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Muzak Limited Partnership
Muzak Capital Corporation
$100,000,000
Aggregate Principal Amount
of ___% Senior Notes due 2003
INDENTURE
Dated as of _____________, 1996
First Trust National Association
--------------------------------
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) ............................................................. N.A.
(b)(2) ............................................................. 7.06
(c) ................................................................ 7.06;11.02
(d)................................................................. 7.06
314 (a) ................................................................ 4.03;11.05
(b) ................................................................ N.A.
(c)(1) ............................................................. 11.04
(c)(2) ............................................................. 11.04
(c)(3) ............................................................. N.A.
(d)................................................................. N.A.
(e) ............................................................... 11.05
(f)................................................................. N.A.
315 (a)................................................................. 7.01
(b)................................................................. 7.05,11.02
(c) ............................................................... 7.01
(d)................................................................. 7.01
(e)................................................................. 6.11
316 (a)(last sentence) ................................................. N.A.
(a)(1)(A)........................................................... 6.05
(a)(1)(B) .......................................................... 6.04
(a)(2) ............................................................. N.A.
(b) ................................................................ 6.07
(c) ................................................................ 2.13
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
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions.......................................................... 1
Section 1.02. Other Definitions.................................................... 13
Section 1.03. Incorporation by Reference of Trust Indenture Act.................... 14
Section 1.04. Rules of Construction................................................ 14
ARTICLE 2
THE SENIOR NOTES
Section 2.01. Form and Dating...................................................... 14
Section 2.02. Execution and Authentication......................................... 15
Section 2.03. Registrar and Paying Agent........................................... 15
Section 2.04. Paying Agent to Hold Money in Trust.................................. 16
Section 2.05. Lists of Holders of the Senior Notes................................. 16
Section 2.06. Transfer and Exchange................................................ 16
Section 2.07. Replacement Senior Notes............................................. 17
Section 2.08. Outstanding Senior Notes............................................. 17
Section 2.09. Treasury Senior Notes................................................ 17
Section 2.10. Temporary Senior Notes............................................... 18
Section 2.11. Cancellation......................................................... 18
Section 2.12. Defaulted Interest................................................... 18
Section 2.13. Record Date.......................................................... 18
Section 2.14. CUSIP Number......................................................... 18
ARTICLE 3
REDEMPTION
Section 3.01. Notices to Trustee................................................... 19
Section 3.02. Selection of Senior Notes to Be Redeemed............................. 19
Section 3.03. Notice of Redemption................................................. 19
Section 3.04. Effect of Notice of Redemption....................................... 20
Section 3.05. Deposit of Redemption Price.......................................... 20
Section 3.06. Senior Notes Redeemed in Part........................................ 21
Section 3.07. Optional Redemption.................................................. 21
Section 3.08. Mandatory Redemption................................................. 21
Section 3.09. Offer to Purchase by Application of Excess Proceeds.................. 21
ARTICLE 4
COVENANTS
Section 4.01. Payment of Senior Notes.............................................. 23
Section 4.02. Maintenance of Office or Agency...................................... 23
Section 4.03. Reports.............................................................. 24
Section 4.04. Compliance Certificate............................................... 24
Section 4.05. Taxes................................................................ 25
Section 4.06. Stay, Extension and Usury Laws....................................... 25
i
Section 4.07. Restricted Payments.................................................. 25
Section 4.08. Dividend and Other Payment Restrictions
Affecting Subsidiaries............................................... 28
Section 4.09. Incurrence of Indebtedness and Issuance
of Preferred Equity Interests........................................ 28
Section 4.10. Asset Sales.......................................................... 30
Section 4.11. Transactions with Affiliates......................................... 31
Section 4.12. Liens................................................................ 31
Section 4.13. Sale and Leaseback Transactions...................................... 31
Section 4.14. Limitation on Issuances and Sales of Capital
Interests of Wholly Owned Subsidiaries................................32
Section 4.15. Limitations on Issuances of Guarantees of Indebtedness............... 32
Section 4.16. Subsidiary Guarantees................................................ 32
Section 4.17. Line of Business..................................................... 33
Section 4.18. Offer to Repurchase Upon Change of Control........................... 33
Section 4.19. Corporate Existence.................................................. 33
Section 4.20. Reorganization of the Company as a Partnership....................... 34
Section 4.21. Limitation on Activities of Capital Corp............................. 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.................................................... 36
Section 6.02. Acceleration......................................................... 37
Section 6.03. Other Remedies....................................................... 38
Section 6.04. Waiver of Past Defaults.............................................. 38
Section 6.05. Control by Majority.................................................. 39
Section 6.06. Limitation on Suits.................................................. 39
Section 6.07. Rights of Holders of Senior Notes to Receive Payment................. 39
Section 6.08. Collection Suit by Trustee........................................... 39
Section 6.09. Trustee May File Proofs of Claim..................................... 40
Section 6.10. Priorities........................................................... 40
Section 6.11. Undertaking for Costs................................................ 40
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee.................................................... 41
Section 7.02. Rights of Trustee.................................................... 42
Section 7.03. Individual Rights of Trustee......................................... 42
Section 7.04. Trustee's Disclaimer................................................. 42
Section 7.05. Notice of Defaults................................................... 43
Section 7.06. Reports by Trustee to Holders of the Senior Notes.................... 43
Section 7.07. Compensation and Indemnity........................................... 43
Section 7.08. Replacement of Trustee............................................... 44
Section 7.09. Successor Trustee by Merger, etc..................................... 45
ii
Section 7.10. Eligibility; Disqualification........................................ 45
Section 7.11. Preferential Collection of Claims Against Company.................... 45
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance............. 45
Section 8.02. Legal Defeasance and Discharge....................................... 45
Section 8.03. Covenant Defeasance.................................................. 46
Section 8.04. Conditions to Legal or Covenant Defeasance........................... 46
Section 8.05. Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions....................................... 48
Section 8.06. Repayment to Issuers ................................................ 48
Section 8.07. Reinstatement........................................................ 48
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Senior Notes........................... 49
Section 9.02. With Consent of Holders of Senior Notes.............................. 49
Section 9.03. Compliance with Trust Indenture Act.................................. 51
Section 9.04. Revocation and Effect of Consents.................................... 51
Section 9.05. Notation on or Exchange of Senior Notes.............................. 51
Section 9.06. Trustee to Sign Amendments, etc...................................... 51
ARTICLE 10
GUARANTEE OF SENIOR NOTES
Section 10.01. Guarantee............................................................ 52
Section 10.02. Limitation of the Guarantors' Liability.............................. 53
Section 10.03. Release of the Guarantors............................................ 53
Section 10.04. Merger, Consolidation or Sale of Assets.............................. 53
Section 10.05. Execution and Delivery of Guarantees................................. 53
ARTICLE 11
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls......................................... 54
Section 11.02. Notices.............................................................. 54
Section 11.03. Communication by Holders of Senior Notes with
Other Holders of Senior Notes........................................ 55
Section 11.04. Certificate and Opinion as to Conditions Precedent................... 55
Section 11.05. Statements Required in Certificate or Opinion........................ 56
Section 11.06. Rules by Trustee and Agents.......................................... 56
Section 11.07. No Personal Liability of Directors, Officers,
Employees and Stockholders........................................... 56
Section 11.08. Governing Law........................................................ 56
Section 11.09. No Adverse Interpretation of Other Agreements........................ 56
Section 11.10. Successors........................................................... 57
Section 11.11. Severability......................................................... 57
Section 11.12. Counterpart Originals................................................ 57
Section 11.13. Table of Contents, Headings, etc..................................... 57
iii
EXHIBITS
Exhibit A Form of Senior Note
Exhibit B Form of Guarantee
Exhibit C Form of Supplemental Indenture
iv
EXHIBIT 4.1
INDENTURE dated as of ___________, 1996 among Muzak Limited Partnership, a
Delaware limited partnership (the "Company"), and Muzak Capital Corporation, a
Delaware corporation ("Capital Corp." and, together with the Company, the
"Issuers"), as joint and several obligors and First Trust National Association,
as trustee (the "Trustee").
The Issuers and the Trustee agree as follows for the benefit of each other
and for the equal and ratable benefit of the Holders of the ___% Senior Notes
due 2003 (the "Senior Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions.
"Acquired Debt" means, with respect to any specified Person, (i) Indebtedness
of any other Person existing at the time such other Person is merged with or
into or became a Subsidiary of such specified Person, including, without
limitation, Indebtedness incurred in connection with, or in contemplation of,
such other Person merging with or into or becoming a Subsidiary of such
specified Person, and (ii) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person.
"Administrative Expenses" means, with respect to the General Partner, any
general partner of the Company or the parent of the Company (in the event that
the Company is reorganized as a corporation), ordinary operating expenses
(including reasonable professional fees and expenses) in connection with (a)
complying with reporting obligations pursuant to the federal securities laws and
obligations to prepare and distribute business records in the ordinary course of
business, (b) maintaining such Person's corporate or partnership existence and
franchise (including annual franchise taxes) and (c) the payment of reasonable
fees and expense reimbursements to directors thereof.
"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; provided that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Asset Sale" means (a) the sale, lease, conveyance or other disposition of
any assets (including, without limitation, by way of a sale and leaseback) other
than sales of inventory in the ordinary course of business consistent with past
practices (provided that the sale, lease, conveyance or other disposition of all
or substantially all of the assets of the Company and its Restricted
Subsidiaries taken as a whole shall be governed by the provisions of Section
4.18 and/or Section 5.01 hereof and not by the provisions of Section 4.10
hereof), (b) the issuance by any Restricted Subsidiary of Equity Interests of
such Restricted Subsidiary and (c) the disposition by the Company or any of its
Restricted Subsidiaries of Equity Interests of any of the Company's
Subsidiaries, in the case of either clause (a), (b) or (c), whether in a single
transaction or a series of related transactions, (i) that have a fair market
value in excess of $2.0 million or (ii) for net proceeds in excess of $2.0
million. Notwithstanding the foregoing, (a) a transfer of assets by the Company
to a Wholly Owned Restricted Subsidiary or by a Wholly Owned Restricted
Subsidiary to the Company or to another Wholly Owned Restricted Subsidiary, (b)
an issuance of Equity Interests by a Wholly Owned
Restricted Subsidiary to the Company or to another Wholly Owned Restricted
Subsidiary, (c) a Restricted Payment that is permitted by the Section 4.07
hereof and (d) any sale and leaseback transaction otherwise permitted pursuant
to Section 4.13 hereof shall not be deemed to be Asset Sales.
"Attributable Debt" in respect of a sale and leaseback transaction means, at
the time of determination, the present value (discounted at the rate of interest
implicit in such transaction, determined in accordance with GAAP) of the
obligation of the lessee for net rental payments during the remaining term of
the lease included in such sale and leaseback transaction (including any period
for which such lease has been extended or may, at the option of the lessor, be
extended).
"Board of Directors" means the Board of Directors of the General Partner, on
behalf of the Company (or the Company, if the Company is reorganized as a
corporation), or of Capital Corp. or any authorized committee of the Board of
Directors.
"Borrowing Base" means, as of any date, an amount equal to (a) 80.0% of the
face amount of all accounts receivable owned by the Company and its Restricted
Subsidiaries as of such date that are not more than 90 days past due, plus (b)
60.0% of the book value (calculated on an average cost basis) of all inventory
owned by the Company and its Restricted Subsidiaries as of such date, minus (c)
any amount applied pursuant to Section 4.10(b) hereof to permanently reduce
Indebtedness permitted to be incurred pursuant to Section 4.09(b)(i) hereof, all
calculated on a consolidated basis and in accordance with GAAP. To the extent
that information is not available as to the amount of accounts receivable or
inventory as of a specific date, the Company may utilize the most recent
available information for purposes of calculating the Borrowing Base.
"Business Day" means any day other than a Legal Holiday.
"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 required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Interests" 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.
"Cash Equivalents" means (i) United States dollars, (ii) securities issued or
directly and fully guaranteed or insured by the United States government or any
agency or instrumentality thereof having maturities of not more than six months
from the date of acquisition, (iii) certificates of deposit and eurodollar time
deposits with maturities of six months or less from the date of acquisition,
bankers' acceptances with maturities not exceeding six months and overnight bank
deposits or demand deposits, in each case with any lender party to any Credit
Facility or with any domestic commercial bank having capital and surplus in
excess of $1.0 billion, (iv) repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clauses (ii) and
(iii) above entered into with any financial institution meeting the
qualifications specified in clause (iii) above, (v) commercial paper having the
highest rating obtainable from Moody's Investors Service, Inc. or Standard &
Poor's Ratings Service, a division of The McGraw-Hill Companies, Inc., and in
each case maturing within six months after the date of acquisition and (vi)
investments in money market funds all of whose assets comprise securities of the
types described in clauses (i), (ii) and (iii) above.
2
"Centre Partners" means Centre Partners L.P., a Delaware limited partnership.
"Change of Control" means the occurrence of any of the following: (i) the
sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Restricted Subsidiaries
taken as a whole to any "person" (as such term is used in Section 13(d)(3) of
the Exchange Act) other than the Principals or their Related Parties (as defined
below), (ii) the adoption of a plan relating to the liquidation or dissolution
of the Company (other than as part of the reorganization of the Company as a
corporation), (iii) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as defined above), other than the Principals and their Related
Parties, becomes the "beneficial owner" (as such term is defined in Rule 13d-3
and Rule 13d-5 under the Exchange Act), directly or indirectly, of more than a
majority of the voting Capital Interests of the Company, (iv) the first day on
which a majority of the members of the Board of Directors are not Continuing
Directors or (v) prior to the reorganization of the Company as a corporation,
the first day on which the Company ceases to own 100% of the outstanding Equity
Interests of Capital Corp. For purposes of this definition, any transfer of an
equity interest of an entity that was formed for the purpose of acquiring voting
Capital Interests of the Company shall be deemed to be a transfer of such
portion of such voting Capital Interests as corresponds to the portion of the
equity of such entity that has been so transferred. Notwithstanding the
foregoing, the reorganization of the Company as a corporation shall not be
deemed to constitute a Change of Control, so long as such reorganization does
not result in any of the occurrences described above under clauses (i) through
(v).
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission.
"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 (i) an amount equal to any extraordinary loss plus any net loss
realized in connection with an Asset Sale (to the extent such losses were
deducted in computing such Consolidated Net Income), plus (ii) provision for
taxes based on income or profits of such Person and its Restricted Subsidiaries
for such period, to the extent that such provision for taxes was included in
computing such Consolidated Net Income, plus (iii) consolidated interest expense
of such Person and its Restricted Subsidiaries for such period, whether paid or
accrued and whether or not capitalized (including, without limitation,
amortization of original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, imputed interest with
respect to Attributable Debt, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance financings, and
net payments (if any) pursuant to Hedging Obligations), to the extent that any
such expense was deducted in computing such Consolidated Net Income, plus (iv)
all items classified as "depreciation" or "amortization" on such Person's
statement of operations and other non-cash charges (including non-cash, equity-
based compensation charges, but excluding any non-cash charge to the extent that
it represents an accrual of or reserve for cash charges in any future period or
amortization of a prepaid cash expense that was paid in a prior period) of such
Person and its Restricted Subsidiaries for such period to the extent that such
depreciation, amortization and other non-cash charges were deducted in
computing such Consolidated Net Income, plus (v) in the case of calculations
with respect to the Company, the amount of any Tax Distributions by the Company
to its partners, or, following the reorganization of the Company as a
corporation, any tax sharing payment made pursuant to a tax sharing agreement
executed in connection therewith, in each case, on a consolidated basis and
determined in accordance with GAAP. Notwithstanding the foregoing, the
provision for taxes on the income or profits of, and the depreciation
3
and amortization and other non-cash charges of, a Restricted Subsidiary of the
referent 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 Restricted 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 Restricted 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
Restricted Subsidiary or its stockholders or partners. Notwithstanding the
foregoing, the provision for taxes based on the income or profits of, and the
depreciation and amortization and other non-cash charges 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 or distributed to the Company by such Subsidiary
without prior approval (that has not been obtained), pursuant to the terms of
its organizational documents and all agreements, instruments, judgments,
decrees, orders, statutes, rules and governmental regulations applicable to that
Restricted Subsidiary or its stockholders or partners.
"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 that (i) the Net Income (but not loss) 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 paid in cash to the referent Person or a Wholly Owned Restricted
Subsidiary thereof, (ii) the Net Income of any Restricted Subsidiary shall be
excluded to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at the
date of determination permitted without any prior governmental approval (which
has not been obtained) or, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to that Restricted Subsidiary or its
stockholders or partners, (iii) 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, (iv) in the case of calculations with respect to
the Company, Consolidated Net Income of the Company shall be reduced by the
amount of any Tax Distributions by the Company to its partners, (v) the
cumulative effect of a change in accounting principles shall be excluded, (vi)
Consolidated Net Income shall not include 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, (vii) Consolidated Net Income shall not include any extraordinary
or nonrecurring gain (but not loss), together with any related provision for
taxes on such extraordinary or nonrecurring gain (but not loss) and (viii) the
Net Income of any Unrestricted Subsidiary shall be excluded, whether or not
distributed to the Company or one of its Subsidiaries.
"Consolidated Net Worth" means, (a) with respect to a partnership, the common
and preferred partnership interests of such partnership and its consolidated
Subsidiaries, as determined on a consolidated basis in accordance with GAAP, and
(b) with respect to any other Person, the sum of (i) the consolidated equity of
the common stockholders of such Person and its consolidated Subsidiaries plus
(ii) the respective amounts reported on such Person's most recent balance sheet
with respect to any series of preferred stock; provided that the preferred
partnership interests or the preferred stock, as the case may be, shall be
included in Consolidated Net Worth only if such preferred partnership interests
or preferred stock (A) is not a Disqualified Interest and (B) is not by its
terms entitled to the payment of dividends or distributions,
4
unless such dividends or distributions 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
partnership interests or 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 twelve months after the
acquisition of such business) subsequent to the date of the most recently
completed fiscal quarter in the book value of any asset owned by such Person or
a consolidated Subsidiary of such Person, (y) all investments in unconsolidated
Subsidiaries and in Persons that are not Subsidiaries (except, in each case,
investments in marketable securities), and (z) all unamortized debt discount and
expense and unamortized deferred financing charges, all of the foregoing
determined in accordance with GAAP.
"Continuing Directors" means, as of any date of determination, any member of
the Board of Directors who (i) was a member of such Board of Directors on the
date hereof or (ii) was nominated for election or elected to such Board of
Directors with the approval of the Principals and their Related Parties or a
majority of the Continuing Directors who were members of such Board of Directors
at the time of such nomination or election.
"Credit Facility" means any credit facility entered into by and among the
Company, any of its Subsidiaries that is a Guarantor and the lending
institutions party thereto, including any credit agreement, 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.
"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.
"Disqualified Interests" means any Equity Interest which, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
91st day after the date on which the Senior Notes mature.
"Domestic Subsidiary" of a Person means any direct or indirect Subsidiary of
such Person that is not a Foreign Subsidiary.
"Equity Interests" means Capital Interests and all warrants, options or other
rights to acquire Capital Interests (but excluding any debt security that is
convertible into, or exchangeable for, Capital Interests).
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Existing Indebtedness" means the aggregate principal amount of Indebtedness
of the Company and its Subsidiaries in existence on the date hereof, until such
amounts are repaid.
"Fixed Charges" means, with respect to any Person for any period, the sum of
(i) the consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued (including, without
limitation, amortization of original issue discount, non-cash interest payments,
the interest component of any deferred payment obligations, the interest
component of all payments associated with Capital Lease Obligations, imputed
interest with respect to Attributable Debt, commissions, discounts
5
and other fees and charges incurred in respect of letter of credit or bankers'
acceptance financings, and net payments (if any) pursuant to Hedging Obligations
but excluding amortization of deferred financing fees), (ii) the consolidated
interest expense of such Person and its Restricted Subsidiaries that was
capitalized during such period, (iii) any interest expense on Indebtedness of
another Person that is Guaranteed by such Person or one of its Restricted
Subsidiaries or secured by a Lien on assets of such Person or one of its
Restricted Subsidiaries (whether or not such Guarantee or Lien is called upon)
and (iv) the amount of dividends or distributions paid in respect of preferred
stock or preferred partnership interests of such Person, in each case, on a
consolidated basis and in accordance with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person and its
Restricted Subsidiaries for such period to the Fixed Charges of such Person and
its Restricted Subsidiaries for such period. In the event that the Company or
any of its Restricted Subsidiaries incurs, assumes, Guarantees or redeems any
Indebtedness (other than revolving credit borrowings) or issues preferred stock
or preferred partnership interests subsequent to the commencement of the period
for which the Fixed Charge Coverage Ratio is being calculated but prior to the
date on which the event for which the calculation of the Fixed Charge Coverage
Ratio is made (the "Calculation Date"), then the Fixed Charge Coverage Ratio
shall be calculated giving pro forma effect to such incurrence, assumption,
Guarantee or redemption of Indebtedness, or such issuance or redemption of
preferred stock or preferred partnership interests, as if the same had occurred
at the beginning of the applicable four-quarter reference period. For purposes
of making the computation referred to above, (i) acquisitions that have been
made by the Company or any of its Restricted Subsidiaries, including through
mergers or consolidations and including any related financing transactions,
during the four-quarter reference period or subsequent to such reference period
and on or prior to the Calculation Date shall be deemed to have occurred on the
first day of the four-quarter reference period, (ii) the Consolidated Cash Flow
attributable to discontinued operations, as determined in accordance with GAAP,
and operations or businesses disposed of prior to the Calculation Date, shall be
excluded, and (iii) the Fixed Charges attributable to discontinued operations,
as determined in accordance with GAAP, and operations or businesses disposed of
prior to the Calculation Date, shall be excluded, but only to the extent that
the obligations giving rise to such Fixed Charges shall not be obligations of
the referent Person or any of its Restricted Subsidiaries following the
Calculation Date.
"Foreign Credit Facility" means any credit facility entered into by and among
any Foreign Subsidiary of the Company and the lending institutions party
thereto, including any credit agreement, 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.
"Foreign Restricted Subsidiary" of a Person means any Restricted Subsidiary
of such Person that is also a Foreign Subsidiary.
"Foreign Subsidiary" of a Person means any direct or indirect Subsidiary of
such Person that is organized under the laws of any jurisdiction outside the
United States, any district or territoriality thereof and The Commonwealth of
Puerto Rico.
"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 have been approved by a significant segment of the accounting
profession, which are in effect on the date hereof.
6
"General Partner" means Music Holdings, as general partner of MLP
Acquisition, the managing general partner of the Company.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States of America is
pledged.
"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.
"Guarantor" means any Domestic Subsidiary of the Company (other than Capital
Corp.) that executes a Subsidiary Guarantee in accordance with the provisions
hereof, and their respective successors and assigns.
"Guarantor Senior Indebtedness" means any Indebtedness permitted to be
incurred by any Guarantor under the terms hereof, unless the instrument under
which such Indebtedness is incurred expressly provides that it is subordinated
in right of payment to such Guarantor's Subsidiary Guarantee. Notwithstanding
the foregoing, Guarantor Senior Indebtedness shall not include (i) any
Obligation of such Guarantor to any Subsidiary of such Guarantor, (ii) any
liability for federal, state, local or other taxes owed or owing by such
Guarantor, (iii) any accounts payable or other liability to trade creditors
arising in the ordinary course of business (including Guarantees thereof or
instruments evidencing such liabilities), (iv) any Indebtedness, Guarantee or
Obligation of the Guarantor that is contractually subordinated or junior in any
respect to any other Indebtedness, Guarantee or Obligation of such Guarantor or
(v) any Indebtedness incurred in violation hereof.
"Hedging Obligations" means, with respect to any Person, the obligations of
such Person under (i) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements and (ii) other agreements or
arrangements designed solely to protect such Person against fluctuations in
interest rates.
"Holder" means a Person in whose name a Senior 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 credit (or
reimbursement agreements in respect thereof) or banker's 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, 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.
"Indenture" means this Indenture, as amended or supplemented 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 guarantees of Indebtedness or other obligations but
excluding advances to customers in the ordinary course of business that are
recorded as accounts receivable on the balance sheet of such Person or its
Subsidiaries in accordance with GAAP),
7
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;
provided that an acquisition of assets, Equity Interests or other securities by
the Company for consideration consisting of common equity securities of the
Company shall not be deemed to be an Investment.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York, in the city of the principal corporate
trust office of the Trustee 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, payment may be made 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).
"MLP Acquisition" means MLP Acquisition L.P., a Delaware limited partnership
and the general partner of the Company.
"MLP Holdings" means MLP Holdings L.P., a Delaware limited partnership and a
limited partner of MLP Acquisition.
"Music Holdings" means Music Holdings Corp., a Delaware corporation, wholly-
owned by Centre Partners and MLP Holdings; and the general partner of MLP
Acquisition.
"Net Income" means, with respect to any Person, the net income (loss) of such
Person, determined in accordance with GAAP.
"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
(other than Senior Revolving Debt) secured by a Lien on the asset or assets that
were 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.
"Non-Recourse Debt" means Indebtedness (a) as to which neither the Company
nor any of its Restricted Subsidiaries (i) provides credit support of any kind
(including any undertaking, agreement or instrument that would constitute
Indebtedness or any agreement to maintain specified levels of financial or
operational performance), (ii) is directly or indirectly liable (as a guarantor
or otherwise), or (iii) constitutes the lender; (b) 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
8
a default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity; and (c) as to which the
lenders have been notified in writing that they shall not have any recourse to
the stock or assets of the Company or any of its Restricted Subsidiaries.
"Notes" means the Senior Notes described above and issued under this
Indenture, as amended or supplemented from time to time pursuant to the terms
hereof.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"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 Treasurer, any Assistant Treasurer, Controller, Secretary
or any Vice-President of such Person, or, if such Person is a partnership, any
such officer of the general partner or the general partner of the general
partner 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 principal executive
officer, principal financial officer, treasurer or principal accounting officer
of the Company.
"Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company, any Subsidiary of the Company or the Trustee.
"Pari Passu Indebtedness" means any Indebtedness which ranks pari passu in
right of payment with, and which is not expressly by its terms subordinated in
right of payment of principal, interest or premium, if any, to, the Senior
Notes.
"Park Road" means Park Road Corporation, a Delaware corporation and the
managing general partner of Centre Partners.
"Partnership Agreement" means the Third Amended and Restated Agreement of
Limited Partnership of the Company, as amended, supplemented or otherwise
modified and as in effect from time to time.
"Permitted Investments" means (a) any Investments in the Company or in a
Wholly Owned Restricted Subsidiary of the Company that is engaged in the same or
a similar or related line of business as the Company and its Restricted
Subsidiaries were engaged in on the date hereof; (b) any Investments in Cash
Equivalents; (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
Wholly Owned Restricted Subsidiary of the Company that is engaged in the same or
a similar or related line of business as the Company and its Restricted
Subsidiaries were engaged in on the date hereof 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 Wholly Owned
Restricted Subsidiary of the Company that is engaged in the same or a similar or
related line of business as the Company and its Restricted Subsidiaries were
engaged in on the date hereof; (d) Restricted Investments made as a result of
the receipt of non-cash consideration from an Asset Sale that was made pursuant
to and in compliance with Section 4.10 hereof; (e) Investments in endorsements
of negotiable instruments and similar negotiable documents in the ordinary
course of business; (f) Investments existing on the date hereof; (g) Investments
in obligations of account debtors to the Company or any of its Restricted
Subsidiaries and stock or obligations issued to the Company or any such
Restricted Subsidiary by any Person, in each case, in connection with the
insolvency, bankruptcy, receivership or reorganization of such Person or a
composition
9
or readjustment of such Person's Indebtedness and (h) other Investments in any
one or more Persons that do not exceed $5.0 million in the aggregate at any time
outstanding.
"Permitted Liens" means (i) Liens on accounts receivable and inventory
securing Indebtedness permitted to be incurred under Section 4.09(b)(i) hereof;
(ii) Liens in favor of the Company; (iii) Liens on property of a Person existing
at the time such Person is merged into, consolidated with or acquired by the
Company or any Restricted Subsidiary of the Company; provided that such Liens
were not incurred 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; (iv) Liens on property existing at the time of acquisition
thereof by the Company or any Subsidiary of the Company, provided that such
Liens were in existence prior to the contemplation of such acquisition; (v)
Liens to secure the performance of statutory obligations, surety or appeal
bonds, performance bonds or other obligations of a like nature incurred in the
ordinary course of business; (vi) Liens to secure Indebtedness permitted by
Section 4.09(b)(vi) hereof covering only the assets acquired with such
Indebtedness; (vii) Liens existing on the date hereof; (viii) 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; (ix) Liens securing Permitted Refinancing Indebtedness,
provided that such Liens do not extend to or cover any assets or property other
than the collateral securing the Indebtedness to be refinanced; (x) Liens
arising by operation of law in connection with judgments, for a period not
resulting in an Event of Default with respect thereto; (xi) easements, rights of
way, zoning restrictions and other similar encumbrances or title defects which
do not materially detract from the value of the property or the assets subject
thereto or interfere with the ordinary conduct of the business of the Company
and its Restricted Subsidiaries, taken as a whole; (xii) Liens securing
Attributable Debt with respect to any sale and leaseback transaction in an
aggregate amount not to exceed the aggregate principal amount of Attributable
Debt permitted to be incurred pursuant to Section 4.09 hereof, provided that
such Liens do not extend to or cover any assets or property other than the
collateral securing such Attributable Debt; (xiii) Liens on assets of any
Foreign Restricted Subsidiary securing Indebtedness of such Foreign Restricted
Subsidiary incurred pursuant to Section 4.09(b)(ix) hereof; (xiv) Liens incurred
in the ordinary course of business of the Company or any Restricted Subsidiary
of the Company with respect to obligations that (A) are not incurred in
connection with the borrowing of money or the obtaining of advances or credit
(other than trade credit in the ordinary course of business) and (B) do not in
the aggregate materially detract from the value of the property or materially
impair the use thereof in the operation of business by the Company or such
Restricted Subsidiary; and (xv) Liens on accounts receivable and inventory
securing Hedging Obligations.
"Permitted Refinancing Indebtedness" 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 of such Permitted Refinancing Indebtedness does not
exceed the principal amount of the Indebtedness so extended, refinanced,
renewed, replaced, defeased or refunded (plus the amount of 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 Senior Notes, such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and is subordinated in
right of payment to, the Senior Notes on terms at least as favorable to the
holders
10
of Senior 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 or unincorporated organization
(including any subdivision or ongoing business of any such entity or
substantially all of the assets of any such entity, subdivision or business).
"Principals" means MLP Acquisition, MLP Holdings, Music Holdings, Centre
Partners and Park Road.
"Related Party" with respect to any Principal means (a) any controlling
stockholder or general partner, 80% (or more) owned Subsidiary, or spouse or
immediate family member (in the case of an individual) of such Principal or (b)
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 clause (a), or (c) any Person
employed by the Company in a management capacity as of the date hereof.
"Responsible Officer," when used with respect to the Trustee, means any
officer within the Corporate Trust Administration 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 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.
"Securities Act" means the Securities Act of 1933, as amended, and the rules
and regulations of the Commission promulgated thereunder.
"Senior Revolving Debt" means revolving credit borrowings under any Credit
Facility.
"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; provided that Capital Corp. and each Guarantor shall be deemed a
Significant Subsidiary.
"Subordinated Indebtedness" means any Indebtedness which is expressly by its
terms subordinated in right of payment of principal, interest or premium, if
any, to the Senior Notes.
"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 Capital Interests entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by such Person or
one or more of the other Subsidiaries
11
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 one or more Subsidiaries of such Person (or any combination thereof).
"Tax Amount" means, with respect to any Person for any period, the aggregate
amount of tax distributions required to be made by the Company to its partners
under the Partnership Agreement as in effect on the date hereof.
Notwithstanding anything to the contrary, Tax Amount shall not include taxes
resulting from such Person's reorganization as or change in the status to a
corporation.
"Tax Distribution" means a distribution in respect of taxes to the partners
of the Company pursuant to Section 4.07(b)(iv) hereof.
"Taxable Income" means, with respect to any Person for any period, the
taxable income or loss of such Person for such period for federal income tax
purposes; provided that (i) all items of income, gain, loss or deduction
required to be stated separately pursuant to Section 703(a)(1) of the Code shall
be included in taxable income or loss, (ii) any basis adjustment made in
connection with an election under Section 754 of the Code shall be disregarded
and (iii) such taxable income shall be increased or such taxable loss shall be
decreased by the amount of any interest expense incurred by such Person that is
not treated as deductible for federal income tax purposes by a partner or member
of such Person.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-77bbbb)
as in effect on the date on which this Indenture is qualified under the TIA.
"Trustee" means the party named as such above until a successor replaces it
in accordance with the applicable provisions of this Indenture and thereafter
means the successor serving hereunder.
"Unrestricted Subsidiary" means any Subsidiary (other than Capital Corp.)
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 (i)
has no Indebtedness other than Non-Recourse Debt; (ii) 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; (iii) is a Person with respect to
which neither the Company nor any of its Restricted Subsidiaries has any direct
or indirect obligation (A) to subscribe for additional Equity Interests or (B)
to maintain or preserve such Person's financial condition or to cause such
Person to achieve any specified levels of operating results; (iv) has not
guaranteed or otherwise directly or indirectly provided credit support for any
Indebtedness of the Company or any of its Restricted Subsidiaries; and (v) has
at least one director on its board of directors that is not a director or
executive officer of the Company or any of its Restricted Subsidiaries and has
at least one executive officer that is not a director or executive officer 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
an Officers' Certificate certifying that such designation complied with the
foregoing conditions and was permitted by Section 4.07 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 4.09 hereof, the Company shall be in
default of such covenant). The Board of Directors of the Company may at any time
designate any
12
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 (a) such Indebtedness is permitted under Section 4.09 hereof, and
(b) no Default or Event of Default would be in existence following such
designation; and provided, further, that, to the extent applicable, the Company
shall cause such Subsidiary to comply with Section 4.16 hereof.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (a) the sum of the
products 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 shall elapse
between such date and the making of such payment, by (b) the then outstanding
principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Interests or other
ownership interests of which (other than directors' qualifying shares or
interests) shall at the time be owned by such Person or by one or more Wholly
Owned Restricted Subsidiaries of such Person and one or more Wholly Owned
Restricted Subsidiaries of such Person.
Section 1.02. Other Definitions.
Defined in
Term Section
"Affiliate Transaction"........... 4.11
"Asset Sale Offer"................ 4.10
"Asset Sale Offer Price".......... 4.10
"Bankruptcy Law".................. 6.01
"Change of Control Offer"......... 4.18
"Change of Control Payment"....... 4.18
"Change of Control Payment Date".. 4.18
"Covenant Defeasance"............. 8.03
"Custodian"....................... 6.01
"Event of Default"................ 6.01
"Excess Proceeds"................. 4.10
"incur"........................... 4.09
"Legal Defeasance"................ 8.02
"Offer Amount".................... 4.10
"Offer Period".................... 3.09
"Paying Agent".................... 2.03
"Payment Default"................. 6.01
"Purchase Date"................... 3.09
"Registrar"....................... 2.03
"Restricted Payments"............. 4.07
"Subsidiary Guarantee"............ 4.16
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.
13
The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Senior Notes;
"indenture security holder" means a Holder of a Senior Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Senior Notes means the Issuers, as joint and several
obligors, and any successor obligor upon the Senior Notes.
All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by Commission rule under the TIA
have the meanings so assigned to them.
Section 1.04. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) 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 SENIOR NOTES
Section 2.01. Form and Dating.
The Senior Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A hereto, the terms of which are
incorporated in and made a part of this Indenture. The Senior Notes may have
notations, legends or endorsements approved as to form by the Issuers and
required by law, stock exchange rule, agreements to which the Issuers are
subject or usage. Each Senior Note shall be dated the date of its
authentication. The Senior Notes shall be issuable only in denominations of
$1,000 and integral multiples thereof.
Section 2.02. Execution and Authentication.
An Officer of the General Partner, on behalf of the Company (or the Company,
if the Company is a corporation), and Capital Corp. shall sign the Senior Notes
for each of the Company and Capital Corp.
14
by manual or facsimile signature. The Company's seal shall be reproduced on the
Senior Notes and may be in facsimile form.
If an Officer whose signature is on a Senior Note no longer holds that office
at the time the Senior Note is authenticated, the Senior Note shall nevertheless
be valid.
A Senior Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature of the Trustee shall be conclusive evidence that
the Senior Note has been authenticated under this Indenture. The form of
Trustee's certificate of authentication to be borne by the Senior Notes shall be
substantially as set forth in Exhibit A hereto.
The Trustee shall, upon a written order of the Issuers signed by an Officer
of each of the General Partner, on behalf of the Company (or the Company, if the
Company is a corporation), and Capital Corp., authenticate Senior Notes for
original issue up to an aggregate principal amount stated in paragraph 4 of the
Senior Notes. The aggregate principal amount of Senior Notes outstanding at any
time shall not exceed the amount set forth herein except as provided in Section
2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the Issuers to
authenticate Senior Notes. Unless limited by the terms of such appointment, an
authenticating agent may authenticate Senior 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 Issuers or an Affiliate of the Issuers.
Section 2.03. Registrar and Paying Agent.
The Issuers shall maintain (i) an office or agency where Senior Notes may be
presented for registration of transfer or for exchange (including any co-
registrar, the "Registrar") and (ii) an office or agency where Senior Notes may
be presented for payment ("Paying Agent"). The Registrar shall keep a register
of the Senior Notes and of their transfer and exchange. The Issuers may appoint
one or more co-registrars and one or more additional paying agents. The term
"Paying Agent" includes any additional paying agent. The Issuers may change any
Paying Agent, Registrar or co-registrar without prior notice to any Holder of a
Senior Note. The Issuers shall notify the Trustee, and the Trustee shall notify
the Holders of the Senior Notes, of the name and address of any Agent not a
party to this Indenture. The Issuers or any Subsidiary of the Company may act as
Paying Agent, Registrar or co-registrar. The Company shall enter into an
appropriate agency agreement with any Agent not a party to this Indenture, which
shall incorporate the provisions of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Issuers shall notify
the Trustee of the name and address of any such Agent. If the Issuers fail to
maintain a Registrar or Paying Agent, or fail to give the foregoing notice, the
Trustee shall act as such, and shall be entitled to appropriate compensation in
accordance with Section 7.07 hereof.
The Issuers initially appoint the Trustee as Registrar, Paying Agent and
agent for service of notices and demands in connection with the Senior Notes.
Section 2.05. Paying Agent to Hold Money in Trust.
The Issuers shall require each Paying Agent other than the Trustee to agree
in writing that the Paying Agent shall hold in trust for the benefit of the
Holders of the Senior Notes or the Trustee all money held by the Paying Agent
for the payment of principal of, premium, if any, and interest on the Senior
Notes, and shall notify the Trustee of any Default by the Issuers in making any
such payment. While any such
15
Default continues, the Trustee may require a Paying Agent to pay all money held
by it to the Trustee. The Issuers at any time may require a Paying Agent to pay
all money held by it to the Trustee. Upon payment over to the Trustee, the
Paying Agent (if other than the Issuers or any of their Subsidiaries) shall have
no further liability for the money delivered to the Trustee. If either Issuer or
any of their Subsidiaries acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the Holders of the Senior Notes all money
held by it as Paying Agent.
Section 2.05. Lists of Holders of the Senior Notes.
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 Holders of
the Senior Notes and shall otherwise comply with TIA (S) 312(a). If the Trustee
is not the Registrar, the Issuers 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 of the names and addresses of Holders of the
Senior Notes, including the aggregate principal amount of the Senior Notes held
by each thereof, and the Company shall otherwise comply with TIA (S) 312(a).
Section 2.06. Transfer and Exchange.
When Senior Notes are presented to the Registrar with a request to register
the transfer or to ex change them for an equal principal amount of Senior Notes
of other denominations, the Registrar shall register the transfer or make the
exchange if its requirements for such transactions are met; provided that any
Senior Note presented or surrendered for registration of transfer or exchange
shall be duly endorsed or accompanied by a written instruction of transfer in
form satisfactory to the Registrar and the Trustee duly executed by the Holder
thereof or by his attorney duly authorized in writing. To permit registrations
of transfer and exchanges, the Issuers shall issue and the Trustee shall
authenticate Senior Notes at the Registrar's request, subject to such rules as
the Trustee may reasonably require.
Neither the Issuers nor the Registrar shall be required to (i) issue,
register the transfer of or exchange Senior Notes during a period beginning at
the opening of business on a Business Day 15 days before the day of any
selection of Senior Notes for redemption under Section 3.02 or (ii) register the
transfer of or exchange any Senior Note so selected for redemption in whole or
in part, except the unredeemed portion of any Senior Note being redeemed in
part.
No service charge shall be made to any Holder of a Senior Note for any
registration of transfer or exchange (except as otherwise expressly permitted
herein), but the Issuers may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than such transfer tax or similar governmental charge payable upon
exchanges pursuant to Sections 2.10, 3.06 or 9.05 hereof, which shall be paid by
the Issuers).
Prior to due presentment to the Trustee for registration of the transfer of
any Senior Note, the Trustee, any Agent and the Issuers may deem and treat the
Person in whose name any Senior Note is registered as the absolute owner of such
Senior Note for the purpose of receiving payment of principal of, premium, if
any, and interest on such Senior Note and for all other purposes whatsoever,
whether or not such Senior Note is overdue, and neither the Trustee, any Agent
nor the Company shall be affected by notice to the contrary. The registered
Holder of a Senior Note shall be treated as its owner for all purposes.
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Section 2.07. Replacement Senior Notes.
If any mutilated Senior Note is surrendered to the Trustee, or the Issuers
and the Trustee receive evidence to their satisfaction of the destruction, loss
or theft of any Senior Note, the Issuers shall issue and the Trustee, upon the
written order of the Issuers signed by an Officer of each of the General
Partner, on behalf of the Company (or the Company, if the Company is a
corporation), and Capital Corp. shall authenticate a replacement Senior Note if
the Trustee's requirements for replacements of Senior Notes are met. If
required by the Trustee or the Issuers, an indemnity bond must be supplied by
the Holder that is sufficient in the judgment of the Trustee and the Issuers to
protect the Issuers, the Trustee, any Agent or any authenticating agent from any
loss which any of them may suffer if a Senior Note is replaced. The Issuers and
the Trustee may charge for its expenses in replacing a Senior Note.
Every replacement Senior Note is an additional obligation of the Issuers, and
shall be entitled to all of the benefits of this Indenture equally and ratably
with all other Senior Notes duly issued hereunder.
Section 2.08. Outstanding Senior Notes.
The Senior Notes outstanding at any time are all the Senior Notes
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation and those described in this Section as not outstanding.
If a Senior Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Senior Note is held by a bona fide purchaser. If the principal amount
of any Senior Note is considered paid under Section 4.01 hereof, it ceases to be
outstanding and interest on it ceases to accrue. Subject to Section 2.09
hereof, a Senior Note does not cease to be outstanding because any Issuer, a
Subsidiary of any Issuer or an Affiliate of any Issuer holds the Senior Note.
Section 2.09. Treasury Senior Notes.
In determining whether the Holders of the required principal amount of Senior
Notes have concurred in any direction, waiver or consent, Senior Notes owned by
any Issuer, any Subsidiary of any Issuer or any Affiliate of any Issuer shall be
considered as though not outstanding, except that for purposes of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Senior Notes which a Responsible Officer knows to be so owned
shall be so considered. Notwithstanding the foregoing, Senior Notes that are to
be acquired by any Issuer, any Subsidiary of any Issuer or an Affiliate of any
Issuer pursuant to an exchange offer, tender offer or other agreement shall not
be deemed to be owned by such Issuer, such Subsidiary of such Issuer or an
Affiliate of such Issuer until legal title to such Senior Notes passes to such
Issuer, such Subsidiary or Affiliate, as the case may be.
Section 2.10. Temporary Senior Notes.
Until definitive Senior Notes are ready for delivery, the Issuers may prepare
and the Trustee shall authenticate temporary Senior Notes. Temporary Senior
Notes shall be substantially in the form of definitive Senior Notes but may have
variations that the Company and the Trustee consider appropriate for temporary
Senior Notes. Without unreasonable delay, the Issuers shall prepare and the
Trustee, upon receipt of the written order of the Company signed by an Officer
of each of the General Partner, on behalf of the Company (or the Company, if the
Company is a corporation), and Capital Corp., shall authenticate definitive
Senior Notes in exchange for temporary Senior Notes. Until such exchange,
temporary Senior Notes shall be entitled to the same rights, benefits and
privileges as definitive Senior Notes.
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Section 2.11. Cancellation.
The Issuers at any time may deliver Senior Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Senior Notes surrendered to them for registration of transfer, exchange or
payment. The Trustee shall cancel all Senior Notes surrendered for registration
of transfer, exchange, payment, replacement or cancellation and shall destroy
cancelled Senior Notes (subject to the record retention requirement of the
Exchange Act), unless the Company directs that cancelled Senior Notes be
returned to it. The Issuers may not issue new Senior Notes to replace Senior
Notes that it has redeemed or paid or that have been delivered to the Trustee
for cancellation. All cancelled Senior Notes held by the Trustee shall be
destroyed and certification of their destruction delivered to the Issuers,
unless by a written order, signed by an Officer of each of the General Partner,
on behalf of the Company (or the Company, if the Company is a corporation), and
Capital Corp., the Issuers shall direct that cancelled Senior Notes be returned
to it.
Section 2.12. Defaulted Interest.
If the Issuers default in a payment of interest on the Senior Notes, they
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders of the Senior Notes on a subsequent special record date, which date
shall be at the earliest practicable date but in all events at least five
Business Days prior to the payment date, in each case at the rate provided in
the Senior Notes and in Section 4.01 hereof. The Issuers shall, with the
consent of the Trustee, fix or cause to be fixed each such special record date
and payment date. At least 15 days before the special record date, the Issuers
(or the Trustee, in the name of and at the expense of the Issuers) shall mail to
Holders of the Senior Notes a notice that states the special record date, the
related payment date and the amount of such interest to be paid.
Section 2.13. Record Date.
The record date for purposes of determining the identity of Holders of the
Senior 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 TIA (S) 316(c).
Section 2.14. CUSIP Number.
The Company in issuing the Senior Notes may use a "CUSIP" number and, if it
does so, the Trustee shall use the CUSIP number in notices of redemption 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 Senior Notes and that reliance may be
placed only on the other identification numbers printed on the Senior Notes.
The Issuers shall promptly notify the Trustee of any change in the CUSIP number.
ARTICLE 3
REDEMPTION
Section 3.01. Notices to Trustee.
If the Issuers elect to redeem Senior Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, they shall furnish to the Trustee,
at least 45 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the Section of this Indenture pursuant
to which
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the redemption shall occur, (ii) the redemption date, (iii) the principal amount
of Senior Notes to be redeemed and (iv) the redemption price.
Section 3.02. Selection of Senior Notes to Be Redeemed.
If less than all of the Senior Notes are to be redeemed at any time,
selection of Senior Notes for redemption shall be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which the Senior Notes are listed, or, if the Senior Notes are not so
listed, on a pro rata basis, by lot or by such method as the Trustee shall deem
fair and appropriate, provided that no Senior Notes 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
Senior Notes to be redeemed at its registered address. If any Senior Note is to
be redeemed in part only, the notice of redemption that relates to such Senior
Note shall state the portion of the principal amount thereof to be redeemed. A
new Senior 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 Senior Note. On and after the redemption date, interest ceases to
accrue on Senior Notes or portions of them called for redemption unless the
Issuers default in making such redemption payment.
The Trustee shall promptly notify the Issuers in writing of the Senior Notes
selected for redemption and, in the case of any Senior Note selected for partial
redemption, the principal amount thereof to be redeemed. Senior Notes and
portions of them selected shall be in amounts of $1,000 or whole multiples of
$1,000; except that if all of the Senior Notes of a Holder are to be redeemed,
the entire outstanding amount of Senior Notes held by such Holder, even if not a
multiple of $1,000, shall be redeemed. Except as provided in the preceding
sentence, provisions of this Indenture that apply to Senior Notes called for
redemption also apply to portions of Senior Notes called for redemption.
Section 3.03. Notice of Redemption.
Subject to the provisions of Section 3.09 hereof, at least 30 days but not
more than 60 days before a redemption date, the Issuers shall mail or cause to
be mailed, by first class mail, a notice of redemption to each Holder whose
Senior Notes are to be redeemed at its registered address.
The notice shall identify the Senior Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Senior Note is being redeemed in part, the portion of the
principal amount of such Senior Note to be redeemed and that, after the
redemption date upon surrender of such Senior Note, a new Senior Note or
Senior Notes in principal amount equal to the unredeemed portion shall be
issued;
(d) the name and address of the Paying Agent;
(e) that Senior Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
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(f) that, unless the Issuers default in making such redemption payment,
interest on Senior Notes called for redemption ceases to accrue on and after
the redemption date;
(g) the paragraph of the Senior Notes and/or Section of this Indenture
pursuant to which the Senior Notes called for redemption are being redeemed;
and
(h) that no representation is made as to the correctness or accuracy of
the CUSIP number, if any, listed in such notice or printed on the Senior
Notes.
At the Issuers' request, the Trustee shall give the notice of redemption in
the name of the Issuers and at their expense; provided that the Issuers shall
have delivered to the Trustee, at least 45 days prior to the redemption date, an
Officers' Certificate requesting that the Trustee give such notice and setting
forth the information to be stated in such notice as provided in the preceding
paragraph.
Section 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03 hereof,
Senior Notes called for redemption become due and payable on the redemption date
at the redemption price.
Section 3.05. Deposit of Redemption Price.
One Business Day prior to the redemption date, the Issuers shall deposit with
the Trustee or with the Paying Agent money sufficient to pay the redemption
price of and accrued interest on all Senior Notes to be redeemed on that date.
The Trustee or the Paying Agent shall promptly return to the Issuers any money
deposited with the Trustee or the Paying Agent by the Issuers in excess of the
amounts necessary to pay the redemption price of, and accrued interest on, all
Senior Notes to be redeemed.
On and after the redemption date, interest shall cease to accrue on the
Senior Notes or the portions of Senior Notes called for redemption. If a Senior
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 shall be
paid to the Person in whose name such Senior Note was registered at the close of
business on such record date. If any Senior Note called for redemption shall
not be so paid upon surrender for redemption because of the failure of the
Issuers to comply with the preceding paragraph, interest shall be paid on the
unpaid principal, from the redemption date until such principal is paid, and to
the extent lawful on any interest not paid on such unpaid principal, in each
case at the rate provided in the Senior Notes and in Section 4.01 hereof.
Section 3.06. Senior Notes Redeemed in Part.
Upon surrender of a Senior Note that is redeemed in part, the Issuers shall
issue and the Trustee shall authenticate for the Holder of the Senior Notes at
the expense of the Issuers a new Senior Note equal in principal amount to the
unredeemed portion of the Senior Note surrendered.
Section 3.07. Optional Redemption.
(a) The Senior Notes shall not be redeemable at the Issuers' option prior to
__________, 2000. Thereafter, the Senior Notes shall be subject to redemption
at the option of the Issuers, in whole or in part, upon not less than 30 nor
more than 60 days' notice, in cash at the redemption prices (expressed as
percentages of principal amount) set forth below, plus accrued and unpaid
interest, if any, thereon to the
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applicable redemption date, if redeemed during
the twelve-month period beginning on __________ of the years indicated below:
Redemption
Year Price
---- ----------
2000..................................... %
2001..................................... %
2002 and thereafter...................... 100.000%
(b) Notwithstanding the foregoing, during the first 36 months after the date
of this Prospectus, the Issuers may on any one or more occasions redeem up to
35% of the initially outstanding aggregate principal amount of Senior Notes at a
redemption price equal to ___% of the principal amount thereof, plus accrued and
unpaid interest, if any, thereon to the redemption date, with the net proceeds
of one or more equity offerings of the Issuers generating in each case net
proceeds of at least $15.0 million; provided that at least 65% of the initially
outstanding aggregate principal amount of Senior Notes remains outstanding
immediately after the occurrence of any such redemption; and provided, further,
that such redemption shall occur within 60 days of the date of the closing of
any such equity offering of the Issuers.
Section 3.08. Mandatory Redemption.
Except as set forth under Sections 4.10 and 4.18 of this Indenture, the
Issuers shall not be required to make mandatory redemption or sinking fund
payments with respect to the Senior Notes.
Section 3.09. Offer to Purchase by Application of Excess Proceeds.
In the event that, pursuant to Section 4.10 hereof, the Company shall
commence an Asset Sale Offer, it shall follow the procedures specified below:
The Asset Sale Offer shall remain open for a period of 20 Business Days
following its commencement and no longer, except to the extent that a longer
period is required by applicable law (the "Offer Period"). No later than five
Business Days after the termination of the Offer Period (the "Purchase Date"),
the Company shall purchase the Offer Amount or, if less than the Offer Amount
has been tendered, all Senior Notes tendered in response to the Asset Sale
Offer.
If the Purchase Date is on or after an interest record date and on or before
the related interest payment date, any accrued interest shall be paid to the
Person in whose name a Senior Note is registered at the close of business on
such record date, and no additional interest shall be payable to Holders who
tender Senior Notes pursuant to the Asset Sale Offer.
Upon the commencement of any Asset Sale Offer, the Company shall send, by
first class mail, a notice to the Trustee and each of the Holders of the Senior
Notes, with a copy to the Trustee. The notice shall contain all instructions
and materials necessary to enable such Holders to tender Senior Notes pursuant
to the Asset Sale Offer. The notice, which shall govern the terms of the Asset
Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section
3.09 and Section 4.10 and the length of time the Asset Sale Offer shall
remain open;
(b) the Offer Amount, the purchase price pursuant to Section 4.10 and
the Purchase Date;
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(c) that any Senior Note not tendered or accepted for payment shall
continue to accrue interest;
(d) that any Senior Note accepted for payment pursuant to the Asset
Sale Offer shall cease to accrue interest after the Purchase Date unless the
Company defaults in making such payment;
(e) that Holders electing to have a Senior Note purchased pursuant to
any Asset Sale Offer shall be required to surrender the Senior Note, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Senior Note completed, to the Company, a depositary, if appointed by the
Company, or a Paying Agent at the address specified in the notice at least
three days before the Purchase Date;
(f) that Holders shall be entitled to withdraw their election if the
Company, depositary or Paying Agent, as the case may be, receives, not later
than the expiration of the Offer Period, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Senior Note the Holder delivered for purchase and a statement
that such Holder is withdrawing his election to have the Senior Note
purchased;
(g) that, if the aggregate principal amount of Senior Notes surrendered
by Holders exceeds the Offer Amount, the Company shall select the Senior
Notes to be purchased on a pro rata basis (with such adjustments as may be
deemed appropriate by the Company so that only Senior Notes in denominations
of $1,000, or integral multiples thereof, shall be purchased); and
(h) that Holders whose Senior Notes were purchased only in part shall
be issued new Senior Notes equal in principal amount to the unpurchased
portion of the Senior Notes surrendered.
On or before the Purchase Date, the Company shall, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Senior Notes or portions thereof tendered pursuant to the Asset Sale
Offer, or if less than the Offer Amount has been tendered, all Senior Notes or
portions thereof tendered, and deliver to the Trustee an Officers' Certificate
stating that such Senior Notes or portions thereof were accepted for payment by
the Company in accordance with the terms of this Section 3.09. The Company,
depository or Paying Agent, as the case may be, shall promptly (but in any case
not later than five days after the Purchase Date) mail or deliver to each
tendering Holder an amount equal to the purchase price of the Senior Note
tendered by such Holder and accepted by the Company for purchase, and the
Company shall promptly issue a new Senior Note, and the Trustee shall
authenticate and mail or deliver such new Senior Note to such Holder equal in
principal amount to any unpurchased portion of the Senior Note surrendered. Any
Senior Note not so accepted shall be promptly mailed or delivered by the Company
to the Holder thereof. The Company shall publicly announce the results of the
Asset Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
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ARTICLE 4
COVENANTS
Section 4.01. Payment of Senior Notes.
The Issuers shall pay or cause to be paid the principal of, premium, if any,
and interest on the Senior Notes on the dates and in the manner provided in the
Senior Notes. Principal, premium, if any, and interest shall be considered paid
on the date due if the Paying Agent, if other than the Issuers, holds as of
10:00 a.m. Eastern Time on the due date money deposited by the Issuers in
immediately available funds and designated for and sufficient to pay all
principal, premium, if any, and interest then due.
The Issuers shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
the then applicable interest rate on the Senior Notes to the extent lawful; it
shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace period) at the same rate to the extent lawful.
Section 4.02. Maintenance of Office or Agency.
The Issuers shall maintain in the Borough of Manhattan, the City of New York,
an office or agency (which may be an office of the Trustee or an affiliate of
the Trustee, Registrar or co-registrar) where Senior Notes may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Senior Notes and this Indenture may be
served. The Issuers shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Issuers shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.
The Issuers may also from time to time designate one or more other offices or
agencies where the Senior Notes may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided that
no such designation or rescission shall in any manner relieve the Issuers of
their obligation to maintain an office or agency in the Borough of Manhattan,
the City of New York for such purposes. The Issuers shall give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency.
The Issuers hereby designate the Corporate Trust Office of the Trustee as one
such office or agency of the Issuers in accordance with Section 2.03.
Section 4.03. Reports.
(a) So long as any of the Senior Notes remain outstanding, the Issuers are
shall submit copies of all quarterly and annual financial reports and of the
information, documents, and other reports (or copies of such portions of any of
the foregoing as the Commission may by rules and regulations prescribe) which
the Issuers are required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act to be filed with the Trustee and mailed to the Holders
at their addresses appearing in the register of Senior Notes maintained by the
Registrar, in each case, within 15 days of filing with the Commission. If the
Issuers are not subject to the requirements of such Section 13 or 15(d) of the
Exchange Act, the Issuers are shall nevertheless continue to submit the annual
and quarterly financial statements, including any notes thereto (and, with
respect to annual reports, an auditors' report by an accounting firm of
established national reputation) and a "Management's Discussion and Analysis of
Financial Condition and Results of
23
Operations," comparable to that which would have been required to appear in
annual or quarterly reports filed under Section 13 or 15(d) of the Exchange Act
to be so filed with the Commission for public availability and the Trustee and
mailed to the Holders within 120 days after the end of the Issuers' fiscal years
and within 60 days after the end of each of the first three quarters of each
such fiscal year. The Issuers shall make such information available to
securities analysts and prospective investors upon request. The Issuers shall
also comply with the provisions of TIA (S) 314(a).
(b) The Issuers 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 of the Senior Notes under this Section 4.03.
Section 4.04. Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 120 days after the end
of each fiscal year, 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 each 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 each entity
has kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Indenture (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 each is taking 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 or interest, if any, on the Senior Notes
is prohibited or if such event has occurred, a description of the event and what
action each is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03 above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention which would lead them to believe that the Company has violated
any provisions of Sections 4.01, 4.05, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13,
4.14, 4.15, 4.16, 4.17, 4.18, 4.19 or 4.21 hereof or Article 5 of this Indenture
or, if any such violation has occurred, specifying the nature and period of
existence thereof, it being understood that such accountants shall not be liable
directly or indirectly to any Person for any failure to obtain knowledge of any
such violation.
(c) Each Issuer shall, so long as any of the Senior Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of (i) any
Default or Event of Default or (ii) any event of default under any Indebtedness
referred to in Section 6.01(d) hereof, an Officers' Certificate specifying such
Default, Event of Default or default and what action the Issuers are taking or
proposes to take with respect thereto.
Section 4.05. Taxes.
Each Issuer shall pay, and shall cause each of its Subsidiaries to pay, prior
to delinquency, all material taxes, assessments, and governmental levies except
as contested in good faith and by appropriate
24
proceedings or where the failure to effect such payment is not adverse in any
material respect to the Holders of the Senior Notes.
Section 4.06. Stay, Extension and Usury Laws.
Each Issuer covenants (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the covenants or
the performance of this Indenture; and each Issuer (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it shall not, by resort to any such law, hinder, delay
or impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law has
been enacted.
Section 4.07. 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 distribution on account of the Company's or any of its Restricted
Subsidiaries' Equity Interests (including, without limitation, any such
distribution by such Persons in connection with any merger or consolidation
involving the Company or Capital Corp. but excluding any such distribution
directly relating to the reorganization of the Company as a corporation)(other
than dividends or distributions payable in Equity Interests (other than
Disqualified Interests) of the Company or dividends or distributions payable to
the Company or any Wholly Owned Restricted Subsidiary of the Company); (ii)
purchase, redeem or otherwise acquire or retire for value any Equity Interests
of the Company or any direct or indirect parent of the Company; (iii) make any
principal payment on, or purchase, redeem, defease or otherwise acquire or
retire for value any Subordinated Indebtedness, except at final maturity; 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 would occur as a consequence thereof; and
(B) the Company would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been made
at the beginning of the most recently ended four fiscal quarters for which
financial statements are available, have been permitted to incur at least
$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio
test set forth in Section 4.09(a) hereof; and
(C) 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), (iv), (vi) and (vii) of Section 4.07(b) hereof), is less than
the sum of (1) 50% of the Consolidated Net Income 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 (or, if such
Consolidated Net Income for such period is a deficit, less 100% of such
deficit), plus (2) 100% of the aggregate net cash proceeds received by the
Company from the issuance 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
25
other than Disqualified Interests or debt securities that have been converted
into Disqualified Interests), plus (3) 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 lesser of (x) the cash return of capital
with respect to such Restricted Investment (less the cost of disposition, if
any) and (y) the initial amount of such Restricted Investment.
(b) The foregoing provisions shall not prohibit (i) the payment of any
dividend or distribution within 60 days after the date of declaration thereof,
if at said date of declaration such payment would have complied with the
provisions hereof; (ii) the redemption, repurchase, retirement or other
acquisition of any Equity Interests of the Company in exchange for, or out of
the proceeds of, the substantially concurrent sale (other than to a Subsidiary
of the Company) of other Equity Interests of the Company (other than any
Disqualified Interests); 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 clause (C)(2) of Section 4.07(a) hereof;
(iii) the defeasance, redemption or repurchase of Subordinated Indebtedness with
the net cash proceeds from an incurrence of Permitted Refinancing Indebtedness
or the substantially concurrent sale (other than to a Subsidiary of the Company)
of Equity Interests of the Company (other than Disqualified Interests); 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
clause (C)(2) of Section 4.07(a) hereof; (iv) distributions not more frequently
than quarterly in accordance with the Code in respect of partners' income tax
liability in an amount not to exceed the Tax Amount; (v) the repurchase,
redemption or other acquisition or retirement for value of any Equity Interests
of the Company or any Restricted Subsidiary of the Company held by any member of
the Company's (or any of its Restricted Subsidiaries') management pursuant to
the Partnership Agreement or any management equity subscription agreement or
stock option agreement in effect as of the date hereof or any successor
arrangement entered into in connection with the reorganization of the Company as
a corporation (provided that such successor arrangement is on terms
substantially similar to those of the arrangement so replaced); provided that
the aggregate price paid for all such repurchased, redeemed, acquired or retired
Equity Interests shall not exceed $500,000 in each twelve-month period, plus the
amount of any such amounts which remain unused at the end of the two prior
twelve-month periods, but in no event shall such aggregate amount exceed $1.5
million in any such 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; (vi) prior to the
reorganization of the Company as a corporation, distributions or payments to
partners of the Company in an aggregate amount not to exceed $750,000 in any
fiscal year in respect of Administrative Expenses; and (vii) following the
reorganization of the Company as a corporation, (A) payments by the Company to
its parent pursuant to any tax sharing agreement between the Company and such
parent, (B) reimbursement payments by the Company to such parent in respect of
out-of-pocket insurance payments made by such parent on behalf of the Company
and its Restricted Subsidiaries and (C) payments by the Company to such parent
in respect of Administrative Expenses.
(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 shall be deemed to be Restricted Payments at the
time of such designation and shall reduce the amount available for Restricted
Payments under the first paragraph of this covenant. All such outstanding
Investments shall be deemed to constitute Investments in an amount equal to
the fair market value of such Investments at the time of such
designation.
26
Such designation shall 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.
(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 the date of making any Restricted Payment, 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
Section 4.07(a) hereof were computed, which calculations may be based upon the
Issuers' latest available financial statements.
Section 4.08. 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 (a)(i) pay dividends or make any other distributions to
the Company or any of its Restricted Subsidiaries (A) on their Capital Interests
or (B) with respect to any other interest or participation in, or measured by,
its profits, or (ii) pay any Indebtedness owed to the Company or any of its
Restricted Subsidiaries, (b) make loans or advances to the Company or any of its
Restricted Subsidiaries or (c) transfer any of its properties or assets to the
Company or any of its Restricted Subsidiaries, except for such encumbrances or
restrictions existing under or by reason of (i) Existing Indebtedness as in
effect on the date hereof, (ii) any credit facility or Foreign Credit Facility,
provided that any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings thereto are no more
restrictive with respect to such dividend and other payment restrictions than
those contained in such Credit Facility as in effect on the date of its
execution, (iii) the Indenture and the Senior Notes, (iv) applicable law, (v) by
reason of customary non-assignment provisions in leases entered into in the
ordinary course of business and consistent with past practices, (vi) Capital
Lease Obligations, mortgage financings or purchase money obligations for
property acquired in the ordinary course of business that impose restrictions of
the nature described in clause (c) above on the property so acquired, (vii)
existing with respect to any Person or the property or assets of such Person
acquired by the Company or any of its Restricted Subsidiaries, at the time of
such acquisition and not incurred in contemplation thereof, which encumbrances
or restrictions are not applicable to any Person or the property or assets of
any Person other than such Person or the property or assets of such Person so
acquired, or (viii) Permitted Refinancing Indebtedness, provided that the
restrictions contained in the agreements governing such Permitted Refinancing
Indebtedness are no more restrictive than those contained in the agreements
governing the Indebtedness being refinanced.
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock.
(a) The Company shall not, and shall not permit any of its 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 the
Company shall not issue any Disqualified Interests and shall not permit any of
its Subsidiaries to issue any shares of preferred stock or preferred partnership
interests; provided that the Company and any of its Restricted Subsidiaries that
is a Guarantor may incur Indebtedness (including Acquired Debt) or issue
Disqualified Interests, if the Fixed Charge Coverage Ratio for the Company's
most recently ended four
27
full fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is incurred
or such Disqualified Interests are issued would have been at least (a) 2.0 to 1,
on or prior to December 31, 1998, and (b) 2.25 to 1, 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 Interests had been issued, as the case may be, at the beginning of
such four-quarter period.
(b) The foregoing provisions shall not apply to:
(i) the incurrence by the Company and any of its Restricted Subsidiaries
that is a Guarantor of Senior Revolving Debt and letters of credit pursuant
to any Credit Facility for working capital purposes (with letters of credit
being deemed to have a principal amount equal to the maximum potential
liability of the Company thereunder) in an aggregate principal amount not to
exceed the amount of the Borrowing Base;
(ii) the incurrence by the Company and its Restricted Subsidiaries of the
Existing Indebtedness and the Company's Class C-1 Limited Partner Interest
outstanding as of the date hereof and any conversion of such interest in
accordance with the terms of the Partnership Agreement;
(iii) the incurrence by the Company and Capital Corp. of the Indebtedness
represented by the Senior Notes and the incurrence by any Guarantor of the
Indebtedness represented by its Subsidiary Guarantee;
(iv) the incurrence by the Company and any of its Restricted Subsidiaries
that is a Guarantor of Permitted Refinancing Indebtedness in exchange for, or
the net proceeds of which are used to extend, refinance, renew, replace,
defease or refund, Indebtedness that was permitted hereby to be incurred;
(v) the incurrence by the Company or any of its Restricted Subsidiaries of
intercompany Indebtedness between or among the Company and any of its Wholly
Owned Restricted Subsidiaries; provided that (A) any subsequent issuance or
transfer of Equity Interests that results in any such Indebtedness being held
by a Person other than a Wholly Owned Restricted Subsidiary and (B) any sale
or other transfer of any such Indebtedness to a Person that is not either the
Company or a Wholly Owned Restricted Subsidiary shall be deemed, in each
case, to constitute an incurrence of such Indebtedness by the Company or such
Restricted Subsidiary, as the case may be;
(vi) the incurrence by the Company and any of its Restricted Subsidiaries
that is a Guarantor of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case incurred for
the purpose of financing up to 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 $2.0 million at any time outstanding;
(vii) the incurrence by the Company and any of its Restricted
Subsidiaries that is a Guarantor of Hedging Obligations that are incurred for
the purpose of fixing or hedging interest rate risk with respect to any
floating rate Indebtedness that is permitted by the terms of this Indenture
to be outstanding;
28
(viii) the incurrence by the Company and any of its Restricted
Subsidiaries that is a Guarantor of statutory obligations, surety or appeal
bonds, performance bonds or other obligations of a like nature incurred in
the ordinary course of business;
(ix) the incurrence by the Foreign Restricted Subsidiaries of the Company
of Indebtedness in an aggregate amount not to exceed $3.0 million at any time
outstanding;
(x) the incurrence by the Company and any of its Restricted Subsidiaries
that is a Guarantor of Indebtedness not otherwise permitted hereunder in an
aggregate amount not to exceed $5.0 million at any time outstanding, less the
aggregate principal amount of any Indebtedness incurred pursuant to clause
(ix) of this paragraph; and
(xi) the incurrence by the Company's Unrestricted Subsidiaries of Non-
Recourse Debt, provided that, if any such Indebtedness ceases to be Non-
Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to
constitute an incurrence of Indebtedness by a Restricted Subsidiary of the
Company.
Section 4.10. Asset Sales.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in an Asset Sale, unless (a) 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 set forth in an Officers' Certificate
delivered to the Trustee) of the assets or Equity Interests issued or sold or
otherwise disposed of and (b) at least 75% of the consideration therefor
received by the Company or such Restricted Subsidiary is in the form of cash or
Cash Equivalents; provided that the amount of (i) 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 Senior Notes or any
guarantee thereof) that are assumed by the transferee of any such assets and
(ii) any notes or other obligations received by the Company or any such
Restricted Subsidiary from such transferee that are promptly converted by the
Company or such Restricted Subsidiary into cash (to the extent of the cash
received), shall be deemed to be cash for purposes of this provision; and
provided, further, that the limitation in clause (b) above shall not apply to
any Asset Sale in which the cash portion of the consideration received therefor,
determined in accordance with foregoing proviso, is equal to or greater than
what the after-tax net proceeds would have been had such Asset Sale complied
with the aforementioned limitation.
(b) Within 360 days after the receipt of any Net Proceeds from an Asset Sale,
the Issuers may apply such Net Proceeds (a) to permanently reduce Pari Passu
Indebtedness, (b) to permanently reduce Indebtedness permitted to be incurred
pursuant to Section 4.09(b)(i) hereof or (c) to an investment in another
business, the making of a capital expenditure or the acquisition of other
tangible assets, in each case, in the same or a similar or related line of
business as the Issuers were engaged in on the date hereof. Pending the final
application of any such Net Proceeds, the Company and its Restricted
Subsidiaries may temporarily reduce Senior Revolving Debt or otherwise invest
such Net Proceeds in any manner that is not prohibited hereby. Any Net Proceeds
from Asset Sales that are not applied or invested as provided in the first
sentence of this paragraph shall be deemed to constitute "Excess Proceeds." When
the aggregate amount of Excess Proceeds exceeds $10.0 million, the Company shall
be required to make an offer to all holders of Senior Notes (an "Asset Sale
Offer") to purchase the maximum principal amount of Senior Notes that may be
purchased out of the Excess Proceeds (the "Offer Amount"), at an offer price in
cash in an amount equal to 101% of the principal amount thereof, plus accrued
and unpaid interest thereon to the date of purchase
29
(the "Asset Sale Offer Price"), in accordance with the procedures set forth
herein. To the extent that the aggregate amount of Senior Notes tendered
pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company
and its Restricted Subsidiaries may use any remaining Excess Proceeds for
general corporate purposes. If the aggregate principal amount of Senior Notes
surrendered by holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Senior Notes to be purchased on a pro rata basis. Upon
completion of such offer to purchase, the amount of Excess Proceeds shall be
reset at zero.
Section 4.11. Transactions with Affiliates.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, 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 any contract, agreement, understanding, loan, advance or guarantee with,
or for the benefit of, any Affiliate (each of the foregoing, an "Affiliate
Transaction"), unless (a) such Affiliate Transaction is on terms that are no
less favorable to the Company or the relevant Restricted Subsidiary than those
that would have been obtained in a comparable transaction by the Company or such
Restricted Subsidiary with an unrelated Person and (b) the Company delivers to
the Trustee (i) with respect to any Affiliate Transaction involving aggregate
consideration in excess of $1.0 million, a resolution of the Board of Directors
set forth in an Officers' Certificate certifying that such Affiliate Transaction
complies with clause (a) above and that such Affiliate Transaction has been
approved by a majority of the disinterested members of the Board of Directors
and (ii) with respect to any Affiliate Transaction involving aggregate
consideration in excess of $7.5 million, an opinion as to the fairness to the
Company or such Restricted Subsidiary of such Affiliate Transaction from a
financial point of view issued by a nationally-recognized investment banking
firm; provided that (A) any reasonable employment arrangement entered into by
the Company or any of its Restricted Subsidiaries in the ordinary course of
business of the Company or such Restricted Subsidiary, (B) transactions between
or among the Company and/or its Restricted Subsidiaries, (C) following the
reorganization of the Company as a corporation, the payment of reasonable fees,
expense reimbursement and customary indemnification and other similar
arrangements to directors of the Company, (D) reasonable loans or advances to
employees of the Company and its Restricted Subsidiaries in the ordinary course
of business and (E) transactions permitted by Section 4.07 hereof, in each case,
shall not be deemed to be Affiliate Transactions.
Section 4.12. Liens.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist or
become effective any Lien of any kind (other than Permitted Liens) upon any of
their property or assets, now owned or hereafter acquired, unless all payments
due under this Indenture and the Senior Notes and the Subsidiary Guarantees, if
any, 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 4.13. Sale and Leaseback Transactions
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, enter into any sale and leaseback transaction; provided that
the Company and any of its Restricted Subsidiaries that is a Guarantor may enter
into a sale and leaseback transaction if (a) the Company or such Restricted
Subsidiary could have (i) incurred Indebtedness in an amount equal to the
Attributable Debt relating to such sale and leaseback transaction pursuant to
Section 4.09 hereof and (ii) incurred a Lien to secure such Indebtedness
pursuant to Section 4.12 hereof, (b) the gross cash proceeds of such sale and
leaseback transaction are at least equal to the fair market value (as determined
in good faith by the Board of Directors and set forth in an Officers'
Certificate delivered to the Trustee) of the property that is the subject of
such sale and
30
leaseback transaction and (c) the transfer of assets in such sale and leaseback
transaction is permitted by, and the Company or such Restricted Subsidiary
applies the proceeds of such transaction in compliance with, Section 4.10
hereof.
Section 4.14. Limitation on Issuances and Sales of Capital Interests of Wholly
Owned Subsidiaries
The Company (a) shall not, and shall not permit any Wholly Owned Restricted
Subsidiary of the Company to, transfer, convey, sell, lease or otherwise dispose
of any Capital Interests of any Wholly Owned Restricted Subsidiary of the
Company to any Person (other than the Company or a Wholly Owned Restricted
Subsidiary of the Company), unless (i) such transfer, conveyance, sale, lease or
other disposition is of all the Capital Interests of such Wholly Owned
Restricted Subsidiary and (ii) the cash Net Proceeds from such transfer,
conveyance, sale, lease or other disposition are applied in accordance with
Section 4.10 hereof, and (b) shall not permit any Wholly Owned Restricted
Subsidiary of the Company to issue any of its Equity Interests (other than, if
necessary, Capital Interests constituting directors' qualifying shares or
interests) to any Person other than to the Company or a Wholly Owned Restricted
Subsidiary of the Company; provided that, notwithstanding the foregoing, Capital
Corp. shall, at all times prior to the reorganization of the Company as a
corporation, remain a Wholly Owned Restricted Subsidiary of the Company.
Section 4.15. Limitations on Issuances of Guarantees of Indebtedness
The Company shall not permit any Restricted Subsidiary, directly or
indirectly, to Guarantee or secure the payment of any other Indebtedness, unless
such Restricted Subsidiary simultaneously executes and delivers a supplemental
indenture to this Indenture providing for the Guarantee of the payment of the
Senior Notes by such Restricted Subsidiary, which Guarantee shall be senior to
or pari passu with such Restricted Subsidiary's Guarantee of, or pledge to
secure, such other Indebtedness. Notwithstanding the foregoing, any such
Guarantee by a Restricted Subsidiary of the Senior Notes shall provide by its
terms that it shall be automatically and unconditionally released and discharged
upon either (a) the release or discharge of such Guarantee of such Indebtedness,
except a discharge by or as a result of payment under such Guarantee, or (b) any
sale, exchange or transfer, to any Person not an Affiliate of the Company, of
all of the Company's Capital Interests in, or all or substantially all the
assets of, such Restricted Subsidiary, which sale, exchange or transfer is made
in compliance with the applicable provisions hereof. The form of such Guarantee
is attached as Exhibit B hereto.
Section 4.16. Subsidiary Guarantees
If the Company or any of its Restricted Subsidiaries shall, after the date
hereof, (a) transfer or cause to be transferred, in one or a series of
transactions (whether or not related), any assets, businesses, divisions, real
property or equipment having an aggregate fair market value (as determined in
good faith by the Board of Directors) in excess of $1.0 million to any Domestic
Subsidiary that is not a Guarantor, (b) acquire another Domestic Subsidiary
having total assets with a fair market value (as determined in good faith by the
Board of Directors) in excess of $1.0 million or (c) redesignate an Unrestricted
Subsidiary that is a Domestic Subsidiary as a Restricted Subsidiary having
total assets with a fair market value (as determined in good faith by the Board
of Directors) in excess of $1.0 million, then such transferee or acquired or
redesignated Subsidiary shall execute a guarantee of the Senior Notes in the
form attached hereto as Exhibit B (each, a "Subsidiary Guarantee") and a
supplemental indenture in the form attached hereto as Exhibit C and deliver an
Opinion of Counsel, in accordance with the terms hereof; provided that the
foregoing shall not apply to any Subsidiary that has been properly designated as
an Unrestricted
31
Subsidiary in accordance herewith for so long as such Subsidiary continues to
constitute an Unrestricted Subsidiary.
Section 4.17. Line of Business.
The Company shall not, and shall not permit any Subsidiary to, engage in any
business, other than such business activities as the Company or its Subsidiaries
are engaged in on the date hereof and such business activities similar or
reasonably related thereto.
Section 4.18. Offer to Repurchase Upon Change of Control
(a) Upon the occurrence of a Change of Control, each holder of Senior Notes
shall have the right to require the Issuers to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of such holder's Senior Notes
pursuant to the offer described below (the "Change of Control Offer") at an
offer price in cash equal to 101% of the aggregate principal amount thereof,
plus accrued and unpaid interest, if any, thereon to the date of purchase (the
"Change of Control Payment"). Within ten days following any Change of Control,
the Issuers shall mail a notice to each holder describing the transaction or
transactions that constitute the Change of Control and offering to repurchase
Senior Notes pursuant to the procedures required hereby and described in such
notice. The Issuers 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 Senior Notes as a result of a Change of Control.
(b) On the payment date set forth in the Change of Control Offer (the "Change
of Control Payment Date"), the Issuers shall, to the extent lawful, (i) accept
for payment all Senior Notes or portions thereof properly tendered pursuant to
the Change of Control Offer, (ii) deposit with the Paying Agent an amount equal
to the Change of Control Payment in respect of all Senior Notes or portions
thereof so tendered and (iii) deliver or cause to be delivered to the Trustee
the Senior Notes so accepted together with an Officers' Certificate stating the
aggregate principal amount of Senior Notes or portions thereof being purchased
by the Issuers. The Paying Agent shall promptly mail to each holder of Senior
Notes so tendered the Change of Control Payment for such Senior Notes, and the
Trustee shall promptly authenticate and mail (or cause to be transferred by book
entry) to each holder a new Senior Note equal in principal amount to any
unpurchased portion of the Senior Notes surrendered, if any; provided that each
such new Senior Note shall be in a principal amount of $1,000 or an integral
multiple thereof. The Issuers shall publicly announce the results of the Change
of Control Offer on or as soon as practicable after the Change of Control
Payment Date.
Section 4.19. Corporate Existence.
Subject to Article 5 hereof, each Issuer shall do or cause to be done all
things necessary to preserve and keep in full force and effect (i) its
partnership or corporate existence, and the corporate, partnership or other
existence of any Subsidiary, in accordance with the respective organizational
documents (as the same may be amended from time to time) of such Issuer or any
such Subsidiary and (ii) their rights (charter and statutory), licenses and
franchises; provided that the Issuers shall not be required to preserve any such
right, license or franchise, or the corporate, partnership or other existence of
any Subsidiary, if the Board of Directors of each of the General Partner, on
behalf of the Company (or the Company, if the Company is a corporation), and
Capital Corp. shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Issuers and their respective
Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any
material respect to the Holders of the Senior Notes and provided, further, that
following the reorganization of the Company as a corporation, Capital Corp. may
be merged into or consolidated with the Company.
32
Section 4.20. Reorganization of the Company as a Partnership
Notwithstanding anything else contained in the Senior Notes or this
Indenture, the Company is permitted to reorganize as a corporation, provided
that:
(a) the successor or surviving corporation is organized and existing under
the laws of the United States, any state thereof or the District of Columbia;
(b) such reorganization is not materially adverse to Holders of the Senior
Notes; provided that such reorganization shall not be considered materially
adverse to Holders of the Senior Notes solely because (i) of the accrual of
deferred tax liabilities resulting from such reorganization or (ii) the
successor or surviving corporation (A) is subject to income taxation as an
entity or (B) is considered to be an "includible corporation" of an
affiliated group of corporations within the meaning of Section 1504(a)(1) of
the Code or any similar state or local law;
(c) immediately after giving effect to such transaction, no Default or
Event of Default exists;
(d) the Company's obligations under the Partnership Agreement terminate
prior to such reorganization, unless (i) the successor or surviving
corporation is not a party to the Partnership Agreement and (ii) the
successor or surviving corporation will neither assume nor be subject to, is
not currently, and will never be, liable and/or responsible for any
obligations and/or duties under the Partnership Agreement;
(e) such reorganization itself will not result in a material tax liability
to the successor or surviving corporation; and
(f) the successor or surviving corporation has assumed all obligations of
the Company under the Senior Notes and this Indenture.
The successor or surviving corporation shall execute a supplemental indenture
in a form reasonably satisfactory to the Trustee to the effect set forth in
paragraph (f) above. The Issuers shall deliver to the Trustee prior to such
reorganization an Officers' Certificate covering paragraphs (a) through (f)
above and an Opinion of Counsel covering paragraphs (a), (c), (d), (e) and (f)
above (in the case of paragraph (c), to such counsel's knowledge), stating that
such reorganization and such supplemental indenture and Collateral Documents
comply with this Indenture. The Trustee shall be entitled to conclusively rely
upon such Officers' Certificate and Opinion of Counsel.
Section 4.21. Limitation on Activities of Capital Corp.
In addition to the restrictions set forth under Section 4.09 hereof, Capital
Corp. shall not incur any Indebtedness, unless (a) the Company is a co-obligor
or guarantor of such Indebtedness or (b) the net proceeds of such Indebtedness
are lent to the Company, used to acquire outstanding debt securities issued by
the Company or used directly or indirectly to refinance or discharge
Indebtedness permitted under the limitations of this paragraph. Capital Corp.
shall not acquire or hold any significant assets or other properties or engage
in any business activities, other than those business activities related
directly or indirectly to obtaining money or arranging financing for the
Company.
33
Section 4.22. Payments for Consent.
Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any holder of any Senior Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of the Indenture or the Senior Notes, unless such consideration is offered to be
paid or agreed to be paid to all holders of the Senior Notes that consent, waive
or agree to amend in the time frame set forth in the solicitation documents
relating to such consent, waiver or agreement.
ARTICLE 5
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets
(a) Neither the Company nor Capital Corp. may consolidate or merge with or
into (whether or not the Company or Capital Corp., as the case may be, is the
surviving corporation), 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, unless (i) the
Company or Capital Corp., as the case may be, is the surviving Person or the
entity or the Person formed by or surviving any such consolidation or merger (if
other than the Company or Capital Corp., as the case may be) or to which such
sale, assignment, transfer, lease, conveyance or other disposition shall have
been made is organized and existing under the laws of the United States, any
state thereof or the District of Columbia, provided that Capital Corp. may not
consolidate or merge with or into any entity other than a corporation satisfying
such requirements for so long as the Company remains a partnership; (ii) the
entity or Person formed by or surviving any such consolidation or merger (if
other than the Company or Capital Corp.) or the entity or Person to which such
sale, assignment, transfer, lease, conveyance or other disposition shall have
been made assumes all the obligations of the Issuers under the Senior Notes and
this Indenture pursuant to a supplemental indenture in a form reasonably
satisfactory to the Trustee; (iii) immediately after such transaction no Default
or Event of Default exists; and (iv) the Company, Capital Corp. or the entity or
Person formed by or surviving any such consolidation or merger, or to which such
sale, assignment, transfer, lease, conveyance or other disposition shall have
been made (A) shall have Consolidated Net Worth immediately after the
transaction equal to or greater than the Consolidated Net Worth of the Company
or Capital Corp. immediately preceding the transaction and (B) shall, 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
Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof. Following
the reorganization of the Company as a corporation, the foregoing provision
shall not apply to any consolidation or merger of Capital Corp. with or into the
Company.
(b) The Company shall deliver to the Trustee prior to the consummation of the
proposed transaction an Officers' Certificate to the foregoing effect and an
Opinion of Counsel stating that the proposed transaction and such Supplemental
Indenture comply with this Indenture. The Trustee shall be entitled to
conclusively rely upon such Officers' Certificate and Opinion of Counsel.
Section 5.02. Successor Corporation Substituted.
Upon (a) any consolidation or merger, or any sale, lease, conveyance or other
disposition of all or substantially all of the assets of any Issuer in
accordance with Section 5.01 hereof, or (b) the reorganization of the Company as
a corporation in accordance with Section 4.20 hereof, the successor corporation
formed by such consolidation or into or with which such Issuer is merged or to
which such sale, lease, conveyance
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or other disposition is made, or formed by such reorganization, as the case may
be, shall succeed to, and be substituted for and may exercise every right and
power of such Issuer under this Indenture and the Senior Notes with the same
effect as if such successor Person has been named as such Issuer herein; and it
is contemplated that, if upon a reorganization in accordance with Section 4.20
hereof, or at any time after such reorganization, the successor or surviving
corporation is an includible corporation (other than a common parent) of an
affiliated group of corporations within the meaning of Section 1504(a)(1) of the
Code, a tax sharing agreement shall be entered into consistent with the terms
hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
Each of the following constitutes an "Event of Default":
(a) default by the Issuers for 30 days in the payment when due of interest
on the Senior Notes;
(b) default by the Issuers in the payment of all or any part of the
principal, or premium, if any, on the Senior Notes when and as the same
becomes due and payable at maturity, upon redemption, by acceleration, or
otherwise, including, without limitation, the payment of the Change of
Control Payment or the Asset Sale Offer Price, or otherwise;
(c) failure by any of the Issuers or any of their respective Subsidiaries
to observe or perform any other covenant or agreement on the part of such
Issuer or such Subsidiary contained in the Senior Notes or this Indenture and
the continuance of such failure for a period of 30 days after written notice
is given to the Issuers by the Trustee or to the Issuers and the Trustee by
the holders of at least 25% in aggregate principal amount of the Senior Notes
then outstanding, specifying such default, requiring that it be remedied and
stating that such notice is a "Notice of Default;"
(d) 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) is caused by a failure to
pay principal of or premium, if any, or interest on such Indebtedness prior
to the expiration of the grace period provided in such Indebtedness on the
date of such default (a "Payment Default") or (B) results in the acceleration
of such Indebtedness prior to its express maturity and, in each case, the
principal amount of any such Indebtedness, 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 $5.0 million or
more;
(e) failure by the Company or any of its Subsidiaries to pay one or more
final judgments aggregating in excess of $5.0 million entered by courts of
competent jurisdiction which judgments are not paid, discharged or stayed
within 60 days after their entry;
(f) except as permitted hereby, any Subsidiary Guarantee 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
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or any Guarantor, or any Person acting on behalf of any Guarantor, shall deny
or disaffirm its obligations under its Subsidiary Guarantee;
(g) the Company or any of its Significant Subsidiaries pursuant to or
within the meaning of Bankruptcy Law:
(i) commences a voluntary case;
(ii) consents to the entry of an order for relief against it in an
involuntary case;
(iii) consents to the appointment of a Custodian of it or for all or
substantially all of its property; or
(iv) makes a general assignment for the benefit of its creditors; and
(h) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(i) is for relief against the Company or any Significant Subsidiary of
the Company in an involuntary case;
(ii) appoints a Custodian of the Company or any Significant Subsidiary
of the Company or for all or substantially all of the property of the Company
or any Significant Subsidiary of the Company; or
(iii) orders the liquidation of the Company or any Significant
Subsidiary of the Company,
and the order or decree remains unstayed and in effect for 60 consecutive
days.
The term "Bankruptcy Law" means title 11, U.S. Code or any similar Federal or
state law for the relief of debtors. The term "Custodian" means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy Law.
Section 6.02. Acceleration.
(a) If an Event of Default (other than an Event of Default specified in
clause (g) or (h) of Section 6.01 relating to the Company, any Significant
Subsidiary or any group of Subsidiaries of the Company that, taken together,
would constitute a Significant Subsidiary) occurs and is continuing, the Trustee
by notice to the Issuers, or the Holders of not less than 25% in aggregate
principal amount of the then outstanding Senior Notes by written notice to the
Issuers and the Trustee, may declare the unpaid principal of, premium, if any,
and any accrued and unpaid interest on all the Senior Notes to be due and
payable. Upon such declaration the principal, premium, if any, and interest
shall be due and payable immediately. If an Event of Default specified in
clause (g) or (h) of Section 6.01 occurs relating to the Company, any
Significant Subsidiary or any group of Subsidiaries of the Company that, taken
together,
36
would constitute a Significant Subsidiary, such an amount shall ipso facto
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Holder. The Holders of a majority in
aggregate principal amount of the then outstanding Senior Notes, by written
notice to the Trustee, may on behalf of all of the Holders rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default (except nonpayment of
principal, interest or premium that has become due solely because of the
acceleration) have been cured or waived.
(b) In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Issuers with
the intention of avoiding payment of the premium that the Issuers would have had
to pay if the Issuers then had elected to redeem the Senior Notes pursuant to
Section 3.07 hereof, an equivalent premium shall also become and be immediately
due and payable to the extent permitted by law upon acceleration of the Senior
Notes. If an Event of Default occurs prior to __________, 2000 by reason of any
willful action (or inaction) taken (or not taken) by or on behalf of the Issuers
with the intention of avoiding the prohibition on redemption of the Senior Notes
prior to ___________, 2000 pursuant to Section 3.07, then the premium payable
for purposes of this paragraph for each of the years beginning on _____________
of the years set forth below shall be as set forth in the following table,
expressed as a percentage of the amount that would otherwise be due but for the
provisions of this paragraph, plus accrued interest, if any, to the date of
payment:
YEAR PERCENTAGE
1997...................... _______%
1998...................... _______%
1999...................... _______%
Section 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of principal, premium, if any, and
interest on the Senior Notes or to enforce the performance of any provision of
the Senior Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Senior Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Senior Note in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
Section 6.04. Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal amount of the
then outstanding Senior Notes by notice to the Trustee may on behalf of the
Holders of all of the Senior Notes waive an existing Default or Event of Default
and its consequences, except a continuing Default or Event of Default in the
payment of the principal of, premium, if any, or interest on, the Senior Notes.
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
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Section 6.05. Control by Majority.
Holders of a majority in principal amount of the then outstanding Senior
Notes may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with the law or this Indenture, that the Trustee determines may be
unduly prejudicial to the rights of other Holders of Senior Notes or that may
involve the Trustee in personal liability.
Section 6.06. Limitation on Suits.
A Holder of a Senior Note may pursue a remedy with respect to this
Indenture or the Senior Notes only if:
(a) the Holder of a Senior Note gives to the Trustee written notice of
a continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Senior Notes make a written request to the Trustee to pursue
the remedy;
(c) such Holder of a Senior Note or Holders of Senior Notes offer and,
if requested, provide to the Trustee indemnity satisfactory to the Trustee
against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Senior Notes do not give the Trustee a
direction inconsistent with the request.
A Holder of a Senior Note may not use this Indenture to prejudice the
rights of another Holder of a Senior Note or to obtain a preference or priority
over another Holder of a Senior Note.
Section 6.07. Rights of Holders of Senior Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Senior Note to receive payment of principal, premium, if any, and
interest on the Senior Note, on or after the respective due dates expressed in
the Senior Note, or to bring suit for the enforcement of any such payment on or
after such respective dates, shall not be impaired or affected without the
consent of the Holder of the Senior Note.
Section 6.08. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(a) or (b) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and as
trustee of an express trust against the Issuers for the whole amount of
principal of, premium, if any, and interest remaining unpaid on the Senior Notes
and interest on overdue principal and, to the extent lawful, interest and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
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Section 6.09. Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Senior Notes allowed in any judicial proceedings relative to the
Issuers (or any other obligor upon the Senior Notes), its creditors or its
property and shall be entitled and empowered to collect, receive and distribute
any money or other property payable or deliverable on any such claims and any
custodian in any such judicial proceeding is hereby authorized by each Holder of
a Senior Note to make such payments to the Trustee, and in the event that the
Trustee shall consent to the making of such payments directly to the Holders of
the Senior Notes, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof.
To the extent that the payment of any such compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel, and any other amounts due
the Trustee under Section 7.07 hereof out of the estate in any such proceeding,
shall be denied for any reason, payment of the same shall be secured by a Lien
on, and shall be paid out of, any and all distributions, dividends, money,
securities and other properties which the Holders of the Senior Notes 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 of a Senior Note any plan of reorganization,
arrangement, adjustment or composition affecting the Senior Notes or the rights
of any Holder of a Senior Note thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder of a Senior Note in any such 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, its agents and attorneys for amounts due under
Section 7.07, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs
and expenses of collection;
Second: to Holders of Senior Notes for amounts due and unpaid on the
Senior Notes for principal, premium, if any, and interest, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Senior Notes for principal, premium, 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 of Senior Notes.
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,
39
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 of a Senior Note pursuant to Section 6.07, or a
suit by Holders of more than 10% in principal amount of the then outstanding
Senior Notes.
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, 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 duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee, and
(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 or not they conform to the requirements of this Indenture.
(c) the Trustee may not be relieved from liabilities for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section;
(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
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b), and (c) of this Section.
(e) 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 of Senior Notes, unless such Holder 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 received by
it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
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Section 7.02. Rights of Trustee.
(a) The Trustee may conclusively rely upon any document believed by it to
be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel 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 the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability 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 its attorneys and agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Issuers shall be sufficient if signed by
an Officer of each of the General Partner, on behalf of the Company (or the
Company, if the Company is a corporation), and Capital Corp.
(f) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders unless such Holders shall have offered to the Trustee reasonable
security or indemnity against costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Senior Notes and may otherwise deal with any Issuer or any Affiliate
of any Issuer with the same rights it would have if it were not Trustee.
However, in the event that the Trustee acquires any conflicting interest it must
eliminate such conflict within 90 days, apply to the Commission for permission
to continue as trustee or resign. Any Agent may do the same with like rights
and duties. 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 Senior Notes, it shall not be
accountable for the Issuers' use of the proceeds from the Senior Notes or any
money paid to the Issuers or upon the Issuers' direction under any provision of
this Indenture, it shall not be responsible for the use or application of any
money received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Senior
Notes or any other document in connection with the sale of the Senior Notes or
pursuant to this Indenture other than its certificate of authentication.
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Section 7.05. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Senior Notes 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 of principal of, premium,
if any, or interest on any Senior Note, the Trustee may withhold the notice if
and so long as a committee of its Responsible Officers in good faith determines
that withholding the notice is in the interests of the Holders of the Senior
Notes.
Section 7.06. Reports by Trustee to Holders of the Senior Notes.
Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture and for so long as Senior Notes remain outstanding, the
Trustee shall mail to the Holders of the Senior Notes a brief report dated as of
such reporting date that complies with TIA (S) 313(a) (but if no event described
in TIA (S) 313(a) has occurred within the twelve months preceding the reporting
date, no report need be transmitted). The Trustee also shall comply with TIA
(S) 313(b)(2). The Trustee shall also transmit by mail all reports as required
by TIA (S) 313(c).
A copy of each report at the time of its mailing to the Holders of Senior
Notes shall be mailed to the Issuers and filed with the Commission and each
stock exchange on which the Senior Notes are listed. The Issuers shall promptly
notify the Trustee when the Senior Notes are listed on any stock exchange.
Section 7.07. Compensation and Indemnity.
The Issuers shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Issuers shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it 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 Issuers shall indemnify the Trustee against any and all losses,
liabilities or expenses incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture without
negligence or bad faith on its part. The Trustee shall notify the Issuers
promptly of any claim for which it may seek indemnity. Failure by the Trustee to
so notify the Issuers shall not relieve the Issuers of their obligations
hereunder, except to the extent of actual prejudice to the Issuers resulting
from such failure. The Issuers shall defend the claim and the Trustee shall
cooperate in the defense. The Trustee may have separate counsel and the Issuers
shall pay the reasonable fees and expenses of such counsel. The Issuers need not
pay for any settlement made without their consent, which consent shall not be
unreasonably withheld.
The obligations of the Issuers under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture.
To secure the Issuers' payment obligations in this Section, the Trustee
shall have a Lien prior to the Senior Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Senior Notes. Such Lien shall survive the satisfaction
and discharge of this Indenture.
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When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01 (g) or (h) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration 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.
The Trustee may resign in writing at any time and be discharged from the
trust hereby created by so notifying the Issuers. The Holders of Senior Notes
of a majority in principal amount of the then outstanding Senior Notes may
remove the Trustee by so notifying the Trustee and the Issuers in writing. The
Issuers may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) 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;
(c) a Custodian or public officer takes charge of the Trustee or its
property; or
(d) 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 Issuers shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Senior Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Issuers.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuers or the
Holders of Senior Notes of at least 10% in principal amount of the then
outstanding Senior Notes may petition any court of competent jurisdiction for
the appointment of a successor Trustee.
If the Trustee after written request by any Holder of a Senior Note who has
been a Holder of a Senior Note for at least six months fails to comply with
Section 7.10, such Holder of a Senior Note 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 Issuers. Thereupon, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Holders of the Senior Notes. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, provided all sums owing
to the 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 Issuers' obligations under Section 7.07 hereof shall continue
for the benefit of the retiring Trustee.
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Section 7.09. Successor Trustee by Merger, etc.
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.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America or of any state thereof authorized under such laws to exercise corporate
trustee power, shall be subject to supervision or examination by federal or
state authority and shall have a combined capital and surplus of at least $100
million as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA (S) 310(a)(1), (2) and (5). The Trustee is subject to TIA (S) 310(b).
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee is subject to TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.
The Issuers may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, with respect to
the Senior Notes, elect to have either Section 8.02 or 8.03 be applied to all
outstanding Senior Notes upon compliance with the conditions set forth below in
this Article 8.
Section 8.02. Legal Defeasance and Discharge.
Upon the Issuers' exercise under Section 8.01 of the option applicable to
this Section 8.02, the Issuers shall be deemed to have been discharged from
their obligations with respect to all outstanding Senior Notes on the date the
conditions set forth below are satisfied (hereinafter, "Legal Defeasance"). For
this purpose, such Legal Defeasance means that the Issuers shall be deemed to
have paid and discharged the entire Indebtedness represented by the outstanding
Senior Notes, which shall thereafter be deemed to be "outstanding" only for the
purposes of Section 8.05 and the other Sections of this Indenture referred to in
(a) and (b) below, and to have satisfied all their other obligations under such
Senior Notes and this Indenture (and the Trustee, on demand of and at the
expense of the Issuers, shall execute proper instruments acknowledging the
same), except for the following which shall survive until otherwise terminated
or discharged hereunder: (a) the rights of Holders of outstanding Senior Notes
to receive solely from the trust fund described in Section 8.04, and as more
fully set forth in such Section,
44
payments in respect of the principal of, premium, if any, and interest on such
Senior Notes when such payments are due, (b) the Issuers' obligations with
respect to such Senior Notes under Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.10
and 4.02, (c) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and the Company's obligations in connection therewith and (d) this
Article 8. Subject to compliance with this Article 8, the Issuers may exercise
their option under this Section 8.02 notwithstanding the prior exercise of their
option under Section 8.03 with respect to the Senior Notes.
Section 8.03. Covenant Defeasance.
Upon the Issuers' exercise under Section 8.01 of the option applicable to
this Section 8.03, the Issuers shall be released from their obligations under
the covenants contained in Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13,
4.14, 4.15, 4.16, 4.17, 4,18, 4,19, 4,20, 4,21 and 4.22 and Article Five with
respect to the outstanding Senior Notes on and after the date the conditions set
forth below are satisfied (hereinafter, "Covenant Defeasance"), and the Senior
Notes 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 Senior Notes shall not be deemed outstanding for accounting
purposes). For this purpose, such Covenant Defeasance means that, with respect
to the outstanding Senior Notes, the Issuers 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, but, except as specified above, the remainder of this Indenture
and such Senior Notes shall be unaffected thereby. In addition, upon the
Issuers' exercise under Section 8.01 of the option applicable to this Section
8.03, Sections 6.01(d) and 6.01(e) shall not constitute Events of Default.
Section 8.04. Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to application of either Section 8.02
or Section 8.03 to the outstanding Senior Notes:
(a) The Issuers shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 7.10 who shall agree to comply with the provisions of this
Article Eight applicable to it) as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Senior Notes, (i)
cash in U.S. Dollars in an amount, (ii) non-callable Government Securities
which through the scheduled payment of principal and interest in respect
thereof in accordance with their terms shall provide, not later than one
day before the due date of any payment, cash in U.S. Dollars in an amount,
or (iii) a combination thereof, in such amounts, as will 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 and which shall be applied by the Trustee (or
other qualifying trustee) to pay and discharge (A) the principal of,
premium, if any, and interest on the outstanding Senior Notes on the stated
maturity or on the applicable redemption date, as the case may be, of such
principal or installment of principal, premium, if any, or interest and (B)
any mandatory sinking fund payments or analogous payments applicable to the
outstanding Senior Notes on the day on which such payments are due and
payable in accordance with the terms of this Indenture and of such Senior
Notes; provided that the Trustee shall have been irrevocably instructed to
apply such
45
money or the proceeds of such non-callable Government Securities to said
payments with respect to the Senior Notes.
(b) In the case of an election under Section 8.02, the Issuers shall
have delivered to the Trustee an Opinion of Counsel in the United States
reasonably satisfactory to the Trustee confirming that (i) the Issuers have
received from, or there has been published by, the Internal Revenue Service
a ruling or (ii) 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 Senior Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such Legal Defeasance and will
be subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Legal Defeasance
has not occurred;
(c) In the case of an election under Section 8.03, the Issuers shall
have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee to the effect that the Holders of the
outstanding Senior Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such Covenant Defeasance and
will be subject to federal income tax in the same amount, in the same
manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
(d) No Default or Event of Default with respect to the Senior Notes
shall have occurred and be continuing on the date of such deposit (other
than a Default or Event of Default resulting from the borrowing of funds to
be applied to such deposit) or, insofar as Subsection 6.01(g) or 6.01(h) is
concerned, at any time in the period ending on the 91st day after the date
of such 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 other material
agreement or instrument (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) In the case of an election under either Section 8.02 or 8.03, the
Issuers shall have delivered to the Trustee an Opinion of Counsel to the
effect that after the 91st day following the deposit, and assuming that
prior to such 91st day no voluntary or involuntary bankruptcy case has been
commenced with respect to any Issuer, such deposit will not constitute a
preference as defined in Section 547 of the U.S. Bankruptcy Code, and,
assuming such a bankruptcy case is commenced on or after such 91st day, the
trust funds will not constitute property included within the estate of the
debtor.
(g) In the case of an election under either Section 8.02 or 8.03, the
Issuers shall have delivered to the Trustee an Officers' Certificate
stating that the deposit made by the Issuers pursuant to their election
under Section 8.02 or 8.03 was not made by the Issuers with the intent of
preferring the Holders over other creditors of the Issuers or with the
intent of defeating, hindering, delaying or defrauding creditors of the
Issuers or others; and
(h) The Issuers shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel in the United States, each stating
that all conditions precedent provided for
46
relating to either the Legal Defeasance under Section 8.02 or the Covenant
Defeasance under Section 8.03 (as the case may be) have been complied with
as contemplated by this Section 8.04.
Section 8.05. Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.06, 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 in respect of the outstanding Senior Notes shall be held in
trust and applied by the Trustee, in accordance with the provisions of such
Senior Notes and this Indenture, to the payment, either directly or through any
Paying Agent (including any Issuer or a Subsidiary Guarantor, if any, acting as
Paying Agent) as the Trustee may determine, to the Holders of such Senior Notes
of all sums due and to become due thereon in respect of principal, premium, if
any, and interest, but such money need not be segregated from other funds except
to the extent required by law.
The Issuers 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 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 Senior Notes.
Anything in this Article Eight to the contrary notwithstanding, the Trustee
shall deliver or pay to the Issuers from time to time upon the Issuers' request
any money or non-callable Government Securities held by it as provided in
Section 8.04 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)), are in excess of the amount thereof which would then be required to be
deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06. Repayment to Issuers.
Any money deposited with the Trustee or any Paying Agent, or then held by the
Issuers in trust for the payment of the principal of, premium, if any, or
interest on any Senior Note and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable shall be
paid to the Issuers on their request or (if then held by the Issuers) shall be
discharged from such trust; and the Holder of such Senior Note shall thereafter,
as an unsecured general creditor, look only to the Issuers for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Issuers as trustee thereof, shall thereupon
cease; provided 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 Issuers.
Section 8.07. Reinstatement.
If the Trustee or Paying Agent is unable to apply any U.S. Dollars or non-
callable Government Securities in accordance with Section 8.02 or 8.03, 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 Issuers' obligations under this Indenture and the Senior Notes shall be
revived and
47
reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03
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, as the case may be; provided
that, if the Issuers make any payment of principal of, premium, if any, or
interest on any Senior Note following the reinstatement of its obligations, the
Issuers shall be subrogated to the rights of the Holders of such Senior Notes to
receive such payment from the money held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Senior Notes.
Notwithstanding Section 9.02 of this Indenture, the Issuers and the Trustee
may amend or supplement this Indenture, the Senior Notes or any Subsidiary
Guarantee without the consent of any Hold er of a Senior Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Senior Notes in addition to or in place
of certificated Senior Notes;
(c) to provide for the assumption of the Issuers' obligations to the
Holders of the Senior Notes in the case of a merger, consolidation or sale of
all or substantially all of the Issuers' assets pursuant to Article 5 or
Section 10.02 hereof;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Senior Notes or that does not materially
adversely affect the legal rights hereunder of any Holder of the Senior Note;
(e) to provide for Subsidiary Guarantees of the Senior Notes; or
(f) to comply with requirements of the Commission in order to effect or
maintain the qualification of this Indenture under the TIA.
Upon the request of the Issuers accompanied by resolutions of the boards of
directors of each of the General Partner, on behalf of the Company (or the
Company, if the Company is a corporation), and Capital Corp. authorizing the
execution of any such amended or supplemental Indenture and upon receipt by the
Trustee of the documents described in Section 9.06 hereof, the Trustee shall
join with the Issuers 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 which may be therein contained, but the
Trustee shall not be obligated to enter into such amended or supplemental
Indenture which affects its own rights, duties or immunities under this
Indenture or otherwise.
Section 9.02. With Consent of Holders of Senior Notes.
Except as provided below in this Section 9.02, the Issuers and the Trustee
may amend or supplement this Indenture or the Senior Notes or any amended or
supplemental Indenture with the written consent of the Holders of Senior Notes
of not less than a majority in aggregate principal amount of the Senior Notes
then outstanding (including consents obtained in connection with a tender offer
or exchange offer
48
for the Senior Notes), and, subject to Sections 6.04 and 6.07 hereof, any
existing Default or Event of Default and its consequences (other than a Default
or Event of Default in the payment of the principal of, premium, if any, or
interest on the Senior Notes, except a payment default resulting from an
acceleration that has been rescinded) or compliance with any provision of this
Indenture or the Senior Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Senior Notes (including
consents obtained in connection with a tender offer or exchange offer for the
Senior Notes).
Upon the request of the Issuers accompanied by resolutions of the boards of
directors of each of the General Partner, on behalf of the Company (or the
Company, if the Company is a corporation), and Capital Corp. authorizing the
execution of any such amended or supplemental Indenture, and upon the filing
with the Trustee of evidence satisfactory to the Trustee of the consent of the
Holders of Senior Notes as aforesaid, and upon receipt by the Trustee of the
documents described in Section 9.06 hereof, the Trustee shall join with the
Issuers 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 shall not be obligated to, enter into such amended or
supplemental Indenture.
It shall not be necessary for the consent of the Holders of Senior Notes
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, supplement or waiver under this Section becomes
effective, the Issuers shall mail to the Holders of Senior Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Issuers 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 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount of the Senior Notes then
outstanding may waive compliance in a particular instance by the Issuers with
any provision of this Indenture or the Senior Notes. However, without the
consent of each Holder affected, an amendment or waiver may not (with respect to
any Senior Notes held by a non-consenting Holder of Senior Notes):
(a) reduce the principal amount of Senior Notes whose Holders must consent
to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Senior
Note, alter the provisions with respect to the redemption of the Senior Notes
or waive a redemption payment with respect to any Senior Note;
(c) reduce the rate of or change the time for payment of interest,
including default interest, on any Senior Note;
(d) waive a Default or Event of Default in the payment of principal of,
premium, if any, or interest on the Senior Notes (except a rescission of
acceleration of the Senior Notes by the Holders of at least a majority in
aggregate principal amount of the then outstanding Senior Notes and a waiver
of the payment default that resulted from such acceleration);
(e) make any Senior Note payable in money other than that stated in the
Senior Notes;
49
(f) make any change in Section 6.04 or 6.07 hereof or in the provisions of
this Indenture relating to the rights of Holders of Senior Notes to receive
payments of principal of, premium, if any, or interest on the Senior Notes;
or
(g) make any change in this sentence of this Section 9.02.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Senior Notes shall be
set forth in a amended 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 Senior Note is a continuing consent by the Holder of a Senior
Note and every subsequent Holder of a Senior Note or portion of a Senior Note
that evidences the same debt as the consenting Holder's Senior Note, even if
notation of the consent is not made on any Senior Note. However, any such
Holder of a Senior Note or subsequent Holder of a Senior Note may revoke the
consent as to its Senior Note if the Trustee receives written notice of
revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder of a Senior Note.
Section 9.05. Notation on or Exchange of Senior Notes.
The Trustee may place an appropriate notation about an amendment, supplement
or waiver on any Senior Note thereafter authenticated. The Issuers in exchange
for all Senior Notes may issue and the Trustee shall authenticate new Senior
Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Senior Note shall not
affect the validity and effect of such amendment, supplement or waiver.
Section 9.06. Trustee to Sign Amendments, etc.
The Trustee shall sign any amended or supplemental Indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The
Issuers may not sign an amendment or supplemental Indenture until Board of
Directors each of the General Partner, on behalf of the Company (or the Company,
if the Company is a corporation), and Capital Corp. approves it, and no
Guarantor may sign such an amendment or supplemental Indenture until its board
of directors approves it. The Trustee shall be entitled to receive, and shall
be fully protected in relying upon, an Officer's Certificate and an Opinion of
Counsel stating that such amendment or supplement is authorized or permitted by
this Indenture, that all conditions precedent to the execution of the amendment
or supplement by the parties thereto have been complied with and that the
amendment or supplement is valid and binding upon the Issuers and any Guarantor
in accordance with its terms.
50
ARTICLE 10
GUARANTEE OF SENIOR NOTES
Section 10.01. Guarantee.
Subject to the provisions of this Article 10, each Guarantor hereby, jointly
and severally, unconditionally guarantees, on a senior unsubordinated basis, to
each Holder of a Senior 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 Senior Notes or the Obligations of the
Issuers to the Holders or the Trustee hereunder or under the Senior Notes, that
(a) the principal of, premium, if any, and any accrued and unpaid interest on
the Senior Notes shall be duly and punctually paid in full when due, whether at
maturity, by acceleration or otherwise, and interest on overdue principal of,
premium, if any, and (to the extent permitted by law) interest on the Senior
Notes and all other Obligations of the Issuers to the Holders or the Trustee
hereunder or under the Senior Notes (including fees, expenses or other) shall be
promptly paid in full or performed, all in accordance with the terms hereof and
thereof; (b) in case of any extension of time of payment or renewal of any
Senior Notes or any of such other Obligations, the same shall be promptly paid
in full when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise; and (c) any
and all costs and expenses (including, without limitation, reasonable attorneys'
fees and expenses) incurred by the Trustee or its agents or any Holder of Senior
Notes in enforcing any rights under any Guarantee shall be promptly paid in full
when due. Failing payment when due of any amount so guaranteed or failing
performance of any other Obligation of the Issuers to the Holders, for whatever
reason, each Guarantor shall be obligated to pay, or to perform or to cause the
performance of, the same immediately. Each Guarantor agrees that this is a
Guarantee of payment and not a Guarantee of collection. An Event of Default
under this Indenture or the Senior Notes shall constitute an event of default
under this Guarantee, and shall entitle the Holders of Senior Notes to
accelerate the Obligations of the Guarantors hereunder in the same manner and to
the same extent as the Obligations of the Issuers. Each Guarantor hereby agrees
that its Obligations hereunder shall be unconditional, irrespective of the
validity, regularity or enforceability of the Senior Notes or this Indenture,
the absence of any action to enforce the same, any waiver or consent by any
Holder of Senior Notes with respect to any provisions hereof or thereof, the
recovery of any judgment against the Issuers, 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 either or any of the Issuers and such Guarantor,
protest, notice and all demands whatsoever and covenants that its Guarantee
shall not be discharged except by complete performance of all Obligations under
the Senior Notes and this Indenture, except as specified in Section 10.03. If
any Holder or the Trustee is required by any court or otherwise to return to the
Issuers or such Guarantor, or any custodian, trustee, liquidator or other
similar official acting in relation to either the Issuers or such Guarantor, any
amount paid by any such entity to the Trustee or such Holder, such Guarantor's
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect. Each Guarantor agrees that it shall not be entitled to any
right of subrogation in relation to the Holders in respect of any Obligations
guaranteed hereby until payment in full of all Obligations guaranteed hereby.
Each Guarantor agrees that, as between the Guarantors, on the one hand, and the
Holders of Senior Notes and the Trustee, on the other hand, (x) the maturity of
the Obligations guaranteed hereby may be accelerated as provided in Article 6
hereof for the purposes of its 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 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 such Guarantor for the
purpose of its Guarantee. The obligations of each Guarantor shall rank pari
passu in right of payment with all Guarantor Senior Indebtedness of such
Guarantor.
51
Section 10.02. Limitation of the Guarantors' Liability.
Each Guarantor and, by its acceptance hereof, each beneficiary hereof, hereby
confirms that it is the intention and agreement of all such parties that such
Guarantor's Guarantee not constitute a fraudulent transfer or conveyance for
purposes of any Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar Federal or state law (including,
without limitation, the Debtor and Creditor Law of the State of New York). To
effectuate the foregoing intention, each such Person hereby irrevocably agrees
that the Obligations of the Guarantors under this Article 10 shall be limited to
the maximum amount as will, after giving effect to all other contingent and
fixed liabilities of such Guarantor, result in the Obligations of such Guarantor
under its Guarantee not constituting a fraudulent transfer or conveyance.
Section 10.03. Release of the Guarantors.
In the event of a sale or other disposition of 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, 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 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 Section 4.10 hereof. The
Trustee shall deliver an appropriate instrument evidencing such release upon
receipt of a request of the Issuers accompanied by an Officers' Certificate and
Opinion of Counsel certifying as to the compliance with this Section 10.03. Any
Guarantor not released from its Obligations under its Guarantee shall remain
liable for the full amount of principal of, premium, if any, and accrued and
unpaid interest on the Senior Notes and for the other Obligations of such
Guarantor under this Indenture as provided in this Article 10.
Section 10.04. Merger, Consolidation or Sale of Assets.
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 (other than a Restricted
Subsidiary of the Company that is a Guarantor) unless (i) subject to Section
10.03 hereof, 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, under the Senior Notes and the Indenture, (ii)
immediately after giving effect to such transaction, no Default or Event of
Default exists and (iii) such Guarantor, or any Person formed by or surviving
any such consolidation or merger, would be permitted by virtue of the Company's
pro forma Fixed Charge Coverage Ratio to incur, immediately after giving effect
to such transaction, at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof; provided
that the foregoing provisions shall not apply to any Asset Sale subject to
Section 4.10 hereof.
Section 10.05. Execution and Delivery of Guarantees.
To evidence its Guarantee set forth in this Article 10, each Guarantor hereby
agrees that a notation of such Guarantee substantially in the form of Exhibit B
shall be endorsed by an Officer of such Guarantor on each Senior Note
authenticated and delivered thereafter by the Trustee, and, to the extent not a
party to this Indenture on the date hereof, each Guarantor shall execute and
deliver to the Trustee a supplemental indenture in the form of Exhibit C hereto,
pursuant to which such Subsidiary shall become
52
a Guarantor under this Article 10 and shall guarantee the Obligations of the
Issuers under this Indenture and the Senior Notes. Concurrently with the
execution and delivery of such supplemental indenture, the Issuers shall deliver
to the Trustee an Opinion of Counsel reasonably satisfactory to the Trustee to
the effect that such supplemental indenture has been duly authorized, executed
and delivered by such Guarantor and that, subject to the application of
bankruptcy, insolvency, moratorium and other similar laws relating to creditors'
rights generally and to general principles of equity, whether considered in a
proceeding at law or in equity, and to the discretion of the court before which
any proceeding therefor may be brought, the Guarantee of each such Guarantor
contained herein (subject to the limitations set forth in Section 10.02) is a
legal, valid and binding obligation of such Guarantor, enforceable against such
Guarantor in accordance with its terms.
Each Guarantor hereby agrees that its Guarantee set forth in this Article 10
shall remain in full force and effect and apply to all of the Senior Notes
notwithstanding any failure to endorse on each Senior Note a notation of such
Guarantee. The delivery of any Senior Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the Guarantee
set forth in this Indenture on behalf of each Guarantor.
ARTICLE 11
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA (S)318(c), the imposed duties shall control.
Section 11.02. Notices.
Any notice or communication by the Issuers, any Guarantor or the Trustee to
the others is duly given if in writing and delivered in person or mailed by
first class mail (registered or certified, return receipt requested), telex,
telecopier or overnight air courier guaranteeing next day delivery, to the
others' address:
If to the Issuers:
Muzak Limited Partnership
2901 Third Avenue, Suite 400
Seattle, Washington 98121
Telecopier No.: (206) 633-6210
Attention: Chief Financial Officer
With a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Telecopier No.: (212) 310-8007
Attention: Norman D. Chirite, Esq.
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If to the Trustee:
First Trust National Association
Telecopier No.: (___) __________
Attention: Corporate Trust Administration
The Issuers, any Guarantor or the Trustee, by notice to the others, may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders of Senior
Notes) shall be deemed to have been duly given: at the time delivered by hand,
if personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder of a Senior Note shall be mailed by
first class mail or by overnight air courier guaranteeing next day delivery to
its address shown on the register kept by the Registrar. Any notice or
communication shall also be so mailed to any Person described in TIA (S) 313(c),
to the extent required by the TIA. Failure to mail a notice or communication to
a Holder of a Senior Note or any defect in it shall not affect its sufficiency
with respect to other Holders of Senior Notes.
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 Issuers mail a notice or communication to Holders of Senior Notes,
they shall mail a copy to the Trustee and each Agent at the same time.
Section 11.03. Communication by Holders of Senior Notes with Other Holders of
Senior Notes.
Holders of the Senior Notes may communicate pursuant to TIA (S) 312(b) with
other Holders of Senior Notes with respect to their rights under this Indenture
or the Senior Notes. The Issuers, any Guarantor, the Trustee, the Registrar and
anyone else shall have the protection of TIA (S) 312(c).
Section 11.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Issuers to the Trustee to take any
action under this Indenture, the Issuers shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably satisfactory
to the Trustee (which shall include the statements set forth in Section 10.05
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 satisfied; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory to
the Trustee (which shall include the statements set forth in Section 10.05
hereof) stating that, in the opinion of such counsel, all such conditions
precedent and covenants have been satisfied.
54
Section 11.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA (S) 314(a)(4)) shall comply with the provisions of TIA (S)314(e)
and shall include:
(a) a statement that the person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of 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
satisfied; and
(d) a statement as to whether or not, in the opinion of such person, such
condition or covenant has been satisfied.
Section 11.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders of Senior Notes. The Registrar or Paying Agent may make reasonable
rules and set reasonable requirements for its functions.
Section 11.07. No Personal Liability of Directors, Officers, Employees,
Partners and Stockholders.
No director, officer, employee, incorporator, partner or stockholder of any
Issuer, as such, shall have any liability for any obligations of the Issuers
under the Senior Notes or this Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of the
Senior Notes by accepting a Senior Note waives and releases all such liability.
The waiver and release are part of the consideration for issuance of the Senior
Notes. Such waiver may not be effective to waive liabilities under the federal
securities laws and it is the view of the Commission that such a waiver is
against public policy.
Section 11.08. Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE SENIOR NOTES AND ANY SUBSIDIARY GUARANTEE.
Section 11.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or debt
agreement of any Issuer or its Subsidiaries. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
55
Section 11.10. Successors.
All agreements of the Issuers in this Indenture and the Senior Notes shall
bind their successors. All agreements of the Trustee in this Indenture shall
bind its successor.
Section 11.11. Severability.
In case any provision in this Indenture or in the Senior 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 11.12. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
Section 11.13. 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 of this Indenture and shall in no way modify or
restrict any of the terms or provisions hereof.
[Signatures on following page]
56
SIGNATURES
Dated as of ____________, 1996 Muzak Limited Partnership
By MLP Acquisition L.P., its General Partner
By Music Holdings Corp., its General Partner
By:_____________________________
Name:
Title:
Muzak Capital Corporation
By:_____________________________
Name:
Title:
First Trust National Association,
as Trustee
By:_____________________________
Name:
Title:
57
EXHIBIT A
(Form of Face of Senior Note)
___% Senior Note due 2003
No. $__________
MUZAK LIMITED PARTNERSHIP
MUZAK CAPITAL CORPORATION
promises to pay to
____________________
or its registered assigns
the principal sum of
Dollars on ________________, 2003.
Interest Payment Dates: __________ and __________, commencing __________, 1997.
Record Dates: ________ and ________ (whether or not a Business Day).
Dated: ____________,1996
Muzak Limited Partnership
By MLP Acquisition L.P., its General Partner
By Music Holdings Corp., its General Partner
By: _____________________________________
Name:
Title:
A-1
Muzak Capital Corporation
By: _______________________________
Name:
Title:
(SEAL)
This is one of the Senior Notes
referred to in the within-
mentioned Indenture:
First Trust National Association, as Trustee
By: ____________________________________
(Authorized Signature)
A-2
(Form of Reverse Side of Senior Note)
___% Senior Note due 2003
Capitalized terms used herein have the meanings assigned to them in the
Indenture (as defined) unless otherwise indicated.
1. Interest. Muzak Limited Partnership, a Delaware limited partnership (the
"Company"), and Muzak Capital Corporation, a Delaware corporation ("Capital
Corp." and, together with the Company, the "Issuers"), jointly and severally,
promise to pay interest on the principal amount of this Senior Note at the rate
and in the manner specified below. The Issuers shall pay interest on the
principal amount of this Senior Note in cash at the rate per annum of ___%. The
Issuers will pay interest semi-annually on __________ and ___________ of each
year, commencing _____________, 1997, or, if any such day is not a Business Day,
on the next succeeding Business Day (each, an "Interest Payment Date") to
Holders of record on the immediately preceding __________ and ___________.
Interest will be computed on the basis of a 360-day year consisting of twelve
30-day months. Interest shall accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the date of the
original issuance of the Senior Notes. To the extent lawful, the Issuers shall
pay interest on overdue principal at the rate of the then applicable interest
rate on the Senior Notes; they shall pay interest on overdue installments of
interest (without regard to any applicable grace periods) at the same rate to
the extent lawful.
2. Method of Payment. The Issuers will pay interest on the Senior Notes
(except defaulted interest) to the Persons who are registered Holders of Senior
Notes at the close of business on the record date next preceding the Interest
Payment Date, even if such Senior Notes are cancelled after such record date and
on or before such Interest Payment Date. The Holder hereof must surrender this
Senior Note to a Paying Agent to collect principal payments. The Issuers will
pay principal and interest in money of the United States that at the time of
payment is legal tender for payment of public and private debts. The Issuers
however, may pay principal, premium, if any, and interest by check payable in
such money. The Senior Notes will be payable as to principal, premium and
interest at the office or agency of the Issuers maintained for such purpose
within the City and State of New York or, at the option of the Issuers, payment
of interest may be made by check mailed to the Holders of Senior Notes at their
respective addresses set forth in the register of Holders of Senior Notes.
Unless otherwise designated by the Issuers, the Issuers' office or agency in New
York, New York will be the office of the Trustee maintained for such a purpose.
3. Paying Agent and Registrar. Initially, the Trustee will act as Paying
Agent and Registrar. The Issuers may change any Paying Agent, Registrar or co-
registrar without prior notice to any Holder of a Senior Note. The Company or
any Subsidiary may act in any such capacity.
4. Indenture. The Issuers issued the Senior Notes under an Indenture, dated
as of _____________ , 1996 (the "Indenture"), between the Company and the
Trustee. The terms of the Senior Notes include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (15 U.S. Code (S)(S) 77aaa-77bbbb), as in effect on the date of
the Indenture. The Senior Notes are subject to all such terms, and Holders of
Senior Notes are referred to the Indenture and such act for a statement of such
terms. The terms of the Indenture shall govern any inconsistencies between the
Indenture and the Senior Notes. The Senior Notes are senior unsecured
obligations of the Issuers limited to $100,000,000 in aggregate principal
amount.
5. Optional Redemption. The Senior Notes will not be redeemable at the
Issuers' option prior to __________, 2000. Thereafter, the Senior Notes will be
subject to redemption at the option of the
A-3
Issuers, in whole or in part, upon not less than 30 nor more than 60 days'
notice, in cash at the redemption prices (expressed as percentages of principal
amount) set forth below, plus accrued and unpaid interest, if any, thereon to
the applicable redemption date, if redeemed during the twelve-month period
beginning on __________ of the years indicated below:
Redemption
Year Price
---- ----------
2000 ............................... %
2001 ............................... %
2002 and thereafter ................ 100.000%
Notwithstanding the foregoing, during the first 36 months after the date of
this Prospectus, the Issuers may on any one or more occasions redeem up to 35%
of the initially outstanding aggregate principal amount of Senior Notes at a
redemption price equal to ___% of the principal amount thereof, plus accrued and
unpaid interest, if any, thereon to the redemption date, with the net proceeds
of one or more equity offerings of the Issuers generating in each case net
proceeds of at least $15.0 million; provided that at least 65% of the initially
outstanding aggregate principal amount of Senior Notes remains outstanding
immediately after the occurrence of any such redemption; and provided, further,
that such redemption shall occur within 60 days of the date of the closing of
any such equity offering of the Issuers.
6. Mandatory Redemption. Except as set forth in Sections 4.10 and 4.18 of
the Indenture, the Company is not required to make mandatory redemption or
sinking fund payments with respect to the Senior Notes.
7. Repurchase at Option of Holder. (a) Upon the occurrence of a Change of
Control, each Holder of Senior Notes will have the right to require the Issuers
to repurchase all or any part (equal to $1,000 or an integral multiple thereof)
of such Holder's Senior Notes at an offer price in cash equal to 101% of the
aggregate principal amount thereof, plus accrued and unpaid interest, if any,
thereon to the date of purchase. Holders of Senior Notes that are subject to an
offer to purchase will receive a Change of Control Offer from the Company prior
to any related Change of Control Payment Date and may elect to have such Senior
Notes purchased by completing the form entitled "Option of Holder to Elect
Purchase" appearing below.
(b) If the Company or a Restricted Subsidiary consummates any Asset Sales,
and when the aggregate amount of Excess Proceeds from such Asset Sales exceeds
$10.0 million, the Company will be required to make an offer to all holders of
Senior Notes to purchase the maximum principal amount of Senior Notes that may
be purchased out of the Excess Proceeds, at an offer price in cash in an amount
equal to 101% of the principal amount thereof, plus accrued and unpaid interest
thereon to the date of purchase, in accordance with the procedures set forth in
the Indenture. If the aggregate principal amount of Senior Notes surrendered by
Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select
the Senior Notes to be purchased on a pro rata basis. Holders of Senior Notes
that are the subject of an offer to purchase will receive an Asset Sale Offer
from the Company prior to any related purchase date and may elect to have such
Senior Notes purchased by completing the form entitled "Option of Holder to
Elect Purchase" appearing below.
8. Notice of Redemption. Notice of redemption shall be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Senior Notes are to be redeemed at its registered address. Senior Notes may be
redeemed in part but only in whole multiples of $1,000, unless all of the Senior
Notes held by a Holder of Senior Notes are to be redeemed. On and after the
A-4
redemption date, interest ceases to accrue on Senior Notes or portions of them
called for redemption unless the Issuers default in making such redemption
payment.
9. Denominations, Transfer, Exchange. The Senior Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Senior Notes may be registered and Senior Notes may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder of a Senior Note, 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 Senior Note or portion of a Senior Note se lected for
redemption. Also, it need not exchange or register the transfer of any Senior
Notes for a period of 15 days before a selection of Senior Notes to be redeemed.
10. Persons Deemed Owners. Prior to due presentment to the Trustee for
registration of the transfer of this Senior Note, the Trustee, any Agent and the
Issuers may deem and treat the Person in whose name this Senior Note is
registered as its absolute owner for the purpose of receiving payment of
principal of, premium, if any, and interest on this Senior Note and for all
other purposes whatsoever, whether or not this Senior Note is overdue, and
neither the Trustee, any Agent nor the Issuers shall be affected by notice to
the contrary. The registered Holder of a Senior Note shall be treated as its
owner for all purposes.
11. Amendments, Supplement and Waivers. Subject to certain exceptions, the
Indenture or the Senior Notes may be amended or supplemented with the consent of
the holders of at least a majority in principal amount of the Senior Notes then
outstanding (including consents obtained in connection with a tender offer or
exchange offer for Senior Notes), and any existing default or compliance with
any provision of the Indenture or the Senior Notes may be waived with the
consent of the holders of a majority in principal amount of the then outstanding
Senior Notes (including consents obtained in connection with a tender offer or
exchange offer for Senior Notes). Without the consent of each holder affected,
an amendment or waiver may not (with respect to any Senior Notes held by a non-
consenting holder) (i) reduce the principal amount of Senior Notes whose holders
must consent to an amendment, supplement or waiver, (ii) reduce the principal of
or change the fixed maturity of any Senior Note or alter the provisions with
respect to the redemption of the Senior Notes, (iii) reduce the rate of or
change the time for payment of interest on any Senior Note, (iv) waive a Default
or Event of Default in the payment of principal of or premium, if any, or
interest on the Senior Notes (except a rescission of acceleration of the Senior
Notes by the holders of at least a majority in aggregate principal amount of the
Senior Notes and a waiver of the payment default that resulted from such
acceleration), (v) make any Senior Note payable in money other than that stated
in the Senior Notes, (vi) make any change in the provisions of the Indenture
relating to waivers of past Defaults or the rights of holders of Senior Notes to
receive payments of principal of or premium, if any, or interest on the Senior
Notes, (vii) waive a redemption payment with respect to any Senior Note or
(viii) make any change in the foregoing amendment and waiver provisions.
Notwithstanding the foregoing, without the consent of any holder of Senior
Notes, the Issuers and the Trustee may amend or supplement the Indenture or the
Senior Notes to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Senior Notes in addition to or in place of certificated Senior
Notes, to provide for the assumption of the Issuers' obligations to holders of
Senior Notes in the case of a merger or consolidation, to make any change that
would provide any additional rights or benefits to the holders of Senior Notes
or that does not materially adversely affect the legal rights under the
Indenture of any such holder, to provide for Subsidiary Guarantees of the Senior
Notes or to comply with requirements of the Commission in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act.
12. Defaults and Remedies. Each of the following constitutes an Event of
Default: (i) default for 30 days in the payment when due of interest on the
Senior Notes; (ii) default in the payment of all or any
A-5
part of the principal, or premium, if any, on the Senior Notes when and as the
same becomes due and payable at maturity, upon redemption, by acceleration, or
otherwise, including, without limitation, the payment of the Change of Control
Payment or the Asset Sale Offer Price, or otherwise; (iii) failure by any of the
Issuers or any of their respective Subsidiaries to observe or perform any other
covenant or agreement on the part of such Issuer or such Subsidiary contained in
the Senior Notes or the Indenture and the continuance of such failure for a
period of 30 days after written notice is given to the Issuers by the Trustee or
to the Issuers and the Trustee by the holders of at least 25% in aggregate
principal amount of the Senior Notes then outstanding, specifying such default;
requiring that it be remedied and stating that such notice is a "Notice of
Default"; (iv) 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 of the Indenture, which default (A) is caused by a
failure to pay principal of or premium, if any, or interest on such Indebtedness
prior to the expiration of the grace period provided in such Indebtedness on the
date of such default (a "Payment Default") or (B) results in the acceleration of
such Indebtedness prior to its express maturity and, in each case, the principal
amount of any such Indebtedness, 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 $5.0 million or more; (v) failure
by the Company or any of its Subsidiaries to pay final judgments aggregating in
excess of $5.0 million, which judgments are not paid, discharged or stayed for a
period of 60 days; (vi) except as permitted by the Indenture, any Subsidiary
Guarantee 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, or any Person acting on behalf of any Guarantor, shall deny or
disaffirm its obligations under its Subsidiary Guarantee; and (vii) certain
events of bankruptcy or insolvency with respect to the Company or any of its
Significant Subsidiaries.
If any Event of Default occurs and is continuing, the Trustee or the Holders
of at least 25% in principal amount of the then outstanding Senior Notes may
declare all the Senior Notes to be due and payable immediately. Notwithstanding
the foregoing, in the case of an Event of Default arising from certain events of
bankruptcy or insolvency, with respect to the Company, any Significant
Subsidiary or any group of Subsidiaries that, taken together, would constitute a
Significant Subsidiary, all outstanding Senior Notes will become due and payable
without further action or notice. Holders of the Senior Notes may not enforce
the Indenture or the Senior Notes except as provided in the Indenture. Subject
to certain limitations, Holders of a majority in principal amount of the then
outstanding Senior Notes may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of the Senior 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 their interest. The Holders of a majority in aggregate
principal amount of the Senior Notes then outstanding, by notice to the Trustee,
may on behalf of the Holders of all of the Senior Notes waive any existing
Default or Event of Default and its consequences under the Indenture except a
continuing Default or Event of Default in the payment of principal of, premium,
if any, and interest on, the Senior Notes and except as to Sections 4.10 and
4.18 of the Indenture. The Issuers are required to deliver to the Trustee
annually a statement regarding compliance with the Indenture, and the Issuers
are required upon becoming aware of any Default or Event of Default, to deliver
to the Trustee a statement specifying such Default or Event of Default.
13. Trustee Dealings with Issuers. The Trustee under the Indenture, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Issuers or their Affiliates, and may otherwise deal
with the Issuers or their Affiliates, as if it were not Trustee; however, if the
Trustee acquires any conflicting interest it must eliminate such conflict within
90 days, apply to the Commission for permission to continue as Trustee or
resign.
A-6
14. No Personal Liabilities of Directors, Officers, Employees, Partners and
Stockholders. No director, officer, employee, manager, incorporator, partner or
stockholder or other Affiliate of the Issuers shall have any liability for any
obligations of the Issuers under the Senior Notes or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Holder of a Senior Note by accepting a Senior Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Senior Notes. Such waiver may not be
effective to waive liabilities under the federal securities laws and it is the
view of the Commission that such a waiver is against public policy.
15. Authentication. This Senior Note shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
16. Abbreviations. Customary abbreviations may be used in the name of a
Holder of a Senior Note 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).
17. 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 Senior Notes and has directed the Trustee to
use CUSIP numbers in notices of redemption as a convenience to Holders of Senior
Notes. No representation is made as to the accuracy of such numbers either as
printed on the Senior Notes or as contained in any notice of redemption and
reliance may be placed only on the other identification numbers placed thereon.
18. Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN
AND BE USED TO CONSTRUE THE INDENTURE, THE SENIOR NOTES AND ANY SUBSIDIARY
GUARANTEE.
The Issuers will furnish to any Holder of a Senior Note upon written request
and without charge a copy of the Indenture. Request may be made to:
Muzak Limited Partnership
Muzak Capital Corporation
2901 Third Avenue, Suite 400
Seattle, Washington 98121
Telecopier No.: (206) 633-6210
Attention: Chief Financial Officer
A-7
ASSIGNMENT FORM
To assign this Senior Note, fill in the form below: (I) or (we) assign and
transfer this Senior Note to
- -------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint _______________________________________________________
agent to transfer this Senior Note on the books of the Issuers. The agent may
substitute another to act for him.
- --------------------------------------------------------------------------------
Date: ______________
Your Signature: ________________________________
(Sign exactly as your name appears on the face of
this Senior Note)
Signature Guarantee.
A-8
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Senior Note purchased
by the Issuers pursuant to Section 4.10 or Section 4.18 of the Indenture check
the appropriate box:
[_] Section 4.10 [_] Section 4.18
If you want to have only part of the Senior Note purchased by the
Issuers pursuant to Section 4.10 or Section 4.18 of the Indenture, state the
amount (in integral multiples of $1,000) you elect to have purchased:
$ _______________
Date:____________
Your Signature: _________________________________
(Sign exactly as your name appears on the face of
this Senior Note)
Signature Guarantee.
A-9
EXHIBIT B
GUARANTEE
---------
Each Guarantor (which term includes any successor or assign under the
Indenture) hereby, jointly and severally, unconditionally guarantees, on a
senior unsubordinated basis, to each Holder of a Senior Note 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 Senior
Notes or the Obligations of the Issuers to the Holders or the Trustee under the
Indenture or under the Senior Notes, that (a) the principal of, premium, if any,
and any accrued and unpaid interest on the Senior Notes shall be duly and
punctually paid in full when due, whether at maturity, by acceleration or
otherwise, and interest on overdue principal of, premium, if any, and (to the
extent permitted by law) interest on the Senior Notes and all other Obligations
of the Issuers to the Holders or the Trustee under the Indenture or under the
Senior Notes (including fees, expenses or other) shall be promptly paid in full
or performed, all in accordance with the terms hereof and thereof; (b) in case
of any extension of time of payment or renewal of any Senior Notes or any of
such other Obligations, the same shall be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise; and (c) any and all costs and
expenses (including, without limitation, reasonable attorneys' fees and
expenses) incurred by the Trustee or its agents or any Holder of Senior Notes in
enforcing any rights under any Guarantee shall be promptly paid in full when
due.
The obligations of each Guarantor to the Holders of Senior Notes and to the
Trustee pursuant to this Guarantee and the Indenture are expressly set forth in
Article 10 of the Indenture and reference is hereby made to such Indenture for
the precise terms of this Guarantee. THE TERMS OF ARTICLE 10 OF THE INDENTURE
ARE INCORPORATED HEREIN BY REFERENCE. In the case of any discrepancy between
this writing and Article 10 of the Indenture, Article 10 of the Indenture shall
control.
This is a continuing 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 Issuers' obligations under
the Senior Notes and the Indenture (subject to Section 10.05 of the Indenture)
and shall inure to the benefit of the successors and assigns of the Trustee and
the Holders of Senior Notes and, in the event of any transfer or assignment of
rights by any Holder of Senior 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 Guarantee of payment and not a Guarantee of collection.
Each Guarantor and, by its acceptance hereof, each beneficiary hereof,
hereby confirms that it is the intention and agreement of all such parties that
this Guarantee not constitute a fraudulent transfer or conveyance for purposes
of any Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar Federal or state law (including, without
limitation, the Debtor and Creditor Law of the State of New York). To
effectuate the foregoing intention, each such Person hereby irrevocably agrees
that the Obligations of each Guarantor under Article 10 of the Indenture shall
be limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Guarantor, result in the Obligations of
such Guarantor under its Guarantee not constituting a fraudulent transfer or
conveyance.
This Guarantee shall not be valid or obligatory for any purpose until the
certificate of authentication on the Senior 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.
B-10
[Guarantor]
By: _____________________________
Name:
Title:
Attest:
________________________________
Name:
Title:
B-11
EXHIBIT C
FORM OF SUPPLEMENTAL INDENTURE
Supplemental Indenture (this "Supplemental Indenture"), dated as of
____________________, ____, between _____________________________ (the
"Guarantor"), a subsidiary of Muzak Limited Partnership, a Delaware limited
partnership (the "Company"), and First Trust National Association, as trustee
under the indenture referred to below (the "Trustee").
W I T N E S S E T H
WHEREAS, the Issuers have heretofore executed and delivered to the Trustee
an indenture (the "Indenture"), dated as of _____________, 1996, providing for
the issuance of an aggregate principal amount of $100,000,000 of ___% Senior
Notes due 2003 (the "Senior Notes");
WHEREAS, Section 4.16 of the Indenture provides that under certain
circumstances the Issuers are 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 Issuers' obligations under the Senior
Notes pursuant to a Guarantee on the terms and conditions set forth in Article
10 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 Senior Notes as follows:
(a) Capitalized Terms. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
(b) Agreement to Guarantee. The Guarantor hereby agrees, jointly and
severally with all other Guarantors, to guarantee, on a senior unsubordinated
basis, the Issuers' Obligations under the Senior Notes on the terms and subject
to the conditions set forth in Article 10 of the Indenture and to be bound by
all other applicable provisions of the Indenture.
(c) No Recourse Against Others. No officer, employee, director or
stockholder of the Guarantor shall have any liability for any Obligations of the
Issuers or any Guarantor under the Senior Notes, any Guarantee, the Indenture or
this Supplemental Indenture or for any claim based on, in respect of, or by
reason of, such Obligations or their creation of any such Obligation. Each
Holder by accepting a Senior Note waives and releases all such liability, and
such waiver and release is part of the consideration for the issuance of the
Senior Notes.
(d) 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.
(e) Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
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(f) Effect of Headings. The Section headings herein are for convenience
only and shall not affect the construction hereof.
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:
First Trust National Association,
as Trustee
By: _____________________________
Name:
Title:
Attest:
________________________________
Name:
Title:
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