee is required by any court or otherwise to return to the Company, the
Guarantors, or any Note Custodian, Trustee, liquidator or other similar official
acting in relation to either the Company or the Guarantors, any amount paid by
either to the Trustee or such Holder, this Subsidiary Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect. Each
Guarantor agrees that it shall not be entitled to, and hereby waives, any right
of subrogation in relation to the Holders in respect of any Obligations
guaranteed hereby until payment in full of the Obligations hereunder. Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders and the Trustee, on the other hand, (x) the maturity of the
Obligations guaranteed hereby may be accelerated as provided in Article 6 for
the purposes of this Subsidiary Guarantee, notwithstanding any stay, injunction
or other prohibition preventing such acceleration in respect of the Obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such Obligations as provided in Article 6 hereof, such Obligations (whether or
not due and payable) shall forthwith become due and payable by the Guarantors
for the purpose of this Subsidiary Guarantee. The Guarantors shall have the
right to seek contribution from any non- paying Guarantor so long as the
exercise of such right does not impair the rights of the Holders under the
Subsidiary Guarantees.
SECTION 11.02. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE.
To evidence its Subsidiary Guarantee set forth in Section 11.01
hereof, each Guarantor hereby agrees that a notation of such Subsidiary
Guarantee substantially in the form of Exhibit D shall be endorsed by an Officer
of such Guarantor on each Note authenticated and delivered by the Trustee and
that this Indenture shall be executed on behalf of such Guarantor, by manual or
facsimile signature, by an Officer of such Guarantor.
Each Guarantor hereby agrees that its Subsidiary Guarantee set forth
in Section 11.01 hereof shall remain in full force and effect notwithstanding
any failure to endorse on each Note a notation of such Subsidiary Guarantee.
If an Officer whose signature is on this Indenture or on the
Subsidiary Guarantee no longer holds that office at the time the Trustee
authenticates the Note on which a Subsidiary Guarantee is endorsed, the
Subsidiary Guarantee shall be valid nevertheless.
57
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Subsidiary Guarantee (in
existence on or after the date hereof) set forth in this Indenture on behalf of
the Guarantors.
SECTION 11.03. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
(a) Except as set forth in Articles 4 and 5 hereof, nothing contained
in this Indenture shall prohibit a merger between a Guarantor and another
Guarantor or a merger between a Guarantor and the Company.
(b) Except as provided in Section 11.03(a) hereof or in a transaction
referred to in Section 11.04 hereof no Guarantor may consolidate with or merge
with or into (whether or not such Guarantor is the surviving Person), another
corporation, Person or entity whether or not affiliated with such Guarantor
unless (i) the Person formed by or surviving any such consolidation or merger
(if other than such Guarantor) assumes all the obligations of such Guarantor
pursuant to a supplemental indenture in form and substance reasonably
satisfactory to the Trustee, in the Form of Exhibit E hereto, under the Notes
and this Indenture; (ii) immediately after giving effect to such transaction, no
Default or Event of Default exists; (iii) such Guarantor, or any Person formed
by or surviving any such consolidation or merger, would have Consolidated Net
Worth (immediately after giving effect to such transaction), equal to or greater
than the Consolidated Net Worth of such Guarantor immediately preceding the
transaction; and (iv) the Company would be permitted, immediately after giving
effect to such transaction, to incur at least $1.00 of additional Indebtedness
pursuant to the Indebtedness to Cash Flow Ratio test set forth in Section 4.07
hereof. The requirements of subparagraphs (iii) and (iv) of this Section
11.03(b) shall not apply in the case of a consolidation with or merger with or
into the Company or another Guarantor.
(c) In the case of any such consolidation, merger, sale or conveyance
and upon the assumption by the successor Person, by supplemental indenture,
executed and delivered to the Trustee and substantially in the form of Exhibit E
hereto, of the Subsidiary Guarantee endorsed upon the Notes and the due and
punctual performance of all of the covenants and conditions of this Indenture to
be performed by the Guarantor, such successor Person shall succeed to and be
substituted for the Guarantor with the same effect as if it had been named
herein as a Guarantor; provided that, solely for purposes of computing
Consolidated Cash Flow for purposes of Section 4.05(a)(B) hereof, the
Consolidated Cash Flow of any Person other than the Company and its Restricted
Subsidiaries shall only be included for periods subsequent to the effective time
of such merger, consolidation, combination or transfer of assets. Such successor
Person thereupon may cause to be signed any or all of the Subsidiary Guarantees
to be endorsed upon all of the Notes issuable hereunder which theretofore shall
not have been signed by the Company and delivered to the Trustee. All of the
Subsidiary Guarantees so issued shall in all respects have the same legal rank
and benefit under this Indenture as the Subsidiary Guarantees theretofore and
thereafter issued in accordance with the terms of this Indenture as though all
of such Subsidiary Guarantees had been issued at the date of the execution
hereof.
SECTION 11.04. RELEASES.
In the event of a sale or other disposition of all or substantially
all of the assets of any Guarantor, by way of merger, consolidation or
otherwise, or a sale or other disposition of all of the Capital Stock of any
Guarantor, then such Guarantor (in the event of a sale or other disposition, by
way of such a merger, consolidation or otherwise, of all of the capital stock of
such Guarantor) or the corporation acquiring the property (in the event of a
sale or other disposition of all or substantially all of the assets of such
Guarantor) will be released and relieved of any obligations under its Subsidiary
Guarantee; provided that the Net Proceeds of such sale or other disposition are
applied in accordance with the applicable provisions of the Indenture pursuant
to Section 4.14 hereof.
SECTION 11.05. ADDITIONAL GUARANTORS.
Any Person that was not a Guarantor on the date hereof may become a
Guarantor by executing and delivering to the Trustee (a) a supplemental
indenture in substantially the form of Exhibit E hereto, and (b) an Opinion of
Counsel to the effect that such supplemental indenture has been duly authorized
and executed by such Person and constitutes the legal, valid, binding and
enforceable obligation of such Person (subject to such customary exceptions
concerning creditors rights', fraudulent transfers, public policy and equitable
principles as may be acceptable to the Trustee in its discretion).
58
SECTION 11.06. LIMITATION ON GUARANTOR LIABILITY.
For purposes hereof, each Guarantor's liability shall be limited to
the lesser of (i) the aggregate amount of the Obligations of the Company under
the Notes and this Indenture and (ii) the amount, if any, which would not have
(A) rendered such Guarantor "insolvent" (as such term is defined in the United
States Bankruptcy Code and in the Debtor and Creditor Law of the State of New
York) or (B) left such Guarantor with unreasonably small capital at the time its
Subsidiary Guarantee of the Notes was entered into; provided that it will be a
presumption in any lawsuit or other proceeding in which a Guarantor is a party
that the amount guaranteed pursuant to the Subsidiary Guarantee is the amount
set forth in clause (i) above unless any creditor, or representative of
creditors of such Guarantor, or debtor in possession or trustee in bankruptcy of
the Guarantor, otherwise proves in such a lawsuit that the aggregate liability
of the Guarantor is the amount set forth in clause (ii) above. In making any
determination as to solvency or sufficiency of capital of a Guarantor in
accordance with the previous sentence, the right of such Guarantor to
contribution from other Guarantors, and any other rights such Guarantor may
have, contractual or otherwise, shall be taken into account.
SECTION 11.07. "TRUSTEE" TO INCLUDE PAYING AGENT.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article 11 shall in each case (unless the context shall
otherwise require) be construed as extending to and including such Paying Agent
within its meaning as fully and for all intents and purposes as if such Paying
Agent were named in this Article 11 in place of the Trustee.
SECTION 11.08. SUBORDINATION OF SUBSIDIARY GUARANTEE.
The obligations of each Guarantor under its Subsidiary Guarantee
pursuant to this Article 11 shall be senior in right of payment to the Katz
Notes, but junior and subordinated to the Senior Debt of such Guarantor on the
same basis as the Notes are junior and subordinated to Senior Debt of the
Company. For the purposes of the foregoing sentence, the Trustee and the Holders
of Notes shall have the right to receive and/or retain payments by any of the
Guarantors only at such times as they may receive and/or retain payments in
respect of Notes pursuant to this Indenture, including Article 10 hereof. In the
event that the Trustee or any Holder shall have received any Guarantor payment
that is prohibited by the foregoing sentence, such Guarantor payment shall be
paid over and delivered forthwith to the holders of the Senior Debt remaining
unpaid, to the extent necessary to pay in full all Senior Debt.
Each Holder of a Note by its acceptance thereof (a) agrees to and
shall be bound by the provisions of this Section 11.08, (b) authorizes and
directs the Trustee in its behalf to take such actions as may be necessary and
appropriate to effectuate the subordination so provided and (c) appoints the
Trustee its attorney-in-fact for any and all such purposes.
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies, or conflicts
with the duties imposed by operation of section 318(c) of the TIA, the imposed
duties shall control.
SECTION 12.02. NOTICES.
Any notice or communication by the Company or the Trustee to the other
is duly given if in writing and delivered in person, mailed by registered or
certified mail, postage prepaid, return receipt requested or delivered by
telecopier or overnight air courier guaranteeing next day delivery to the
other's address:
59
If to the Company:
Katz Media Corporation
125 West 55th Street
New York, NY 10019
Attention: Chief Financial Officer
Telecopier No.: (212) 424-6489
with a copy to:
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
399 Park Avenue, 22nd Floor
New York, New York 10022
Attention: Edward D. Sopher, Esq.
Telecopier No.: (212) 872-1002
If to the Trustee:
American Stock Transfer & Trust Company
6201 15th Avenue
Brooklyn, NY 11219
Attention: Corporate Trust Administration Department
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; the date receipt is acknowledged, if mailed by registered
or certified mail; when answered back, if telecopied; and the next Business Day
after timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first-class
mail to his or her address shown on the register kept by the Registrar. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
SECTION 12.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Holders may communicate pursuant to section 312(b) of the TIA with
other Holders with respect to their rights under this Indenture or the Notes.
The Company, the Trustee, the Registrar and any other Person shall have the
protection of section 312(c) of the TIA.
SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate (which shall include the statements set
forth in Section 12.05 hereof) stating that, in the opinion of
the signers, all conditions precedent and covenants, if any,
provided for in this Indenture relating to the proposed action
have been complied with; and
60
(b) an Opinion of Counsel (which shall include the statements set
forth in Section 12.05 hereof) stating that, in the opinion of
such counsel, all such conditions precedent provided for in this
Indenture relating to the proposed action have been complied
with.
SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to section 314(a)(4) of the TIA) shall include:
(1) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained
in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether, in such Person's opinion, such
condition or covenant has been complied with.
SECTION 12.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 12.07. LEGAL HOLIDAYS.
If a payment date is a Legal Holiday at a place of payment, payment
may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
SECTION 12.08. NO RECOURSE AGAINST OTHERS.
No officer, employee, director, incorporator or stockholder of the
Company or a Guarantor shall have any liability for any Obligations of the
Company or a Guarantor under the Notes or this Indenture, or for any claim based
on, in respect of, or by reason of, such Obligations or the creation of any such
Obligation. Each Holder by accepting a Note waives and releases all such
liability, and such waiver and release is part of the consideration for the
issuance of the Notes.
SECTION 12.09. COUNTERPARTS.
This Indenture may be executed in any number of counterparts and by
the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
SECTION 12.10. VARIABLE PROVISIONS.
The Company initially appoints the Trustee as Paying Agent, Registrar
and authenticating agent.
The first compliance certificate to be delivered by the Company to the
Trustee pursuant to Section 4.03 hereof shall be for the fiscal year ending on
December 31, 1997.
SECTION 12.11. GOVERNING LAW.
The internal laws of the State of New York shall govern this Indenture
and the Notes, without regard to the conflict of laws provisions thereof.
61
SECTION 12.12. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or any of its Subsidiaries, and no other
indenture, loan or debt agreement may be used to interpret this Indenture.
SECTION 12.13. SUCCESSORS.
All agreements of the Company in this Indenture and the Notes shall
bind its successor. All agreements of the Trustee in this Indenture shall bind
its successor.
SECTION 12.14. SEVERABILITY.
If 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 12.15. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table, and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
[NEXT PAGE IS THE SIGNATURE PAGE]
62
Dated as of December 19, 1996 KATZ MEDIA CORPORATION
By: /S/ RICHARD E. VENDIG
----------------------------------
Name: Richard E. Vendig
Title:Chief Financial Officer and
Treasurer
Dated as of December 19, 1996 KATZ COMMUNICATIONS, INC.
KATZ MILLENNIUM MARKETING INC.
BANNER RADIO SALES, INC.
CHRISTAL RADIO SALES, INC.
EASTMAN RADIO SALES, INC.
SELTEL INC.
KATZ CABLE CORPORATION
THE NATIONAL PAYROLL COMPANY, INC.
By: /S/ RICHARD E. VENDIG
----------------------------------
Name: Richard E. Vendig
Title:Chief Financial Officer and
Treasurer
Dated as of December 19, 1996 AMERICAN STOCK TRANSFER & TRUST COMPANY
as Trustee
By: /S/ HERBERT J. LEMMER
----------------------------------
Name: Herbert J. Lemmer
Title:Vice President
By: /S/ SUSAN SILBER
----------------------------------
Name: Susan Sliber
Title:Assistant Secretary
63
EXHIBIT A-1
(Face of Note)
10 1/2% Series [A/B] Senior Subordinated Note due 2007
No. $__________
CUSIP No.
KATZ MEDIA CORPORATION
promises to pay to
or registered assigns,
the principal sum of
Dollars on January 15, 2007.
Interest Payment Dates: July 15 and January 15.
Record Dates: January 1 and July 1.
Dated: December 19, 1996
KATZ MEDIA CORPORATION
By:______________________________
Name:
Title:
Trustee's Certificate of Authentication
Dated: December 19, 1996
This is one of the [Global]
Notes referred to in the
within-mentioned Indenture:
AMERICAN STOCK TRANSFER & TRUST COMPANY,
as Trustee
By:_____________________________
(Authorized Signatory)
[Unless and until it is exchanged in whole or in part for Notes in
definitive form, this Note may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. The Depository Trust Company shall act as the Depositary until a
successor shall be appointed by the Company and the Registrar. Unless this
certificate is presented by an authorized representative of The Depository Trust
Company (55 Water Street, New York, New York) ("DTC"), to the issuer or its
A1-1
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or such other name as may be
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or such other entity as may be requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY Person IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]1
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE
UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE
BENEFIT OF THE ISSUER THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144
UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN
PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE
SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND, IN THE CASE OF
CLAUSE (b), (c) or (d), BASED UPON AN OPINION OF COUNSEL IF THE ISSUER
SO REQUESTS), (2) TO THE ISSUER OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE."2
Additional provisions of this Note are set forth on the other side of
this Note.
- --------
1 This paragraph should be included only if the Note is issued in global
form.
2 This paragraph should be removed upon the exchange of Series A Notes
for Series B Notes in the Exchange Offer or upon the registration of
the Series A Notes pursuant to the terms of the Registration Rights
Agreement.
A1-2
(Back of Note)
10 1/2% SERIES [A/B] SENIOR SUBORDINATED NOTE DUE 2007
1. Interest. Katz Media Corporation, a Delaware corporation, (the
"Company") promises to pay interest on the principal amount of the Notes at the
rate and in the manner specified below. Interest on the Notes will accrue at 10
1/2% per annum from the date this Note is issued until maturity. The Company
will pay Liquidated Damages, if any, pursuant to Section 5 of the Registration
Rights Agreement referred to below. Interest and Liquidated Damages, if any,
will be payable semiannually in cash in arrears on January 15 and July 15 of
each year, or if any such day is not a Business Day on the next succeeding
Business Day (each, an "Interest Payment Date"). Interest on the Notes will
accrue from the most recent date on which interest has been paid or, if no
interest has been paid, from the date of original issuance; provided that the
first Interest Payment Date shall be July 15, 1997. The Company shall pay
interest on overdue principal and premium, if any, from time to time on demand
at the rate of 1% per annum in excess of the interest rate then in effect and
shall pay interest on overdue installments of interest and Liquidated Damages,
if any, (without regard to any applicable grace periods) from time to time on
demand at the same rate to the extent lawful. Interest will be computed on the
basis of a 360-day year of twelve 30 day months.
2. Method of Payment. The Company will pay interest on the Notes
(except defaulted interest) and Liquidated Damages, if any, to the Persons who
are registered holders of Notes at the close of business on the January 1 or
July 1 next preceding the Interest Payment Date, even if such Notes are
cancelled after such record date and on or before such Interest Payment Date,
except as provided in Section 2.12 of the Indenture with respect to defaulted
interest. The Notes shall be payable as to principal, premium, if any, interest
and Liquidated Damages, if any, at the office or agency of the Company
maintained for such purpose within the City and State of New York, or, at the
option of the Company, payment of interest may be made by check mailed to the
Holders at their addresses set forth in the register of Holders; provided that
payment by wire transfer of immediately available funds shall be required with
respect to principal of, and interest, premium and Liquidated Damages, if any,
on, all Global Notes and all other Notes the Holders of which shall have
provided written wire transfer instructions to the Company or the Paying Agent.
Such payment shall be in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts.
3. Paying Agent and Registrar. American Stock Transfer & Trust Company
(the "Trustee") will initially act as the Paying Agent and Registrar. The
Company may appoint additional paying agents or co-registrars, and change the
Paying Agent, any additional paying agent, the Registrar or any co-registrar
without prior notice to any Holder. The Company or any of its Subsidiaries may
act in any such capacity.
4. Indenture. The Company issued the Notes under an Indenture, dated
as of December 19, 1996 (the "Indenture"), among the Company, as issuer, Katz
Communications, Inc., Katz Millennium Marketing Inc., Banner Radio Sales, Inc.,
Christal Radio Sales, Inc., Eastman Radio Sales, Inc., Seltel Inc., Katz Cable
Corporation and The National Payroll Company, Inc., as Guarantors and the
Trustee. 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 of 1939 (15
U.S. Code ss.ss. 77aaa-77bbbb) as in effect on the date of the original issuance
of the Notes (the "Trust Indenture Act"). The Notes are subject to, and
qualified by, all such terms, certain of which are summarized herein, and
Holders are referred to the Indenture and the Trust Indenture Act for a
statement of such terms (all capitalized terms not defined herein shall have the
meanings assigned them in the Indenture). The Notes are unsecured senior
subordinated obligations of the Company limited to $100,000,000 in aggregate
principal amount.
A1-3
5. Optional Redemption. (a) Except as described in paragraph 5(b)
below, the Notes may not be redeemed at the option of the Company prior to
January 15, 2002. During the twelve (12) month period beginning January 15 of
the years indicated below, the Notes will be redeemable at the option of the
Company, in whole or in part, on at least 30 but not more than 60 days' notice
to each Holder of Notes to be redeemed, at the redemption prices (expressed as
percentages of the principal amount) set forth below, plus any accrued and
unpaid interest and Liquidated Damages, if any, to the applicable date of
redemption:
Year Percentage
2003................................................................105.250%
2003................................................................103.938%
2004................................................................102.625%
2005................................................................101.313%
2006 and thereafter.................................................100.000%
A1-4
(b) Notwithstanding the foregoing, at any time prior to January 15,
2000, the Company may redeem up to 35% in aggregate principal amount of the
Notes with the net proceeds of (i) one or more offerings of Equity Interests
(other than Disqualified Stock) of the Company or (ii) one or more offerings of
Equity Interests or other securities of KMG or KMSI, to the extent the net
proceeds thereof are contributed or advanced to the Company as a capital
contribution to common equity, in each case, at a redemption price equal to
109.5% of the principal amount thereof, plus accrued and unpaid interest and
Liquidated Damages, if any, to the redemption date; provided that at least 65%
in aggregate principal amount of the Notes originally issued remain outstanding
immediately after the occurrence of any such redemption; and provided, further,
that such redemption will occur within 90 days of the date of the closing of
such offering.
6. Mandatory Redemption. Subject to the Company's obligation to make
an offer to purchase Notes under certain circumstances pursuant to Sections 4.13
and 4.14 of the Indenture (as described in paragraph 7 below), the Company is
not required to make any mandatory redemption, purchase or sinking fund payments
with respect to the Notes.
7. Mandatory Offers to Purchase Notes. (a) Upon the occurrence of a
Change of Control, each Holder of Notes shall have the right to require the
Company to repurchase all or any part (equal to $1,000 or an integral multiple
thereof) of such Holder's Notes pursuant to an offer (a "Change of Control
Offer") at a purchase price in cash equal to 101% of the aggregate principal
amount thereof plus accrued and unpaid interest and Liquidated Damages, if any,
to the date of purchase.
(b) If the Company or any Restricted Subsidiary consummates one or
more Asset Sales and does not use all of the Net Proceeds from such Asset Sales
as provided in Section 4.14 of the Indenture, the Company will be required,
under certain circumstances, to utilize the Excess Proceeds from such Asset
Sales to offer (an "Asset Sale Offer") to purchase Notes at a purchase price in
cash equal to 100% of the aggregate principal amount of the Notes plus any
accrued and unpaid interest and Liquidated Damages, if any, to the date of
purchase. If the Excess Proceeds are insufficient to purchase all Notes tendered
pursuant to any Asset Sale Offer, the Trustee shall select the Notes to be
purchased in accordance with the terms of Article 3 of the Indenture.
(c) Holders may tender all or, subject to paragraph 8 below, any
portion of their Notes in a Change of Control Offer or Asset Sale Offer
(collectively, an "Offer") by completing the form below entitled "OPTION OF
HOLDER TO ELECT PURCHASE."
(d) The Company shall comply with any tender offer rules under the
Exchange Act which may then be applicable, including Rule 14e-1, in connection
with an offer required to be made by the Company to repurchase the Notes as a
result of a Change of Control or an Asset Sale. To the extent that the
provisions of any securities laws or regulations conflict with provisions of
this Indenture, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Indenture by virtue thereof.
8. Notice of Redemption or Purchase. Notice of an optional redemption
or an Offer will be mailed to each Holder at its registered address at least 30
days but not more than 60 days before the date of redemption or purchase. Notes
may be redeemed or purchased in part, but only in whole multiples of $1,000
unless all Notes held by a Holder are to be redeemed or purchased. On or after
any date on which Notes are redeemed or purchased, interest and Liquidated
Damages, if any, ceases to accrue on the Notes or portions thereof called for
redemption or accepted for purchase on such date.
9. Subordination. The Notes are subordinated in right of payment, to
the extent and in the manner provided in Article 10 of the Indenture, to the
prior payment in full of all Senior Debt, which includes (i) all Obligations
A1-5
(including without limitation interest accruing after filing of a petition in
bankruptcy whether or not such interest is an allowable claim in such
proceeding) of the Company or its Subsidiaries, including without limitation any
Guarantees of such Obligations pursuant to the New Credit Agreement and (ii) any
other Indebtedness permitted to be incurred by the Company or the Guarantors
under the terms of the Indenture, unless the instrument under which such
Indebtedness is incurred expressly provides that it is on a parity with or
subordinated in right of payment to the Notes. Notwithstanding anything to the
contrary in the foregoing, Senior Debt will not include (w) any liability for
federal, state, local or other taxes owed or owing by the Company, (x) any
Indebtedness of the Company to any of its Restricted Subsidiaries or other
Affiliates (other than Indebtedness arising under the New Credit Agreement), (y)
any trade payables or (z) any Indebtedness that is incurred in violation of
Section 4.07 of the Indenture. The Company agrees, and each Holder by accepting
a Note consents and agrees, to the subordination provided in the Indenture and
authorizes the Trustee to give it effect.
10. Subsidiary Guarantees. The Company's payment obligations under the
Notes are jointly and severally unconditionally guaranteed by the Guarantors.
The Subsidiary Guarantees of each Guarantor will be subordinated to the prior
payment in full of all Senior Debt of such Guarantor and the amounts for which
the Guarantors will be liable under the guarantees issued from time to time with
respect to Senior Debt.
11. Denominations, Transfer, Exchange. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples thereof.
The transfer of Notes may be registered and Notes may be exchanged as provided
in the Indenture. Holders seeking to transfer or exchange their Notes may be
required, 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 exchange or register the transfer of any Note
or portion of a Note selected for redemption or tendered pursuant to an Offer.
Also, it need not exchange or register the transfer of any Notes for a period of
15 Business Days before a selection of Notes to be redeemed or between a record
date and the next succeeding Interest Payment Date.
12. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.
13. Amendment, Supplement and Waiver. Subject to the following
paragraphs, the Indenture, the Notes and the Subsidiary Guarantees may be
amended or supplemented with the consent of the holders of at least a majority
in principal amount of the Notes then outstanding (including, without
limitation, consents obtained in connection with a purchase of, or tender offer
or exchange offer for Notes), and any existing Default or Event of Default
(other than a payment Default) or compliance with any provision of the Indenture
or the Notes may be waived with the consent of the holders of a majority in
principal amount of the then outstanding Notes (including consents obtained in
connection with a tender offer or exchange offer for Notes).
A1-6
Without the consent of any Holder, the Indenture or the Notes may be
amended to: cure any ambiguity, defect or inconsistency; provide for
uncertificated Notes in addition to or in place of certificated Notes; provide
for the assumption of the Company's obligations to Holders of Notes in the case
of a merger or consolidation of the Company; following the Exchange Offer, to
comply with the SEC's requirements to effect or maintain the qualification of
the Indenture under the TIA; provide for additional Guarantees with respect to
the Notes; make any change that does not materially adversely affect any
Holder's legal rights under the Indenture; or, evidence and provide for a
successor Trustee, add additional covenants or Events of Default or secure the
Notes. Any amendment to the provisions of Article 10 or Section 11.08 hereof
will require the consent of the holders of at least 75% in aggregate principal
amount of the Notes then outstanding if such amendment would adversely affect
the rights of holders of Notes. Certain amendments require the consent of each
Holder adversely affected.
14. Defaults and Remedies. Events of Default include (in summary
form): default for 30 days in payment when due of interest on, or Liquidated
Damages, if any, with respect to, the Notes; default in payment when due of
principal of, or premium, if any, on the Notes at maturity; failure by the
Company for 30 days after receipt of notice to it to comply with the provisions
of Sections 4.13, 4.14, 4.05, 4.07 or Article 5 of the Indenture; failure by the
Company for 60 days after receipt of notice to it to comply with any of its
other agreements or covenants in, or provisions of, the Indenture or the Notes;
certain defaults under and acceleration prior to maturity of, or failure to pay
at maturity, certain other Indebtedness; failure to pay certain final judgments
that remain undischarged; certain judicial findings of unenforceability or
invalidity as to any guarantee of the Notes or the disaffirmance or denial by
any guarantor of its guarantee of the Notes; and certain events of bankruptcy or
insolvency involving the Company or any Restricted Subsidiary that is a
Significant Subsidiary. If an Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the Notes then
outstanding may declare all the Notes to be immediately due and payable by
notice in writing to the Company and the Trustee specifying the respective Event
of Default and that it is a "notice of acceleration" (the "Acceleration
Notice"), and the same (i) shall become immediately due and payable or (ii) if
there are any amounts outstanding under the New Credit Agreement, shall become
immediately due and payable upon the first to occur of an acceleration under the
New Credit Agreement or five Business Days after receipt by the Company and the
Representative under the New Credit Agreement of such Acceleration Notice but
only if such Event of Default is then continuing. Notwithstanding the foregoing,
in the case of an Event of Default arising from certain events of bankruptcy or
insolvency with respect to the Company, all outstanding Notes will become due
and payable without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The holders
of a majority in aggregate principal amount of the Notes then outstanding by
notice to the Trustee may on behalf of all Holders of all of the Notes waive any
existing Default or Event of Default and its consequences under this Indenture,
except a continuing Default or Event of Default in the payment of the principal
of, premium, if any, and interest on, and Liquidated Damages, if any, with
respect to such Notes, which may only be waived with the consent of each Holder
of Notes affected.The Trustee may withhold from Holders notice of any continuing
Default or Event of Default (except a payment Default) if it determines that
withholding notice is in their interests. The Company must furnish an annual
compliance certificate to the Trustee.
A1-7
15. Trustee Dealings with the Company. The Trustee, in its individual
or any other capacity, may make loans to, accept deposits from, and perform
services for the Company or any Affiliate, and may otherwise deal with the
Company or any Affiliate, as if it were not Trustee.
16. No Recourse Against Others. No officer, employee, incorporator
director, stockholder or Subsidiary of the Company or Guarantor shall have any
liability for any Obligations of the Company or Guarantor under the Notes or the
Indenture, or for any claim based on, in respect of, or by reason of, such
Obligations or the creation of any such Obligation, except, in the case of a
Subsidiary, for an express guarantee or an express creation of any Lien by such
Subsidiary of the Company's Obligations under the Notes. Each Holder by
accepting a Note waives and releases all such liability, and such waiver and
release is part of the consideration for the issuance of the Notes.
17. Additional Rights of Holders of Transfer Restricted Notes . In
addition to the rights provided to Holders of Notes under the Indenture, Holders
of Transfer Restricted Notes shall have all the rights set forth in the
Registration Rights Agreement, dated as of December 19, 1996, among the Company,
the Guarantors and Donaldson, Lufkin & Jenrette Securities Corporation (the
"Registration Rights Agreement").
18. Successor Corporation Substituted. Upon any consolidation or
merger, or any sale, assignment, transfer, lease, conveyance or other
disposition of all or substantially all of the assets of the Company in
accordance with Section 5.01 of the Indenture, the successor corporation formed
by such consolidation or with which or into the Company is merged or to which
such sale, assignment, transfer, lease, conveyance or other disposition is made
shall succeed to, and be substituted for, and may exercise every right and power
of, the Company under this Indenture with the same effect as if such successor
has been named as the Company under the Indenture; provided, however, that
neither the Company nor any successor corporation shall be released from its
Obligation to pay the principal of, premium, if any, and accrued and unpaid
interest on, and Liquidated Damages, if any, with respect to the Notes.
19. Governing Law. The internal laws of the state of New York shall
govern this Indenture and the Notes without regard to the conflict of laws
provisions thereof.
20. Authentication. This Note shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
21. 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).
22. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and have directed the Trustee to use
CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be placed
only on the other identification numbers printed on the Notes.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Request may be made to:
Katz Media Corporation
125 West 55th Street
New York, NY 10019
Attention: Chief Financial Officer
A1-8
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we) assign
and transfer this Security to
_______________________________________________________________________________
(Insert assignee's Social Security or tax I.D. No.)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint _______________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
_______________________________________________________________________________
Date: ___________________
Your Signature: ______________________________
(Sign exactly as your name appears on the
face of this Security)
Signature Guarantee:***_______________________
- --------
*** Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A1-9
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.13 or 4.14 of the Indenture, check the box below:
[_]Section 4.13 [_]Section 4.14
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.13 or Section 4.14 of the Indenture, state the
amount you elect to have purchased: $___________
Date: Your Signature:______________________________________
(Sign exactly as your name appears on the Security)
Tax Identification No.: _____________________________
Signature Guarantee:*________________________________
- --------
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A1-10
SCHEDULE OF EXCHANGES FOR DEFINITIVE NOTES FOR ANOTHER NOTE2
The following exchanges of a part of this Global Note for Definitive
Notes or another Global Note have been made:
Principal Amount of
this Global Note Signature of
Amount of decrease Amount of increase following such authorized officer
in Principal Amount in Principal Amount decrease Trustee or Note
Date of Exchange of this Global Note of this Global Note (or increase) Custodian
- ------------------ ------------------- -------------------- ------------------- --------------
- --------
2. To be included only if the Note is issued in global form.
A1-11
EXHIBIT A-2
(Face of Regulation S Temporary Global Note)
10 1/2% Series [A/B] Senior Subordinated Note due 2007
No. $__________
CUSIP No.
KATZ MEDIA CORPORATION
promises to pay to
or registered assigns,
the principal sum of
Dollars on January 15, 2007.
Interest Payment Dates: July 15 and January 15.
Record Dates: January 1 and July 1.
Dated: December 19, 1996
KATZ MEDIA CORPORATION
By:______________________________
Name:
Title:
Trustee's Certificate of Authentication
Dated: December 19, 1996
This is one of the [Global] Notes referred to in the within-mentioned Indenture:
AMERICAN STOCK TRANSFER & TRUST COMPANY,
as Trustee
By:_____________________________
(Authorized Signatory)
A2-1
(Back of Regulation S Temporary Global Note)
10 1/2% SERIES [A/B] SENIOR SUBORDINATED NOTE DUE 2007
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND
THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE NOTES, ARE
AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN).
NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S
TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON.
[UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. THE DEPOSITORY TRUST COMPANY SHALL ACT AS THE DEPOSITARY UNTIL A
SUCCESSOR SHALL BE APPOINTED BY THE COMPANY AND THE REGISTRAR. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]1
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF
THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND
THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY
IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) SUCH SECURITY MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) TO A PERSON WHO
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE
UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND, IN THE CASE OF CLAUSE (b), (c) or (d), BASED UPON
AN OPINION OF COUNSEL IF THE ISSUER SO REQUESTS), (2) TO THE ISSUER OR
(3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE,
IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
- --------
1 This paragraph should be included only if the Note is issued in global
form.
A2-2
FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS
SET FORTH IN (A) ABOVE."1
Katz Media Corporation, a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Note at the rate of 10
1/2% per annum, which interest shall be payable in cash semi-annually on January
1 and July 1 of each year, or if any such day is not a Business Day, on the next
succeeding Business Day (each an "Interest Payment Date"); provided that the
first Interest Payment Date shall be July 1, 1997. Interest on the Notes will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of original issuance. Interest will be
computed on the basis of a 360-day year comprised of twelve 30-day months.
This Regulation S Temporary Global Note is issued in respect of an
issue of 10 1/2% Senior Subordinated Notes due 2007 (the "Notes") of the
Company, limited to the aggregate principal amount of U.S. $ 100.0 million
issued pursuant to an Indenture (the "Indenture") dated as of December 19, 1996,
between the Company, Katz Communications, Inc., Katz Millennium Marketing Inc.,
Banner Radio Sales, Inc., Christal Radio Sales, Inc., Eastman Radio Sales, Inc.,
Seltel Inc., Katz Cable Corporation and The National Payroll Company, Inc., as
Guarantors (the "Guarantors") and American Stock Transfer & Trust Company, as
trustee (the "Trustee"), and is governed by the terms and conditions of the
Indenture governing the Notes, which terms and conditions are incorporated
herein by reference and, except as otherwise provided herein, shall be binding
on the Company and the Holder hereof as if fully set forth herein. Unless the
context otherwise requires, the terms used herein shall have the meanings
specified in the Indenture.
Until this Regulation S Temporary Global Note is exchanged for
Regulation S Permanent Global Notes, the Holder hereof shall not be entitled to
receive payments of interest hereon; until so exchanged in full, this Regulation
S Temporary Global Note shall in all other respects be entitled to the same
benefits as other Notes under the Indenture.
This Regulation S Temporary Global Note is exchangeable in whole or in
part for one or more Regulation S Permanent Global Notes or Rule 144A Global
Notes only (i) on or after the termination of the 40-day restricted period (as
defined in Regulation S) and (ii) upon presentation of certificates (accompanied
by an opinion of counsel, if applicable) required by Article 2 of the Indenture.
Upon exchange of this Regulation S Temporary Global Note for one or more
Regulation S Permanent Global Notes or Rule 144A Global Notes, the Trustee shall
cancel this Regulation S Temporary Global Note.
This Regulation S Temporary Global Note shall not become valid or
obligatory until the certificate of authentication hereon shall have been duly
manually signed by the Trustee in accordance with the Indenture. This Regulation
S Temporary Global Note shall be governed by and construed in accordance with
the laws of the State of the New York. All references to "$," "Dollars,"
"dollars" or "U.S. $" are to such coin or currency of the United States of
America as at the time shall be legal tender for the payment of public and
private debts therein.
- --------
1 This paragraph should be removed upon the exchange of Series A
Notes for Series B Notes in the Exchange Offer or upon the registration of
the Series A Notes pursuant to the terms of the Registration Rights
Agreement.
A2-3
SCHEDULE OF EXCHANGES FOR GLOBAL NOTE
The following exchanges of a part of this Regulation S Temporary
Global Note for other Global Notes have been made:
Principal Amount of
this Global Note Signature of
Amount of decrease Amount of increase following such authorized officer
in Principal Amount in Principal Amount decrease Trustee or Note
Date of Exchange of this Global Note of this Global Note (or increase) Custodian
- ------------------ ------------------- -------------------- ------------------- --------------
A2-4
EXHIBIT B-1
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM RULE 144A GLOBAL NOTE TO REGULATION S GLOBAL NOTE
(Pursuant to Section 2.06(a)(i) of the Indenture)
American Stock Transfer & Trust Company
6201 15th Avenue
Brooklyn, NY 11219
Attention: Corporate Trust Division
Re: 10 1/2% Notes due 2007 of Katz Media Corporation
Reference is hereby made to the Indenture, dated as of December 19,
1996 (the "Indenture"), between Katz Media Corporation, as issuer (the
"Company"), Katz Communications, Inc., Katz Millennium Marketing Inc., Banner
Radio Sales, Inc., Christal Radio Sales, Inc., Eastman Radio Sales, Inc., Seltel
Inc., Katz Cable Corporation and The National Payroll Company, Inc., as
Guarantors (the "Guarantors") and American Stock Transfer & Trust Company, as
trustee (the "Trustee"). Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
This letter relates to $_______ principal amount of Notes which are
evidenced by one or more Rule 144A Global Notes (CUSIP 486107AA3) and held with
the Depositary in the name of ____________________________ (the "Transferor").
The Transferor has requested a transfer of such beneficial interest in the Notes
to a Person who will take delivery thereof in the form of an equal principal
amount of Notes evidenced by one or more Regulation S Global Notes (CUSIP
U24450AA3), which amount, immediately after such transfer, is to be held with
the Depositary through Euroclear or Cedel Bank or both (Common Code 7211783).
In connection with such request and in respect of such Notes, the
Transferor hereby certifies that such transfer has been effected in compliance
with the transfer restrictions applicable to the Global Notes and pursuant to
and in accordance with Rule 903 or Rule 904 of Regulation S under the United
States Securities Act of 1933, as amended (the "Securities Act"), and
accordingly the Transferor hereby further certifies that:
(1) The offer of the Notes was not made to a person in the United
States;
(2) either:
(a) at the time the buy order was originated, the transferee was
outside the United States or the Transferor and any person
acting on its behalf reasonably believed and believes that
the transferee was outside the United States; or
(b) the transaction was executed in, on or through the
facilities of a designated offshore securities market and
neither the Transferor nor any person acting on its behalf
knows that the transaction was prearranged with a buyer in
the United States;
(3) no directed selling efforts have been made in contravention of
the requirements of Rule 904(b) of Regulation S;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) upon completion of the transaction, the beneficial interest being
transferred as described above is to be held with the Depositary
through Euroclear or Cedel Bank or both (Common Code 7211783).
Upon giving effect to this request to exchange a beneficial
interest in a Rule 144A Global Note for a beneficial interest in a Regulation S
B1-1
Global Note, the resulting beneficial interest shall be subject to the
restrictions on transfer applicable to Regulation S Global Notes pursuant to the
Indenture and the Securities Act and, if such transfer occurs prior to the end
of the 40-day restricted period associated with the initial offering of Notes,
the additional restrictions applicable to transfers of interest in the
Regulation S Temporary Global Note.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company, the Guarantors and Donaldson, Lufkin &
Jenrette Securities Corporation (277 Park Avenue, New York, NY 10172), the
initial purchaser of such Notes being transferred. Terms used in this
certificate and not otherwise defined in the Indenture have the meanings set
forth in Regulation S under the Securities Act.
__________________________
[Insert Name of Transferor]
By: ______________________
Name:
Title:
Dated: _______________________
cc: Katz Media Corporation
Donaldson, Lufkin & Jenrette Securities Corporation
B1-2
EXHIBIT B-2
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM REGULATION S GLOBAL NOTE TO RULE 144A GLOBAL NOTE
(Pursuant to Section 2.06(a)(ii) of the Indenture)
American Stock Transfer & Trust Company
6201 15th Avenue
Brooklyn, NY 11219
Attention: Corporate Trust Division
Re: 10 1/2% Notes due 2007 of Katz Media Corporation
Reference is hereby made to the Indenture, dated as of December 19,
1996 (the "Indenture"), between Katz Media Corporation, as issuer (the
"Company"), Katz Communications, Inc., Katz Millennium Marketing Inc., Banner
Radio Sales, Inc., Christal Radio Sales, Inc., Eastman Radio Sales, Inc., Seltel
Inc., Katz Cable Corporation and The National Payroll Company, Inc., as
Guarantors (the "Guarantors") and American Stock Transfer & Trust Company, as
trustee (the "Trustee"). Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
This letter relates to $_______ principal amount of Notes which are
evidenced by one or more Regulation S Global Notes (CUSIP U24450AA3) and held
with the Depositary through Euroclear or Cedel Bank (Common Code 7211783) in the
name of ____________________________ (the "Transferor"). The Transferor has
requested a transfer of such beneficial interest in the Notes to a Person who
will take delivery thereof in the form of an equal principal amount of Notes
evidenced by one or more Rule 144A Global Notes (CUSIP 486107AA3), to be held
with the Depositary.
In connection with such request and in respect of such Notes, the
Transferor hereby certifies that:
[CHECK ONE]
[_] such transfer is being effected pursuant to and in accordance with
Rule 144A under the United States Securities Act of 1933, as amended
(the "Securities Act"), and, accordingly, the Transferor hereby
further certifies that the Notes are being transferred to a Person
that the Transferor reasonably believes is purchasing the Notes for
its own account, or for one or more accounts with respect to which
such Person exercises sole investment discretion, and such Person and
each such account is a "qualified institutional buyer" within the
meaning of Rule 144A in a transaction meeting the requirements of Rule
144A;
or
[_] such transfer is being effected pursuant to and in accordance with
Rule 144 under the Securities Act;
or
[_] such transfer is being effected pursuant to an effective registration
statement under the Securities Act;
or
[_] such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A
or Rule 144, and the Transferor hereby further certifies that the
Notes are being transferred in compliance with the transfer
restrictions applicable to the Global Notes and in accordance with the
requirements of the exemption claimed, which certification is
B2-1
supported by an opinion of counsel, provided by the transferor or the
transferee (a copy of which the Transferor has attached to this
certification) in form reasonably acceptable to the Company and to the
Registrar, to the effect that such transfer is in compliance with the
Securities Act;
and such Notes are being transferred in compliance with any applicable blue sky
securities laws of any state of the United States.
Upon giving effect to this request to exchange a beneficial interest
in Regulation S Global Notes for a beneficial interest in Rule 144A Global
Notes, the resulting beneficial interest shall be subject to the restrictions on
transfer applicable to Rule 144A Global Notes pursuant to the Indenture and the
Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company, the Guarantors and Donaldson, Lufkin &
Jenrette Securities Corporation (277 Park Avenue, New York, NY 10172), the
initial purchaser of such Notes being transferred. Terms used in this
certificate and not otherwise defined in the Indenture have the meanings set
forth in Regulation S under the Securities Act.
____________________________________
[Insert Name of Transferor]
By: _________________________________
Name:
Title:
Dated: _____________, _____
cc: Katz Media Corporation
Donaldson, Lufkin & Jenrette Securities Corporation
B2-2
EXHIBIT B-3
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
OF DEFINITIVE NOTES
(Pursuant to Section 2.06(b) of the Indenture)
American Stock Transfer & Trust Company
6201 15th Avenue
Brooklyn, NY 11219
Attention: Corporate Trust Division
Re: 10 1/2% Notes due 2007 of Katz Media Corporation
Reference is hereby made to the Indenture, dated as of December 19,
1996 (the "Indenture"), between Katz Media Corporation, as issuer (the
"Company"), Katz Communications, Inc., Katz Millennium Marketing Inc., Banner
Radio Sales, Inc., Christal Radio Sales, Inc., Eastman Radio Sales, Inc., Seltel
Inc., Katz Cable Corporation and The National Payroll Company, Inc., as
Guarantors (the "Guarantors") and American Stock Transfer & Trust Company, as
trustee (the "Trustee"). Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
This letter relates to $_______ principal amount of Notes which are
evidenced by one or more Definitive Notes (CUSIP __________) in the name of
________________ (the "Transferor"). The Transferor has requested an exchange or
transfer of such Definitive Note(s) in the form of an equal principal amount of
Notes evidenced by one or more Definitive Notes (CUSIP _________), to be
delivered to the Transferor or, in the case of a transfer of such Notes, to such
Person as the Transferor instructs the Trustee.
In connection with such request and in respect of the Notes
surrendered to the Trustee herewith for exchange or transfer (the "Surrendered
Notes"), the Transferor hereby certifies that:
[CHECK ONE]
[_] the Surrendered Notes are being acquired for the Transferor's own
account, without transfer;
or
[_] the Surrendered Notes are being transferred to the Company;
or
[_] the Surrendered Notes are being transferred pursuant to and in
accordance with Rule 144A under the United States Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, the
Transferor hereby further certifies that the Surrendered Notes are
being transferred to a Person that the Transferor reasonably believes
is purchasing the Surrendered Notes for its own account, or for one or
more accounts with respect to which such Person exercises sole
investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A, in
each case in a transaction meeting the requirements of Rule 144A;
or
[_] the Surrendered Notes are being transferred in a transaction permitted
by Rule 144 under the Securities Act;
B3-1
or
[_] the Surrendered Notes are being transferred pursuant to an effective
registration statement under the Securities Act;
or
[_] such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A
or Rule 144, and the Transferor hereby further certifies that the
Notes are being transferred in compliance with the transfer
restrictions applicable to the Global Notes and in accordance with the
requirements of the exemption claimed, which certification is
supported by an opinion of counsel, provided by the transferor or the
transferee (a copy of which the Transferor has attached to this
certification) in form reasonably acceptable to the Company and to the
Registrar, to the effect that such transfer is in compliance with the
Securities Act;
and the Surrendered Notes are being transferred in compliance with any
applicable blue sky securities laws of any state of the United States.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company, the Guarantors and Donaldson, Lufkin &
Jenrette Securities Corporation (277 Park Avenue, New York, NY 10172), the
initial purchaser of such Notes being transferred. Terms used in this
certificate and not otherwise defined in the Indenture have the meanings set
forth in Regulation S under the Securities Act.
--------------------------
[Insert Name of Transferor]
By: ____________________________________
Name:
Title:
Dated: _____________, _____
cc: Katz Media Corporation
Donaldson, Lufkin & Jenrette Securities Corporation
B3-2
EXHIBIT B-4
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM RULE 144A GLOBAL NOTE OR REGULATION S PERMANENT GLOBAL
NOTE TO DEFINITIVE NOTE
(Pursuant to Section 2.06(c) of the Indenture)
American Stock Transfer & Trust Company
6201 15th Avenue
Brooklyn, NY 11219
Attention: Corporate Trust Division
Re: 10 1/2% Notes due 2007 of Katz Media Corporation
Reference is hereby made to the Indenture, dated as of December 19,
1996 (the "Indenture"), between Katz Media Corporation, as issuer (the
"Company"), Katz Communications, Inc., Katz Millennium Marketing Inc., Banner
Radio Sales, Inc., Christal Radio Sales, Inc., Eastman Radio Sales, Inc., Seltel
Inc., Katz Cable Corporation and The National Payroll Company, Inc., as
Guarantors (the "Guarantors") and American Stock Transfer & Trust Company, as
trustee (the "Trustee"). Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
This letter relates to $_______ principal amount of Notes which are
evidenced by a beneficial interest in one or more Rule 144A Global Notes or
Regulation S Permanent Global Notes (CUSIP __________) in the name of
______________________ (the "Transferor"). The Transferor has requested an
exchange or transfer of such beneficial interest in the form of an equal
principal amount of Notes evidenced by one or more Definitive Notes (CUSIP
_________), to be delivered to the Transferor or, in the case of a transfer of
such Notes, to such Person as the Transferor instructs the Trustee.
In connection with such request and in respect of the Notes
surrendered to the Trustee herewith for exchange or transfer (the "Surrendered
Notes"), the Transferor hereby certifies that:
[CHECK ONE]
[_] the Surrendered Notes are being transferred to the beneficial owner of
such Notes;
or
[_] the Surrendered Notes are being transferred pursuant to and in
accordance with Rule 144A under the United States Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, the
Transferor hereby further certifies that the Surrendered Notes are
being transferred to a Person that the Transferor reasonably believes
is purchasing the Surrendered Notes for its own account, or for one or
more accounts with respect to which such Person exercises sole
investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A, in
each case in a transaction meeting the requirements of Rule 144A;
or
[_] the Surrendered Notes are being transferred in a transaction permitted
by Rule 144 under the Securities Act;
or
B4-1
the Surrendered Notes are being transferred pursuant to an effective
registration statement under the Securities Act;
or
such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A
or Rule 144, and the Transferor hereby further certifies that the
Notes are being transferred in compliance with the transfer
restrictions applicable to the Global Notes and in accordance with the
requirements of the exemption claimed, which certification is
supported by an opinion of counsel, provided by the transferor or the
transferee (a copy of which the Transferor has attached to this
certification) in form reasonably acceptable to the Company and to the
Registrar, to the effect that such transfer is in compliance with the
Securities Act;
and the Surrendered Notes are being transferred in compliance with any
applicable blue sky securities laws of any state of the United States.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company, the Guarantors and Donaldson, Lufkin &
Jenrette Securities Corporation (277 Park Avenue, New York, NY 10172), the
initial purchaser of such Notes being transferred. Terms used in this
certificate and not otherwise defined in the Indenture have the meanings set
forth in Regulation S under the Securities Act.
--------------------------
[Insert Name of Transferor]
By: ____________________________
Name:
Title:
Dated: _____________, _____
cc: Katz Media Corporation
Donaldson, Lufkin & Jenrette Securities Corporation
B4-2
EXHIBIT C
FORM OF CERTIFICATE TO BE DELIVERED BY
INSTITUTIONAL ACCREDITED INVESTORS
----------------, -----
American Stock Transfer & Trust Department, as Registrar
Attention: Corporate Trust Department
Ladies and Gentlemen:
In connection with our proposed purchase of certain 10 1/2% Series
[A/B] Senior Subordinated Notes due 2007 (the "Notes") of Katz Media
Corporation, a Delaware corporation (the "Company"), we represent that:
(i) we are an "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended
(the "Securities Act"), or an entity in which all of the equity owners are
accredited investors within the meaning of Rule 501(a)(1), (2), (3) or (7)
under the Securities Act (an "Institutional Accredited Investor");
(ii) any purchase of Notes will be for our own account or for the
account of one or more other Institutional Accredited Investors;
(iii) in the event that we purchase any Notes, we will acquire such
Notes having a minimum purchase price of at least $100,000 for our own
account and for each separate account for which we are acting;
(iv) we have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of
purchasing Notes;
(v) we are not acquiring Notes with a view to any distribution thereof
in a transaction that would violate the Securities Act or the securities
laws of any State of the United States or any other applicable
jurisdiction; provided that the disposition of our property and the
property of any accounts for which we are acting as fiduciary shall remain
at all times within our control; and
(vi) we have received a copy of the Offering Memorandum and
acknowledge that we have had access to such financial and other
information, and have been afforded the opportunity to ask such questions
of representatives of the Company and receive answers thereto, as we deem
necessary in connection with our decision to purchase Notes.
We understand that the Notes are being offered in a transaction not
involving any public offering within the meaning of the Securities Act and that
the Notes have not been registered under the Securities Act, and we agree, on
our own behalf and on behalf of each account for which we acquire any Notes,
that such Notes may be offered, resold, pledged or otherwise transferred only
(i) to a person whom we reasonably believe to be a qualified institutional buyer
(as defined in Rule 144A under the Securities Act) in a transaction meeting the
requirements of Rule 144A, in a transaction meeting the requirements of Rule 144
under the Securities Act, outside the United States in a transaction meeting the
requirements of Rule 904 under the Securities Act or in accordance with another
exemption from the registration requirements of the Securities Act (and based
upon an opinion of counsel if the Company so requests), (ii) to the Company or
(iii) pursuant to an effective registration statement, and, in each case, in
accordance with any applicable securities laws of any State of the United States
or any other applicable jurisdiction. We understand that the registrar will not
be required to accept for registration of transfer any Notes, except upon
presentation of evidence satisfactory to the Company that the foregoing
restrictions on transfer have been complied with. We further understand that the
Notes purchased by us will be in the form of definitive physical certificates
and that such certificates will bear a legend reflecting the substance of this
paragraph.
We acknowledge that you, the Company and others will rely upon our
confirmations, acknowledgements and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.
B4-3
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
Very truly yours,
_____________________________________
[Name of Transferor]
By:_______________________
Name:
Title:
Address:
B4-4
EXHIBIT D
FORM OF SUBSIDIARY GUARANTEE
Each Guarantor hereby, jointly and severally, unconditionally
guarantees to each Holder of a 10 1/2 Senior Subordinated Note due 2007 of Katz
Media Corporation, a Delaware corporation (the "Company") authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of the Indenture, the Notes and
the Obligations of the Company hereunder and thereunder, that: (a) the principal
of, premium, if any, interest and Liquidated Damages, if any, on the Notes will
be promptly paid in full when due, subject to any applicable grace period,
whether at maturity, by acceleration, redemption or otherwise, and interest on
the overdue principal, premium, if any (to the extent permitted by law),
interest on any interest, if any, and Liquidated Damages, if any, on the Notes,
and all other payment Obligations of the Company to the Holders or the Trustee
hereunder or thereunder will be promptly paid in full and 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 any of such other Obligations, the
same will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, subject to any applicable grace period,
whether at stated maturity, by acceleration, redemption or otherwise. Failing
payment when so due of any amount so guaranteed or any performance so guaranteed
for whatever reason the Guarantors will be jointly and severally obligated to
pay the same immediately.
The obligations of each Guarantor to the Holders of Notes and to the
Trustee pursuant to this Subsidiary Guarantee and the Indenture are expressly
set forth in Article 11 of the Indenture and reference is hereby made to such
Indenture for the precise terms of this Subsidiary Guarantee. THE TERMS OF
ARTICLE 11 OF THE INDENTURE ARE INCORPORATED HEREIN BY REFERENCE. In the case of
any discrepancy between this writing and Article 11 of the Indenture, Article 11
of the Indenture shall control.
This is a continuing Subsidiary Guarantee and shall remain in full
force and effect and shall be binding upon each Guarantor and its successors and
assigns until full, final and indefeasible payment of all of the Company's
obligations under the Notes and the Indenture (subject to Section 11.04 of 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 the party shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions hereof.
This is a Subsidiary Guarantee of payment and not a guarantee of collection.
For purposes hereof, each Guarantor's liability shall be limited to
the lesser of (i) the aggregate amount of the Obligations of the Company under
the Notes and the Indenture and (ii) the amount, if any, which would not have
(A) rendered such Guarantor "insolvent" (as such term is defined in the United
States Bankruptcy Code and in the Debtor and Creditor Law of the State of New
York) or (B) left such Guarantor with unreasonably small capital at the time its
Subsidiary Guarantee of the Notes was entered into; provided that it will be a
presumption in any lawsuit or other proceeding in which a Guarantor is a party
that the amount guaranteed pursuant to the Subsidiary Guarantee is the amount
set forth in clause (i) above unless any creditor, or representative of
creditors of such Guarantor, or debtor in possession or trustee in bankruptcy of
the Guarantor, otherwise proves in such a lawsuit that the aggregate liability
of the Guarantor is the amount set forth in clause (ii) above. The Indenture
provides that, in making any determination as to solvency or sufficiency of
capital of a Guarantor in accordance with the previous sentence, the right of
such Guarantor to contribution from other Guarantors, and any other rights such
Guarantor may have, contractual or otherwise, shall be taken into account.
This Subsidiary Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Note upon which this
Guarantee is noted shall have been executed by the Trustee under the Indenture
by the manual signature of one of its authorized officers.
D-1
Capitalized terms used herein have the same meanings given in the
Indenture unless otherwise indicated.
[GUARANTOR]
By:_______________________
Name
Title
D-2
EXHIBIT E
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of ,
____, between (the "Guarantor"), a subsidiary of Katz Media Corporation, a
Delaware corporation (the "Company"), and American Stock Transfer & Trust
Company, as trustee under the indenture referred to below (the "Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of December 19, 1996, providing
for the issuance of an aggregate principal amount of $100,000,000 of 10 1/2%
Series [A/B] Senior Subordinated Notes due 2007 (the "Notes");
WHEREAS, Section 4.15 of the Indenture provides that under certain
circumstances the Company is required to cause the Guarantor to execute and
deliver to the Trustee a supplemental indenture pursuant to which the Guarantor
shall unconditionally guarantee all of the Company's obligations under the Notes
pursuant to a Guarantee on the terms and conditions set forth in Article 11 of
the Indenture; and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
Guarantor and the Trustee mutually covenant and agree for the equal and ratable
benefit of the holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The Guarantor hereby agrees, jointly and
severally with all other Guarantors, to guarantee the Company's Obligations
under the Notes on the terms and subject to the conditions set forth in Article
11 of the Indenture and to be bound by all other applicable provisions of the
Indenture.
3. NO RECOURSE AGAINST OTHERS. No officer, employee, director,
incorporator or stockholder of the Company or a Guarantor shall have any
liability for any Obligations of the Company or a Guarantor under the Notes or
this Indenture, or for any claim based on, in respect of, or by reason of, such
Obligations or the creation of any such Obligation. Each Holder by accepting a
Note waives and releases all such liability, and such waiver and release is part
of the consideration for the issuance of the Notes.
4. GOVERNING LAW. The internal laws of the State of New York shall
govern this Supplemental Indenture, without regard to the conflict of laws
provisions thereof.
5. COUNTERPARTS. This Indenture may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
E-1
6. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and shall not affect the construction hereof.
E-2
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: __________________, ______
[GUARANTOR]
By:_____________________________
Name:
Title:
Attest:
- --------------------------------
Name:
Title:
AMERICAN STOCK TRANSFER & TRUST COMPANY,
as Trustee
By:_____________________________
Name:
Title:
Attest:
- --------------------------------
Name:
Title:
E-3