EXHIBIT 4.1
EXECUTION COPY
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SCOVILL ACQUISITION INC.,
as Issuer
SCOVILL HOLDINGS INC.,
as Parent Guarantor
TO
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
____________________
INDENTURE
Dated as of November 26, 1997
_____________________
$100,000,000
11 1/4% Senior Notes
due 2007
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SCOVILL ACQUISITION INC.
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT
OF 1939 AND INDENTURE, DATED AS OF NOVEMBER 26, 1997
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
(S) 310(a)(1) .................................. 607(a)
(a)(2) .................................. 607(a)
(b) .................................. 608
(S) 313(c) .................................. 702
(S) 314(a) .................................. 703
(a)(4) .................................. 1008(a)
(c)(1) .................................. 102
(c)(2) .................................. 102
(e) .................................. 102
(S) 315(b) .................................. 601
(S) 316(a)(last
sentence) .................................. 101 ("Outstanding")
(a)(1)(A) .................................. 502, 512
(a)(1)(B) .................................. 513
(b) .................................. 508
(c) .................................. 104(d)
(S) 317(a)(1) .................................. 503
(a)(2) .................................. 504
(b) .................................. 1003
(S) 318(a) .................................. 111
(c) .................................. 111
__________________
Note: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Indenture.
TABLE OF CONTENTS
PAGE
PARTIES.................................................................. 1
RECITALS OF THE COMPANY.................................................. 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101.Definitions ....................................... 2
"Acquired Indebtedness"............................................. 2
"Act"............................................................... 3
"Affiliate"......................................................... 3
"amend"............................................................. 3
"Asset Sale"........................................................ 3
"Attributable Indebtedness"......................................... 4
"Banks"............................................................. 4
"Basket"............................................................ 4
"Board of Directors"................................................ 4
"Board Resolution".................................................. 4
"Business Day"...................................................... 4
"Capital Stock"..................................................... 4
"Capitalized Lease Obligations"..................................... 5
"Cash Equivalents".................................................. 5
"Change of Control"................................................. 5
"Commission"........................................................ 6
"Common Stock"...................................................... 6
"Company"........................................................... 6
"Company Request" or "Company Order"................................ 6
"Consolidated Amortization Expense"................................. 6
"Consolidated Depreciation Expense"................................. 6
"Consolidated Fixed Charge Coverage Ratio".......................... 7
"Consolidated Income Tax Expense"................................... 8
"Consolidated Interest Expense"..................................... 8
"Consolidated Net Income"........................................... 8
"Consolidated Net Worth"............................................ 9
"Corporation"....................................................... 9
"Credit Agreement".................................................. 9
"Currency Agreements"............................................... 10
"Default"........................................................... 10
"Defaulted Interest"................................................ 10
____________________
Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
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PAGE
"Depositary"........................................................ 10
"Disinterested Director"............................................ 10
"Disqualified Stock"................................................ 10
"EBITDA"............................................................ 11
"Event of Default".................................................. 11
"Exchange Act"...................................................... 11
"Exchange Notes".................................................... 11
"Exchange Offer".................................................... 11
"Exchange Offer Registration Statement"............................. 11
"Fair Market Value"................................................. 11
"Federal Bankruptcy Code"........................................... 12
"Fixed Charges"..................................................... 12
"Foreign Subsidiary"................................................ 12
"GAAP".............................................................. 12
"Global Notes"...................................................... 12
"guarantee"......................................................... 12
"Guarantee"......................................................... 12
"Guarantor"......................................................... 13
"Hedging Obligations"............................................... 13
"Holder"............................................................ 13
"incur"............................................................. 13
"Indebtedness"...................................................... 13
"Indenture"......................................................... 14
"Independent Financial Advisor"..................................... 14
"Initial Notes"..................................................... 14
"Initial Purchasers"................................................ 14
"Institutional Accredited Investor"................................. 14
"Interest Payment Date"............................................. 14
"Interest Rate Agreements".......................................... 14
"Investments"....................................................... 14
"Issue Date"........................................................ 15
"Lien".............................................................. 15
"Management Services Agreement"..................................... 15
"Maturity".......................................................... 15
"Moody's"........................................................... 15
"Net Available Proceeds"............................................ 15
"Non-Recourse Purchase Money Indebtedness".......................... 16
"Non-U.S. Person"................................................... 16
"Notes"............................................................. 16
"Note Register" and "Note Registrar"................................ 16
"Obligations"....................................................... 16
"Officers' Certificate"............................................. 17
"Offshore Global Notes"............................................. 17
"Offshore Physical Notes"........................................... 17
"Offshore Notes Exchange Date"...................................... 17
"Opinion of Counsel"................................................ 17
"Outstanding"....................................................... 17
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PAGE
"Parent" or "Parent Guarantor"...................................... 18
"Paying Agent"...................................................... 18
"Payment Event of Default".......................................... 18
"Payment Restriction"............................................... 18
"Permanent Offshore Global Notes"................................... 18
"Permitted Holders"................................................. 19
"Permitted Indebtedness"............................................ 19
"Permitted Investments"............................................. 21
"Permitted Liens" means:............................................ 22
"Permitted Transferees"............................................. 24
"Person"............................................................ 24
"Physical Notes".................................................... 24
"Plan of Liquidation"............................................... 24
"Predecessor Note".................................................. 24
"Private Placement Legend".......................................... 24
"Public Equity Offering"............................................ 25
"Purchase Money Indebtedness"....................................... 25
"QIB"............................................................... 25
"Qualified Stock"................................................... 25
"redeem"............................................................ 25
"Redemption Date"................................................... 25
"Redemption Price".................................................. 25
"refinance"......................................................... 25
"Refinancing Indebtedness".......................................... 25
"Registration Rights Agreement"..................................... 26
"Registration Statement"............................................ 26
"Regular Record Date"............................................... 26
"Related Assets".................................................... 26
"Responsible Officer"............................................... 26
"Restricted Investment"............................................. 27
"Restricted Payment"................................................ 27
"Restricted Subsidiary"............................................. 27
"S&P"............................................................... 27
"Sale and Leaseback Transaction".................................... 27
"Saratoga".......................................................... 27
"Securities Act".................................................... 27
"Shelf Registration Statement"...................................... 28
"Significant Subsidiary"............................................ 28
"Special Record Date"............................................... 28
"Stated Maturity"................................................... 28
"Subordinated Indebtedness"......................................... 28
"Subsidiary"........................................................ 28
"Subsidiary Guarantor".............................................. 28
"Successor"......................................................... 28
"Temporary Offshore Global Notes"................................... 28
"Trust Indenture Act" or "TIA"...................................... 28
"Trustee"........................................................... 28
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PAGE
...................................................................
"Unrestricted Subsidiary"............................................. 29
"U.S. Global Notes"................................................... 29
"U.S. Physical Notes"................................................. 30
"Vice President"...................................................... 30
"Voting Stock"........................................................ 30
"Weighted Average Life to Maturity"................................... 30
"Wholly Owned Restricted Subsidiary".................................. 30
SECTION 102. Compliance Certificates and Opinions................ 30
SECTION 103. Form of Documents Delivered to Trustee.............. 31
SECTION 104. Acts of Holders..................................... 32
SECTION 105. Notices, etc., to Trustee, Company and Agent........ 33
SECTION 106. Notice to Holders; Waiver........................... 34
SECTION 107. Effect of Headings and Table of Contents............ 34
SECTION 108. Successors and Assigns.............................. 34
SECTION 109. Separability Clause................................. 34
SECTION 110. Benefits of Indenture............................... 35
SECTION 111. Governing Law....................................... 35
SECTION 112. Legal Holidays...................................... 35
SECTION 113. No Personal Liability of Directors, Officers,
Employees, Stockholders or Incorporators........... 35
SECTION 114. Counterparts........................................ 35
SECTION 115. Rules of Interpretation............................. 36
SECTION 116. Ancillary Agreements................................ 36
SECTION 117. Conflict with Trust Indenture Act................... 36
ARTICLE TWO
NOTE FORMS
SECTION 201. Forms Generally..................................... 36
SECTION 202. Restrictive Legends................................. 38
ARTICLE THREE
THE NOTES
SECTION 301. Title and Terms..................................... 39
SECTION 302. Denominations....................................... 40
SECTION 303. Execution, Authentication, Delivery and Dating...... 40
SECTION 304. Temporary Notes..................................... 42
SECTION 305. Registration, Registration of Transfer and Exchange. 42
SECTION 306. Mutilated, Destroyed, Lost and Stolen Notes......... 43
SECTION 307. Payment of Interest; Interest Rights Preserved...... 44
SECTION 308. Persons Deemed Owners............................... 46
SECTION 309. Cancellation........................................ 46
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PAGE
SECTION 310. Computation of Interest............................ 46
SECTION 311. Book-Entry Provisions for Global Notes............. 46
SECTION 312. Transfer Provisions................................ 48
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture............ 51
SECTION 402. Application of Trust Money......................... 53
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.................................. 53
SECTION 502. Acceleration of Maturity; Rescission
and Annulment....................................... 55
SECTION 503. Collection of Indebtedness and Suits
for Enforcement by Trustee.......................... 57
SECTION 504. Trustee May File Proofs of Claim................... 57
SECTION 505. Trustee May Enforce Claims Without
Possession of Notes................................. 58
SECTION 506. Application of Money Collected..................... 59
SECTION 507. Limitation on Suits................................ 59
SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium and Liquidated Damages, if any,
and Interest........................................ 60
SECTION 509. Restoration of Rights and Remedies................. 60
SECTION 510. Rights and Remedies Cumulative..................... 60
SECTION 511. Delay or Omission Not Waiver....................... 61
SECTION 512. Control by Holders................................. 61
SECTION 513. Waiver of Past Defaults............................ 61
SECTION 514. Waiver of Stay or Extension Laws................... 62
ARTICLE SIX
THE TRUSTEE
SECTION 601. Notice of Defaults................................. 62
SECTION 602. Certain Rights of Trustee.......................... 62
SECTION 603. Trustee Not Responsible for Recitals or
Issuance of Notes................................... 64
SECTION 604. May Hold Notes..................................... 64
SECTION 605. Money Held in Trust................................ 64
SECTION 606. Compensation, Reimbursement........................ 64
SECTION 607. Corporate Trustee Required; Eligibility............ 66
SECTION 608. Resignation and Removal; Appointment of
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PAGE
Successor........................................ 66
SECTION 609. Acceptance of Appointment by Successor............ 67
SECTION 610. Merger, Conversion, Consolidation or Succession
to Business...................................... 68
ARTICLE SEVEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Disclosure of Names and Addresses of Holders...... 68
SECTION 702. Reports by Trustee................................ 68
SECTION 703. Reports by Company................................ 69
ARTICLE EIGHT
MERGER, CONSOLIDATION AND SALE OF ASSETS
SECTION 801. Company May Consolidate, etc., Only on Certain
Terms............................................ 69
SECTION 802. Successor Substituted............................. 71
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of
Holders.......................................... 71
SECTION 902. Supplemental Indentures with Consent of Holders... 72
SECTION 903. Execution of Supplemental Indentures.............. 73
SECTION 904. Effect of Supplemental Indentures................. 74
SECTION 905. Conformity with Trust Indenture Act............... 74
SECTION 906. Reference in Notes to Supplemental Indentures..... 74
SECTION 907. Notice of Supplemental Indentures................. 74
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Liquidated
Damages, if any, and Interest................... 74
SECTION 1002. Maintenance of Office or Agency.................. 75
SECTION 1003. Money for Note Payments to Be Held in Trust...... 75
SECTION 1004. Corporate Existence.............................. 77
SECTION 1005. Payment of Taxes and Other Claims................ 77
SECTION 1006. Maintenance of Properties........................ 77
SECTION 1007. Insurance........................................ 78
SECTION 1008. Statement by Officers As to Default.............. 78
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PAGE
SECTION 1009. Limitations on Additional Indebtedness........... 78
SECTION 1010. [INTENTIONALLY OMITTED........................... 79
SECTION 1011. Limitations on Restricted Payments............... 79
SECTION 1012. Limitations on Restrictions on Distributions
from Restricted Subsidiaries.................... 80
SECTION 1013. Limitations on Transactions with Affiliates...... 81
SECTION 1014. Limitations on Liens............................. 82
SECTION 1015. Limitations on Asset Sales....................... 83
SECTION 1016. Restrictions on Sale and Leaseback Transactions.. 85
SECTION 1017. Restrictions on Sale of Capital Stock of
Restricted Subsidiaries......................... 85
SECTION 1018. Reports.......................................... 85
SECTION 1019. Purchase of Notes Upon Change of Control......... 85
SECTION 1020. Waiver of Certain Covenants...................... 87
ARTICLE ELEVEN
REDEMPTION OF NOTES
SECTION 1101. Right of Redemption.............................. 88
SECTION 1102. Applicability of Article......................... 89
SECTION 1103. Election to Redeem; Notice to Trustee............ 89
SECTION 1104. Selection by Trustee of Notes to Be Redeemed..... 89
SECTION 1105. Notice of Redemption............................. 89
SECTION 1106. Deposit of Redemption Price...................... 90
SECTION 1107. Notes Payable on Redemption Date................. 90
SECTION 1108. Notes Redeemed in Part........................... 91
ARTICLE TWELVE
GUARANTEES
SECTION 1201. Unconditional Guarantee.......................... 91
SECTION 1202. Execution and Delivery of Guarantees............. 93
SECTION 1203. Limitation on Merger or Consolidation............ 94
SECTION 1204. Release of Parent Guarantor and Subsidiary
Guarantors...................................... 94
SECTION 1205. Additional Subsidiary Guarantors................. 95
SECTION 1206. Limitation on Parent Guarantor and Subsidiary
Guarantor's Liability........................... 96
SECTION 1207. Contribution..................................... 96
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. Company's Option to Effect Defeasance or
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Covenant Defeasance............................. 97
SECTION 1302. Defeasance and Discharge......................... 97
SECTION 1303. Covenant Defeasance.............................. 97
SECTION 1304. Conditions to Defeasance or Covenant Defeasance.. 98
SECTION 1305. Deposited Money and U.S. Government Obligations
to Be Held in Trust; Other Miscellaneous
Provisions...................................... 99
SECTION 1306. Repayment to the Company or Subsidiary
Guarantors...................................... 100
SECTION 1307. Reinstatement.................................... 101
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EXHIBITS
Exhibit A-1 Form of Note
Exhibit A-2 Form of Guarantee
Exhibit B Form of Certificate to Be Delivered upon Termination of Restricted
Period
Exhibit C-1 Form of Certificate to Be Delivered by Transferor in Connection
with Transfers to Institutional Accredited Investors
Exhibit C-2 Form of Certificate to Be Delivered By Transferees in Connection
with Transfers to Institutional Accredited Investors
Exhibit D Form of Regulation S Certificate
INDENTURE, dated as of November 26, 1997 between SCOVILL ACQUISITION
INC., a corporation duly organized and existing under the laws of the State of
Delaware (herein called the "Company"), having its principal office at 1802
Scovill Drive, Clarkesville, Georgia 30523, SCOVILL HOLDINGS INC., a corporation
duly organized and existing under the laws of the State of Delaware (herein
called "Parent" or "Parent Guarantor" and, together with the Subsidiary
Guarantors, the "Guarantors"), having its principal offices at 1802 Scovill
Drive, Clarkesville, Georgia 30523, and the UNITED STATES TRUST COMPANY OF NEW
YORK, a bank and trust company duly organized and existing under the New York
banking law, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of 11 1/4%
Senior Notes due 2007 (the "Initial Notes") and its 11 1/4% Series B Senior
Notes due 2007 (the "Exchange Notes", and together with the Initial Notes, the
"Notes"), of substantially the tenor and amount hereinafter set forth, and to
provide therefor the Company has duly authorized the execution and delivery of
this Indenture.
Upon the issuance of the Exchange Notes, if any, or the effectiveness
of the Exchange Offer Registration Statement (as defined herein) or, under
certain circumstances, the effectiveness of the Shelf Registration Statement (as
defined herein), this Indenture will be subject to the provisions of the Trust
Indenture Act of 1939, as amended, that are required to be part of this
Indenture and shall, to the extent applicable, be governed by such provisions.
All things necessary have been done to make the Notes, when executed
by the Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company and to make this Indenture a valid
agreement of the Company, in accordance with their and its terms.
RECITALS OF THE GUARANTOR
Parent Guarantor has duly authorized the execution and delivery of
this Indenture and of its Guarantee under the terms set forth herein.
RECITALS OF THE TRUSTEE
The Trustee has agreed to act as trustee under this Indenture on the
terms and conditions set forth herein.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Notes, as follows:
2
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
-----------
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein, and the terms "cash transaction" and "self-
liquidating paper", as used in TIA Section 311, shall have the meanings
assigned to them in the rules of the Commission adopted under the Trust
Indenture Act;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles, and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles as
are generally accepted at the date of such computation; and
(d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Acquired Indebtedness" means, with respect to any specified
Person, (a) Indebtedness of any other Person existing at the time such
other Person merged with or into or became a Restricted Subsidiary of such
specified Person, including Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Restricted Subsidiary of such specified Person or (b) assumed in connection
with acquisitions of properties or assets from such Person. Acquired
Indebtedness shall be deemed to be incurred on the date the acquired Person
becomes a Restricted Subsidiary or the date of the related acquisition of
properties or assets from such Person.
"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
"Affiliate" means, with respect to any specified Person, (a) any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person or (b) any executive officer
or director of any such specified Person or other Person. For the purposes of
this definition, "control," when used with respect to any specified Person,
includes the power to vote 10% or more of any class of voting securities of
3
such Person or to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"amend" means amend, modify, supplement, restate or amend and restate,
in whole or in part, including successively; and "amending" and "amended" have
correlative meanings.
"Asset Sale" means any sale, issuance, conveyance, transfer, lease,
assignment or other disposition to any Person other than the Company or any of
its Subsidiaries (including, without limitation, by means of a Sale and
Leaseback Transaction or a merger or consolidation) (collectively, for purposes
of this definition, a "transfer"), directly or indirectly, in one transaction or
a series of related transactions, of (a) any Capital Stock of any Restricted
Subsidiary or (b) any other properties or assets of the Company or any of its
Restricted Subsidiaries other than transfers of cash, Cash Equivalents, accounts
receivable, inventory or other properties or assets in the ordinary course of
business. For the purposes of this definition, the term "Asset Sale" shall not
include any of the following: (i) any transaction that is governed by, and made
in accordance with, the provisions described in Article Eight hereof or that
constitutes a "Change of Control"; (ii) any Restricted Payment or Restricted
Investment permitted under Section 1011 hereof; (iii) sales of damaged, worn-out
or obsolete equipment or assets that, in the Company's reasonable judgment, are
either no longer used or useful in the business of the Company or its
Subsidiaries; (iv) any disposition of defaulted receivables for collection; (v)
the granting of any Lien, or any foreclosure thereon, granted in compliance with
the provisions described under Section 1014 hereof; (vi) the conversion of any
operating lease to which attaching machinery of the Company or any of its
Restricted Subsidiaries is subject to, or the sale of any such attaching
machinery pursuant to, a Capitalized Lease Obligation; and (vii) any transfers
that, but for this clause (vii), would be Asset Sales, if after giving effect to
such transfers, the aggregate Fair Market Value of the properties or assets
transferred in such transaction or any such series of related transactions does
not exceed $100,000.
"Attributable Indebtedness" means, with respect to any particular
lease under which any Person is at the time liable, whether or not accounted for
as a Capitalized Lease Obligation, and at any date as of which the amount
thereof is to be determined, the present value of the total net amount of rent
required to be paid by such Person under the lease during the primary term
thereof, without giving effect to any renewals at the option of the lessee,
discounted from the respective due dates thereof to such date of determination
at a rate per annum equal to the discount rate which would be applicable to a
Capitalized Lease Obligation with a like term in accordance with GAAP. As used
in the preceding sentence, the "net amount of rent" under any such lease for any
such period shall mean the sum of rental and other payments required to be made
with respect to such period by the lease thereunder, excluding any amounts
required to be paid by such lessee on account of maintenance and repairs,
insurance, taxes, assessments or similar charges. In the case of any lease that
is terminable by the lessee upon payment of a penalty, such net amount of rent
shall also include the amount of such penalty, but no rent shall be considered
as required to be paid under such lease subsequent to the first date upon which
it may be so terminated.
"Banks" means the lenders from time to time who are parties to the
Credit Agreement.
4
"Basket" has the meaning set forth in Section 1011.
"Board of Directors" of any Person means the Board of Directors of
such Person (or comparable governing body) or any authorized committee thereof.
"Board Resolution" means a duly adopted resolution of the Board of
Directors of the Company.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in The City of New York
are authorized or obligated by law or executive order to close.
"Capital Stock" of any Person means any and all shares, rights to
purchase, warrants or options (whether or not currently exercisable),
participations or other equivalents of or interests in (however designated) the
equity (including without limitation common stock, preferred stock and
partnership interests) of such Person.
"Capitalized Lease Obligations" means, with respect to any Person, any
obligation of that Person to pay lease payments, rent or other amounts under a
lease of (or other similar agreement conveying the right to use) any property
(whether real, personal or mixed) that is required to be classified and
accounted for as a capital lease obligation under GAAP and, for purposes of this
Indenture, the amount of that obligation at any date shall be the capitalized
amount thereof at that date, as determined in accordance with GAAP.
"Cash Equivalents" means (i) marketable obligations with a maturity of
180 days or less issued or directly and fully guaranteed or insured by the
United States of America or any agency or instrumentality thereof (provided that
the full faith and credit of the United States of America is pledged in support
thereof); (ii) demand and time deposits and certificates of deposit or
acceptances with a maturity of 180 days or less of any financial institution
that is a member of the Federal Reserve System having combined capital and
surplus and undivided profits of not less than $500 million; (iii) commercial
paper maturing no more than 180 days from the date of creation thereof issued by
a corporation that is not an Affiliate of the Company and is organized under the
laws of any state of the United States or the District of Columbia and rated at
least A-1 by S&P or at least P-1 by Moody's; (iv) repurchase obligations with a
term of not more than seven days for underlying securities of the types
described in clause (i) above entered into with any commercial bank meeting the
specifications of clause (ii) above; and (v) investments in money market or
other mutual funds substantially all of whose assets comprise securities of the
types described in clauses (i) through (iv) above.
"Change of Control" means the occurrence of any of the following: (i)
the consummation of any transaction the result of which is (x) if such
transaction occurs prior to the first sale of Voting Stock of the Company
pursuant to a registration statement under the Securities Act that results in at
least 20% of the then outstanding Voting Stock of the Company having been sold
to the public, that Permitted Holders beneficially own Voting Stock representing
less than, directly or indirectly, 51% of the voting power of the Voting Stock
of the Company, and (y) if such transaction occurs thereafter, that any Person
or group (as such term is used in Section 13(d)(3) of the Exchange Act) (other
than Permitted Holders) is or
5
becomes the beneficial owner (as defined in Rule 13d-3 of the Exchange Act),
directly or indirectly, of Voting Stock representing more than 35% of the voting
power of the Voting Stock of the Company unless Permitted Holders beneficially
own Voting Stock representing a greater percentage of the voting power of the
Voting Stock of the Company, (ii) the Company consolidates with, or merges with
or into, another person or sells, assigns, conveys, transfers, leases or
otherwise disposes of all or substantially all of the assets of the Company and
its Restricted Subsidiaries taken as a whole to any Person, or any Person
consolidates with, or merges with or into, the Company, in any such event
pursuant to a transaction in which the outstanding Voting Stock of the Company,
as the case may be, is converted into or exchanged for cash, securities or other
property, other than any such transaction where the outstanding Voting Stock of
the Company, as the case may be, is converted into or exchanged for Voting Stock
(other than Disqualified Stock) of the surviving or transferee corporation and
the beneficial owners of the Voting Stock of the Company immediately prior to
such transaction own, directly or indirectly, Voting Stock representing not less
than a majority of the voting power of the Voting Stock of the surviving or
transferee corporation immediately after such transaction, (iii) during any
consecutive two-year period, individuals who at the beginning of such period
constituted the Board of Directors of the Company (together with any new
directors whose election by such Board of Directors or whose nomination for
election by the stockholders of the Company was approved by either (i) a vote of
two-thirds of the directors then still in office who were either directors at
the beginning of such period or whose election or nomination for election was
previously so approved or (ii) a Permitted Holder) cease for any reason to
constitute a majority of the Board of Directors of the Company then in office,
or (iv) the approval by the holders of Capital Stock of the Company of any plan
or proposal for liquidation or dissolution of the Company.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, or,
if at any time after the execution of this Indenture such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Common Stock" means, with respect to any Person, any and all shares,
interests, participations and other equivalents (however designated, whether
voting or non-voting) of such Person's common stock, whether now outstanding or
issued after the date of this Indenture, and includes, without limitation, all
series and classes of such common stock.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture, until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman, its President, any Vice
President, its Treasurer or an Assistant Treasurer, and delivered to the
Trustee.
"Consolidated Amortization Expense" of any Person for any period means
the amortization expense of such Person and its Restricted Subsidiaries for such
period (to the extent included in the computation of Consolidated Net Income of
such Person), determined on a consolidated basis in accordance with GAAP.
6
"Consolidated Depreciation Expense" of any Person for any period means
the depreciation expense of such Person and its Restricted Subsidiaries for such
period (to the extent included in the computation of Consolidated Net Income of
such Person), determined on a consolidated basis in accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" of any Person means, with
respect to any determination date, the ratio of (x) EBITDA for such Person's
four full fiscal quarters immediately preceding the determination date for which
financial statements are available to (y) the aggregate Fixed Charges of such
Person for such four fiscal quarters. In making such computations, (i) EBITDA
and Fixed Charges shall be calculated on a pro forma basis assuming that (A) the
Indebtedness to be incurred or the Disqualified Stock to be issued (and all
other Indebtedness incurred or Disqualified Stock issued after the first day of
such period of four full fiscal quarters referred to in Section 1009 hereof
through and including the date of determination), and (if applicable) the
application of the net proceeds therefrom (and from any other such Indebtedness
or Disqualified Stock), including the refinancing of other Indebtedness, had
been incurred on the first day of such four quarter period and, in the case of
Acquired Indebtedness, on the assumption that the related transaction (whether
by means of purchase, merger or otherwise) also had occurred on such date with
the appropriate adjustments with respect to such acquisition being included in
such pro forma calculation and (B) any acquisition or disposition by the Company
or any Restricted Subsidiary of any properties or assets outside the ordinary
course of business or any repayment of any principal amount of any Indebtedness
of the Company or any Restricted Subsidiary, in either case since the first day
of such period of four full fiscal quarters through and including the date of
determination, had been consummated on such first day of such four quarter
period; (ii) the Fixed Charges attributable to interest on any Indebtedness
required to be computed on a pro forma basis in accordance with Section 1009
hereof and (A) bearing a floating interest rate shall be computed as if the rate
in effect on the date of computation had been the applicable rate for the entire
period and (B) which was not outstanding during the period for which the
computation is being made but which bears, at the option of the Company, a fixed
or floating rate of interest, shall be computed by applying, at the option of
the Company, either the fixed or floating rate; (iii) the Fixed Charges
attributable to interest on any Indebtedness under a revolving credit facility
required to be computed on a pro forma basis in accordance with Section 1009
hereof shall be computed based upon the average daily balance of such
Indebtedness during the applicable period, provided that such average daily
balance shall be reduced by the amount of any repayment of Indebtedness under a
revolving credit facility during the applicable period, which repayment
permanently reduced the commitments or amounts available to be reborrowed under
such facility; (iv) notwithstanding the foregoing clauses (ii) and (iii),
interest on Indebtedness determined on a fluctuating basis, to the extent such
interest is covered by agreements relating to Hedging Obligations, shall be
deemed to have accrued at the rate per annum resulting after giving effect to
the operation of such agreements; and (v) if after the first day of the
applicable four-quarter period the Company has permanently retired any
Indebtedness out of the net proceeds of the issuance and sale of shares of
Capital Stock (other than Disqualified Stock) of the Company within 30 days of
such issuance and sale, Fixed Charges shall be calculated on a pro forma basis
as if such Indebtedness had been retired on the first day of such period.
"Consolidated Income Tax Expense" means, for any period, the provision
for
7
federal, state, local and foreign income taxes (including state franchise taxes
accounted for as income taxes in accordance with GAAP) of the Company and the
Restricted Subsidiaries for the period as determined on a consolidated basis in
accordance with GAAP.
"Consolidated Interest Expense" means, without duplication, with
respect to any Person for any period, the sum of the interest expense on all
Indebtedness of such Person and its Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP and including,
without limitation (i) imputed interest on Capitalized Lease Obligations, (ii)
commissions, discounts and other fees and charges owed with respect to letters
of credit securing financial obligations and bankers' acceptance financing,
(iii) the net costs associated with Hedging Obligations, (iv) amortization of
financing fees and expenses other than with respect to financing fees and
expenses paid on or prior to the Issue Date, (v) the interest portion of any
deferred payment obligations, (vi) amortization of debt discount or premium, if
any, (vii) all other non-cash interest expense, (viii) capitalized interest,
(ix) all interest payable with respect to discontinued operations, and (x) all
interest on any Indebtedness of any other Person guaranteed by such Person or
any of its Restricted Subsidiaries.
"Consolidated Net Income" of any Person for any period means the net
income (or loss) of such Person and its Restricted Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP; provided that there
shall be excluded from such net income (to the extent otherwise included
therein), without duplication: (i) the net income (or loss) of any Person
(other than a Restricted Subsidiary of the referent Person) in which any Person
other than the referent Person has an ownership interest, except to the extent
that any such income has actually been received by the referent Person or any of
its Restricted Subsidiaries in the form of cash dividends during such period
(subject in the case of a dividend or distribution paid to a Restricted
Subsidiary, to the limitation in clause (iii) below); (ii) except to the extent
includible in the consolidated net income of the referent Person pursuant to the
foregoing clause (i), the net income (or loss) of any Person that accrued prior
to the date that (a) such Person becomes a Restricted Subsidiary (other than a
Guarantor) of the referent Person or is merged into or consolidated with the
referent Person or any of its Restricted Subsidiaries or (b) the assets of such
Person are acquired by the referent Person or any of its Restricted
Subsidiaries; (iii) the net income of any Restricted Subsidiary (other than a
Guarantor) of the referent Person during such period to the extent that the
declaration or payment of dividends or similar distributions by such Restricted
Subsidiary of that income is not permitted 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 during such
period; (iv) any gain (or loss), together with any related provisions for taxes
on any such gain (or loss), realized during such period by the referent Person
or any of its Restricted Subsidiaries upon (a) the acquisition of any
securities, or the extinguishment of any Indebtedness, of the referent Person or
any of its Restricted Subsidiaries or (b) any Asset Sale by the referent Person
or any of its Restricted Subsidiaries; (v) any extraordinary gain (or loss),
together with any related provision for taxes on any such extraordinary gain (or
loss), realized by the referent Person or any of its Restricted Subsidiaries;
(vi) in the case of a successor to such Person by consolidation, merger or
transfer of its assets, any earnings of the successor prior to such merger,
consolidation or transfer of assets; and (vii) non-cash gains and losses due
solely to fluctuations in currency values; and provided further that, subject to
clause (iii) above, any gain referred to in clauses (iv) and (v) above that
relates to a Restricted Investment and that is received in cash by the referent
Person or one of its Restricted
8
Subsidiaries during such period shall be included in the consolidated net income
of the referent Person.
"Consolidated Net Worth" means, with respect to any Person as of any
date, the sum of (i) the consolidated equity of the common stockholders of such
Person and its consolidated Restricted Subsidiaries as of such date plus (ii)
the respective amounts reported on such Person's balance sheet as of such date
with respect to any series of preferred stock (other than Disqualified Stock),
less all write-ups (other than write-ups resulting from foreign currency
translations and write-ups of tangible assets of a going concern business made
within 12 months after the acquisition of such business) subsequent to the Issue
Date in the book value of any asset owned by such Person or a Restricted
Subsidiary of such Person.
"Corporate Trust Office" means the principal corporate trust office of
the Trustee, at which at any particular time its corporate trust business shall
be administered, which office at the date of execution of this Indenture is
located at 114 West 47th Street, New York, New York 10036, Attn: Corporate
Trust Administration, except that with respect to presentation of Notes for
payment or for registration of transfer or exchange, such term shall mean the
office or agency of the Trustee at 770 Broadway, 13th Floor, New York, New York
10003, Attn: Corporate Trust Services.
"Corporation" includes corporations, associations, companies and
business trusts.
"Credit Agreement" means that certain Credit Agreement dated as of
November 26, 1997 by and among the Company, the guarantors party thereto, Swiss
Bank Corporation and the other lenders party thereto, and all guarantees, notes,
security agreements, pledge agreements and other instruments in connection
therewith, as amended or refinanced from time to time, and/or one or more
letters of credit issued by one or more lenders for the benefit of the Company
and/or one or more of Parent and its Subsidiaries and in each case as amended or
refinanced from time to time.
"Currency Agreements" means any spot or forward foreign exchange
agreements and currency swap, currency option or other similar financial
agreements or arrangements entered into by the Company or any of its Restricted
Subsidiaries in the ordinary course of business and designed to protect against
or manage exposure to fluctuations in foreign currency exchange rates.
"Default" means any event, act or condition that after notice or the
passage of time or both would be an Event of Default.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means The Depository Trust Company, its nominees and
successors or any replacement thereof.
"Disinterested Director" means, with respect to any transaction or
series of transactions in respect of which a Board Resolution is required under
the Indenture, a member of the Board of Directors of the Company who does not
have any material direct or indirect financial interest (other than an interest
arising solely from the beneficial ownership of Capital
9
Stock of the Company) in or with respect to such transaction or series of
transactions.
"Disqualified Stock" means any Capital Stock of such Person that, by
its terms, by the terms of any agreement related thereto or by the terms of any
security into which it is convertible, puttable or exchangeable, is, or upon the
happening of any event or the passage of time would be, required to be redeemed
or repurchased by such Person or any of its Restricted Subsidiaries, whether or
not at the option of the holder thereof, or matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, in whole or in
part, on or prior to the stated final maturity of the Notes; provided, however,
that (i) any class of Capital Stock of such Person that, by its terms,
authorizes such Person to satisfy in full its obligations with respect to the
payment of dividends or upon maturity, redemption (pursuant to a sinking fund or
otherwise) or repurchase thereof or otherwise by the delivery of Qualified
Stock, and that is not convertible, puttable or exchangeable for Disqualified
Stock or Indebtedness, shall not be deemed to be Disqualified Stock so long as
such Person satisfies its obligations with respect thereto solely by the
delivery of Qualified Stock and (ii) any Capital Stock that would constitute
Disqualified Stock solely because the holders thereof (or of any security into
which it is convertible or for which it is exchangeable) have the right to
require the issuer to repurchase such Capital Stock (or such security into which
it is exchangeable) upon the occurrence of an Asset Sale or a Change of Control
shall not constitute Disqualified Stock if such Capital Stock (and all such
securities into which it is convertible or for which it is exchangeable)
provides that the issuer thereof will not repurchase or redeem any such Capital
Stock (or any such security into which it is convertible or for which it is
exchangeable) pursuant to such provisions prior to compliance by the Company
with the provisions of Section 1015 hereof or Section 1019 hereof and purchase
of any Notes properly tendered pursuant to an offer to purchase required
thereunder and not withdrawn.
"EBITDA" means, with respect to any Person for any period, without
duplication, the sum of the amounts for such period of (i) Consolidated Net
Income, (ii) Consolidated Income Tax Expense, (iii) Consolidated Amortization
Expense, (iv) Consolidated Depreciation Expense, (v) Fixed Charges, (vi)
prepayment or make-whole payments incurred in connection with the repayment of
Indebtedness on the Issue Date, and (vii) all other non-cash items reducing
Consolidated Net Income (excluding any such non-cash charge that results in an
accrual of a reserve for cash charges in any future period) of such Person and
its Restricted Subsidiaries, in each case determined on a consolidated basis in
accordance with GAAP (provided, however, that the amounts set forth in clauses
(ii) through (vii) shall be included without duplication and only to the extent
such amounts actually reduced Consolidated Net Income), less the aggregate
amount of all non-cash items, determined on a consolidated basis, to the extent
such items increase Consolidated Net Income.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" has the meaning stated in the first recital of this
Indenture and refers to any Exchange Notes containing terms substantially
identical to the Initial Notes (except that such Exchange Notes shall not
contain terms with respect to transfer restrictions and shall be registered
under the Securities Act) that are issued and exchanged for the Initial Notes in
accordance with the Exchange Offer, as provided for in the Registration Rights
10
Agreement and this Indenture.
"Exchange Offer" means the offer by the Company to the Holders of the
Initial Notes to exchange all of the Initial Notes for Exchange Notes, as
provided for in the Registration Rights Agreement.
"Exchange Offer Registration Statement" means the Exchange Offer
Registration Statement as defined in the Registration Rights Agreement.
"Fair Market Value" means, with respect to any asset or property, the
sale value that would be obtained in an arm's-length transaction between an
informed and willing seller under no compulsion to sell and an informed and
willing buyer under no compulsion to buy; provided, however, that if such value
exceeds $1.0 million, such determination shall be made in good faith by the
Board of Directors of the Company, whose determination shall be conclusive.
"Federal Bankruptcy Code" means the Bankruptcy Act of Title 11 of the
United States Code, as amended from time to time.
"Fixed Charges" means, with respect to any Person for any period, the
sum of (a) the Consolidated Interest Expense of such Person and its Restricted
Subsidiaries for such period, and (b) the product of (i) all cash dividend
payments (and non-cash dividend payments in the case of a Person that is a
Restricted Subsidiary) on any series of preferred stock of such Person or a
Restricted Subsidiary of such Person, times (ii) a fraction, the numerator of
which is one and the denominator of which is one minus the then current combined
federal, state and local statutory tax rate of such Person, expressed as a
decimal, in each case, on a consolidated basis and in accordance with GAAP.
"Foreign Subsidiary" means a Restricted Subsidiary that is
incorporated in a jurisdiction other than the United States or a state thereof
or the District of Columbia and that has no material operations or assets in the
United States.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, as in effect on the Issue Date.
"Global Notes" has the meaning set forth in Section 201.
"guarantee" means, as applied to any obligation, (i) a guarantee
(other than by endorsement of negotiable instruments for collection in the
ordinary course of business), direct or indirect, in any manner, of any part or
all of such obligation and (ii) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, the
payment of amounts drawn down under letters of credit. When used as a verb,
"guarantee" has a corresponding meaning.
11
"Guarantee" shall mean the guarantees of Parent Guarantor and
Subsidiary Guarantors pursuant to Article Twelve hereof. When used as a verb,
"Guarantee" shall have a corresponding meaning.
"Guarantor" means Parent Guarantor and any Subsidiary Guarantor
determined in accordance with Article Twelve hereof.
"Hedging Obligations" of any person means the obligations of such
person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" means a Person in whose name a Note is registered in the Note
Register.
"incur" means, with respect to any Indebtedness or obligation, incur,
create, issue, assume, guarantee or otherwise become directly or indirectly
liable, contingently or otherwise, with respect to such Indebtedness or
obligation. Neither the accrual of interest nor the accretion of accreted value
shall be deemed to be an incurrence.
"Indebtedness" of any Person at any date means, without duplication:
(i) all liabilities, contingent or otherwise, of such Person for borrowed money
(whether or not the recourse of the lender is to the whole of the assets of such
Person or only to a portion thereof); (ii) all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments; (iii) all
obligations of such Person in respect of letters of credit or other similar
instruments (or reimbursement obligations with respect thereto); (iv) all
obligations of such Person to pay the deferred and unpaid purchase price of
property or services, except trade payables and accrued expenses incurred by
such Person in the ordinary course of business in connection with obtaining
goods, materials or services; (v) the maximum fixed repurchase price of all
Disqualified Stock of such Person; (vi) all Capitalized Lease Obligations of
such Person; (vii) all Indebtedness of others secured by a Lien on any asset of
such Person, whether or not such Indebtedness is assumed by such Person; (viii)
all Indebtedness of others guaranteed by such Person to the extent of such
guarantee; provided that Indebtedness of the Company or its Restricted
Subsidiaries that is guaranteed by the Company or the Company's Restricted
Subsidiaries shall only be counted once in the calculation of the amount of
Indebtedness of the Company and its Restricted Subsidiaries on a consolidated
basis; and (ix) to the extent not otherwise included in this definition,
obligations under Hedging Obligations not entered into solely for the purpose of
protecting the Company or its Restricted Subsidiaries against fluctuations in
foreign currency exchange rates or interest rates on or in connection with
indebtedness of the Company or any of its Restricted Subsidiaries then
outstanding. The amount of Indebtedness of any Person at any date shall be,
without duplication, the outstanding balance at such date of all unconditional
obligations as described above, the maximum liability of such Person for any
such contingent obligations at such date and, in the case of clause (vii), the
lesser of (A) the Fair Market Value of any asset subject to a Lien securing the
Indebtedness of others on the date that the Lien attaches and (B) the amount of
the Indebtedness secured. For purposes of the preceding sentence, the "maximum
fixed repurchase price" of any Disqualified Stock that does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Disqualified Stock as if such Disqualified Stock were purchased on any date on
which Indebtedness shall be required to be determined pursuant to the Indenture,
and if such price is based upon, or measured by, the fair market value of such
12
Disqualified Stock (or any equity security for which it may be exchanged or
converted), such fair market value shall be determined in good faith by the
Board of Directors of such Person, which determination shall be evidenced by a
Board Resolution.
"Indenture" means this instrument as originally executed and as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Independent Financial Advisor" means an accounting, appraisal or
investment banking firm of nationally recognized standing that is disinterested
and independent with respect to the Company and its Affiliates and, in the
reasonable judgment of the Company's Board of Directors, is qualified to perform
the task for which it has been engaged.
"Initial Notes" has the meaning specified in the recitals to this
Indenture.
"Initial Purchasers" means SBC Warburg Dillon Read Inc. and BT Alex.
Brown Incorporated.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
of Regulation D under the Securities Act.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Notes.
"Interest Rate Agreements" means any interest rate protection
agreements and other types of interest rate hedging agreements (including,
without limitation, interest rate swaps, caps, floors, collars and similar
agreements) designed to protect against or manage exposure to fluctuations in
interest rates.
"Investments" means, with respect to any Person, any direct or
indirect advance, loan, guarantee of Indebtedness or other extension of credit
or capital contribution to (by means of any transfer of cash or other property
or assets to others or any payment for property, assets or services for the
account or use of others), or any purchase or acquisition by such Person of any
Capital Stock, bonds, notes, debentures or other securities (including
derivatives) or evidences of Indebtedness issued by, any other Person. In
addition, the Fair Market Value of the net assets of any Restricted Subsidiary
at the time that such Restricted Subsidiary is designated an Unrestricted
Subsidiary shall be deemed to be an "Investment" made by the Company in such
Unrestricted Subsidiary at such time. "Investments" shall exclude (a)
extensions of trade credit or other advances to customers on commercially
reasonable terms in accordance with normal trade practices or otherwise in the
ordinary course of business, (b) Hedging Obligations, but only to the extent
that the same constitute Permitted Indebtedness and (c) endorsements of
negotiable instruments and documents in the ordinary course of business.
"Issue Date" means November 26, 1997, the date the Notes are initially
issued.
"Lien" means any mortgage, charge, pledge, lien (statutory or other),
security interest, hypothecation, assignment for security, claim or similar type
of encumbrance
13
(including, without limitation, any agreement to give or grant any lease,
conditional sale or other title retention agreement having substantially the
same economic effect as any of the foregoing) upon or with respect to any
property of any kind. A Person will be deemed to own subject to a Lien any
property that the Person has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement.
"Liquidated Damages" means all liquidated damages then owing pursuant
to Section 5 of the Registration Rights Agreement.
"Management Services Agreement" means the Management Services
Agreement to be entered into between Saratoga and/or its Affiliate, on the one
hand, and Parent and/or one or more of its Subsidiaries, as such agreement may
be amended from time to time in any manner; provided that after giving effect to
such amendment the terms thereof are, in the aggregate, no less favorable to the
Holders.
"Maturity", when used with respect to any Note, means the date on
which the principal of such Note or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption or otherwise.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Net Available Proceeds" means, with respect to any Asset Sale, the
proceeds thereof in the form of cash or Cash Equivalents including payments in
respect of deferred payment obligations when received in the form of cash or
Cash Equivalents (except to the extent that such obligations are financed by or
sold with recourse to the Company or any Subsidiary), net of (i) brokerage
commissions and other fees and expenses (including fees and expenses of legal
counsel, accountants and investment banks) related to such Asset Sale, (ii)
provisions for all taxes payable as a result of such Asset Sale (after taking
into account any available tax credits or deductions and any tax sharing
arrangements), (iii) amounts required to be paid to any Person (other than the
Company or any Subsidiary) owning a beneficial interest in the properties or
assets subject to the Asset Sale or having a Lien thereon and (iv) appropriate
amounts to be provided by the Company or any Subsidiary, as the case may be, as
a reserve required in accordance with GAAP against any liabilities associated
with such Asset Sale and retained by the Company or any Subsidiary, as the case
may be, after such Asset Sale, including, without limitation, pensions and other
postemployment benefit liabilities, liabilities related to environmental matters
and liabilities under any indemnification obligations associated with such Asset
Sale, all as reflected in an Officers' Certificate delivered to the Trustee;
provided, however, that any amounts remaining after adjustments, revaluations or
liquidations of such reserves shall constitute Net Available Proceeds.
"Non-Recourse Purchase Money Indebtedness" means Indebtedness of the
Company or any of its Restricted Subsidiaries incurred (a) to finance the
purchase of any assets of the Company or any of its Restricted Subsidiaries
within 90 days of such purchase, (b) to the extent the amount of Indebtedness
thereunder does not exceed 100% of the purchase cost of such assets, (c) to the
extent the purchase cost of such assets is or should be included in "additions
to property, plant and equipment" in accordance with GAAP, (d) to the extent
that such Indebtedness is non-recourse to the Company or any of its Restricted
Subsidiaries or any
14
of their respective assets other than the assets so purchased, and (e) to the
extent the purchase of such assets is not part of an acquisition of any Person.
Indebtedness will not be deemed recourse because there is recourse to the
borrower, any guarantor or any other Person for (x) environmental warranties and
indemnities, or (y) indemnities for and liabilities arising from fraud,
misrepresentation, misapplication or non-payment of rents, profits, insurance
and condemnation proceeds and other sums actually received by the borrower from
secured assets to be paid to the lender, waste and mechanics' liens.
"Non-U.S. Person" means a person who is not a U.S. person as defined
in Regulation S.
"Notes" has the meaning stated in the first recital of this Indenture
and more particularly means any Notes authenticated and delivered under this
Indenture.
"Note Register" and "Note Registrar" have the respective meanings
specified in Section 305.
"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 the Company or any Guarantor, the
Chairman, the President, a Vice President, the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary.
"Officer's Certificate" means a certificate signed by the Chairman,
the President, a Vice President, the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary of the Company or any Guarantor, and
delivered to the Trustee.
"Officers' Certificate" means a certificate signed by the Chairman,
the President or a Vice President, and by the Treasurer, an Assistant Treasurer,
the Secretary or an Assistant Secretary of the Company or any Guarantor, and
delivered to the Trustee.
"Offshore Global Notes" has the meaning set forth in Section 201.
"Offshore Physical Notes" has the meaning set forth in Section 201.
"Offshore Notes Exchange Date" has the meaning set forth in Section
201.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company or any Guarantor, including an employee of the Company,
and who shall be acceptable to the Trustee.
"Outstanding", when used with respect to Notes, means, as of the date
of determination, all Notes theretofore authenticated and delivered under this
Indenture, except:
(i) Notes theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
15
(ii) Notes, or portions thereof, for whose payment or redemption
money in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Company) in trust or set aside
and segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Notes; provided that, if such Notes
are to be redeemed, notice of such redemption has been duly given pursuant
to this Indenture or provision therefor satisfactory to the Trustee has
been made;
(iii) Notes, except to the extent provided in Sections 1302 and 1303,
with respect to which the Company has effected defeasance and/or covenant
defeasance as provided in Article Thirteen; and
(iv) Notes which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Notes have been authenticated and
delivered pursuant to this Indenture, other than any such Notes in respect
of which there shall have been presented to the Trustee proof satisfactory
to it that such Notes are held by a bona fide purchaser in whose hands the
Notes are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Notes have given any request, demand,
authorization, direction, consent, notice or waiver hereunder, and for the
purpose of making the calculations required by TIA Section 313, Notes owned by
the Company or any other obligor upon the Notes or any Affiliate of the Company
or such other obligor shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be protected in making
such calculation or in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes which the Trustee knows to be
so owned shall be so disregarded. Notes so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Notes and that the pledgee is not the Company or any other obligor upon the
Notes or any Affiliate of the Company or such other obligor.
"Parent" or "Parent Guarantor" means Scovill Holdings Inc. or any
Successor thereto.
"Paying Agent" means any Person (including the Company acting as
Paying Agent) authorized by the Company to pay the principal of (and premium and
Liquidated Damages, if any) or interest on any Notes on behalf of the Company.
"Payment Restriction", with respect to a Subsidiary of any Person,
means any encumbrance, restriction or limitation, whether by operation of the
terms of its charter or by reason of any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation, on the ability of (i)
such Subsidiary to (a) pay dividends or make other distributions on its Capital
Stock or make payments on any obligation, liability or Indebtedness owed to such
Person or any other Subsidiary of such Person, (b) make loans or advances to
such Person or any other Subsidiary of such Person or (c) transfer any of its
properties or assets to such Person or any other Subsidiary of such Person or
(ii) such Person or any other Subsidiary of such Person to receive or retain any
such dividends, distributions or payments, loans or
16
advances or transfer of properties or assets.
"Permanent Offshore Global Notes" has the meaning set forth in Section
201.
"Permitted Holders" means (i) Saratoga (ii) David J. Barrett, Martin
A. Moore, Michael Baxley, John Champagne, Robert Feltz, and Frank A. Wright, and
(iii) Permitted Transferees of the foregoing.
"Permitted Indebtedness" means any of the following:
(i) Indebtedness of the Company and any Guarantor under the Credit
Agreement in an aggregate principal amount at any time outstanding (with
letters of credit being deemed to have a principal amount equal to the
aggregate maximum then available to be drawn thereunder assuming compliance
with all conditions to such drawing) not to exceed the greater of (a) $25
million or (b) the sum of 80% of the book value of accounts receivable and
60% of the book value of inventory of the Company and its Restricted
Subsidiaries (as set forth on the latest available balance sheet),
calculated on a consolidated basis and in accordance with GAAP;
(ii) Indebtedness of the Company and any Guarantor under the Credit
Agreement in an aggregate principal amount at any time outstanding (with
letters of credit being deemed to have a principal amount equal to the
maximum then available to be drawn thereunder assuming compliance with all
conditions to such drawing) not to exceed $28.0 million, less the aggregate
amount of all Net Available Proceeds of Asset Sales applied to permanently
reduce the outstanding amount or the commitments with respect to such
Indebtedness pursuant to Section 1015 hereof;
(iii) Indebtedness under the Notes, the Guarantees and this
Indenture;
(iv) all of the Indebtedness of the Company and its Restricted
Subsidiaries not otherwise referred to in this definition that is
outstanding on the Issue Date;
(v) Indebtedness under Interest Rate Agreements, provided that (1)
such Interest Rate Agreements are related to payment obligations on
Permitted Indebtedness or Indebtedness otherwise permitted by the
Consolidated Fixed Charge Coverage Ratio test set forth in Section 1009
hereof, and (2) the notional principal amount of such Interest Rate
Agreements does not exceed the principal amount of such Indebtedness to
which such Hedging Obligations relate;
(vi) Indebtedness under Currency Hedge Agreements, provided that
(a) such Currency Agreements are related to payment obligations on
Permitted Indebtedness or Indebtedness otherwise permitted by the
Consolidated Fixed Charge Coverage Ratio test set forth in Section 1009
hereof or to the foreign currency cash flows reasonably expected to be
generated or required by the Company and the Restricted Subsidiaries, (b)
the notional principal amount of the Currency Agreements does not exceed
the principal amount of that Indebtedness and the amount of those foreign
currency cash flows to which such Currency Agreements relate and (c) such
Currency Agreements are entered into for the purpose of limiting currency
exchange rate risks in connection
17
with Indebtedness permitted to be incurred under this Indenture or
transactions entered into in the ordinary course of business;
(vii) Indebtedness of the Company to a Restricted Subsidiary and
Indebtedness of any Restricted Subsidiary to the Company or to a Restricted
Subsidiary; provided, however, that upon either (1) any such Restricted
Subsidiary ceasing to be a Restricted Subsidiary or (2) the transfer or
other disposition of any such Indebtedness (except to the Company or a
Restricted Subsidiary), the provisions of this clause (vii) shall no longer
be applicable to such Indebtedness and such Indebtedness shall be deemed,
in each case, to be incurred and shall be treated as an incurrence for
purposes of the Consolidated Fixed Charge Coverage Ratio test set forth in
Section 1009 at the time the Restricted Subsidiary in question ceased to be
a Restricted Subsidiary or the time such transfer or other disposition
occurred;
(viii) Indebtedness in respect of bid, performance or surety bonds
issued for the account of the Company in the ordinary course of business,
including guarantees or obligations of the Company with respect to letters
of credit supporting such bid, performance or surety obligations (in each
case other than for an obligation for money borrowed);
(ix) Indebtedness in respect of Non-Recourse Purchase Money
Indebtedness incurred by the Company or any Restricted Subsidiary;
(x) Refinancing Indebtedness;
(xi) Indebtedness of Restricted Subsidiaries in an aggregate
principal amount not to exceed $5 million at any time outstanding;
(xii) Indebtedness incurred to finance the acquisition of (1) any
Person principally engaged in the business of the Company and its
Restricted Subsidiaries as conducted on the Issue Date or any business
reasonably related thereto that becomes a Restricted Subsidiary or (2) any
Related Assets that constitute a line of business, company or other
business entity, in an aggregate principal amount not to exceed $21.0
million at any time outstanding provided that such Person or Related
Assets, after giving pro forma effect to such Indebtedness as if it had
been incurred by such Person or Related Assets would have had a Fixed
Charge Coverage Ratio of 2.0 to 1; provided that pro forma effect, to the
extent permitted by Regulation S-X, pursuant to the Securities Act, may be
given to cost savings and expense reductions in connection with such
acquisition; and
(xiii) other Indebtedness in an aggregate principal amount not to
exceed $2 million at any time outstanding.
"Permitted Investments" means any of the following:
(i) Investments in Cash Equivalents;
(ii) Investments in the Company or any of its Restricted
Subsidiaries;
18
(iii) Investments by the Company or any of its Restricted
Subsidiaries in another Person, if as a result of such Investment (A) such
other Person becomes a Restricted Subsidiary or (B) such other Person is
merged or consolidated with or into, or transfers or conveys all or
substantially all of its properties and assets to, the Company or a
Restricted Subsidiary;
(iv) Investments permitted under Section 1015 hereof;
(v) Investments made in the ordinary course of business in prepaid
expenses, lease, utility, workers' compensation, performance and other
similar deposits;
(vi) Investments received upon foreclosure, perfection or
enforcement of any Lien granted by, in the course of good faith settlement
of claims against, or by reason of a composition or readjustment of debt or
a reorganization of, any debtor of the Company or any of its Subsidiaries;
(vii) endorsements for collection or deposit in the ordinary course
of business of bank drafts and similar negotiable instruments received as
payment for ordinary course of business trade receivables;
(viii) Hedging Obligations permitted under clause (a) under Section
1009 hereof;
(ix) loans or advances to employees or directors of the Company or
any Restricted Subsidiary in the ordinary course of business;
(x) guarantees of Indebtedness of the Company or any Restricted
Subsidiary, which guarantees are permitted to be incurred under this
Indenture;
(xi) any Investment (x) to the extent that the consideration
therefor consists of Qualified Stock or (y) out of the proceeds of a
substantially concurrent issuance and sale (other than to a Restricted
Subsidiary of the Company) of Qualified Stock (provided that such issuance
and sale shall not increase the Basket); and
(xii) Investments in an aggregate amount not to exceed $5.0 million
at any time outstanding.
"Permitted Liens" means:
(i) Liens for taxes, assessments or governmental charges or
claims that either (a) are not yet delinquent or (b) are being contested in
good faith by appropriate proceedings and as to which appropriate reserves
or other provisions have been made in accordance with GAAP;
(ii) statutory and common law Liens of landlords and carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen or other similar
Liens arising in the ordinary course of business and with respect to
amounts that either (a) are
not yet delinquent or (b) are being contested in good faith by appropriate
proceedings and as to which appropriate reserves or other provisions have
been made in accordance with GAAP;
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security;
(iv) Liens incurred or deposits made to secure the performance of
tenders, bids, leases, statutory obligations, surety and appeal bonds,
progress payments, government contracts, performance and return-of-money
bonds and other obligations of a similar nature (exclusive of obligations
for the payment of borrowed money), in each case, incurred in the ordinary
course of business;
(v) easements, rights-of-way, municipal and zoning ordinances,
restrictions and other similar charges or encumbrances that do not
materially interfere with the ordinary conduct of the business of the
Company or any of its Restricted Subsidiaries;
(vi) leases or subleases granted to others that do not materially
interfere with the ordinary conduct of the business of the Company or any
of its Restricted Subsidiaries and do not materially affect the value of
the property thereto;
(vii) Liens securing Refinancing Indebtedness to the extent
incurred to refinance Indebtedness that is secured by Liens and outstanding
as of the Issue Date (after giving effect to the application of the
proceeds of the offering of the Notes), provided that such Refinancing
Indebtedness shall be secured solely by the assets (including improvements
thereon) securing the outstanding Indebtedness being refinanced;
(viii) Liens securing Indebtedness between the Company and its
Restricted Subsidiaries or between or among such Restricted Subsidiaries;
(ix) Liens existing as of the Issue Date to the extent and in the
manner such Liens are in effect on the Issue Date (after giving effect to
the application of the proceeds of the offering of the Notes);
(x) Liens securing the Credit Agreement up to the amount of
Indebtedness permitted to be incurred under clauses (i), (ii) and (xiii) of
the definition of Permitted Indebtedness;
(xi) Liens arising from the rendering of a final judgment or order
against the Company or any Restricted Subsidiary that does not give rise to
an Event of Default;
(xii) Liens securing reimbursement obligations with respect to
letters of credit that encumber documents and other property relating to
such letters of credit and the products and proceeds thereof;
(xiii) Liens securing Indebtedness permitted to be incurred pursuant
to clauses (xi) and (xii) of the definition of Permitted Indebtedness;
20
(xiv) Liens securing Hedging Obligations entered into with lenders
under the Credit Agreement;
(xv) Liens in favor of the Company or a Restricted Subsidiary;
(xvi) Liens securing Purchase Money Indebtedness, provided, that
such Liens extend only to the property being acquired and improvements
thereon and such Lien is created within 90 days of the purchase of such
property;
(xvii) Liens securing Acquired Indebtedness permitted to be incurred
under the Indenture, provided that such Liens (x) are not incurred in
connection with, or in contemplation of, the acquisition of the property or
assets acquired and (y) do not extend to or cover any property or assets of
the Company or any of its Restricted Subsidiaries other than the property
or assets so acquired and any improvements on such property or assets;
(xviii) Liens securing obligations under the Indenture, the Notes or
the Guarantees;
(xix) Liens on property of a Person existing at the time such
Person is acquired or merged with or into or consolidated with the Company
or any Restricted Subsidiary (and not created in anticipation or
contemplation thereof); and
(xx) Liens to secure Indebtedness incurred to refinance, in whole
or in part, any Indebtedness secured by Liens referred to in the foregoing
clauses (xv) - (xix), provided that in each of clauses (xvi), (xvii) and
(xix) such Liens do not extend to any additional property or assets (other
than improvements thereon).
"Permitted Transferees" means, with respect to any Person, (x) in the
case of any Person that is a natural person, (i) such individual's spouse,
estate, lineal descendants, heirs, executors, legal representatives,
administrators, (ii) any trust for the benefit of any of the foregoing, and (y)
in the case of any Person that is not a natural person, any other Person
controlled by such Person.
"Person" means any individual, corporation, partnership, joint
venture, incorporated or unincorporated association, joint-stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof or other entity of any kind.
"Physical Notes" has the meaning set forth in Section 201.
"Plan of Liquidation", with respect to any Person, means a plan that
provides for, contemplates or the effectuation of which is preceded or
accompanied by (whether or not substantially contemporaneously, in phases or
otherwise): (i) the sale, lease, conveyance or other disposition of all or
substantially all of the assets of such Person otherwise than as an entirety or
substantially as an entirety; and (ii) the distribution of all or substantially
all of the proceeds of such sale, lease, conveyance or other disposition and all
or substantially all of the remaining assets of such Person to holders of
Capital Stock of such Person.
21
"Predecessor Note" of any particular Note means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 306 in exchange for a mutilated
security or in lieu of a lost, destroyed or stolen Note shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Note.
"Private Placement Legend" has the meaning set forth in Section 202.
"Public Equity Offering" means an offer and sale of Qualified Stock of
the Company or Parent for cash pursuant to a registration statement that has
been declared effective by the Commission pursuant to the Securities Act (other
than a registration statement on Form S-8 or otherwise relating to equity
securities issuable under any employee benefit plan); provided that any net
proceeds to Parent are contributed in cash to the common equity of the Company.
"Purchase Money Indebtedness" means Indebtedness incurred for the
purpose of financing all or any part of the purchase price, or the cost of
construction, of any property, plant or equipment to be used in the business of
the Company and the Restricted Subsidiaries, provided that such Indebtedness
shall not exceed 100% of the lower of cost or Fair Market Value (at the time of
incurrence) of the property, plant or equipment so purchased or constructed.
"QIB" means a "Qualified Institutional Buyer" within the meaning of
Rule 144A under the Securities Act.
"Qualified Stock" of any Person means any and all Capital Stock of
such Person other than Disqualified Stock.
"redeem" means redeem, repurchase, defease or otherwise acquire or
retire for value; and "redemption" and "redeemed" have correlative meanings.
"Redemption Date", when used with respect to any Note to be redeemed,
in whole or in part, means the date fixed for such redemption by or pursuant to
this Indenture.
"Redemption Price", when used with respect to any Note to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"refinance" means refinance, renew, extend, replace, defease or
refund, in whole or in part, including successively; and "refinancing" and
"refinanced" have correlative meanings.
"Refinancing Indebtedness" means Indebtedness of the Company or a
Restricted Subsidiary of the Company issued in exchange for, or the proceeds
from the issuance and sale or disbursement of which are used substantially
concurrently to refinance or constituting an amendment of, any Indebtedness
pursuant to clause (ii) and (iii) of the definition of Permitted Indebtedness of
the Company or any of its Restricted Subsidiaries or any Indebtedness incurred
pursuant to the Fixed Charge Coverage Ratio test set forth in Section 1009
hereof in a principal amount not in excess of (a) the principal amount of the
Indebtedness so refinanced
22
plus (b) the lesser of the amount of any premium required to be paid in
connection with such refinancing pursuant to the terms of the Indebtedness
refinanced and the amount of any premium reasonably determined by the issuer of
such Indebtedness as necessary to accomplish such refinancing by means of a
tender offer, exchange offer or privately negotiated repurchase plus (c) the
expenses of such issuer reasonably incurred in connection therewith (or, if such
Refinancing Indebtedness refinances Indebtedness under a revolving credit
facility or other agreement providing a commitment for subsequent borrowings,
with a maximum commitment not to exceed the maximum commitment under such
revolving credit facility or other agreement); provided that: (i) the
Refinancing Indebtedness is the obligation of the same Person; (ii) in the case
of any refinancing of Indebtedness (including the Notes) that is pari passu with
or subordinated in right of payment to the Notes, then such Refinancing
Indebtedness is pari passu with or subordinated in right of payment to the Notes
at least to the same extent as the Indebtedness being refinanced; (iii) the
Refinancing Indebtedness is scheduled to mature either (a) no earlier than the
Indebtedness being refinanced or (b) after the maturity date of the Notes; (iv)
the portion, if any, of the Refinancing Indebtedness that is scheduled to mature
on or prior to the maturity date of the Notes has a Weighted Average Life to
Maturity at the time such Refinancing Indebtedness is incurred that is equal to
or greater than the Weighted Average Life to Maturity of the portion of the
Indebtedness being repaid that is scheduled to mature on or prior to the
maturity date of the Notes; and (v) the Refinancing Indebtedness is secured only
to the extent, if at all, and by the assets, that the Indebtedness being repaid
or amended is secured.
"Registration Rights Agreement" means the Registration Rights
Agreement relating to the Initial Notes dated as of the date hereof, among the
Company, the Parent and the Initial Purchasers.
"Registration Statement" means the Registration Statement as defined
in the Registration Rights Agreement.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the May 15 or November 15 (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date.
"Related Assets" means properties and assets that will be used in the
business of the Company and its Restricted Subsidiaries as conducted on the
Issue Date or in businesses reasonably related thereto.
"Responsible Officer", when used with respect to the Trustee, means
the chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any trust officer or assistant trust officer, the controller
or any assistant controller 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", with respect to any Person, means (without
23
duplication) any Investment by such Person other than a Permitted Investment,
including, without limitation, the designation of a Restricted Subsidiary as an
Unrestricted Subsidiary.
"Restricted Payment", with respect to any Person, means: (i) the
declaration of any dividend (other than a dividend declared or paid by a
Restricted Subsidiary to the Company or a Restricted Subsidiary) or the making
of any other payment or distribution of cash, securities or other property or
assets in respect of such Person's Capital Stock (except that a dividend payable
solely in Qualified Stock of such Person shall not constitute a Restricted
Payment); (ii) any payment on account of the redemption of such Person's Capital
Stock or any other payment or distribution made in respect thereof, either
directly or indirectly (other than a payment solely in Qualified Stock); (iii)
any Restricted Investment; or (iv) any purchase, redemption, defeasance
(including without limitation in substance or legal defeasance) or other
acquisition or retirement for value, directly or indirectly, by the Company or a
Subsidiary, prior to the scheduled maturity or prior to any scheduled repayment
of principal or sinking fund payment, as the case may be, in respect of
Subordinated Indebtedness.
"Restricted Subsidiary" means any direct or indirect Subsidiary of the
Company other than an Unrestricted Subsidiary.
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., and its successors.
"Sale and Leaseback Transaction" means with respect to any Person an
arrangement with any bank, insurance company or other lender or investor or to
which such lender or investor is a party, providing for the leasing by such
Person or any of its Restricted Subsidiaries of any property or asset of such
Person or any of its Restricted Subsidiaries which has been or is being sold or
transferred by such Person or such Restricted Subsidiary to such lender or
investor or to any Person to whom funds have been or are to be advanced by such
lender or investor on the security of such property or asset.
"Saratoga" means Saratoga Partners III, L.P.
"Securities Act" means the Securities Act of 1933, as amended.
"Shelf Registration Statement" means the Shelf Registration Statement
as defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the Issue Date, except all references to "10 percent" in such definition shall
be changed to "2 percent".
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity" means, when used with respect to any Indebtedness or
any installment of interest thereon, the date specified in the instrument
evidencing or governing such Indebtedness as the fixed date on which the
principal of such Indebtedness or such
24
installment of interest is due and payable.
"Subordinated Indebtedness" means Indebtedness of the Company or any
Subsidiary that is subordinated in right of payment to the Notes or the
Subsidiary Guarantees, respectively.
"Subsidiary" of any Person means (i) any corporation of which at least
a majority of the aggregate voting power of whose Voting Stock is owned by such
Person directly or through one or more other Subsidiaries of such Person and
(ii) any entity other than a corporation in which such Person, directly or
indirectly, owns at least a majority of the voting power of the Voting Stock of
such entity, other than any such Person designated as an Unrestricted Subsidiary
in accordance with the definition of Unrestricted Subsidiary.
"Subsidiary Guarantor" means each Person who is required to become a
Subsidiary Guarantor by the terms of this Indenture.
"Successor" has the meaning set forth in Section 801.
"Temporary Offshore Global Notes" has the meaning set forth in Section
201.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939
as in force at the date as of which this Indenture was executed, except as
provided in Section 905.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that
at the time of determination will be designated an Unrestricted Subsidiary by
the Board of Directors of the Company as provided below and (ii) any Subsidiary
of an Unrestricted Subsidiary. The Board of Directors of the Company may
designate any Subsidiary of the Company as an Unrestricted Subsidiary so long as
(a) neither the Company nor any Restricted Subsidiary is directly or indirectly
liable pursuant to the terms of any Indebtedness of such Subsidiary (other than
in the form of an Investment therein in accordance with Section 1011 hereof; (b)
no default with respect to any Indebtedness of such Subsidiary would permit
(upon notice, passage of time or otherwise) any holder of any other Indebtedness
of the Company or any Restricted Subsidiary to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its Stated Maturity; (c) such designation as an Unrestricted Subsidiary would be
permitted under Section 1011 hereof; and (d) the Company could incur $1.00 of
additional Indebtedness (not including the incurrence of Permitted Indebtedness)
pursuant to the Consolidated Fixed Charge Coverage Ratio test set forth in
Section 1009 hereof. Any such designation by the Board of Directors shall be
evidenced to the Trustee by the filing with the Trustee of a certified copy of
the Board Resolution giving effect to such designation and an Officer's
Certificate certifying that such designation complied with the foregoing
conditions and setting forth the underlying calculations of such certificate.
The Board of Directors of the Company may designate any Unrestricted Subsidiary
as a Restricted Subsidiary if (i) immediately after giving effect to such
designation on a pro forma basis, no Default or Event of Default shall have
occurred and be continuing and (ii) Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such
25
redesignation would, if incurred at such time, be permitted to be incurred under
the Indenture.
"U.S. Global Notes" has the meaning set forth in Section 201.
"U.S. Government Obligations" means securities that are (x) direct
obligations of the United States of America for the timely payment of which its
full faith and credit is pledged or (y) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America, which, in either
case, are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act), as custodian with respect to any such U.S.
Government Obligation or a specific payment of principal of or interest on any
such U.S. Government Obligation held by such custodian for the account of the
holder of such depository receipt, provided that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific payment
of principal of or interest on the U.S. Government Obligation evidenced by such
depository receipt.
"U.S. Physical Notes" has the meaning set forth in Section 201.
"Vice President", when used with respect to the Company, any Guarantor
or the Trustee, means any vice president, whether or not designated by a number
or a word or words added before or after the title "vice president".
"Voting Stock", with respect to any specified Person, means any class
or classes of Capital Stock of the specified Person pursuant to which the
holders thereof have the general voting power under ordinary circumstances to
elect at least a majority of the board of directors, managers or trustees of the
specified Person (irrespective of whether or not, at the time, stock of any
other class or classes has, or might have, voting power by reason of the
happening of any contingency).
"Weighted Average Life to Maturity", when applied to any Indebtedness
at any date, means the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" means any Restricted Subsidiary
to the extent (i) all of the Capital Stock or other ownership interests in such
Restricted Subsidiary, other than any directors' qualifying shares mandated by
applicable law, is owned directly or indirectly by the Company or (ii) such
Restricted Subsidiary is organized in a foreign jurisdiction and is required by
the applicable laws and regulations of such foreign jurisdiction to be partially
owned by the government of such foreign jurisdiction or individual or corporate
citizens of such foreign jurisdiction in order for such Restricted Subsidiary to
transact business in such foreign jurisdiction, provided that the Company,
directly or indirectly, owns the
26
remaining Capital Stock or ownership interest in such Restricted Subsidiary and,
by contract or otherwise, controls the management and business of such
Restricted Subsidiary and derives the economic benefits of ownership of such
Restricted Subsidiary to substantially the same extent as if such Restricted
Subsidiary were a wholly owned Subsidiary.
SECTION 102. Compliance Certificates and Opinions.
------------------------------------
Upon any application or request by the Company or the Guarantors to
the Trustee to take any action under any provision of this Indenture, the
Company or the Guarantors shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent, if any, provided for in this Indenture
(including any covenant compliance with which constitutes a condition precedent)
relating to the proposed action have been complied with and an Opinion of
Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than pursuant to
Section 1008(a)) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
--------------------------------------
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company or any
Guarantor may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless such officer
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to the matters upon
27
which his certificate or opinion is based are erroneous. Any such certificate or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Company or any Guarantor stating that the information with respect to such
factual matters is in the possession of the Company or any Guarantor, unless
such counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders.
---------------
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agents duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company or any
Guarantor. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and conclusive in favor of the Trustee, the Company or
any Guarantor, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner that the Trustee deems sufficient.
(c) The principal amount and serial numbers of Notes held by any
Person, and the date of holding the same, shall be proved by the Note Register.
(d) If the Company shall solicit from the Holders of Notes any
request, demand, authorization, direction, notice, consent, waiver or other Act,
the Company may, at its option, by or pursuant to a Board Resolution, fix in
advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act,
but the Company shall have no obligation to do so. Notwithstanding TIA Section
316(c), such record date shall be the record date specified in or pursuant to
such Board Resolution, which shall be a date not earlier than the date 30 days
prior to the first solicitation of Holders generally in connection therewith and
not later than the date such solicitation is completed. If such a record date
is fixed, such request, demand, authorization, direction, notice, consent,
waiver or other Act may be given before or after such record date, but only the
Holders of record at the close of business on such record date shall be deemed
to be Holders for the purposes of determining whether Holders of the
28
requisite proportion of Outstanding Notes have authorized or agreed or consented
to such request, demand, authorization, direction, notice, consent, waiver or
other Act, and for that purpose the Outstanding Notes shall be computed as of
such record date; provided that no such authorization, agreement or consent by
the Holders on such record date shall be deemed effective unless it shall become
effective pursuant to the provisions of this Indenture not later than eleven
months after the record date.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Note shall bind every future Holder of
the same Note and the Holder of every Note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such Note.
SECTION 105. Notices, etc., to Trustee, Company and Agent.
--------------------------------------------
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder, by the Company or by any Guarantor
shall be sufficient for every purpose hereunder if made, given, furnished
or filed in writing to or with the Trustee and received at its Corporate
Trust Office, Attention: Corporate Trust Administration,
(2) the Company by any Guarantor, by the Trustee or by any Holder
shall be sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid,
to the Company addressed to it at the address of its principal office
specified in the first paragraph of this Indenture, or at any other address
previously furnished in writing to the Trustee by the Company, or
(3) any Guarantor by the Company, by the Trustee or by any Holder
shall be sufficient for any purpose hereunder if made, given, furnished or
delivered, in writing and mailed, first-class postage prepaid, to Parent
addressed to it at its principal office specified in the first paragraph of
this Indenture, or at any other address previously furnished in writing to
the Company and the Trustee by such Guarantor.
SECTION 106. Notice to Holders; Waiver.
-------------------------
Where this Indenture provides for notice of any event to Holders by
the Company or the Trustee, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each Holder affected by such event, at his address as it
appears in the Note Register, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice. In any case
where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders. Any notice
mailed to a Holder in the manner herein prescribed shall be conclusively deemed
to have been received by such Holder, whether or not
29
such Holder actually receives such notice. Where this Indenture provides for
notice in any manner, such notice may be waived in writing by the Person
entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of or irregularities in regular
mail service or by reason of any other cause, it shall be impracticable to mail
notice of any event to Holders when such notice is required to be given pursuant
to any provision of this Indenture, then any manner of giving such notice as
shall be satisfactory to the Trustee shall be deemed to be a sufficient giving
of such notice for every purpose hereunder.
SECTION 107. Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 108. Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the Company and the
Guarantors shall bind their respective successors and assigns, whether so
expressed or not.
SECTION 109. Separability Clause.
-------------------
In case any provision in this Indenture or in the Notes or any
Guarantee shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 110. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Notes or any Guarantee, express or
implied, shall give to any Person, other than the parties hereto, any Paying
Agent, any Note Registrar and their successors hereunder and the Holders, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
SECTION 111. Governing Law.
-------------
This Indenture, the Notes and any Guarantee shall be governed by and
construed in accordance with the law of the State of New York. Upon the
issuance of the Exchange Notes, if any, or the effectiveness of the Exchange
Offer Registration Statement (as defined herein) or, under certain
circumstances, the effectiveness of the Shelf Registration Statement (as defined
herein), this Indenture shall be subject to the provisions of the Trust
Indenture Act that are required to be part of this Indenture and shall, to the
extent applicable, be governed by such provisions.
SECTION 112. Legal Holidays.
--------------
In any case where any Interest Payment Date, Redemption Date, or
Stated
30
Maturity or Maturity of any Note shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Notes) payment
of principal (or premium and Liquidated Damages, if any) or interest need not be
made on such date, but may be made on the next succeeding Business Day with the
same force and effect as if made on the Interest Payment Date or Redemption Date
or at the Stated Maturity or Maturity; provided that no interest shall accrue
for the period from and after such Interest Payment Date, Redemption Date,
Stated Maturity or Maturity, as the case may be.
SECTION 113. No Personal Liability of Directors, Officers, Employees,
--------------------------------------------------------
Stockholders or Incorporators.
- -----------------------------
No director, officer, employee, incorporator or stockholder, as such,
of the Company or any Guarantor shall have any liability for any obligations of
the Company or such Guarantor under the Notes, this Indenture or any Guarantee
or for any claim based on, in respect of, or by reason of, such obligations or
their creations. Each Holder by accepting a Note waives and releases all such
liability. Such waiver and release are part of the consideration for the
issuance of the Notes.
SECTION 114. Counterparts.
------------
This Indenture may be executed in any number of counterparts, each of
which shall be an original; but such counterparts shall together constitute but
one and the same instrument.
SECTION 115. Rules of Interpretation.
-----------------------
Use of words "herein", "hereby", "hereunder", "hereof",
"hereinbefore", "hereinafter" and other equivalent words refer to this Indenture
and not solely to the particular portion in which such word is used.
SECTION 116. Ancillary Agreements.
--------------------
The Trustee is hereby authorized and directed to execute and deliver
such agreements, notices, certificates and assignments as are necessary to
implement the terms hereof, including but not limited to the letter of
representations with the Depositary.
SECTION 117. Conflict with Trust Indenture Act.
---------------------------------
If this Indenture is qualified under the TIA and any provision hereof
limits, qualifies or conflicts with any provision thereof which is required to
be included in this Indenture by any of the provisions of the TIA, such required
provision of the TIA shall control.
ARTICLE TWO
NOTE FORMS
31
SECTION 201. Forms Generally.
---------------
The Notes and the Trustee's certificate of authentication shall be
substantially in the form annexed hereto as Exhibit A-1 with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture. The Notes may have notations, legends or
endorsements required by law, stock exchange agreements to which the Company is
subject or usage. The Company shall approve the form of the Notes and any
notation, legend or endorsement on the Notes. Each Note shall be dated the date
of its authentication.
The terms and provisions contained in the form of the Notes annexed
hereto as Exhibit A-1 shall constitute, and are hereby expressly made, a part of
this Indenture. To the extent applicable, the Company, the Guarantors and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.
Notes offered and sold in reliance on Rule 144A shall be issued
initially in the form of one or more permanent global Notes in registered form,
substantially in the form set forth in Exhibit A-1 (the "U.S. Global Notes"),
-----------------
registered in the name of the nominee of the Depositary, deposited with the
Trustee, as custodian for the Depositary, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The aggregate principal
amount of the U.S. Global Notes may from time to time be increased or decreased
by adjustments made on the records of the Trustee, as custodian for the
Depositary or its nominee, in accordance with the instructions given by the
Holder thereof, as hereinafter provided.
Notes offered and sold in offshore transactions in reliance on
Regulation S shall be issued initially in the form of one or more temporary
global Notes in registered form substantially in the form set forth in Exhibit
A-1 (the "Temporary Offshore Global Notes"), registered in the name of the
-------------------------------
nominee of the Depositary, deposited with the Trustee, as custodian for the
Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. At any time following January 5, 1998 (the "Offshore Notes
--------------
Exchange Date"), upon receipt by the Trustee and the Company of a certificate
- -------------
substantially in the form of Exhibit B hereto, one or more permanent global
Notes in registered form substantially in the form set forth in Exhibit A-1 (the
"Permanent Offshore Global Notes"; and together with the Temporary Offshore
-------------------------------
Global Notes, the "Offshore Global Notes") duly executed by the Company and
---------------------
authenticated by the Trustee as hereinafter provided shall be deposited with the
Trustee, as custodian for the Depositary, and the Note Registrar shall reflect
on its books and records the date and a decrease in the principal amount of the
Temporary Offshore Global Notes in an amount equal to the principal amount of
the beneficial interest in the Temporary Offshore Global Notes transferred.
Notes transferred in reliance on Regulation D under the Securities Act
shall be issued in the form of permanent certificated Notes in registered form
in substantially the form set forth in Exhibit A-1 (the "U.S. Physical Notes").
-------------------
Notes issued pursuant to Section 312 in exchange for interests in the Offshore
Global Notes shall be in the form of permanent certificated Notes in registered
form substantially in the form set forth in Exhibit A-1 (the "Offshore Physical
-----------------
Notes").
- -----
32
The Offshore Physical Notes and U.S. Physical Notes are sometimes
collectively herein referred to as the "Physical Notes." The U.S. Global Notes
--------------
and the Offshore Global Notes are sometimes referred to herein as the "Global
------
Notes."
- -----
The definitive Notes shall be typed, printed, lithographed or engraved
or produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any securities exchange on which the Notes may
be listed, all as determined by the Officers executing such Notes, as evidenced
by their execution of such Notes.
SECTION 202. Restrictive Legends.
-------------------
Unless and until a Note is exchanged for an Exchange Note in
connection with an effective Registration Statement pursuant to the Registration
Rights Agreement, the U.S. Global Notes, Temporary Offshore Global Notes and
each U.S. Physical Note shall bear the following legend (the "Private Placement
Legend") on the face thereof:
THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE SECURITIES ACT,
AND THE NOTE EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THE NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED
THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER OR ANOTHER
EXEMPTION UNDER THE SECURITIES ACT. THE HOLDER OF THE NOTE EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH NOTE MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) (a) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT
OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT BUT ONLY IN THE CASE OF A TRANSFER THAT
IS EFFECTED BY THE DELIVERY TO THE TRANSFEREE OF DEFINITIVE SECURITIES
REGISTERED IN ITS NAME (OR ITS NOMINEE'S NAME) IN THE BOOKS MAINTAINED BY
THE NOTE REGISTRAR, AND SUBJECT TO THE RECEIPT BY THE NOTE REGISTRAR OF A
CERTIFICATION OF THE TRANSFEROR AND AN OPINION OF COUNSEL TO THE EFFECT
THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (2) TO THE
COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
33
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE NOTE EVIDENCED HEREBY OF
THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
Each Global Note, whether or not an Exchange Note, shall also bear the
following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY
(AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTIONS 311 AND 312 OF THE INDENTURE.
ARTICLE THREE
THE NOTES
SECTION 301. Title and Terms.
---------------
The aggregate principal amount of Notes which may be authenticated and
delivered under this Indenture is limited to $100,000,000, except for Notes
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Notes pursuant to Section 304, 305, 306, 311, 312,
906, 1015, 1019 or 1108.
The Initial Notes shall be known and designated as the "11 1/4% Senior
Notes due 2007" of the Company and the Exchange Notes shall be known and
designated as the "11 1/4% Series B Senior Notes due 2007" of the Company. The
Stated Maturity of the principal of the Notes shall be November 30, 2007 and
they shall bear interest at the rate of 11 1/4% per annum, payable on May 30
and November 30 of each year, commencing on May
34
30, 1998, until the principal thereof is paid or duly provided for. Interest on
the Notes will accrue from the most recent Interest Payment Date or, if no
interest has been paid, from the Issue Date.
The principal of (and premium and Liquidated Damages, if any) and
interest on the Notes shall be payable at the office or agency of the Company
maintained for such purpose in The City of New York, or at such other office or
agency of the Company as may be maintained for such purpose; provided, however,
that, at the option of the Company, interest may be paid by wire transfer of
immediately available funds or, in the case of Physical Notes only, by check
mailed to addresses of the Persons entitled thereto as such addresses shall
appear on the Note Register.
The Notes shall be redeemable as provided in Article Eleven.
SECTION 302. Denominations.
-------------
The Notes shall be issuable only in registered form without coupons
and only in denominations of $1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
----------------------------------------------
The Notes shall be executed on behalf of the Company by its Chairman,
its President, a Vice President, its Secretary or an Assistant Secretary. The
signature of any of these officers on the Notes may be manual or facsimile
signatures of the present or any future such authorized officer and may be
imprinted or otherwise reproduced on the Notes.
Notes bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Initial Notes executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Initial Notes directing the Trustee to
authenticate the Notes and certifying that all conditions precedent to the
issuance of Notes contained herein have been fully complied with, and the
Trustee in accordance with such Company Order shall authenticate and deliver
such Initial Notes. On Company Order, the Trustee shall authenticate for
original issue Exchange Notes in an aggregate principal amount not to exceed
$100,000,000; provided that such Exchange Notes shall be issuable only upon the
valid surrender for cancellation of Initial Notes of a like aggregate principal
amount in accordance with an Exchange Offer pursuant to the Registration Rights
Agreement and a Company Order for the authentication of such securities
certifying that all conditions precedent to the issuance have been complied with
(including the effectiveness of a registration statement related thereto). In
each case, the Trustee shall be entitled to receive an Officer's Certificate and
an Opinion of Counsel of the Company that it may reasonably request in
connection with such authentication of Notes. Such order shall specify the
amount of Notes to be authenticated and the date on which the original issue of
35
Initial Notes or Exchange Notes is to be authenticated.
Each Note shall be dated the date of its authentication.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Note a
certificate of authentication substantially in the form provided for in Exhibit
A-1 duly executed by the Trustee by manual signature of an authorized officer,
and such certificate upon any Note shall be conclusive evidence, and the only
evidence, that such Note has been duly authenticated and delivered hereunder and
is entitled to the benefits of this Indenture.
In case the Company, pursuant to Article Eight, shall be consolidated
or merged with or into any other Person or shall convey, transfer, lease or
otherwise dispose of its properties and assets substantially as an entirety to
any Person, and the successor Person resulting from such consolidation, or
surviving such merger, or into which the Company shall have been merged, or the
Person which shall have received a conveyance, transfer, lease or other
disposition as aforesaid, shall have executed an indenture supplemental hereto
with the Trustee pursuant to Article Eight, any of the Notes authenticated or
delivered prior to such consolidation, merger, conveyance, transfer, lease or
other disposition may, from time to time, at the request of the successor
Person, be exchanged for other Notes executed in the name of the successor
Person with such changes in phraseology and form as may be appropriate, but
otherwise in substance of like tenor as the Notes surrendered for such exchange
and of like principal amount; and the Trustee, upon Company Request of the
successor Person, shall authenticate and deliver Notes as specified in such
request for the purpose of such exchange. If Notes shall at any time be
authenticated and delivered in any new name of a successor Person pursuant to
this Section in exchange or substitution for or upon registration of transfer of
any Notes, such successor Person, at the option of the Holders but without
expense to them, shall provide for the exchange of all Notes at the time
Outstanding for Notes authenticated and delivered in such new name.
SECTION 304. Temporary Notes.
---------------
Pending the preparation of definitive Notes, the Company may execute,
and upon Company Order the Trustee shall authenticate and deliver, temporary
Notes which are printed, lithographed, typewritten, mimeographed or otherwise
produced, in any authorized denomination, substantially of the tenor of the
definitive Notes in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Notes may determine, as conclusively evidenced by their execution
of such Notes.
If temporary Notes are issued, the Company will cause definitive Notes
to be prepared without unreasonable delay. After the preparation of definitive
Notes, the temporary Notes shall be exchangeable for definitive Notes upon
surrender of the temporary Notes at the office or agency of the Company
designated for such purpose pursuant to Section 1002, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Notes, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as definitive Notes.
36
SECTION 305. Registration, Registration of Transfer and Exchange.
---------------------------------------------------
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 1002 being herein sometimes
referred to as the "Note Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Notes and of transfers of Notes. The Note Register shall be in written form
or any other form capable of being converted into written form within a
reasonable time. At all reasonable times, the Note Register shall be open to
inspection by the Trustee. The Trustee is hereby initially appointed as
security registrar (the "Note Registrar") for the purpose of registering Notes
and transfers of Notes as herein provided.
Upon surrender for registration of transfer of any Note at the office
or agency of the Company designated pursuant to Section 1002, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Notes of any authorized
denomination or denominations of a like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes of
any authorized denomination and of a like aggregate principal amount, upon
surrender of the Notes to be exchanged at such office or agency. Whenever any
Notes are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Notes which the Holder making the
exchange is entitled to receive; provided that no exchange of Initial Notes for
Exchange Notes shall occur until an Exchange Offer Registration Statement shall
have been declared effective by the Commission, the Trustee shall have received
an Officers' Certificate confirming that the Exchange Offer Registration
Statement has been declared effective by the Commission and the Initial Notes to
be exchanged for the Exchange Notes shall be cancelled by the Trustee.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Note Registrar) be duly
endorsed, or be accompanied by a written instrument of transfer, in form
satisfactory to the Company and the Note Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange or redemption of Notes, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 304, 906, 1015, 1019 or 1108 not involving any
transfer.
The Note Registrar shall not be required (i) to issue, register the
transfer of or exchange any Note during a period beginning at the opening of
business 15 days before the
37
selection of Notes to be redeemed under Section 1104 and ending at the close of
business on the day of such mailing of the relevant notice of redemption, or
(ii) to register the transfer of or exchange any Note so selected for redemption
in whole or in part, except the unredeemed portion of any Note being redeemed in
part.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Notes.
-------------------------------------------
If (i) any mutilated Note is surrendered to the Trustee, or (ii) the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Note, and there is delivered to the Company
and the Trustee such security or indemnity as may be required by them to save
each of them harmless, then, in the absence of notice to the Company or the
Trustee that such Note has been acquired by a bona fide purchaser, the Company
shall execute and upon Company Order the Trustee shall authenticate and deliver,
in exchange for any such mutilated Note or in lieu of any such destroyed, lost
or stolen Note, a new Note of like tenor and principal amount, bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Note has become
or is about to become due and payable, at any time on or after November 30, 2002
the Company in its discretion may, instead of issuing a new Note, pay such Note.
Upon the issuance of any new Note under this Section 306, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Note issued pursuant to this Section 306 in lieu of any
mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all benefits of this Indenture equally and proportionately
with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 307. Payment of Interest; Interest Rights Preserved.
----------------------------------------------
Interest on any Note which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name such Note (or one or more Predecessor Notes) is registered at the close of
business on the Regular Record Date for such interest at the office or agency of
the Company maintained for such purpose pursuant to Section 1002; provided,
however, that each installment of interest may at the Company's option be paid
by (i) in the case of Physical Notes only, mailing a check for such interest,
payable to or upon the written order of the Person entitled thereto pursuant to
Section 308, to the address of such Person as it appears in the Note Register or
(ii) by wire transfer in immediately available funds to an account located in
the United States maintained by the payee.
38
Any interest on any Note which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date shall forthwith cease to be
payable to the Holder on the Regular Record Date by virtue of having been such
Holder, and such defaulted interest and (to the extent lawful) interest on such
defaulted interest at the rate borne by the Notes (such defaulted interest and
interest thereon herein collectively called "Defaulted Interest") may be paid by
the Company, at its election in each case, as provided in clause (1) or (2)
below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Notes (or their respective Predecessor
Notes) are registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Note and the date
of the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount proposed
to be paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 10 days
and not less than 5 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date, and in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be given in the manner provided for in
Section 106, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor having been so given, such Defaulted Interest shall be
paid to the Persons in whose names the Notes (or their respective
Predecessor Notes) are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following clause
(2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such notice
as may be required by such exchange, if, after notice given by the Company
to the Trustee of the proposed payment pursuant to this clause, such manner
of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Note.
39
SECTION 308. Persons Deemed Owners.
---------------------
Prior to the due presentment of a Note for registration of transfer,
the Company, the Guarantors, the Trustee and any agent of the Company, the
Guarantors or the Trustee may treat the Person in whose name such Note is
registered as the owner of such Note for the purpose of receiving payment of
principal of (and premium and Liquidated Damages, if any) and (subject to
Sections 305 and 307) interest on such Note and for all other purposes
whatsoever, whether or not such Note be overdue, and none of the Company, the
Guarantors, the Trustee or any agent of the Company, the Guarantors or the
Trustee shall be affected by notice to the contrary.
SECTION 309. Cancellation.
------------
All Notes surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee and shall be promptly cancelled by it. The Company
may at any time deliver to the Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and may deliver to the Trustee (or to any other Person for
delivery to the Trustee) for cancellation any Notes previously authenticated
hereunder which the Company has not issued and sold, and all Notes so delivered
shall be promptly cancelled by the Trustee. If the Company shall so acquire any
of the Notes, however, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Notes unless and until the
same are surrendered to the Trustee for cancellation. No Notes shall be
authenticated in lieu of or in exchange for any Notes cancelled as provided in
this Section, except as expressly permitted by this Indenture. All cancelled
Notes held by the Trustee shall be disposed of by the Trustee in accordance with
its customary procedures and certification of their disposal delivered to the
Company unless by Company Order the Company shall direct that cancelled Notes be
returned to it.
SECTION 310. Computation of Interest.
-----------------------
Interest on the Notes shall be computed on the basis of a 360-day year
of twelve 30-day months.
SECTION 311. Book-Entry Provisions for Global Notes.
--------------------------------------
(a) Each Global Note initially shall (i) be registered in the name of
the Depositary for such Global Notes or the nominee of such Depositary, (ii) be
delivered to the Trustee as custodian for such Depositary and (iii) bear legends
as set forth in Section 202.
Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Note, and the
Depositary may be treated by the Company, the Guarantors, the Trustee and any
agent of the Company, the Guarantors or the Trustee as the absolute owner of
such Global Note for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Guarantors, the Trustee or any
agent of the Company, the Guarantors or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depositary
or impair, as between the Depositary and its Agent Members, the operation of
40
customary practices governing the exercise of the rights of a beneficial owner
of any Note. The registered holder of a Global Note may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Notes.
(b) Interests of beneficial owners in a Global Note may be transferred
in accordance with the applicable rules and procedures of the Depositary and the
provisions of Section 312. Transfers of a Global Note shall be limited to
transfers of such Global Note in whole, but not in part, to the Depositary, its
successors or their respective nominees. Interests of beneficial owners in the
Global Notes may be transferred in accordance with the rules and procedures of
the Depositary and the provisions of Section 312 hereof. U.S. Physical Notes
and Offshore Physical Notes shall be transferred to beneficial owners in
exchange for their beneficial interests in the U.S. Global Notes or the Offshore
Global Notes, as the case may be, if (i) the Depositary notifies the Company
that it is unwilling or unable to continue as Depositary for any such Global
Note and a successor depositary is not appointed by the Company within 90 days
of such notice, (ii) upon the request of the beneficial owner in accordance with
the rules and procedures of the Depositary and the provisions of Section 312
hereof or (iii) upon notice from the Company to the Trustee in writing
requesting the issuance of Physical Notes in exchange for Global Notes. In
connection with a transfer of an entire Global Note to beneficial owners
pursuant to clause (i) or (iii) of this paragraph (b), the applicable Global
Note shall be deemed to be surrendered to the Trustee for cancellation, and the
Company shall execute, and the Trustee shall authenticate and deliver, to each
beneficial owner identified by the Depositary in exchange for its beneficial
interest in the applicable Global Note, an equal aggregate principal amount of
U.S. Physical Notes (in the case of the U.S. Global Note) or Offshore Physical
Notes (in the case of the Offshore Global Note), as the case may be, of
authorized denominations.
(c) Any beneficial interest in one of the Global Notes that is
transferred to a person who takes delivery in the form of an interest in the
other Global Note will, upon transfer, cease to be an interest in such Global
Note and become an interest in the other Global Note and, accordingly, will
thereafter be subject to all transfer restrictions, if any, and other procedures
applicable to beneficial interests in such other Global Note for as long as it
remains such an interest.
(d) Any U.S. Physical Note delivered in exchange for an interest in
the U.S. Global Note pursuant to paragraph (b) of this Section shall, unless
such exchange is made on or after the date which is two years following the date
hereof, or such shorter period of time as permitted under Rule 144(k) under the
Securities Act and except as otherwise provided in Section 312, bear the Private
Placement Legend.
SECTION 312. Transfer Provisions.
-------------------
Unless and until a Note is exchanged for an Exchange Note in
connection with an effective Registration Statement pursuant to the Registration
Rights Agreement, the following provisions shall apply:
(a) Transfers to Non-QIB Institutional Accredited Investors. The following
-------------------------------------------------------
provisions shall apply with respect to the registration of any proposed transfer
of a Note to any
41
Institutional Accredited Investor which is not a QIB (excluding Non-U.S.
Persons):
(i) The Note Registrar shall register the transfer of any Note,
whether or not such Note bears the Private Placement Legend, if (x) the
requested transfer is after the time period referred to in Rule 144(k)
under the Securities Act or (y) (A) the proposed transferor has delivered
to the Note Registrar a certificate substantially in the form of Exhibit C-
1 hereto; and if required by paragraph (d) thereof an Opinion of Counsel to
the effect set forth therein and (B) the proposed transferee has delivered
to the Note Registrar a certificate substantially in the form of Exhibit C-
2 hereto.
(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Note or Offshore Global Note, upon
receipt by the Note Registrar of the documents, if any, required by
paragraph (i)(y) and instructions given in accordance with the Depositary's
and the Note Registrar's procedures, the Note Registrar shall reflect on
its books and records the date and a decrease in the principal amount of
the U.S. Global Note or Offshore Global Note in an amount equal to the
principal amount of the beneficial interest in the U.S. Global Note or
Offshore Global Note to be transferred, and the Company shall execute, and
the Trustee shall authenticate and deliver, one or more U.S. Physical Notes
or Offshore Physical Notes, as the case may be.
(b) Transfers to QIBs. The following provisions shall apply with respect
-----------------
to the registration of any proposed transfer of a U.S. Physical Note or an
interest in the U.S. Global Note to a QIB (excluding Non-U.S. Persons):
(i) If the Note to be transferred consists of (x) U.S. Physical
Notes, the Note Registrar shall register the transfer if such transfer is
being made by a proposed transferor who has checked the box provided for on
the form of Note stating, or has otherwise advised the Company and the Note
Registrar in writing, that the sale has been made in compliance with the
provisions of Rule 144A to a transferee who has signed the certification
provided for on the form of Note stating, or has otherwise advised the
Company and the Note Registrar in writing, that it is purchasing the Note
for its own account (or an account with respect to which it exercises sole
investment discretion) and that it and any such account is a QIB within the
meaning of Rule 144A, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as it has requested pursuant to Rule 144A
or has determined not to request such information and that it is aware that
the transferor is relying upon its foregoing representations in order to
claim the exemption from registration provided by Rule 144A or (y) an
interest in the U.S. Global Note, the transfer of such interest may be
effected only through the book entry system maintained by the Depositary.
(ii) If the proposed transferee is an Agent Member, and the Note to
be transferred consists of U.S. Physical Notes, upon receipt by the Note
Registrar of the documents referred to in clause (i)(x) and instructions
given in accordance with the Depositary's and the Note Registrar's
procedures, the Note Registrar shall reflect on its books and records the
date and an increase in the principal amount of the U.S. Global Note in an
amount equal to the principal amount of the U.S. Physical Notes to be
transferred, and the Trustee shall cancel the U.S. Physical Note so
transferred.
42
(c) Transfers of Interests in the Temporary Offshore Global Note. The
------------------------------------------------------------
following provisions shall apply with respect to registration of any proposed
transfer of interests in the Temporary Offshore Global Note:
(i) The Note Registrar shall register the transfer of any Note (x)
if the proposed transferee is a Non-U.S. Person and the proposed transferor
has delivered to the Note Registrar a certificate substantially in the form
of Exhibit D hereto or (y) if the proposed transferee is a QIB and the
proposed transferor has checked the box provided for on the form of Note
stating, or has otherwise advised the Company and the Note Registrar in
writing, that the sale has been made in compliance with the provisions of
Rule 144A to a transferee who has signed the certification provided for on
the form of Note stating, or has otherwise advised the Company and the Note
Registrar in writing, that it is purchasing the Note for its own account or
an account with respect to which it exercises sole investment discretion
and that it and any such account is a QIB within the meaning of Rule 144A,
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as
it has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon
its foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
(ii) If the proposed transferee is an Agent Member, upon receipt by
the Note Registrar of the documents referred to in clause (i)(x) above and
instructions given in accordance with the Depositary's and the Note
Registrar's procedures, the Note Registrar shall reflect on its books and
records the date and an increase in the principal amount of the U.S. Global
Note in an amount equal to the principal amount of the Temporary Offshore
Global Note to be transferred, and the Trustee shall decrease the amount of
the Temporary Offshore Global Note.
(d) Transfers of Interests in the Permanent Offshore Global Note or
---------------------------------------------------------------
Offshore Physical Notes to U.S. Persons. The following provisions shall apply
- ---------------------------------------
with respect to any transfer of interests in the Permanent Offshore Global Note
or Offshore Physical Notes to U.S. Persons: The Note Registrar shall register
the transfer of any such Note without requiring any additional certification.
(e) Transfers to Non-U.S. Persons at Any Time. The following provisions
-----------------------------------------
shall apply with respect to any transfer of a Note to a Non-U.S. Person:
(i) Prior to January 5, 1998, the Note Registrar shall register any
proposed transfer of a Note to a Non-U.S. Person upon receipt of a
certificate substantially in the form of Exhibit D hereto from the proposed
transferor.
(ii) On and after January 5, 1998, the Note Registrar shall register
any proposed transfer to any Non-U.S. Person if the Note to be transferred
is a U.S. Physical Note or an interest in the U.S. Global Note, upon
receipt of a certificate substantially in the form of Exhibit D hereto from
the proposed transferor.
43
(iii) (a) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Note, upon receipt by the Note
Registrar of the documents, if any, required by paragraph (ii) and
instructions in accordance with the Depositary's and the Note Registrar's
procedures, the Note Registrar shall reflect on its books and records the
date and a decrease in the principal amount of the U.S. Global Note in an
amount equal to the principal amount of the beneficial interest in the U.S.
Global Note to be transferred, and (b) if the proposed transferee is an
Agent Member, upon receipt by the Note Registrar of instructions given in
accordance with the Depositary's and the Note Registrar's procedures, the
Note Registrar shall reflect on its books and records the date and an
increase in the principal amount of the Offshore Global Note in an amount
equal to the principal amount of the U.S. Physical Notes or the U.S. Global
Note, as the case may be, to be transferred, and the Trustee shall cancel
the Physical Note, if any, so transferred or decrease the amount of the
U.S. Global Note.
(f) Private Placement Legend. Upon the transfer, exchange or replacement
------------------------
of Notes not bearing the Private Placement Legend, the Note Registrar shall
deliver Notes that do not bear the Private Placement Legend. Upon the transfer,
exchange or replacement of Notes bearing the Private Placement Legend, the Note
Registrar shall deliver only Notes that bear the Private Placement Legend unless
either (i) the circumstances contemplated by the fourth paragraph of Section 201
or paragraph (a)(i)(x) or (e)(ii) of this Section 312 exist or (ii) there is
delivered to the Note Registrar an Opinion of Counsel reasonably satisfactory to
the Company and the Trustee to the effect that neither such legend nor the
related restrictions on transfer are required in order to maintain compliance
with the provisions of the Securities Act.
(g) General. By its acceptance of any Note bearing the Private Placement
-------
Legend, each Holder of such a Note acknowledges the restrictions on transfer of
such Note set forth in this Indenture and in the Private Placement Legend and
agrees that it will transfer such Note only as provided in this Indenture. The
Note Registrar shall not register a transfer of any Note unless such transfer
complies with the restrictions on transfer of such Note set forth in this
Indenture. In connection with any transfer of Notes, each Holder agrees by its
acceptance of the Notes to furnish the Note Registrar or the Company such
certifications, legal opinions or other information as either of them may
reasonably require to confirm that such transfer is being made pursuant to an
exemption from, or a transaction not subject to, the registration requirements
of the Securities Act; provided that the Note Registrar shall not be required to
determine (but may rely on a determination made by the Company with respect to)
the sufficiency of any such certifications, legal opinions or other information.
The Note Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 311 or this Section 312. The
Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Note Registrar.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
44
SECTION 401. Satisfaction and Discharge of Indenture.
---------------------------------------
This Indenture shall upon Company Request cease to be of further
effect (except as to surviving rights of registration of transfer or exchange of
Notes expressly provided for herein or pursuant hereto) and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture when
(1) either
(a) all Notes theretofore authenticated and delivered (other than
(i) Notes which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 306 and (ii) Notes for
whose payment money or U.S. Government Obligations have theretofore
been deposited in trust with the Trustee or any Paying Agent or
segregated and held in trust by the Company and thereafter repaid to
the Company or discharged from such trust, as provided in Section
1003) have been delivered to the Trustee for cancellation; or
(b) all such Notes not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Maturity within
one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of
the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be deposited with the Trustee as
trust funds in trust for such purpose an amount sufficient to pay and
discharge the entire indebtedness on such Notes not theretofore
delivered to the Trustee for cancellation, for principal (and premium
and Liquidated Damages, if any), interest to the date of such deposit
(in the case of Notes which have become due and payable) or to the
Stated Maturity or Redemption Date, as the case may be, together with
instructions from the Company irrevocably directing the Trustee to
apply such funds to the payment thereof at the Stated Maturity or
Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
45
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 606 and, if money shall
have been deposited with the Trustee pursuant to subclause (b) of clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
--------------------------
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium and
Liquidated Damages, if any) and interest for whose payment such money has been
deposited with the Trustee; but such money need not be segregated from other
funds except to the extent required by law.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
-----------------
"Event of Default", wherever used herein, means any one of the
following events:
(1) failure by the Company to pay interest on any of the Notes when it
becomes due and payable, and continuance of such default for a period of 30
days; or
(2) failure by the Company to pay principal of (or premium, if any,)
any of the Notes when it becomes due and payable, whether at Stated
Maturity, upon redemption, upon acceleration or otherwise; or
(3) any default in the performance or breach by the Company or any
Restricted Subsidiary of the provisions of Article Eight hereof or any
failure of the Company to make or consummate either a Change of Control
Offer or a Net Proceeds Offer in accordance with the provisions of Sections
1019 and 1015, respectively; or
(4) default in the performance, or breach, of any covenant or
agreement of the Company in this Indenture (other than a default in the
performance, or breach, of a covenant or agreement that is specifically
dealt with elsewhere in this Section 501) and continuance of such default
or breach for a period of 30 days after notice of such default has been
given, by registered or certified mail, to the Company by the Trustee or to
the Company and the Trustee by the Holders of at least 25% in principal
amount of the Notes then Outstanding; or
(5) there shall have occurred a default by the Company or any of its
Subsidiaries to make any payment of principal on Indebtedness of the
Company or any
46
such Subsidiary at its stated final maturity after the expiration of any
applicable grace period in an aggregate outstanding principal amount of
$5.0 million or more;
(6) there shall have occurred a default under any Indebtedness of the
Company or any Subsidiary, whether such Indebtedness now exists or
hereafter shall be created, if (A) such default results in the holder or
holders of such Indebtedness causing the Indebtedness to become due prior
to its stated final maturity and (B) the outstanding principal amount of
such Indebtedness, together with the outstanding principal amount of any
other such Indebtedness the maturity of which has been so accelerated,
aggregate $5.0 million or more at any one time;
(7) one or more final judgments or orders that exceed $5.0 million in
the aggregate for the payment of money have been entered by a court or
courts of competent jurisdiction against the Company or any Subsidiary of
the Company and such judgment or judgments have not been satisfied, stayed,
annulled or rescinded within 60 days of being entered;
(8) the entry of a decree or order by a court having jurisdiction in
the premises adjudging the Company or any Significant Subsidiary a bankrupt
or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of
the Company or any Significant Subsidiary under the Federal Bankruptcy Code
or any other applicable federal or state law, or appointing a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) of
the Company or any Significant Subsidiary or of any substantial part of the
property of the Company and its Subsidiaries, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days;
(9) the institution by the Company or any Significant Subsidiary of
proceedings to be adjudicated a bankrupt or insolvent, or the consent by it
to the institution of bankruptcy or insolvency proceedings against it, or
the filing by it of a petition or answer or consent seeking reorganization
or relief under the Federal Bankruptcy Code or any other applicable federal
or state law, or the consent by it to the filing of any such petition or to
the appointment of a receiver, liquidator, assignee, trustee, sequestrator
(or other similar official) of the Company or any Significant Subsidiary or
of any substantial part of the property of the Company and its
Subsidiaries, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due; or
(10) except as permitted hereunder or by the Guarantees, the cessation
of the effectiveness of any Guarantee or the repudiation by any Guarantor
(or by any Person acting on behalf of any Guarantor) of its obligations
under its Guarantee.
47
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
If an Event of Default (other than an Event of Default specified in
Sections 501(8) or 501(9) involving the Company) occurs and is continuing, then
and in every such case the Trustee or the Holders of not less than 25% in
principal amount of the Notes Outstanding may declare the principal amount of
all the Notes to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders) and upon any such declaration
such principal amounts, premium and accrued interest thereon shall become
immediately due and payable. If an Event of Default specified in Section 501(8)
or 501(9) occurs, then the principal amount of all the Notes 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 may not enforce the provisions of the Indenture or the
Notes except as provided in this Indenture. Subject to certain limitations,
Holders of a majority in principal amount of the Notes then Outstanding may
direct the Trustee in its exercise of any trust or power; provided, however,
that such direction does not conflict with the terms of this Indenture. The
Trustee may withhold from the Holders notice of any continuing Default or Event
of Default (except any Default or Event of Default in payment of principal of,
premium or interest on the Notes) if the Trustee determines that withholding
such notice is in the Holders' interest.
At any time after a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter provided in this Article, the Holders of a majority
in principal amount of the Notes Outstanding, by written notice to the Company
and the Trustee, may rescind and annul such declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay,
(A) all overdue interest on all Outstanding Notes,
(B) all unpaid principal of (and premium, if any, on) any
Outstanding Notes which has become due otherwise than by such
declaration of acceleration, and interest on such unpaid principal at
the rate borne by the Notes,
(C) to the extent that payment of such interest is lawful,
interest on overdue interest at the rate borne by the Notes, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;
(2) the rescission would not conflict with any judgment or decree of
a court of competent jurisdiction as certified to the Trustee by the
Company in an Officers' Certificate and Opinion of Counsel; and
48
(3) all Events of Default, other than the non-payment of amounts of
principal of (or premium, if any, on) or interest on Notes which have
become due solely by such declaration of acceleration, have been cured or
waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Notwithstanding the preceding paragraph, in the event of a declaration
of acceleration in respect of the Notes because of an Event of Default specified
in Section 501(5) shall have occurred and be continuing, such declaration of
acceleration shall be automatically annulled if the Indebtedness that is the
subject of such Event of Default has been discharged or the holders thereof have
rescinded their declaration of acceleration in respect of such Indebtedness, and
written notice of such discharge or rescission, as the case may be, shall have
been given to the Trustee by the Company and countersigned by the holders of
such Indebtedness or a trustee, fiduciary or agent for such holders, within 30
days after such declaration of acceleration in respect of the Notes, and no
other Event of Default has occurred during such 30-day period which has not been
cured or waived during such period.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee.
- -------
If an Event of Default specified in Section 501(1) or (2) occurs and
is continuing, the Trustee, in its own name as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon the Notes and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon the Notes,
wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
--------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the Notes
or the property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the principal of the Notes shall then be due
and payable as therein expressed or by declaration or otherwise and irrespective
of whether the Trustee shall have made any demand on the Company for the payment
of overdue principal, premium and Liquidated Damages, if any, or interest) shall
be entitled and empowered, by intervention in such proceeding or otherwise,
49
(i) to file and prove a claim for the whole amount of principal (and
premium and Liquidated Damages, if any) and interest owing and unpaid in
respect of the Notes and to take such other actions, including
participation as a member, voting or otherwise, of any official committee
of creditors appointed in such matter, and to file such other papers or
documents as may be necessary or advisable in order to have the claims of
the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and of
the Holders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other securities or other
property payable or deliverable upon the conversion or exchange of the
Notes or upon any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 606.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of Notes.
------------------------------------------------------
All rights of action and claims under this Indenture or the Notes may
be prosecuted and enforced by the Trustee without the possession of any of the
Notes or the production thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own name and as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Notes in respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected.
------------------------------
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium
and Liquidated Damages, if any) or interest, upon presentation of the Notes and
the notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
606;
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium and Liquidated Damages, if any) and interest on
the Notes in respect of
50
which or for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the amounts due
and payable on such Notes for principal (and premium and Liquidated
Damages, if any) and interest, respectively; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto.
SECTION 507. Limitation on Suits.
-------------------
No Holder of any Notes shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Notes shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority
or more in principal amount of the Outstanding Notes;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal,
----------------------------------------------------
Premium and Liquidated Damages, if any, and Interest.
- ----------------------------------------------------
Notwithstanding any other provision in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
payment, as provided herein (including, if applicable, Article Thirteen) and in
such Note of the principal of (and premium and Liquidated Damages, if any) and
(subject to Section 307) interest on such Note on the respective Stated
Maturities expressed in such Note (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder.
51
SECTION 509. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
------------------------------
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes in the last paragraph of
Section 306, no right or remedy herein conferred upon or reserved to the Trustee
or to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder of any Note to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article Five or by
law to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
SECTION 512. Control by Holders.
------------------
The Holders of not less than a majority in principal amount of the
Outstanding Notes shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(3) the Trustee need not take any action which might involve it in
personal liability or be unjustly prejudicial to the Holders not
consenting.
SECTION 513. Waiver of Defaults.
------------------
52
The Holders of not less than a majority in aggregate principal amount
of the Notes may waive any existing Default or Event of Default hereunder and
its consequences, except a default
(1) in respect of the payment of the principal of (or premium, if
any) or interest on any Note, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Note affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
SECTION 514. Waiver of Stay or Extension Laws.
--------------------------------
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Notice of Defaults.
------------------
Within 90 days after the occurrence of any Default hereunder and if
such Default is known to a Responsible Officer of the Trustee, the Trustee shall
transmit in the manner and to the extent provided in TIA Section 313(c), notice
of such Default hereunder known to the Trustee, unless such Default shall have
been cured or waived; provided, however, that, except in the case of a Default
in the payment of the principal of (or premium and Liquidated Damages, if any)
or interest on any Note, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee or a
trust committee of directors and/or Responsible Officers of the Trustee in good
faith determines that the withholding of such notice is in the interest of the
Holders; and provided further that in the case of any Default of the character
specified in Section 501(4) no such notice to Holders shall be given until such
Default has been continuing for at least 30 days.
SECTION 602. Certain Rights of Trustee.
-------------------------
53
Subject to the provisions of TIA Sections 315(a) through 315(d):
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(3) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney;
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder;
(8) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Indenture; and
(9) except during the continuance of an Event of Default, the Trustee
need perform only those duties as are specifically set forth in this
Indenture.
54
The Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
In the event that an Event of Default has occurred and is continuing,
the Trustee shall, in the exercise of its power, use the degree of care of a
prudent person in similar circumstances in the conduct of his own affairs.
SECTION 603. Trustee Not Responsible for Recitals or Issuance of
---------------------------------------------------
Notes.
- -----
The recitals contained herein and in the Notes, except for the
Trustees certificates of authentication, shall be taken as the statements of the
Company, and the Trustee assumes no responsibility for the correctness of such
statements or of any other document used in connection with the sale of the
Notes. The Trustee makes no representations as to the validity or sufficiency
of this Indenture or of the Notes, except that the Trustee represents that it is
duly authorized to execute and deliver this Indenture, authenticate the Notes
and perform its obligations hereunder and that the statements made by it in any
Statement of Eligibility on Form T-1 supplied to the Company are true and
accurate, subject to the qualifications set forth therein. The Trustee shall
not be accountable for the use or application by the Company of Notes or the
proceeds thereof.
SECTION 604. May Hold Notes.
--------------
The Trustee, any Paying Agent, any Note Registrar or any other agent
of the Company or of the Trustee, in its individual or any other capacity, may
become the owner or pledgee of Notes and, subject to TIA Sections 310(b) and
311, may otherwise deal with the Company and the Guarantors with the same rights
it would have if it were not Trustee, Paying Agent, Note Registrar or such other
agent.
SECTION 605. Money Held in Trust.
-------------------
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
SECTION 606. Compensation, Reimbursement and Indemnification.
-----------------------------------------------
The Company and the Guarantors, jointly and severally, agree:
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder as may be separately agreed in
writing (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee
55
upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee for, and to hold it harmless against,
any loss, liability or expense incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of enforcing
this Indenture against the Company (including Section 606) and of defending
itself against any claim (whether asserted by any Holder , the Company or
any Guarantor) or liability in connection with the exercise or performance
of any of its powers or duties hereunder. The Trustee agrees to notify the
Company promptly of any claim asserted against the Trustee for which it may
seek indemnity. The failure by the Trustee to so notify the Company may
relieve the Company of its obligations hereunder to the extent such failure
results in the loss or compromise of any rights or defenses of the Company.
The Company may, at its option, defend the claim, in which case the Trustee
agrees to cooperate in the defense. The Company will not pay for any
settlement made without its written consent, which consent shall not be
unreasonably withheld.
The obligations of the Company and the Guarantors under this Section
606 to compensate the Trustee, to pay or reimburse the Trustee for expenses,
disbursements and advances and to indemnify and hold harmless the Trustee shall
constitute additional indebtedness hereunder and shall survive the satisfaction
and discharge of this Indenture. As security for the performance of such
obligations of the Company and the Guarantors, the Trustee shall have a claim
prior to the Notes upon all property and funds held or collected by the Trustee
as such, except funds held in trust for the payment of principal of (and premium
and Liquidated Damages, if any) or interest on particular Notes.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 501(8) or (9), the expenses
(including the reasonable charges and expenses of its counsel) of and the
compensation for such services are intended to constitute expenses of
administration under any applicable Federal or State bankruptcy, insolvency or
other similar law.
The provisions of this Section 606 shall survive the termination of
this Indenture.
SECTION 607. Corporate Trustee Required; Eligibility.
---------------------------------------
There shall be at all times a Trustee hereunder which shall be
eligible to act as Trustee under TIA Section 310(a)(1) and shall have a combined
capital and surplus of at least $25,000,000. If such corporation publishes
reports of condition at least annually, pursuant to law or to the requirements
of Federal, State, territorial or District of Columbia supervising or examining
authority, then for the purposes of this Section 607, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the
56
manner and with the effect hereinafter specified in this Article Six.
SECTION 608. Resignation and Removal; Appointment of Successor.
-------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article Six shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 609.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If the instrument of acceptance by a successor Trustee
required by Section 609 shall not have been delivered to the Trustee within 30
days after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of
not less than a majority in principal amount of the Outstanding Notes, delivered
to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Note for at least six months,
or
(2) the Trustee shall cease to be eligible under Section 607(a) and
shall fail to resign after written request therefor by the Company or by
any Holder who has been a bona fide Holder of a Note for at least six
months, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company, by a Board Resolution, may remove the
Trustee, or (ii) subject to TIA Section 315(e), any Holder who has been a bona
fide Holder of a Note for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Notes delivered to
the Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment, become the successor Trustee
and supersede the successor Trustee appointed by the Company. If no successor
Trustee shall have been so appointed by the Company or the Holders and accepted
appointment in the
57
manner hereinafter provided, any Holder who has been a bona fide Holder of a
Note for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the appointment of a
successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to the
Holders of Notes in the manner provided for in Section 106. Each notice shall
include the name of the successor Trustee and the address of its Corporate Trust
Office.
SECTION 609. Acceptance of Appointment by Successor.
--------------------------------------
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Upon request of any such successor Trustee,
the Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article Six.
SECTION 610. Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business.
- --------
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article Six, without the execution or filing of any paper or any further act on
the part of any of the parties hereto. In case any Notes shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Notes so authenticated with the same effect
as if such successor Trustee had itself authenticated such Notes. In case at
that time any of the Notes shall not have been authenticated, any successor
Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor Trustee. In all such cases such
certificates shall have the full force and effect which this Indenture provides
for the certificate of authentication of the Trustee shall have; provided,
however, that the right to adopt the certificate of authentication of any
predecessor Trustee or to authenticate Notes in the name of any predecessor
Trustee shall apply only to its successor or successors by merger, conversion or
consolidation.
58
ARTICLE SEVEN
HOLDERS LISTS AND REPORTS BY TRUSTEE
SECTION 701. Disclosure of Names and Addresses of Holders.
--------------------------------------------
Every Holder of Notes, by receiving and holding the same, agrees with
the Company and the Trustee that none of the Company or the Trustee or any agent
of either of them shall be held accountable by reason of the disclosure of any
such information as to the names and addresses of the Holders in accordance with
TIA Section 312, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under TIA Section 312(b).
SECTION 702. Reports by Trustee.
------------------
Within 60 days after May 15 of each year commencing with the first May
15 after the first issuance of Notes, the Trustee shall transmit to the Holders,
in the manner and to the extent provided in TIA Section 313(c), a brief report
dated as of such May 15 if required by TIA Section 313(a).
ARTICLE EIGHT
MERGER, CONSOLIDATION AND SALE OF ASSETS
SECTION 801. Company May Consolidate, etc., Only on Certain Terms.
----------------------------------------------------
The Company shall not, in a single transaction or a series of related
transactions, (i) consolidate with or merge with or into any other corporation
(other than a merger with a Wholly Owned Restricted Subsidiary solely for the
purpose of changing the Company's jurisdiction of incorporation to another State
of the United States) or sell, lease, transfer, convey or otherwise dispose of
or assign all or substantially all of the assets of the Company and the
Restricted Subsidiaries (taken as a whole), or assign any of its obligations
under the Notes and this Indenture, to any Person or (ii) adopt a Plan of
Liquidation unless, in either case:
(a) the Person formed by or surviving such consolidation or merger
(if other than the Company) or to which such sale, lease, conveyance or
other disposition or assignment shall be made (or, in the case of a Plan of
Liquidation, any Person to which assets are transferred) (collectively, the
"Successor"), is a corporation organized and existing under the laws of the
United States or any State thereof or the District of Columbia, and the
Successor assumes by supplemental indenture in a form satisfactory to the
Trustee all of the obligations of the Company under the Notes and this
Indenture;
(b) immediately prior to and immediately after giving effect to such
transaction and the assumption of the obligations as set forth in clause
(a) above and the incurrence
59
of any Indebtedness to be incurred in connection therewith, no Default or
Event of Default shall have occurred and be continuing;
(c) immediately after and giving effect to such transaction and the
assumption of the obligations set forth in clause (a) above and the
incurrence of any Indebtedness to be incurred in connection therewith, and
the use of any net proceeds therefrom on a pro forma basis, (1) the
Consolidated Net Worth of the Company or the Successor, as the case may be,
would be at least equal to the Consolidated Net Worth of the Company
immediately prior to such transaction and (2) the Company or the
Successor, as the case may be, could incur at least $1.00 of additional
Indebtedness pursuant to the Consolidated Fixed Charge Coverage Ratio test
set forth in Section 1009 hereof;
(d) each Subsidiary Guarantor, unless it is the other party to the
transactions described above, shall have by amendment to its Guarantee
confirmed that its Guarantee of the Notes shall apply to the obligations of
the Company or the Successor under the Notes and the Indenture. For
purposes of this covenant, any Indebtedness of the Successor which was not
Indebtedness of the Company immediately prior to the transaction shall be
deemed to have been incurred in connection with such transaction; and
(e) the Company or such Person shall have delivered to the Trustee
(i) an Officers' Certificate stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required
in connection with such transaction, such supplemental indenture, comply
with this Article Eight and that all conditions precedent herein provided
for relating to such transaction have been complied with and (ii) if a
supplemental indenture is required in connection with such transaction, an
Opinion of Counsel to the effect that such supplemental indenture has been
duly authorized and executed by the Company or such Person and constitutes
the legal, valid, binding and enforceable obligation of the the Company or
such Person (subject to such customary exceptions concerning creditors'
rights and equitable principles).
SECTION 802. Successor Substituted.
---------------------
Upon any consolidation or merger or any transfer of all or
substantially all of the assets of the Company in accordance with Section 801,
the surviving Person formed by such consolidation or into which the Company is
merged or to which such transfer is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under the Indenture
with the same effect as if such surviving Person had been named as the Company
herein; provided, however, that solely for purposes of computing the Basket
described in subclause (iii) of the first paragraph of Section 1011 hereof, the
Basket shall not be affected by the Consolidated Net Income or other attributes
of the surviving Person prior to the effective time of the merger and any such
surviving Person shall be deemed to have succeeded to and be substituted for the
Company only with respect to periods subsequent to the effective time of such
merger, consolidation or transfer of assets.
60
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
--------------------------------------------------
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such Successor of the covenants of the Company
contained herein and in the Notes;
(2) to reflect the release of any Subsidiary Guarantor from its
Subsidiary Guarantee pursuant to Section 1204 or to add as a Subsidiary
Guarantor any Subsidiary of the Company pursuant to Section 1205 in the
manner provided by this Indenture;
(3) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(4) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company;
(5) to add any additional Events of Default;
(6) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee pursuant to the requirements of Section
609; or
(7) to cure any ambiguity, defect or inconsistency or to make any
other change that does not adversely affect the interests of any Holders.
After an amendment under this Section becomes effective, the Company
shall mail to Holders of Notes a notice briefly describing such amendment. The
failure to give such notice to all Holders of Notes, or any defect therein,
shall not impair or affect the validity of an amendment under this Section.
SECTION 902. Supplemental Indentures with Consent of Holders.
-----------------------------------------------
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Notes, by Act of said Holders delivered to
the Company, the Guarantors and the Trustee, the Company, when authorized by a
Board Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders under this Indenture;
provided, however, that no such supplemental indenture shall, without the
consent of 75% of the aggregate principal amount of Notes affected thereby,
amend, change or modify Section 1019
61
or the definitions related thereto; and that no such supplemental indenture
shall, without the consent of the Holder of each Outstanding Note affected
thereby (which may include consent obtained in connection with a tender offer or
exchange offer):
(1) extend the maturity of any Note;
(2) affect the terms of any scheduled payment of interest on or
principal of the Notes (including without limitation any redemption
provisions (other than Sections 1015 or 1019 or the definitions related
thereto));
(3) reduce the percentage in principal amount of the Outstanding
Notes, the consent of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for any waiver of
compliance with certain provisions of this Indenture or certain defaults
hereunder and their consequences provided for in this Indenture;
(4) modify any of the provisions of this Section or Sections 513 and
1019, except to increase any such percentage or to provide that certain
other provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Note affected thereby or the
rights of any Holder to receive payments of principal of or premium, if any
or interest or Liquidated Damages, if any, on the Securities;
(5) modify Article Twelve or any related definition in a manner
adverse to the Holders; or
(6) release a Guarantee except pursuant to its terms.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
------------------------------------
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article Nine or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and shall be fully protected in relying upon, an Opinion of Counsel
stating that the execution of such supplemental indenture is authorized or
permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture which affects the Trustees own
rights, duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Notes theretofore or thereafter authenticated and delivered hereunder shall
be bound thereby.
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SECTION 905. Conformity with Trust Indenture Act.
-----------------------------------
Every supplemental indenture executed pursuant to the Article shall
conform to the requirements of the Trust Indenture Act as then in effect if this
Indenture shall then be qualified under the TIA.
SECTION 906. Reference in Notes to Supplemental Indentures.
---------------------------------------------
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Notes so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Notes of like tenor and in like principal amount.
SECTION 907. Notice of Supplemental Indentures.
---------------------------------
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Section 902, the Company
shall give notice thereof to the Holders of each Outstanding Note affected, in
the manner provided for in Section 106, setting forth in general terms the
substance of such supplemental indenture. The failure to give such notice to all
Holders of Notes, or any defect therein, shall not impair or affect the validity
of such supplemental indenture.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Liquidated Damages,
-----------------------------------------------------
if any, and Interest.
- --------------------
The Company covenants and agrees for the benefit of the Holders that
it will duly and punctually pay the principal of (and premium, if any) and
interest on the Notes in accordance with the terms of the Notes and this
Indenture. A payment will be considered to be paid on the date it is due if the
Trustee or Paying Agent holds on that date legal tender of the United States
designated for and sufficient to pay the installment.
SECTION 1002. Maintenance of Office or Agency.
-------------------------------
The Company will maintain in The City of New York, an office or agency
where Notes may be presented or surrendered for payment, where Notes may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Corporate Trust Office of the Trustee shall be such office or
agency of the Company, unless the Company shall designate and maintain some
other office or agency for one or more of such purposes. The
63
Company will give prompt written notice to the Trustee of any change in the
location of any such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Trustee, and the
Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the Notes may
be presented or surrendered for any or all such purposes and may from time to
time rescind any such designation; provided, however, that no such designation
or rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in The City of New York for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and any change in the location of any such other office or agency.
SECTION 1003. Money for Note Payments to Be Held in Trust.
-------------------------------------------
If the Company shall at any time act as its own Paying Agent, it will,
on or before each due date of the principal of (or premium and Liquidated
Damages, if any) or interest on any of the Notes, segregate and hold in trust
for the benefit of the Persons entitled thereto a sum sufficient to pay the
principal of (or premium and Liquidated Damages, if any) or interest so becoming
due until such sums shall be paid to such Persons or otherwise disposed of as
herein provided and will promptly notify the Trustee of its action or failure so
to act.
Whenever the Company shall have one or more Paying Agents for the
Notes, it will, on or before each due date of the principal of (or premium and
Liquidated Damages, if any) or interest on any Notes, deposit with a Paying
Agent a sum sufficient to pay the principal (and premium and Liquidated Damages,
if any) or interest so becoming due, such sum to be held in trust for the
benefit of the Persons entitled to such principal, premium and Liquidated
Damages or interest, and (unless such Paying Agent is the Trustee) the Company
will promptly notify the Trustee of such action or any failure so to act.
The Company will cause each Paying Agent (other than the Trustee) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of (and
premium and Liquidated Damages, if any) or interest on Notes in trust for
the benefit of the Persons entitled thereto until such sums shall be paid
to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Notes) in the making of any payment of principal
(and premium and Liquidated Damages, if any) or interest; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such
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Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such sums.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (or premium and
Liquidated Damages, if any) or interest on any Note and remaining unclaimed for
two years after such principal, premium, Liquidated Damages or interest has
become due and payable shall be paid to the Company on Company Request, or (if
then held by the Company) shall be discharged from such trust; and the Holder of
such Note shall thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in the Borough of Manhattan, The City of New York, notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Company.
SECTION 1004. Corporate Existence.
-------------------
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect the corporate
existence, rights (charter and statutory) and franchises of the Company and each
Restricted Subsidiary; provided, however, that the Company shall not be required
to preserve the existence of any Subsidiary or any such right or franchise if
the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and its
Subsidiaries as a whole and that the loss thereof is not disadvantageous in any
material respect to the Holders.
SECTION 1005. Payment of Taxes and Other Claims.
---------------------------------
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all material taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary and (b)
all material lawful claims for labor, materials and supplies, which, if unpaid,
might by law become a lien upon the property of the Company or any Subsidiary;
provided, however, that the Company shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings.
65
SECTION 1006. Maintenance of Properties.
-------------------------
The Company will cause all properties owned by the Company or any
Subsidiary or used or held for use in the conduct of its business or the
business of any Subsidiary to be maintained and kept in good condition, repair
and working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that nothing in this Section shall
prevent the Company from discontinuing the maintenance of any of such properties
if such discontinuance is either (i) in the ordinary course of business or (ii)
in the judgment of the Company, desirable in the conduct of its business or the
business of any Subsidiary and not disadvantageous in any material respect to
the Holders.
66
SECTION 1007. Insurance.
---------
The Company will at all times keep all of its and its Subsidiaries
properties which are of an insurable nature insured with insurers, believed by
the Company to be responsible, against loss or damage to the extent that
property of similar character is usually so insured by corporations similarly
situated and owning like properties, unless, the failure to provide such
insurance (together with all other such failures) would not have a material
adverse effect on the financial condition or results of operations of the
Company and the Restricted Subsidiaries taken as a whole.
SECTION 1008. Statement by Officers As to Default.
-----------------------------------
(a) Each of the Company and any Guarantor will deliver to the
Trustee, within 120 days after the end of each fiscal year a brief certificate
from the principal executive officer, principal financial officer or principal
accounting officer as to his or her knowledge of the Company's or such
Guarantor's compliance with all conditions and covenants under this Indenture.
For purposes of this Section 1008(a), such compliance shall be determined
without regard to any period of grace or requirement of notice under this
Indenture.
(b) When any Default has occurred and is continuing under this
Indenture, the Company or such Guarantor shall deliver to the Trustee by
registered or certified mail or by telegram, telex or facsimile transmission an
officers certificate specifying such Default and what action the Company is
taking or proposes to take with respect thereto within five Business Days of its
occurrence.
SECTION 1009. Limitations on Additional Indebtedness.
--------------------------------------
(A) (i) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, incur any Indebtedness
(including without limitation Acquired Indebtedness) and (ii) the Company shall
not permit any of its Restricted Subsidiaries (other than any Guarantor) to
issue (except if issued to or owned beneficially and of record by the Company or
any of its Restricted Subsidiaries) any Capital Stock having a preference in
liquidation or with respect to the payment of dividends; provided that (a) the
Company and its Restricted Subsidiaries may incur Permitted Indebtedness and (b)
the Company or Scovill Fasteners may incur Indebtedness if, after giving effect
thereto, the Company's Consolidated Fixed Charge Coverage Ratio on the date
thereof would be at least 2.0 to 1.
For purposes of determining compliance with this covenant, in the
event that an item of Indebtedness may be incurred through clause (b) of this
covenant or by meeting the criteria of one or more of the types of Permitted
Indebtedness pursuant to clause (a), the Company, in its sole discretion, (i)
may classify such item of Indebtedness under and comply with either of such
clauses (or any of such definitions), as applicable, (ii) may classify and
divide such item of Indebtedness into more than one of such clauses (or
definitions), as applicable, and (iii) may elect to comply with such clauses (or
definitions), as applicable, in any order.
(B) The Company will not, and will not permit any of its Subsidiaries
that are Guarantors to, incur any Indebtedness that is expressly subordinated to
any other
67
Indebtedness of the Company or such Subsidiary unless such Indebtedness by its
terms is also expressly made subordinated to the Notes, in the case of the
Company, or the Subsidiary Guarantees, in the case of a Subsidiary.
SECTION 1010. [INTENTIONALLY OMITTED]
SECTION 1011. Limitations on Restricted Payments.
----------------------------------
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, make any Restricted Payment (except as
permitted below) if at the time of such Restricted Payment:
(i) a Default or Event of Default shall have occurred and be
continuing or shall occur as a consequence thereof;
(ii) the Company would be unable to incur an additional $1.00 of
Indebtedness pursuant to the Consolidated Fixed Charge Coverage Ratio test
set forth in Section 1009 hereof; or
(iii) the amount of such Restricted Payment, when added to the
aggregate amount of all Restricted Payments made after the Issue Date
(other than any Restricted Payment permitted under clause (3)(a), (4) or
(5) of the next paragraph), exceeds the sum (the "Basket") of (A) 50% of
the Company's Consolidated Net Income (taken as one accounting period) from
the beginning of the first fiscal quarter commencing after the Issue Date
to the end of the Company's most recently ended fiscal quarter for which
financial statements are available at the time of such Restricted Payment
(or, if such aggregate Consolidated Net Income shall be a deficit, minus
100% of such aggregate deficit), plus (B) the net cash proceeds from the
issuance and sale (other than to a Restricted Subsidiary of the Company)
after the Issue Date of Qualified Stock, plus (C) the net cash proceeds
from the issuance or sale (other than to a Restricted Subsidiary of the
Company) of Indebtedness or shares of Disqualified Stock after the Issue
Date that have been converted into or exchanged for Qualified Stock of the
Company, together with the aggregate net cash proceeds received by the
Company at the time of such conversion or exchange, plus (D) to the extent
that any Restricted Investment that was made after the Issue Date is sold
for cash or otherwise liquidated or repaid for cash, in whole or in part,
the lesser of (x) the cash return of capital (including repayment in cash
of Indebtedness, if applicable) with respect to such Restricted Investment
(less the cost of disposition, if any) and (y) the initial amount of such
Restricted Investment, plus (E) the amount of Restricted Investment
outstanding in an Unrestricted Subsidiary at the time such Unrestricted
Subsidiary is designated a Restricted Subsidiary of the Company in
accordance with the definition of Unrestricted Subsidiary.
The foregoing provisions will not prohibit, so long as (with respect
to clauses (2) and (3) below) no Default or Event of Default shall have occurred
and be continuing, (1) the payment of any dividend within 60 days after the date
of declaration thereof, if at said date of declaration such payment would have
complied with the provisions of the Indenture; (2) the redemption of any Capital
Stock of the Company in exchange for, or out of the proceeds of, the
substantially concurrent sale (other than to a Restricted Subsidiary of the
68
Company) of any Qualified Stock of the Company; (3) the redemption of
Subordinated Indebtedness (a) with the net proceeds from or incurrence of
Permitted Refinancing Indebtedness or (b) in exchange for, or out of the
proceeds of, the substantially concurrent issue and sale of Qualified Stock of
the Company (other than (x) Capital Stock sold to a Restricted Subsidiary of the
Company and (y) Capital Stock purchased with the proceeds of loans from the
Company or any of its Restricted Subsidiaries), (4) the redemption of any
Capital Stock of the Company or of Parent, or dividends to Parent in any amount
sufficient to and for the purpose of redeeming Capital Stock of Parent, held by
any present or former employee or director of the Company or any of its
Restricted Subsidiaries (or the estate or a trust for the benefit of any such
Person) in an aggregate amount not to exceed $1.5 million in any fiscal year
(provided that any unused amounts may be carried over to the immediately
subsequent fiscal year but not beyond such fiscal year), (5) dividends to Parent
in an amount sufficient for Parent to pay its legal, accounting and other
operating expenses incurred in the ordinary course of business, but not to
exceed $200,000 in the aggregate in any fiscal year and (6) the payment in an
amount not to exceed $600,000 per year of dividends to Parent in an amount
sufficient to and for the purpose of paying fees to Saratoga or its Affiliates
pursuant to the Management Services Agreement.
The amounts referred to in clauses (1), (2), (3)(b) and (6) shall be
included as Restricted Payments in any computation made pursuant to clause (iii)
above.
SECTION 1012. Limitations on Restrictions on Distributions from
-------------------------------------------------
Restricted Subsidiaries.
- -----------------------
The Company will not, and will not permit any of its Restricted
Subsidiaries to, create or otherwise cause or suffer to exist or become
effective any consensual Payment Restriction with respect to any of its
Restricted Subsidiaries, except for any such Payment Restriction existing under
or by reason of (a) applicable law, (b) customary non-assignment or net worth
provisions in leases or other contracts entered into in the ordinary course of
business and consistent with past practices, (c) purchase money obligations for
property acquired in the ordinary course of business that impose restrictions on
the property so acquired, (d) customary restrictions imposed on the transfer of
copyrighted or patented materials, (e) the entering into of a contract for the
sale or other disposition of assets, directly or indirectly, so long as such
restrictions do not extend to assets that are not subject to such sale or other
disposition, (f) the terms of any agreement evidencing any Indebtedness of
Restricted Subsidiaries that was permitted by the Indenture to be incurred that
only restricts the transfer of the assets purchased with the proceeds of such
Indebtedness, (g) the terms of the Credit Agreement in effect on the Issue Date
or any similar Payment Restriction under the Credit Agreement or any similar
bank credit facility, provided that such similar Payment Restriction, taken as a
whole, is not materially more restrictive than the Payment Restriction in effect
on the Issue Date under the Credit Agreement, (h) the terms of any agreement
evidencing any Acquired Indebtedness that was permitted to be incurred pursuant
to the Indenture, provided that such Payment Restriction only applies to assets
that were subject to such restriction and encumbrances prior to the acquisition
of such assets by the Company or its Restricted Subsidiaries, (i) contracts of a
Restricted Subsidiary in effect prior to such Person becoming a Restricted
Subsidiary and not entered into in contemplation thereof, so long as such
restriction applies only to such Restricted Subsidiary or its assets, (j)
restrictions on transfer of property or assets pursuant to any Lien permitted
under the Indenture, (k) the terms of any agreement in effect on the Issue
69
Date as such Payment Restriction is in effect on the Issue Date or as thereafter
amended; provided that such Payment Restriction is no more restrictive, (1) the
Indenture, the Notes or the Guarantees, and (m) Refinancing Indebtedness;
provided that any such Payment Restrictions that arise under such Refinancing
Indebtedness are not, taken as a whole, more restrictive than those under the
agreement creating or evidencing the Indebtedness being refinanced.
SECTION 1013. Limitations on Transactions with Affiliates.
-------------------------------------------
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, in one transaction or a series of
related transactions, sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from or enter into
any contract, agreement, understanding, loan, advance or guarantee with, or for
the benefit of, any of their respective Affiliates (each of the foregoing, an
"Affiliate Transaction"), unless (i) such Affiliate Transaction is on terms that
are no less favorable to the Company or the relevant Restricted Subsidiary than
those that could have been obtained in a comparable transaction by the Company
or such Restricted Subsidiary with an unrelated Person and (ii) the Company
delivers to the Trustee (a) with respect to any Affiliate Transaction (or series
of related transactions) involving aggregate payments in excess of $1.0 million,
an Officers' Certificate certifying that such Affiliate Transaction complies
with clause (i) above and a Secretary's Certificate which sets forth and
authenticates a resolution that has been adopted by a vote of a majority of the
Disinterested Directors approving such Affiliate Transaction or states that
there are no Disinterested Directors, in which case an opinion, as described in
clause (b), shall be required and (b) with respect to any Affiliate Transaction
(or series of related transactions) involving aggregate payments in excess of
$5.0 million, the certificates described in the preceding clause (a) and an
opinion as to the fairness to the Company or such Restricted Subsidiary from a
financial point of view issued by an Independent Financial Advisor; provided,
however, that the following shall not be deemed to be Affiliate Transactions:
(i) transactions exclusively between or among (1) the Company and one or more
Restricted Subsidiaries or (2) Restricted Subsidiaries, provided, in each case,
that no Affiliate of the Company (other than any Person that is such an
Affiliate solely because of the control of such Person by the Company) owns
Capital Stock of any such Restricted Subsidiary; (ii) transactions between the
Company or any Restricted Subsidiary and any qualified employee stock ownership
plan established for the benefit of the Company's employees, or the
establishment or maintenance of any such plan; (iii) reasonable director,
officer and employee compensation and other benefit, and indemnification,
arrangements approved by the Board of Directors; (iv) transactions permitted by
Section 1011 hereof; (v) the existence of, or the performance by the Company or
any Restricted Subsidiary under, the Management Services Agreement with respect
to fees of up to $600,000 per year and any other agreement in effect on the
Issue Date, as such agreement is in effect on the Issue Date or as amended
thereafter in any manner no less favorable to the Holders; (vi) prepaid expenses
and loans or advances to employees or directors of the Company or any of its
Subsidiaries in the ordinary course of business; (vii) the pledge of Capital
Stock of Unrestricted Subsidiaries to support the Indebtedness thereof; (viii)
the entering into of a tax sharing agreement, or payments pursuant thereto,
between the Company and/or one or more Subsidiaries, on the one hand, and any
other Person with which the Company or such Subsidiaries are required or
permitted to file a consolidated tax return or with which the Company or such
Subsidiaries are or could be part of a consolidated group for tax purposes, on
the other hand, which payments
70
by the Company and its Restricted Subsidiaries are not in excess of the tax
liabilities that would have been payable by them on a stand-alone basis; and
(ix) the issuance and sale by the Company to its Affiliates of Qualified Stock.
SECTION 1014. Limitations on Liens.
--------------------
The Company will not incur, and will not permit any Restricted
Subsidiary to, directly or indirectly create, incur, assume or suffer to exist
any Lien on any property or asset now owned or hereafter acquired, or on any
income, profits or proceeds therefrom, or assign or convey any right to receive
income therefrom, except Permitted Liens, unless prior thereto or simultaneously
therewith the Notes are equally and ratably secured; provided that if such
Indebtedness is Subordinated Indebtedness the Lien securing such Indebtedness
shall be expressly subordinated and junior to the Lien securing the Notes.
SECTION 1015. Limitations on Asset Sales.
--------------------------
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, engage in any Asset Sale unless (i) the Company or such
Restricted Subsidiary receives consideration at the time of such Asset Sale at
least equal to the Fair Market Value of the assets sold, (ii) at least 80% of
the consideration received by the Company or the relevant Restricted Subsidiary
in respect of such Asset Sale consists of (A) cash or Cash Equivalents, (B) the
assumption of Indebtedness (other than Subordinated Indebtedness) of the Company
or any Guarantor or Indebtedness of any non-Guarantor Restricted Subsidiary, (C)
Related Assets or (D) any combination of the foregoing clauses (A), (B) and (C).
(b) If the Company or any Restricted Subsidiary engages in an Asset
Sale, the Company or any Restricted Subsidiary may either, no later than 270
days after such Asset Sale, (i) apply all or any of the Net Available Proceeds
therefrom to repay amounts outstanding under the Credit Agreement (including by
providing cash collateral) or any other Indebtedness (other than Subordinated
Indebtedness) of the Company or any Restricted Subsidiary; provided, in each
case, that the related loan commitment (if any) is thereby permanently reduced
by the amount of such Indebtedness so repaid or (ii) invest all or any part of
the Net Available Proceeds thereof in Related Assets. Pending final disposition
of Net Available Proceeds, amounts may be used to repay any amounts outstanding
under the Credit Agreement. The amount of such Net Available Proceeds not
applied or invested as provided in this paragraph will constitute "Excess
Proceeds".
(c) When the aggregate amount of Excess Proceeds exceeds $5.0
million, the Company shall, within 15 business days, make an offer to purchase
(a "Net Proceeds Offer") from all Holders of Notes the maximum principal amount
(expressed as a multiple of $1,000) of Notes that may be purchased (the "Payment
Amount") out of the amount of such Excess Proceeds. The offer price for the
Notes will be payable in cash in an amount equal to 100% of the principal amount
of the Notes tendered pursuant to a Net Proceeds Offer, plus accrued and unpaid
interest and Liquidated Damages, if any, to the date such Net Proceeds Offer is
consummated (the "Offered Price").
(d) The Company shall, within the time period provided in paragraph
(c) above, notify the Trustee in writing of any Net Proceeds Offer and shall
give written notice of
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such Net Proceeds Offer to each Holder of Notes in the manner provided in
Section 106 stating:
(1) that the Holder has the right to require the Company to
repurchase such Holder's Notes at the Offered Price, subject to proration
in the event the Excess Proceeds are less than the aggregate Offered Price
of all Notes tendered;
(2) the date of purchase of Notes pursuant to the Net Proceeds Offer
(the "Asset Sale Purchase Date"), which shall be no earlier than 30 days
nor later than 60 days from the date such notice is mailed, or such later
date as is necessary to comply with requirements under the Exchange Act or
any applicable securities laws or regulations;
(3) that any Note not tendered will continue to accrue interest
pursuant to its terms;
(4) that, unless the Company defaults in the payment of the Offered
Price, any Note accepted for payment pursuant to the Net Proceeds Offer
shall cease to accrue interest after the Asset Sale Purchase Date; and
(5) the instructions a Holder must follow to accept an Net Proceeds
Offer or to withdraw such acceptance in accordance with paragraph (e) of
this Section.
(e) Holders electing to have Notes purchased will be required to
surrender such Notes to the Company at the address specified in the notice at
least five Business Days prior to the Asset Sale Purchase Date. Holders will be
entitled to withdraw their election if the Company receives, not later than
three Business Days prior to the Asset Sale Purchase Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Notes delivered for purchase by the Holder as to which
his election is to be withdrawn and a statement that such Holder is withdrawing
his election to have such Notes purchased. Holders whose Notes are purchased
only in part will be issued new Notes equal in principal amount to the
unpurchased portion of the Note surrendered.
To the extent that the aggregate Offered Price of Notes tendered
pursuant to a Net Proceeds Offer is less than the Payment Amount relating
thereto (such shortfall constituting a "Net Proceeds Deficiency"), the Company
may use such Net Proceeds Deficiency, or a portion thereof, for general
corporate purposes, subject to the limitations of Section 1011 hereof. If the
aggregate Offered Price of Notes validly tendered and not withdrawn by Holders
thereof exceeds the Payment Amount, Notes to be purchased will be selected on a
pro rata basis. Upon completion of such Net Proceeds Offer, the amount of
Excess Proceeds remaining shall be zero.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder, if
applicable, in the event that an Asset Sale occurs and the Company is required
to purchase Notes as described above.
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SECTION 1016. Restrictions on Sale and Leaseback Transactions.
------------------------------------------------
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into, renew or extend any Sale
and Leaseback Transaction unless: (i) the Company or such Subsidiary would be
entitled, under Section 1009 hereof, to incur Indebtedness in an amount equal to
the Attributable Indebtedness with respect to such Sale and Leaseback; (ii) such
Sale and Leaseback Transaction would not result in a violation of Section 1014
hereof; and (iii) the Net Available Proceeds from any such Sale and Leaseback
Transaction are applied in a manner consistent with the provisions of Section
1015 hereof.
SECTION 1017. Restrictions on Sale of Capital Stock of Restricted
---------------------------------------------------
Subsidiaries.
- ------------
The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly sell or otherwise dispose of any of the Capital Stock
of any Restricted Subsidiary unless: (i) (a) the Restricted Subsidiary shall
remain a Restricted Subsidiary, or (b) all of the Capital Stock of such
Restricted Subsidiary shall be sold or otherwise disposed of or any Capital
Stock of such Restricted Subsidiary retained by the Company or its Restricted
Subsidiaries is treated as an Investment and complies with the provisions
described under Section 1011 hereof, and (ii) the Net Available Proceeds from
any such sale or disposition are applied in a manner consistent with the
provisions described under Section 1015 hereof.
SECTION 1018. Reports.
-------
Whether or not required by the rules and regulations of the Securities
and Exchange Commission (the "Commission"), so long as any Notes are
outstanding, the Company and the Guarantors will file with the Commission, to
the extent such filings are accepted by the Commission, and will furnish to the
Holders of Notes all quarterly and annual reports and other information,
documents and reports that would be required to be filed with the Commission
pursuant to Section 13 of the Exchange Act if the Company were required to file
under such section. The Company and the Guarantors have agreed that, for so long
as any Notes remain outstanding, they will furnish to the Holders and beneficial
holders of Notes and to prospective purchasers of Notes designated by the
Holders of Transfer Restricted Notes and to broker-dealers, upon their request,
the information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
SECTION 1019. Purchase of Notes Upon Change of Control.
----------------------------------------
(a) Upon the occurrence of a Change of Control, the Company shall be
obligated to make an offer to purchase (a "Change of Control Offer") all of the
then Outstanding Notes, in whole or in part, from the Holders of such Notes in
integral multiples of $1,000, at a purchase price (the "Change of Control
Purchase Price") equal to 101% of the principal amount of such Notes, plus
accrued and unpaid interest, if any, to the Change of Control Purchase Date (as
defined below), in accordance with the procedures set forth in paragraphs (b),
(c) and (d) of this Section. The Company shall, subject to the provisions
described below, be required to purchase all Notes properly tendered into the
Change of Control Offer and not withdrawn.
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(b) The Change of Control Offer is required to remain open for at
least 20 Business Days and until the close of business on the fifth Business Day
prior to the Change of Control Purchase Date (as defined below) or for such
longer period as required by law.
(c) Not later than the 30th day following any Change of Control, the
Company shall give to the Trustee in the manner provided in Section 105 hereof,
who shall mail at the Company's expense to each Holders of Notes, a copy of the
Change of Control Offer, which shall state, among other things, the procedures
that Holders must follow to accept the Change of Control Offer and stating:
(1) that a Change in Control has occurred and that such Holder has
the right to require the Company to repurchase such Holder's Notes, or
portion thereof, at the Change of Control Purchase Price;
(2) any information regarding such Change of Control required to be
furnished pursuant to Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder;
(3) a purchase date (the "Change of Control Purchase Date") which
shall be on a Business Day and no earlier than 30 days nor later than 60
days from the date of such notice is mailed;
(4) that any Note, or portion thereof, not tendered or accepted for
payment will continue to accrue interest;
(5) that unless the Company defaults in depositing money with the
Paying Agent in accordance with the last paragraph of clause (d) of this
Section 1019, or payment is otherwise prevented, any Note, or portion
thereof, accepted for payment pursuant to the Change of Control Offer shall
cease to accrue interest after the Change of Control Purchase Date; and
(6) the instructions a Holder must follow in order to have his Notes
repurchased in accordance with paragraph (d) of this Section.
(d) Holders electing to have Notes purchased will be required to
surrender such Notes to the Paying Agent at the address specified in the Change
of Control Notice at least five Business Days prior to the Change of Control
Purchase Date. Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than three Business Days prior to the Change of
Control Purchase Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the certificate number(s) (in the case of
Physical Notes) and principal amount of the Notes delivered for purchase by the
Holder as to which his election is to be withdrawn and a statement that such
Holder is withdrawing his election to have such Notes purchased. Holders whose
Notes are purchased only in part will be issued new Notes of like tenor and
equal in principal amount to the unpurchased portion for the Notes surrendered.
On or prior to 10:00 A.M., New York City time, on the Change of
Control Purchase Date, the Company shall (i) accept for payment Notes or portion
thereof validly tendered (and not withdrawn) pursuant to the Change of Control
Offer, (ii) irrevocably deposit
74
with the Paying Agent money sufficient to pay the purchase price of all Notes or
portions thereof so tendered, and (iii) deliver or cause to be delivered to the
Trustee the Notes so accepted. The Paying Agent shall promptly mail or deliver
to Holders of the Notes so tendered payment in an amount equal to the Change of
Control Purchase Price for the Notes, and the Company shall execute and, upon
Company Order, the Trustee shall authenticate and mail or make available for
delivery to such Holders a new Note of like tenor and equal in principal amount
to any unpurchased portion of the Note which any such Holder did not surrender
for purchase. The Company shall announce the results of a Change of Control
Offer on or as soon as practicable after the Change of Control Purchase Date.
For purposes of this Section 1019, the Trustee will act as the Paying Agent.
(e) The Company's obligation to make a Change of Control Offer will
be satisfied if a third party makes the Change of Control Offer in the manner
and at the times and otherwise in compliance with the requirements applicable to
a Change of Control Offer made by the Company and purchases all Notes properly
tendered and not withdrawn under such Change of Control Offer.
(f) The Company shall comply with 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 the event that a Change of Control occurs and
the Company is required to purchase Notes as described in this Section 1019.
SECTION 1020. Waiver of Certain Covenants.
---------------------------
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Section 803 or Sections 1007 through
1018, inclusive, if before or after the time for such compliance (including
after the occurrence and during the existence of a Default or an Event of
Default) the Holders of at least a majority in principal amount of the
Outstanding Notes, by Act of such Holders, waive such compliance (including in
connection with a tender offer or exchange offer) in such instance with such
term, provision or condition, but no such waiver shall extend to or affect such
term, provision or condition except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such term, provision or condition shall
remain in full force and effect.
ARTICLE ELEVEN
REDEMPTION OF NOTES
SECTION 1101. Right of Redemption.
-------------------
The Notes may be redeemed at the option of the Company, as a whole or
from time to time in part, at any time on or after November 30, 2002, at the
Redemption Prices (expressed as percentages of principal amount) set forth
below, if redeemed during the twelve-month period beginning on November 30 of
the year indicated below:
Optional
75
Redemption
Year Price
---- ----------
2002...................................... 105.625%
2003...................................... 103.750%
2004...................................... 101.875%
2005 and thereafter....................... 100.000%
together in the case of any such redemption with accrued and unpaid interest
thereon and Liquidated Damages, if any, to the applicable Redemption Date
(subject to the right of Holders of record on the relevant Regular Record Date
to receive interest due on an Interest Payment Date that is on or prior to such
Redemption Date), all as provided herein.
Notwithstanding the foregoing, at any time on or prior to November 30,
2000, the Company may redeem up to 35% of the aggregate principal amount of
Notes originally issued from the net cash proceeds of one or more Public Equity
Offerings, at a redemption price equal to 111.25% of the principal amount
thereof, together with accrued and unpaid interest thereon and Liquidated
Damages, if any, to the Redemption Date, provided that notice of such redemption
is given to the Holders of Notes pursuant to Section 106 hereof within 60 days
after any such Public Equity Offering closes.
SECTION 1102. Applicability of Article.
------------------------
Redemption of Notes at the election of the Company or otherwise, as
permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article.
SECTION 1103. Election to Redeem; Notice to Trustee.
-------------------------------------
The election of the Company to redeem any Notes pursuant to Section
1101 shall be evidenced by a Board Resolution. In case of any redemption at the
election of the Company, the Company shall, at least 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of Notes to be redeemed and shall deliver to the Trustee
such documentation and records as shall enable the Trustee to select the Notes
to be redeemed pursuant to Section 1104.
SECTION 1104. Selection by Trustee of Notes to Be Redeemed.
--------------------------------------------
If less than all the Notes are to be redeemed, the particular Notes to
be redeemed shall be selected not more than 60 days prior to the Redemption Date
by the Trustee, from the Outstanding Notes not previously called for redemption
on a pro rata basis, by lot or by any other method as the Trustee shall deem
fair and appropriate and which may provide for the selection for redemption of
portions of the principal of Notes; provided, however, that no such partial
redemption shall reduce the portion of the principal amount of a Note not
redeemed to less than $1,000.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Notes selected for partial
redemption, the principal
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amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Notes shall relate, in the
case of any Note redeemed or to be redeemed only in part, to the portion of the
principal amount of such Note which has been or is to be redeemed.
SECTION 1105. Notice of Redemption.
--------------------
Notice of redemption shall be given in the manner provided for in
Section 106 not less than 30 nor more than 60 days prior to the Redemption Date,
to each Holder of Notes to be redeemed.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price and the amount of accrued interest and
Liquidated Damages, if any, to the Redemption Date payable as provided in
Section 1107, if any,
(3) if less than all Outstanding Notes are to be redeemed, the
identification (and, in the case of a partial redemption, the principal
amounts) of the particular Notes to be redeemed,
(4) in case any Note is to be redeemed in part only, the notice which
relates to such Note shall state that on and after the Redemption Date,
upon surrender of such Note, the holder will receive, without charge, a new
Note or Notes of authorized denominations for the principal amount thereof
remaining unredeemed,
(5) that on the Redemption Date the Redemption Price (and accrued
interest, if any, to the Redemption Date payable as provided in Section
1107) will become due and payable upon each such Note, or the portion
thereof, to be redeemed, and that interest thereon will cease to accrue on
and after said date, and
(6) the place or places where such Notes are to be surrendered for
payment of the Redemption Price and accrued interest, if any.
Notice of redemption of Notes to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1106. Deposit of Redemption Price.
---------------------------
Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and accrued interest on, all
the Notes which are to be redeemed on that date.
77
SECTION 1107. Notes Payable on Redemption Date.
--------------------------------
Notice of redemption having been given as aforesaid, the Notes so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified (together with accrued interest, if any, to
the Redemption Date), and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such Notes
shall cease to bear interest. Upon surrender of any such Note for redemption in
accordance with said notice, such Note shall be paid by the Company at the
Redemption Price, together with accrued interest, if any, to the Redemption
Date; provided, however, that installments of interest whose Stated Maturity is
on or prior to the Redemption Date shall be payable to the Holders of such
Notes, or one or more Predecessor Notes, registered as such at the close of
business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Note called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium and Liquidated Damages, if
any) shall, until paid, bear interest from the Redemption Date at the rate borne
by the Notes.
SECTION 1108. Notes Redeemed in Part.
----------------------
Any Note which is to be redeemed only in part shall be surrendered at
the office or agency of the Company maintained for such purpose pursuant to
Section 1002 (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or such Holder's attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Note without service charge, a
new Note or Notes, of any authorized denomination as requested by such Holder,
in aggregate principal amount equal to and in exchange for the unredeemed
portion of the principal of the Note so surrendered.
ARTICLE TWELVE
GUARANTEES
SECTION 1201. Unconditional Guarantee.
-----------------------
Each of Parent Guarantor and any Subsidiary Guarantor hereby jointly
and severally unconditionally Guarantees to each Holder of a Note authenticated
and delivered by the Trustee, and to the Trustee on behalf of such Holder, the
full and punctual payment of the principal of (and premium and Liquidated
Damages, if any) and interest on such Note when and as the same shall become due
and payable, whether at the Stated Maturity, by acceleration, call for
redemption, purchase or otherwise, in accordance with the terms of such Note and
of this Indenture. In case of the failure of the Company punctually to make any
such payment, each of Parent Guarantor and any Subsidiary Guarantor hereby
jointly and severally agrees to pay or cause such payment to be made punctually
when and as the same shall become due and payable, whether at the Stated
Maturity, by acceleration, call for redemption,
78
purchase or otherwise, and as if such payment were made by the Company.
Each of Parent Guarantor and any Subsidiary Guarantor hereby jointly
and severally agrees that its obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of such Note or this
Indenture, the absence of any action to enforce the same, any exchange, or any
release or amendment or waiver of any term of any Guarantee of all or any of the
Notes, or any consent to departure from any requirement of any Guarantee of all
or any of the Notes, the election by the Trustee or any of the Holders in any
proceeding under Chapter 11 of the Federal Bankruptcy Code, or the application
of Section 1111(b)(2) of the Federal Bankruptcy Code, any borrowing or grant of
a security interest by the Company, as debtor-in-possession, under Section 364
of the Federal Bankruptcy Code, the disallowance, under Section 502 of the
Federal Bankruptcy Code, of all or any portion of the claims of the Trustee or
any of the Holders for payment of any of the Notes (including, without
limitation, any interest, Liquidated Damages or premium thereon), any waiver or
consent by the Holder of such Note or by the Trustee with respect to any
provisions thereof or of this Indenture or with respect to the provisions of
this Article Twelve as they apply to Parent Guarantor or any Subsidiary
Guarantor, the obtaining of any judgment against the Company or any action to
enforce the same or any other circumstances which might otherwise constitute a
legal or equitable discharge or defense of the guarantor. Each of Parent
Guarantor and any Subsidiary Guarantor hereby waives the benefits of diligence,
presentment, demand of payment, any requirement that the Trustee or any of the
Holders protect, secure, perfect or insure any security interest in or other
Lien on any property subject thereto or exhaust any right or take any action
against the Company or any other Person, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest or notice with respect to such
Note or the Indebtedness evidenced thereby and all demands whatsoever, and
covenants that its Guarantee will not be discharged in respect of such Note
except by complete performance of the obligations contained in such Note and in
such Guarantee. Each of Parent Guarantor and any Subsidiary Guarantor hereby
agrees that, in the event of a default in payment of principal (or premium or
Liquidated Damages, if any) or interest on such Note, whether at their Stated
Maturity, by acceleration, call for redemption, purchase or otherwise, legal
proceedings may be instituted by the Trustee on behalf of, or by, the Holder of
such Note, subject to the terms and conditions set forth in this Indenture,
directly against Parent Guarantor or any Subsidiary Guarantor to enforce its
Guarantee without first proceeding against the Company. Each of Parent
Guarantor and any Subsidiary Guarantor agrees if, after the occurrence and
during the continuance of an Event of Default, the Trustee or any of the Holders
are prevented by applicable law from exercising their respective rights to
accelerate the maturity of the Notes, to collect interest on the Notes, or to
enforce or exercise any other right or remedy with respect to the Notes, to pay
to the Trustee for the account of the Holders, upon demand thereof, the amount
that would otherwise have been due and payable had such rights and remedies been
permitted to be exercised by the Trustee or any of the Holders.
Each of Parent Guarantor and any Subsidiary Guarantor shall be
subrogated to all rights of the Holders of the Notes against the Company in
respect of any amounts paid by Parent Guarantor or any Subsidiary Guarantor on
account of such Notes pursuant to the provisions of its Guarantee of this
Indenture; provided, however, that neither Parent Guarantor nor any Subsidiary
Guarantor shall be entitled to enforce or to receive any payments arising out
of, or based upon, such right of subrogation until the principal of (and premium
and Liquidated Damages, if any) and interest on all Notes issued hereunder shall
have been paid in
79
full.
Each Guarantee shall remain in full force and effect and continue to
be effective should any petition be filed by or against the Company for
liquidation or reorganization, should the Company become insolvent or make an
assignment for the benefit of creditors or should a receiver or trustee be
appointed for all or any significant part of the Company's assets, and shall, to
the fullest extent permitted by law, continue to be effective or be reinstated,
as the case may be, if at any time payment and performance of the Notes is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by an obligee on the Notes whether as a "voidable
preference", "fraudulent transfer", or otherwise, all as though such payment or
performance has not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Notes shall, to the
fullest extent permitted by law, be reinstated and deemed reduced only by such
amount paid and not so rescinded, restored or returned.
Parent Guarantor and the Subsidiary Guarantors shall have the right to
seek contribution from any non-paying Subsidiary Guarantor (including Parent
Guarantor, as the case may be) so long as the exercise of such right does not
impair the rights of the Holders under Guarantees or under this Article Twelve
in accordance with Section 1207.
Rights of Holders to payment in full under the Notes pursuant to such
Guarantees shall pari passu in right of payment with all other existing and
future unsecured and unsubordinated obligations of such Guarantor and senior to
all existing and future Subordinated Indebtedness of such Guarantor.
SECTION 1202. Execution and Delivery of Guarantees.
------------------------------------
The Guarantee to be endorsed on the Notes is set forth in Exhibit A-2.
Each Guarantor hereby agrees to execute its Guarantee, in a form established
pursuant to Exhibit A-2, to be endorsed on each Note authenticated and delivered
by the Trustee.
The Guarantee shall be executed on behalf of each respective Guarantor
by any Officer of such Guarantor. The signature of any Officer on the Guarantee
may be manual or facsimile.
A Guarantee bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of a Guarantor shall bind such
Guarantor, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of the Note on which
such Guarantee is endorsed or did not hold such offices at the date of such
Guarantee.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Guarantee endorsed
thereon on behalf of the Guarantors. Each of the Guarantors hereby jointly and
severally agrees that its Guarantee set forth in Section 1201 shall remain in
full force and effect notwithstanding any failure to endorse a Guarantee on any
Note.
SECTION 1203. Limitation on Merger or Consolidation.
-------------------------------------
80
No Guarantor shall consolidate or merge with or into (whether or not
such Guarantor is the surviving Person) another Person whether or not affiliated
with such Guarantor unless (i) the Person formed by or surviving any such
consolidation or merger (if other than such Guarantor) assumes all of the
obligations of such Guarantor pursuant to a supplemental indenture, in form and
substance satisfactory to the Trustee, under the Notes and this Indenture; (ii)
immediately after giving effect to such transaction, no Default or Event of
Default exists; and (iii) immediately after giving effect to such transaction,
the Company could incur at least $1.00 of additional Indebtedness pursuant to
the Consolidated Fixed Charge Coverage Ratio set forth in Section 1009.
The foregoing provisions shall not prohibit any consolidation or
merger of one or more Guarantors with or into the Company or into another
Guarantor.
SECTION 1204. Release of Parent Guarantor and Subsidiary Guarantors.
-----------------------------------------------------
(a) Concurrently with any consolidation or merger of a Guarantor as
permitted by Section 1203 hereof, and upon delivery by the Company to the
Trustee of an Officers' Certificate and an Opinion of Counsel to the effect that
such consolidation, merger, sale or conveyance was made in accordance with
Section 1203 hereof, the Trustee shall execute any documents reasonably required
in order to evidence the release of such Guarantor from its obligations under
its Guarantees endorsed on the Notes and under this Article Twelve. Any
Guarantor not released from its obligations under its Guarantees endorsed on the
Notes and under this Article Twelve shall remain liable for the full amount of
principal of (and premium and Liquidated Damages, if any) and interest on the
Notes and for the other obligations of any Guarantor under its Guarantees
endorsed on the Notes and under this Article Twelve.
(b) Concurrently with the legal defeasance of the Notes under
Section 1302 hereof or the covenant defeasance of the Notes under Section 1303
hereof, the Guarantors shall be released from all of their obligations under
their Guarantees endorsed on the Notes and under this Article Twelve.
(c) Upon the sale or disposition (by merger or otherwise) of any
Subsidiary Guarantor by the Company or any Restricted Subsidiary of the Company
to any entity that is not a Restricted Subsidiary of the Company and which sale
or disposition is otherwise in compliance with the terms of this Indenture,
including, without limitation, Section 1015 and Section 1019 of this Indenture,
such Subsidiary Guarantor shall automatically be released from all obligations
under its Subsidiary Guarantees endorsed on the Notes and under this Article
Twelve.
(d) Upon the designation by the Company of a Subsidiary Guarantor
from Restricted Subsidiary to an Unrestricted Subsidiary in compliance with the
provisions of this Indenture, such Subsidiary may, at its option, cease to be a
Subsidiary Guarantor by notice to the Trustee. Upon such notice, such
Subsidiary shall be released from all of the obligations of a Subsidiary
Guarantor under its Subsidiary Guarantees endorsed on the Notes and under this
Article Twelve, which release shall be evidenced by a supplemental indenture
executed by the Company, the Subsidiary Guarantors and the Trustee.
81
SECTION 1205. Additional Subsidiary Guarantors.
--------------------------------
The Company may cause any Subsidiary to become a Subsidiary Guarantor
with respect to the Notes. If the Company or any of its Restricted Subsidiaries
shall acquire or create another Subsidiary (other than any Foreign Subsidiary)
or contribute property or assets to any existing Subsidiary, then such
Subsidiary shall be required to execute a Subsidiary Guarantee, in accordance
with the terms of this Indenture, unless it has been designated as an
Unrestricted Subsidiary; provided that no such Guarantee by such Subsidiary
shall be required so long as (x) the Consolidated Net Income for the four fiscal
quarter periods immediately preceding the date of acquisition or creation of, or
contribution to, such Subsidiary for which financial statements are available
and net assets at the end of such period of such Subsidiary do not exceed 3% of
the Consolidated Net Income for such period and net assets at such date,
respectively, of the Company and its Restricted Subsidiaries and (y) the
combined Consolidated Net Income for such period and the net assets at such date
of all Restricted Subsidiaries (other than Guarantors and Foreign Subsidiaries)
does not exceed 5% of the Consolidated Net Income for such period and the net
assets at such date, respectively, of the Company and its Restricted
Subsidiaries. Any such Subsidiary shall become a Subsidiary Guarantor by
executing and delivering to the Trustee (a) a supplemental indenture, in form
and substance satisfactory to, and executed by, the Trustee and executed by the
Company, which subjects such Subsidiary to the provisions of this Indenture as a
Subsidiary Guarantor and (b) an Opinion of Counsel to the effect that such
supplemental indenture has been duly authorized and executed by such Subsidiary
and constitutes the legal, valid, binding and enforceable obligation of such
Subsidiary (subject to such customary exceptions concerning creditors' rights
and equitable principles).
SECTION 1206. Limitation on Parent Guarantor and Subsidiary
---------------------------------------------
Guarantor's Liability.
- ---------------------
Each of Parent Guarantor and any Subsidiary Guarantor, and by its
acceptance hereof each Holder, hereby confirms that it is the intention of all
such parties that the Guarantee by each of Parent Guarantor and such Subsidiary
Guarantor pursuant to its Guarantee not constitute a fraudulent transfer or
conveyance for purposes of the Federal Bankruptcy Code, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar Federal or
state law. To effectuate the foregoing intention, the Holders and such
Guarantors hereby irrevocably agree that the obligations of such Guarantors
under their Guarantees shall be limited to the maximum amount as will, after
giving effect to all other contingent and fixed liabilities of each Guarantor
and after giving effect to any collection from or payments made by or on behalf
of any Guarantor in respect of the obligations of such Guarantor under its
Guarantee or pursuant to Section 1207, result in the obligations of such
Guarantor under its Guarantee not constituting such a fraudulent transfer or
conveyance.
SECTION 1207. Contribution.
------------
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under its
Guarantee, and so long as the exercise of such right does not impair the rights
of the Holders under the Guarantees or under this Article Twelve, such Funding
Guarantor shall be entitled to a contribution from all other Guarantors
82
in a pro rata amount, based on the net assets of each Guarantor (including the
Funding Guarantor), determined in accordance with GAAP, subject to Section 1206,
for all payments, damages and expenses incurred by that Funding Guarantor in
discharging the Company's obligations with respect to the Notes or any other
Guarantor's obligations with respect to its Guarantee.
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. Company's Option to Effect Defeasance or Covenant
-------------------------------------------------
Defeasance.
- ----------
The Company may, at its option by Board Resolution and at any time,
with respect to the Notes, elect to have either Section 1302 or Section 1303 be
applied to all Outstanding Notes upon compliance with the conditions set forth
below in this Article Thirteen.
SECTION 1302. Defeasance and Discharge.
------------------------
Upon the Company's exercise under Section 1301 of the option
applicable to this Section 1302, the Company and the Guarantors shall be deemed
to have been discharged from its obligations with respect to all Outstanding
Notes on the date the conditions set forth in Section 1304 are satisfied
(hereinafter, "defeasance"). For this purpose, such defeasance means that the
Company shall be deemed to have paid and discharged the entire indebtedness
represented by the Outstanding Notes, which shall thereafter be deemed to be
"Outstanding" only for the purposes of Section 1305 and the other Sections of
this Indenture referred to in (A) and (B) below, and to have satisfied all its
other obligations under such Notes and this Indenture insofar as such Notes are
concerned (and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), and the Guarantors to have been discharged
from their guarantees, except for the following which shall survive until
otherwise terminated or discharged hereunder: (A) the rights of Holders of
Outstanding Notes to receive, solely from the trust fund described in Section
1304 and as more fully set forth in such Section, payments in respect of the
principal of (and premium, if any, on) and interest on such Notes when such
payments are due, (B) the Company's obligations with respect to such Notes under
Sections 304, 305, 306, 1002 and 1003, (C) the rights, powers, trusts, duties
and immunities of the Trustee hereunder and (D) the provisions under this
Article Thirteen. Subject to compliance with this Article Thirteen, the Company
may exercise its option under this Section 1302 notwithstanding the prior
exercise of its option under Section 1303 with respect to the Notes.
SECTION 1303. Covenant Defeasance.
-------------------
Upon the Company's exercise under Section 1301 of the option
applicable to this Section 1303, the Company shall be released from its
obligations under any covenant contained in Section 801(c) and in Sections 1004
through 1007 and 1009 through 1019 shall not apply with respect to the
Outstanding Notes on and after the date the conditions set forth
83
below are satisfied (hereinafter, "covenant defeasance"), and the Notes shall
thereafter be deemed not to be "Outstanding" for the purposes of any direction,
waiver, consent or declaration or Act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"Outstanding" for all other purposes hereunder. For this purpose, such covenant
defeasance means that, with respect to the Outstanding Notes, the Company may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Sections 501(3) and (4), but, except as specified
above, the remainder of this Indenture and such Notes shall be unaffected
thereby.
SECTION 1304. Conditions to Defeasance or Covenant Defeasance.
-----------------------------------------------
The following shall be the conditions to application of either Section
1302 or Section 1303 to the Outstanding Notes:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 607 who shall agree to comply with the provisions of this
Article Thirteen 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 Notes, (A) cash in
United States dollars, or (B) U.S. Government Obligations which through the
scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than one day before the
due date of any payment, money in an amount, or (C) a combination thereof,
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, the principal
of (and premium and Liquidated Damages, if any) and interest on the
Outstanding Notes on the Stated Maturity (or Redemption Date, if
applicable) of such principal (and premium and Liquidated Damages, if any)
or installment of interest; provided that the Trustee shall have been
irrevocably instructed to apply such money or the proceeds of such U.S.
Government Obligations to said payments with respect to the Notes. Before
such a deposit, the Company may give to the Trustee, in accordance with
Section 1103 hereof, a notice of its election to redeem all of the
Outstanding Notes at a future date in accordance with Article Eleven
hereof, which notice shall be irrevocable. Such irrevocable redemption
notice, if given, shall be given effect in applying the foregoing.
(2) No Default or Event of Default with respect to the Notes shall
have occurred and be continuing on the date of such deposit or, insofar as
paragraphs (8) and (9) of Section 501 hereof are concerned, at any time
during the period ending on the 123rd day after the date of such deposit
(it being understood that this condition shall not be deemed satisfied
until the expiration of such period).
(3) Such defeasance or covenant defeasance shall not result in a
breach or
84
violation of, or constitute a default under, this Indenture or any other
material agreement or instrument to which the Company or any of its
Restricted Subsidiaries is a party or by which the Company or any of its
Restricted Subsidiaries is bound.
(4) The Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Holders of the Outstanding Notes will not
recognize income, gain or loss for federal income tax purposes as a result
of such defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the
case if such defeasance had not occurred (in the case of legal defeasance,
such Opinion of Counsel must refer to and be based upon a published ruling
of the Internal Revenue Service or a change in applicable federal income
tax laws).
(5) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the defeasance under Section 1302
or the covenant defeasance under Section 1303 (as the case may be) have
been complied with.
(6) Such legal defeasance or covenant defeasance shall not cause the
Trustee to have a conflicting interest under this Indenture or the Trust
Indenture Act.
(7) The Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders of the Outstanding Notes over other
creditors of the Company with the intent of defeating, hindering, delaying
or defrauding creditors of the Company or others.
SECTION 1305. Deposited Money and U.S. Government Obligations to Be
-----------------------------------------------------
Held in Trust; Other Miscellaneous Provisions.
- ---------------------------------------------
Subject to the provisions of the last paragraph of Section 1003, all
money and U.S. Government Obligations (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee, collectively for purposes of this
Section 1305, the "Trustee") pursuant to Section 1304 in respect of the
Outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Holders of such Notes of
all sums due and to become due thereon in respect of principal (and premium and
Liquidated Damages, if any) and interest, but such money need not be segregated
from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Governmental Obligations
deposited pursuant to Section 1304 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of the Outstanding Notes.
Anything in this Article Thirteen to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or
85
U.S. Government Obligations held by it as provided in Section 1304 which, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to
effect an equivalent defeasance or covenant defeasance, as applicable, in
accordance with this Article.
SECTION 1306. Repayment to the Company or Subsidiary Guarantors.
-------------------------------------------------
Subject to Sections 401, 606, 1301, 1302 and 1303, the Trustee shall
promptly pay to the Company, or if deposited with the Trustee by any Guarantor,
to each Guarantor, upon receipt by the Trustee of the Company's request
accompanied by an Officers' Certificate, any excess money, determined in
accordance with the provisions of Sections 1302 and 1303, held by it at any
time. The Trustee and the Paying Agent shall pay to the Company or any
Guarantor, as the case may be, upon receipt by the Trustee or the Paying Agent,
as the case may be, of an Officers' Certificate, any money held by it for the
payment of principal, interest, premium (if any), and Liquidated Damages (if
any) that remains unclaimed for two years after payment to the Holders is
required; provided however, that the Trustee and the Paying Agent, before being
-------- -------
required to make any payment, may, but need not, cause to be published at the
Company's expense once in a newspaper of general circulation in The City of New
York, or mail to each Holder entitled to such money, notice that such money
remains unclaimed and that after a date specified therein, which shall be at
least 30 days from the date of the publication or mailing, any unclaimed balance
of such money then remaining will be repaid to the Company or the Guarantor.
After payment to the Company or the Guarantor, Holders entitled to money must
look solely to the Company for payment, as general creditors, unless an
applicable abandoned property law designates another person, and all liability
of the Trustee or Paying Agent with respect to the money shall cease thereon.
SECTION 1307. Reinstatement.
-------------
If the Trustee or any Paying Agent is unable to apply any money in
accordance with Section 1305 by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's and any Guarantor's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to Section 1302 or 1303, as the case may be, until such time
as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 1305; provided, however, that if the Company makes any
payment of principal of (or premium and Liquidated Damages, if any) or interest
on any Note following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money held by the Trustee or Paying Agent.
This Indenture may be signed in any number of counterparts each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Indenture.
86
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
SCOVILL ACQUISITION INC.
By_________________________________
Title:
SCOVILL HOLDINGS INC.
By_________________________________
Title:
UNITED STATES TRUST COMPANY
OF NEW YORK
By_________________________________
Title:
Exhibit A-1
-----------
FACE OF NOTE
SCOVILL ACQUISITION INC.
11 1/4% Senior Note due 2007
[CUSIP] [CINS] ________ __________________
No. _______ $_______ __________________
SCOVILL ACQUISITION INC., a Delaware corporation (the "Company", which
term includes any successor under the Indenture hereinafter referred to), for
value received, promises to pay to ___________, or its registered assigns, the
principal sum of ____________________________________ Dollars ($___________), on
November 30, 2007.
Interest Payment Dates: May 30 and November 30 of each year,
commencing May 30, 1998.
Regular Record Dates: May 15 and November 15 of each year.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
A1-2
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by a duly authorized officer.
SCOVILL ACQUISITION INC.
By: ____________________________
Title:
(Form of Trustee's Certificate of Authentication)
This is one of the 11 1/4% Senior Notes due 2007 described in the within-
mentioned Indenture.
Date: ______________ UNITED STATES TRUST COMPANY
OF NEW YORK,
as Trustee
By: ________________________________
Authorized Signatory
A1-3
REVERSE SIDE OF NOTE
SCOVILL ACQUISITION INC.
11 1/4% Senior Note due 2007
1. Principal and Interest.
----------------------
The Company will pay the principal of this Note on November 30, 2007.
The Company promises to pay interest on the principal amount of this
Note on each Interest Payment Date, as set forth below, at the rate of 11 1/4%
per annum.
Interest will be payable semiannually (to the Holders of record of the
Notes (or any predecessor Notes) at the close of business on the May 15 and
November 15 immediately preceding the Interest Payment Date, on each Interest
Payment Date, commencing May 30, 1998.
The Holder of this Note is entitled to the benefits of the
Registration Rights Agreement, dated November 26, 1997, between the Company and
the Initial Purchasers named therein (the "Registration Rights Agreement").
Interest on this Note will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from November 26, 1997;
provided that, if there is no existing default in the payment of interest and if
this Note is authenticated between a Regular Record Date referred to on the face
hereof and the next succeeding Interest Payment Date, interest shall accrue from
such Interest Payment Date. Interest will be computed on the basis of a 360-day
year of twelve 30-day months.
The Company shall pay interest on overdue principal, premium, if any,
and interest on overdue installments of interest, to the extent lawful, at a
rate per annum equal to the rate of interest applicable to the Notes.
2. Method of Payment.
-----------------
The Company will pay interest (except defaulted interest) on the
principal amount of the Notes on each May 30 and November 30 (each, an "Interest
Payment Date") to the persons who are Holders (as reflected in the Note Register
at the close of business on the May 15 and November 15 immediately preceding the
Interest Payment Date).
The Company will pay principal, premium and Liquidated Damages, if
any, and interest in money of the United States that at the time of payment is
legal tender for payment of public and private debts. Payment of the principal
of (and premium and Liquidated Damages, if any) and interest on the Notes will
be made at the office or agency of the
A1-4
Company maintained for that purpose in The City of New York (which shall be the
Corporate Trust Office of the Trustee, unless the Company shall designate and
maintain some other office or agency for such purpose), or at such other office
or agency of the Company as may be maintained for such purpose, in lawful money
of the United States of America, or payment of interest may be made at the
option of the Company by wire transfer in immediately available funds or, in the
case of Physical Notes only, by check mailed to the address of the Person
entitled thereto as such address shall appear on the Note Register. If a payment
date is a date other than a Business Day at a place of payment, payment may be
made at that place on the next succeeding day that is a Business Day and no
interest shall accrue for the intervening period.
3. Paying Agent and Note Registrar.
-------------------------------
Initially, the Trustee will act as Paying Agent and Note Registrar.
The Company may change any Paying Agent or Note Registrar upon written notice
thereto. The Company, any Subsidiary or any Affiliate of any of them may act as
Paying Agent, Note Registrar or co-registrar.
4. Indenture; Limitations.
----------------------
The Company issued the Notes under an Indenture dated as of November
26, 1997 (the "Indenture"), among the Company, Scovill Holdings Inc. and United
States Trust Company of New York, as trustee (the "Trustee"). Capitalized terms
herein are used as defined in the Indenture unless otherwise indicated. The
terms of the Notes include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act. The Notes are subject to
all such terms, and Holders are referred to the Indenture and the Trust
Indenture Act for a statement of all such terms. To the extent permitted by
applicable law, in the event of any inconsistency between the terms of this Note
and the terms of the Indenture, the terms of the Indenture shall control.
The Notes are general unsecured obligations of the Company. The
Indenture limits the aggregate principal amount of the Notes to $100,000,000.
5. Redemption.
----------
A1-5
Optional Redemption. The Notes may be redeemed at the option of
-------------------
the Company, in whole or in part, at any time and from time to time on or after
November 30, 2002 at the following Redemption Prices (expressed in percentages
of principal amount), plus accrued and unpaid interest, if any, to the
Redemption Date (subject to the right of Holders of record on the relevant
Regular Record Date to receive interest due on an Interest Payment Date that is
on or prior to the Redemption Date), if redeemed during the 12-month period
beginning November 30 of each of the years set forth below:
Redemption
Year Price
---- -------------
2002................................. 105.625%
2003................................. 103.750%
2004................................. 101.875%
2005 and thereafter.................. 100.000%
In addition to the optional redemption of the Notes in accordance with
the provisions of the preceding paragraph, at any time or from time to time on
or prior to November 30, 2000, the Company may redeem up to 35% of the aggregate
principal amount of the Notes with the net cash proceeds of one or more Public
Equity Offerings, at 111.25% of the principal amount thereof, together with
accrued and unpaid interest and Liquidated Damages, if any, to the Redemption
Date; provided, however, that notice of such redemption is given to the Holders
within 60 days after such Public Equity Offerings.
Notice of a redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each Holder to be redeemed at such
Holder's last address as it appears in the Note Register. Notes in original
denominations larger than $1,000 may be redeemed in part in integral multiples
of $1,000. On and after the Redemption Date, interest ceases to accrue on Notes
or portions of Notes called for redemption, unless the Company defaults in the
payment of the Redemption Price.
6. Repurchase upon a Change in Control and Asset Sales.
---------------------------------------------------
(a) Upon the occurrence of a Change of Control, the Company is
obligated to make an offer to purchase all outstanding Notes at a redemption
price of 101% of the principal amount thereof, plus accrued and unpaid interest,
if any, to the date of purchase and (b) upon Asset Sales, the Company may be
obligated to make offers to purchase Notes with a portion of the net available
proceeds of such Asset Sales at a redemption price of 100% of the principal
amount thereof plus accrued and unpaid interest, if any, to the date of
purchase.
A1-6
7. Denominations; Transfer; Exchange.
---------------------------------
The Notes are in registered form without coupons, in denominations of
$1,000 and multiples of $1,000 in excess thereof. A Holder may register the
transfer or exchange of Notes in accordance with the Indenture. The Note
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Note Registrar need not register the
transfer or exchange of any Notes selected for redemption (except the unredeemed
portion of any Note being redeemed in part). Also, it need not register the
transfer or exchange of any Notes for a period of 15 days before a selection of
Notes to be redeemed is made.
8. Persons Deemed Owners.
---------------------
A Holder may be treated as the owner of a Note for all purposes.
9. Unclaimed Money.
---------------
If money for the payment of principal, premium and Liquidated Damages,
if any, or interest remains unclaimed for two years, the Trustee and the Paying
Agent will pay the money back to the Company at its request. After that,
Holders entitled to the money must look to the Company for payment, unless an
abandoned property law designates another Person, and all liability of the
Trustee and such Paying Agent with respect to such money shall cease.
10. Discharge Prior to Redemption or Maturity.
-----------------------------------------
If the Company irrevocably deposits, or causes to be deposited, with
the Trustee money or U.S. Government Obligations sufficient to pay the then
outstanding principal of, premium, if any, and accrued interest on the Notes (a)
to redemption or maturity, the Company will be discharged from the Indenture and
the Notes, except in certain circumstances for certain sections thereof, and (b)
to the Stated Maturity, the Company will be discharged from certain covenants
set forth in the Indenture.
11. Amendment; Supplement; Waiver.
-----------------------------
Subject to certain exceptions, the Indenture or the Notes may be
amended or supplemented with the consent of the Holders of at least a majority
in aggregate principal amount of the Notes then outstanding, and any existing
default or compliance with any provision may be waived with the consent of the
Holders of a majority in aggregate principal amount of the Notes then
outstanding. Without notice to or the consent of any Holder, the parties
thereto may amend or supplement the Indenture or the Notes to, among other
things, cure any ambiguity, defect or inconsistency and make any change that
does not materially adversely affect the rights of any Holder.
A1-7
12. Restrictive Covenants.
---------------------
The Indenture contains certain covenants, including, without
limitation, covenants with respect to the following matters: (i) Indebtedness;
(ii) Restricted Payments; (iii) sales of Capital Stock of Restricted
Subsidiaries; (iv) transactions with Affiliates; (v) Liens; (vi), disposition of
proceeds of Asset Sales; (vii), dividends and other payment restrictions
affecting Restricted Subsidiaries; and (viii) merger and certain transfers of
assets. Within 120 days after the end of each fiscal year, the Company must
report to the Trustee on compliance with such limitations.
13. Successor Persons.
-----------------
When a successor person or other entity assumes all the obligations of
its predecessor under the Notes and the Indenture, the predecessor person will
be released from those obligations.
14. Remedies for Events of Default.
------------------------------
If an Event of Default, as defined in the Indenture, occurs and is
continuing, the Trustee or the Holders of not less than 25% in principal amount
of the Notes then outstanding may declare all the Notes to be immediately due
and payable. If a bankruptcy or insolvency default with respect to the Company
or any of its Significant Subsidiaries occurs and is continuing, the Notes
automatically become immediately due and payable. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. The Trustee may
require indemnity satisfactory to it before it enforces the Indenture or the
Notes. Subject to certain limitations, Holders of at least a majority in
principal amount of the Notes then outstanding may direct the Trustee in its
exercise of any trust or power.
15. Trustee Dealings with Company.
-----------------------------
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Notes and may make loans to, accept
deposits from, perform services for, and otherwise deal with, the Company, and
its Affiliates as if it were not the Trustee.
16. Authentication.
--------------
This Note shall not be valid until the Trustee signs the certificate
of authentication on the other side of this Note.
17. No Personal Liability of Directors, Officers, Employees, Stockholders or
------------------------------------------------------------------------
Incorporators.
- -------------
A1-8
No director, officer, employee, incorporator or stockholder, as such,
of the Company or any Guarantor shall have any liability for any obligations of
the Company or such Guarantor under the Notes or for any claim based on, in
respect of, or by reason of, such obligations or their creations. Each Holder
by accepting a Note waives and releases all such liability. Such waiver and
release are part of the consideration for the issuance of the Notes.
18. Abbreviations.
-------------
Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors
Act).
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to Scovill
Acquisition Inc., Attention: Chief Financial Officer.
A1-9
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
- ----------------------------------
________________________________________________________________________________
(Please print or typewrite name and address including zip code of assignee)
________________________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
_________________________________________________________ attorney to transfer
such Note on the books of the Company with full power of substitution in the
premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL NOTES OTHER THAN EXCHANGE NOTES,
PERMANENT OFFSHORE GLOBAL NOTES AND
PERMANENT OFFSHORE PHYSICAL NOTES]
In connection with any transfer of this Note occurring prior to the
date which is the earlier of the date of an effective Registration Statement or
the end of the period referred to in Rule 144(k) under the Securities Act, the
undersigned confirms that without utilizing any general solicitation or general
advertising that:
[Check One]
---------
[_] (a) this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933, as amended, provided by
Rule 144A thereunder.
or
--
[_] (b) this Note is being transferred other than in accordance with (a) above
and documents are being furnished which comply with the conditions of
transfer set forth in this Note and the Indenture.
If none of the foregoing boxes is checked, the Trustee or other Note Registrar
shall not be obligated to register this Note in the name of any Person other
than the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 312 of the Indenture shall have
been satisfied.
Date: ____________________ _________________________
A1-10
NOTICE: The signature to this
assignment must correspond with the name
as written upon the face of the within-
mentioned instrument in every particular,
without alteration or any change
whatsoever.
Signature Guarantee/1/ _______________________
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated:________________________ ________________________________________
NOTICE: To be executed by an executive
officer
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to
Section 1015 or Section 1019 of the Indenture, check the Box: [_]
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 1015 or Section 1019 of the Indenture, state the amount (in
original principal amount) below:
$_____________________.
____________________
/1/ The Holder's signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar which
requirements include membership or participation in the Security Transfer
Agent Medallion Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Note Registrar in addition to or in
substitution for, STAMP, all in accordance with the Securities Exchange Act
of 1934, as amended.
A1-11
Date:______________
Your Signature:__________________________________
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee/2/ _______________________
_______________________
/1/ The Holder's signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar which
requirements include membership or participation in the Security Transfer
Agent Medallion Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Note Registrar in addition to or in
substitution for, STAMP, all in accordance with the Securities Exchange Act
of 1934, as amended.
Exhibit A-2
-----------
GUARANTEE
_________________ (a "Guarantor," as defined in the Indenture referred
to in the Note upon which this notation is endorsed, which term includes any
successor Person under the Indenture) has unconditionally guaranteed on a senior
basis (such guarantee by the Guarantor being referred to herein as the
"Guarantee") (i) the due and punctual payment of the principal amount of,
premium and Liquidated Damages, if any, and interest on the Notes, whether at
maturity, by acceleration or otherwise, the due and punctual payment of interest
on the overdue principal amount and interest, if any, on the Notes, to the
extent lawful, and the due and punctual performance of all other obligations of
the Company to the Holders or the Trustee all in accordance with the terms set
forth in Article Twelve of the Indenture and (ii) in case of any extension of
time of payment or renewal of any Notes or any of such other obligations, that
the same will be promptly paid in full when due or performed in accordance with
the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise.
No director, officer, employee, direct or indirect stockholder or
incorporator, as such, of the Guarantor, including but not limited to
stockholders of the Guarantor, shall have any liability for any obligations of
the Guarantor under the Guarantee or for any claim based on, in respect of or by
reason of such obligations or its creation.
The Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Notes upon which the Guarantee is noted
shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
[Guarantor]
By:_______________________________
Name:
Title:
Exhibit B
---------
Form of Certificate
to Be Delivered upon
Termination of Restricted Period
--------------------------------
__________, ____
United States Trust Company of New York
770 Broadway, 13th Floor
New York, New York 10003
Attention: Corporate Trust Services
Re: Scovill Acquisition Inc. (the "Company")
11 1/4% Senior Notes due 2007 (the "Notes")
-------------------------------------------
Ladies and Gentlemen:
This letter relates to $__________ principal amount of Notes
represented by the offshore global note certificate (the "Offshore Global
Note"). Pursuant to Section 312 of the Indenture dated as of November 26, 1997
relating to the Notes (the "Indenture"), we hereby certify that (1) we are the
beneficial owner of such principal amount of Notes represented by the Offshore
Global Note and (2) we are a Non-U.S. Person to whom the Notes could be
transferred in accordance with Rule 904 of Regulation S promulgated under the
Securities Act of 1933, as amended ("Regulation S"). Accordingly, you are
hereby requested to issue a Permanent Offshore Global Note representing the
undersigned's interest in the principal amount of Notes represented by the
Global Note, all in the manner provided by the Indenture.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Holder]
By:
Authorized Signature
Exhibit C-1
-----------
Form of Certificate to be
Delivered by Transferor in Connection with
Transfers to Institutional Accredited Investors
-----------------------------------------------
[Date]
United States Trust Company of New York
770 Broadway, 13th Floor
New York, New York 10003
Attention: Corporate Trust Services
Re: Scovill Acquisition Inc. (the "Company")
11 1/4% Senior Notes due 2007 (the "Notes")
-------------------------------------------
Ladies and Gentlemen:
We hereby certify that such transfer is being effected in compliance
with the transfer restrictions applicable to the Notes or interests therein
transferred pursuant to and in accordance with the Securities Act of 1933, as
amended (the "Securities Act"), and accordingly we hereby further certify that
(check one):
(a) [_] such transfer is being effected pursuant to and in accordance with
Rule 144 under the Securities Act;
or
--
(b) [_] such transfer is being effected to the Company or a subsidiary
thereof;
or
--
(c) [_] such transfer is being effected pursuant to an effective
registration statement under the Securities Act;
or
--
(d) [_] such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A, Rule 144
or Rule 904, and we hereby further certify that such transfer complies with the
transfer restrictions applicable to the Notes or interests therein transferred
to Institutional Accredited Investors and in accordance with the requirements of
the exemption claimed, which certification is supported by an Opinion of Counsel
provided by us or the transferee (a copy of which we have attached to this
certification), to the effect that (a) such transfer is in compliance with the
Securities Act
C1-2
and (b) such transfer complies with any applicable blue sky securities laws of
any state of the United States. Upon consummation of the proposed transfer in
accordance with the terms of the Indenture, the transferred Notes or interests
therein will be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the U.S. Physical Notes and in the Indenture
and the Securities Act.
Capitalized terms not defined herein have the meaning given to them in
the Indenture dated as of November 26, 1997 ("Identure") among Scovill
Acquisition Inc., Scovill Holdings Inc. and United States Trust Company of New
York.
Very truly yours,
[Name of Transferor]
By:___________________________________
Authorized Signatory
Exhibit C-2
-----------
Form of Certificate to be
Delivered By Transferees in Connection with
Transfers to Institutional Accredited Investors
-----------------------------------------------
[Date]
United States Trust Company of New York
770 Broadway, 13th Floor
New York, New York 10003
Attention: Corporate Trust Services
Re: Scovill Acquisition Inc. (the "Company")
11 1/4% Senior Notes due 2007 (the "Notes")
-------------------------------------------
Ladies and Gentlemen:
In connection with our proposed purchase of $___________ aggregate
principal amount of Notes, we confirm that:
(i) we understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth
in the Indenture dated as of November 26, 1997 relating to the Notes (the
"Indenture") and the Registration Rights Agreement dated November 26, 1997
---------
relating to the Notes (the "Registration Rights Agreement") and the
-----------------------------
undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Notes except in compliance with such restrictions and
conditions and the U.S. Securities Act of 1933, as amended (the "Securities
----------
Act").
---
(ii) we are an institutional "accredited investor" within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act or an
entity in which all of the equity owners are institutional accredited
investors within the meaning of Rule 501(a) under the Securities Act (an
"Institutional Accredited Investor");
(iii) any purchase of Notes by us will be for our own account or for
the account of one or more other Institutional Accredited Investors;
(iv) in the event that we purchase any Notes, we will acquire Notes
having a minimum principal amount of at least $100,000 for our own account
and for each separate account for which we are acting;
(v) we have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of purchasing
Notes;
(vi) we are not acquiring the Notes for or on behalf of, and will
not transfer the Notes to, any pension or welfare plan (as defined in
Section 3 of the Employee Retirement Income Security Act of 1974, as
amended) or plan (as defined in Section 4975 of the Internal Revenue Code,
as amended), except as permitted by the Indenture
C2-2
or the Notes.
We understand that the Notes have not been registered under the
Securities Act, and we agree, on our own behalf and on behalf of each account
for which we acquire any Notes, that, within the time period referred to under
Rule 144(k) under the Securities Act as in effect on the date of the transfer of
such Notes, such Notes may be offered, resold, pledged or otherwise transferred
only (i) (a) to a person whom we reasonably believe to be a qualified
institutional buyer (as defined in Rule 144A under the Securities Act) in a
transaction meeting the requirements of Rule 144A, (b) to an Institutional
Accredited Investor that, prior to such transfer, furnishes to the Trustee (as
defined in the Indenture) a signed letter containing certain representations and
agreements relating to the restrictions on transfer of the Notes (the form of
which letter can be obtained from the Trustee) and, if such transfer is in
respect of Notes having a principal amount at the time of transfer of less than
$100,000, an opinion of counsel acceptable to the Company that such transfer is
in compliance with the Securities Act, (c) in a transaction meeting the
requirements of Rule 144 under the Securities Act, (d) outside the United States
to a foreign person in a transaction meeting the requirements of Rule 904 under
the Securities Act, or (e) in accordance with another exemption from the
registration requirements of the Securities Act (and based upon an opinion of
counsel if the Company so requests), but only in the case of a transfer that is
effected by the delivery to the transferee of definitive securities registered
in its name (or its nominee's name) in the books maintained by the Note
Registrar, and subject to the receipt by such Note Registrar of a certification
of the transferor and an opinion of counsel to the effect that such transfer is
in compliance with the Securities Act, (ii) to the Company or (iii) pursuant to
an effective registration statement under the Securities Act, and, in each case,
in accordance with any applicable securities laws of any State of the United
States or any other applicable jurisdiction. We will notify any purchaser from
us that the Notes are subject to the resale restrictions set forth in the above
sentence. We understand that the Trustee will not be required to accept for
registration or transfer any Notes, except upon presentation of evidence
satisfactory to the Company that the foregoing restrictions on transfer have
been complied with. We further understand that the Notes purchased by us will
be initially issued in the form of one or more Global Notes deposited on the
date of the closing with, or on behalf of, The Depository Trust Company (the
"Depository") and registered in the name of Cede & Co., as nominee of the
Depository, and subsequently may be issued in the form of definitive physical
Notes upon request and subject to the terms and conditions of the Indenture and
that such certificates will bear a legend reflecting the substance of this
paragraph.
We acknowledge that you and others will rely upon our confirmations,
acknowledgments and agreements set forth herein, and we agree to notify you
promptly in writing if any of our representations or warranties herein ceases to
be accurate and complete.
Upon transfer, the Notes would be registered in the name of the new
beneficial owner as follows:
Very truly yours,
[Name of Transferee]
C2-3
By: ____________________
Authorized Signature
Exhibit D
---------
Form of Regulation S Certificate
--------------------------------
[DATE]
United States Trust Company of New York
770 Broadway, 13th Floor
New York, New York 10003
Attention: Corporate Trust Services
Re: Scovill Acquisition Inc. (the "Company")
11 1/4% Senior Notes due 2007 (the "Notes")
-------------------------------------------
Ladies and Gentlemen:
This Certificate relates to our proposed transfer of $____ principal
amount of Notes issued under the Indenture dated as of November 26, 1997
relating to the Notes. Terms are used in this Certificate as defined in
Regulation S under the Securities Act of 1933, as amended (the "Securities
Act"). We hereby certify as follows:
1. The offer of the Notes was not made to a person in the United
States (unless such person or the account held by it for which it is acting
is excluded from the definition of "U.S. person" pursuant to Rule 902(o) of
Regulation S under the circumstances described in Rule 902(i)(3) of
Regulation S) or specifically targeted at an identifiable group of U.S.
citizens abroad.
2. Either (a) at the time the buy order was originated, the buyer was
outside the United States or we and any person acting on our behalf
reasonably believed that the buyer was outside the United States or (b) the
transaction was executed in, on or through the facilities of a designated
offshore securities market, and neither we nor any person acting on our
behalf knows that the transaction was pre-arranged with a buyer in the
United States.
3. Neither we, any of our affiliates, nor any person acting on our or
their behalf has made any directed selling efforts in the United States.
4. The proposed transfer of Notes is not part of a plan or scheme to
evade the registration requirements of the Securities Act.
5. If we are a dealer or a person receiving a selling concession or
other fee or remuneration in respect of the Notes, and the proposed transfer
takes place before the Offshore Note Exchange Date referred to in the
Indenture, or we are an officer or director of the Company or a distributor,
we certify that the proposed transfer is being made in accordance with the
provisions of Rule 904(c) of Regulation S.
You and the Company are entitled to rely upon this Certificate and are
D-2
irrevocably authorized to produce this Certificate or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Very truly yours,
[NAME OF SELLER]
By:__________________________
Authorized Signature