EXHIBIT 10.59
KEVCO, INC.
AND
SCC ACQUISITION CORP.,
KEVCO DELAWARE, INC.,
SUNBELT WOOD COMPONENTS, INC.,
CONSOLIDATED FOREST PRODUCTS, INC.,
BOWEN SUPPLY, INC. AND
ENCORE INDUSTRIES, INC.
AS SUBSIDIARY GUARANTORS
================================================================================
$105,000,000
10 3/8% SENIOR SUBORDINATED NOTES DUE DECEMBER 1, 2007
_____________
INDENTURE
DATED AS OF DECEMBER 1, 1997
================================================================================
UNITED STATES TRUST COMPANY OF NEW YORK
AS TRUSTEE
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
- --------------- -----------------
310(1)..................................................................... 7.10
(a)(2)............................................................... 7.10
(a)(3)............................................................... N.A.
(a)(4)............................................................... N.A.
(a)(5)............................................................... 7.10
(b)............................................................ 7.03, 7.10
(c).................................................................. N.A.
311(a)..................................................................... 7.11
(b).................................................................. 7.11
(c).................................................................. N.A.
312(a)..................................................................... 2.05
(b)................................................................. 12.03
(c)................................................................. 12.03
313(a)..................................................................... 7.06
(b)(1)............................................................... N.A.
(b)(2)......................................................... 7.06, 7.07
(c)........................................................... 7.06, 12.02
(d).................................................................. 7.06
314(a).................................................................... 12.05
(b).................................................................. N.A.
(c)(1).............................................................. 12.04
(c)(2).............................................................. 12.04
(c)(3)............................................................... N.A.
(d).................................................................. N.A.
(e)................................................................. 12.05
(f).................................................................. N.A.
315(a).................................................................. 7.01(b)
(b)........................................................... 7.05, 12.02
(c)............................................................... 7.01(a)
(d)............................................................... 7.01(c)
(e).................................................................. 6.11
316(a)(last sentence)...................................................... 2.09
(a)(1)(A)............................................................ 6.05
(a)(1)(B)............................................................ 6.04
(a)(2)............................................................... N.A.
(b).................................................................. 6.07
(c)............................................................ 2.13, 9.04
317(a)(1).................................................................. 6.08
(a)(2)............................................................... 6.09
(b).................................................................. 2.04
318(a).................................................................... 12.01
(b)................................................................. N.A.
(c)................................................................. 12.01
N.A. means "not applicable."
* This Cross-Reference Table is not part of the Indenture.
TABLE OF CONTENTS
Page
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ARTICLE 1 - DEFINITIONS AND INCORPORATION BY REFERENCE.........................1
Section 1.01 Definitions...................................................1
Section 1.02 Other Definitions............................................17
Section 1.03 Incorporation by Reference of Trust Indenture Act............18
Section 1.04 Rules of Construction........................................19
ARTICLE 2 - THE NOTES.........................................................19
Section 2.01 Form and Dating..............................................19
Section 2.02 Execution and Authentication.................................21
Section 2.03 Registrar and Paying Agent...................................21
Section 2.04 Paying Agent to Hold Money in Trust..........................22
Section 2.05 Holder Lists.................................................22
Section 2.06 Transfer and Exchange........................................23
Section 2.07 Replacement Notes............................................31
Section 2.08 Outstanding Notes............................................31
Section 2.09 Treasury Notes...............................................32
Section 2.10 Temporary Notes..............................................32
Section 2.11 Cancellation.................................................32
Section 2.12 Defaulted Interest...........................................32
Section 2.13 Record Date..................................................33
Section 2.14 Computation of Interest......................................33
Section 2.15 CUSIP Number.................................................33
Section 2.16 Deposit of Moneys............................................33
ARTICLE 3 - REDEMPTION........................................................34
Section 3.01 Notices to Trustee...........................................34
Section 3.02 Selection of Notes to be Redeemed............................34
Section 3.03 Notice of Redemption.........................................34
Section 3.04 Effect of Notice of Redemption...............................35
Section 3.05 Deposit of Redemption Price..................................36
Section 3.06 Notes Redeemed in Part.......................................36
Section 3.07 Optional Redemption..........................................36
Section 3.08 Special Redemption...........................................37
Section 3.09 Mandatory Redemption.........................................38
i
ARTICLE 4 - COVENANTS.........................................................38
Section 4.01 Payment of Notes.............................................38
Section 4.02 Maintenance of Office or Agency..............................39
Section 4.03 Compliance Certificate.......................................39
Section 4.04 Taxes........................................................40
Section 4.05 Stay, Extension and Usury Laws...............................40
Section 4.06 Offer to Repurchase Upon Change of Control...................40
Section 4.07 Limitation on Sale of Assets and Restricted Subsidiary
Stock........................................................42
Section 4.08 Limitation on Restricted Payments............................43
Section 4.09 Limitation on Incurrence of Indebtedness.....................46
Section 4.10 Limitation on Liens..........................................47
Section 4.11 Limitation on Dividends and Other Payment
Restrictions Affecting Restricted Subsidiaries...............48
Section 4.12 Limitation on Layering Indebtedness..........................49
Section 4.13 Designation of Restricted and Unrestricted
Subsidiaries.................................................49
Section 4.14 Limitation on Issuance, Sale and Ownership of
Capital Stock of Restricted Subsidiaries.....................50
Section 4.15 Limitation on Transactions With Affiliates...................50
Section 4.16 Sale and Leaseback Transactions..............................51
Section 4.17 Reports......................................................51
Section 4.18 Limitation on Lines of Business..............................52
Section 4.19 Payments for Consent.........................................52
Section 4.20 Limitation on Status as Investment Company...................53
Section 4.21 Escrow of Proceeds of Notes on Issue Date....................53
Section 4.22 Repurchase Offers For Change of Control and
Asset Sales..................................................53
ARTICLE 5 - SUCCESSORS........................................................56
Section 5.01 Limitations on Merger, Consolidation or Sale of
Substantially All Assets.....................................56
Section 5.02 Successor Corporation Substituted............................56
ARTICLE 6 - DEFAULTS AND REMEDIES.............................................57
Section 6.01 Events of Default............................................57
Section 6.02 Acceleration.................................................58
Section 6.03 Other Remedies...............................................59
Section 6.04 Waiver of Past Defaults......................................60
Section 6.05 Control by Majority..........................................60
ii
Section 6.06 Limitation on Suits..........................................60
Section 6.07 Rights of Holders to Receive Payment.........................61
Section 6.08 Collection Suit by Trustee...................................61
Section 6.09 Trustee May File Proofs of Claim.............................61
Section 6.10 Priorities...................................................62
Section 6.11 Undertaking for Costs........................................62
Section 6.12 Notices to Escrow Agent......................................62
ARTICLE 7 - TRUSTEE...........................................................63
Section 7.01 Duties of Trustee............................................63
Section 7.02 Rights of Trustee............................................64
Section 7.03 Individual Rights of Trustee.................................65
Section 7.04 Trustee's Disclaimer.........................................65
Section 7.05 Notice of Defaults...........................................66
Section 7.06 Reports by Trustee to Holders................................66
Section 7.07 Compensation and Indemnity...................................66
Section 7.08 Replacement of Trustee.......................................67
Section 7.09 Successor Trustee by Merger, Etc.............................68
Section 7.10 Eligibility; Disqualification................................69
Section 7.11 Preferential Collection of Claims Against
the Company..................................................69
ARTICLE 8 - LEGAL DEFEASANCE AND COVENANT DEFEASANCE..........................69
Section 8.01 Option to Effect Defeasance or Covenant Defeasance...........69
Section 8.02 Legal Defeasance and Discharge...............................69
Section 8.03 Covenant Defeasance..........................................70
Section 8.04 Conditions to Defeasance or Covenant Defeasance..............70
Section 8.05 Deposited Money and U.S. Government Obligations
to be Held in Trust; Other Miscellaneous Provisions..........72
Section 8.06 Repayment to Company.........................................72
Section 8.07 Reinstatement................................................73
ARTICLE 9 - AMENDMENT, SUPPLEMENT AND WAIVER..................................73
Section 9.01 Without Consent of Holders...................................73
Section 9.02 With Consent of Holders......................................74
Section 9.03 Compliance With Trust Indenture Act..........................76
Section 9.04 Revocation and Effect of Consents............................76
Section 9.05 Notation on or Exchange of Notes.............................76
Section 9.06 Trustee to Sign Amendments, Etc..............................77
iii
ARTICLE 10 - SUBSIDIARY GUARANTEES............................................77
Section 10.01 Subsidiary Guarantees........................................77
Section 10.02 Execution and Delivery of Subsidiary Guarantees..............79
Section 10.03 Subsidiary Guarantors May Consolidate, Etc.,
on Certain Terms.............................................79
Section 10.04 Releases Following Sale of Assets
and Restricted Subsidiary Stock..............................80
Section 10.05 Limitation of Subsidiary Guarantor's Liability...............80
Section 10.06 Application of Certain Terms and Provisions to
the Subsidiary Guarantors....................................81
Section 10.07 Release of Subsidiary Guarantees.............................81
Section 10.08 Subordination of Subsidiary Guarantees.......................82
Section 10.09 Future Subsidiary Guarantors.................................82
ARTICLE 11 - SUBORDINATION....................................................83
Section 11.01 Notes Subordinated to Senior Indebtedness....................83
Section 11.02 No Payment on Notes in Certain Circumstances.................83
Section 11.03 Payment Over of Proceeds Upon Dissolution, Etc...............84
Section 11.04 Subrogation..................................................85
Section 11.05 Obligations of Company Unconditional.........................86
Section 11.06 Notice to Trustee............................................86
Section 11.07 Reliance on Judicial Order or Certificate of
Liquidating Agent............................................87
Section 11.08 Trustee's Relation to Senior Indebtedness....................87
Section 11.09 Subordination Rights Not Impaired by Acts or
Omissions of the Company or Holders of
Senior Indebtedness..........................................88
Section 11.10 Holders of Notes Authorize Trustee to
Effectuate Subordination of Notes............................88
Section 11.11 This Article Not to Prevent Event of Default.................88
Section 11.12 Trustee's Compensation Not Prejudiced........................88
Section 11.13 No Waiver of Subordination Provisions........................88
Section 11.14 Subordination Provisions Not Applicable to
Collateral Held in Trust for Holders of Notes;
Payments May be Paid Prior to Dissolution....................89
Section 11.15 Acceleration of Notes........................................89
ARTICLE 12 - MISCELLANEOUS....................................................89
Section 12.01 Trust Indenture Act Controls.................................89
Section 12.02 Notices......................................................90
iv
Section 12.03 Communication by Holders With Other Holders..................91
Section 12.04 Certificate and Opinion as to Conditions Precedent...........91
Section 12.05 Statements Required in Certificate or Opinion................91
Section 12.06 Rules By Trustee and Agents..................................92
Section 12.07 Legal Holidays...............................................92
Section 12.08 No Recourse Against Others...................................92
Section 12.09 Duplicate Originals..........................................92
Section 12.10 Governing Law................................................92
Section 12.11 No Adverse Interpretation of Other Agreements................93
Section 12.12 Successors...................................................93
Section 12.13 Severability.................................................93
Section 12.14 Counterpart Originals........................................93
Section 12.15 Table of Contents, Headings, Etc.............................93
v
EXHIBITS
- --------
Exhibit A Form of Note
Exhibit B-1 Form of Certificate for Exchange or Registration of Transfer of
Certificated Notes
Exhibit B-2 Form of Certificate for Exchange or Registration of Transfer From
Global Note to Certificated Note
Exhibit B-3 Form of Certificate for Exchange or Registration of Transfer From
Certificated Note to Global Note
Exhibit C Form of Supplemental Indenture
vi
INDENTURE dated as of December 1, 1997, among Kevco, Inc., a Texas
corporation (the "Company"), SCC Acquisition Corp., an Indiana corporation,
Kevco Delaware, Inc., a Delaware corporation, Sunbelt Wood Components, Inc., a
Delaware corporation, Consolidated Forest Products, Inc., a Delaware
corporation, Bowen Supply, Inc., a Georgia corporation, and Encore Industries,
Inc., a Georgia corporation, as Subsidiary Guarantors (as hereinafter defined),
and United States Trust Company of New York, a New York banking corporation, as
trustee ("Trustee").
Each party agrees as follows for the benefit of each other and for the
equal and ratable benefit of the Holders of the 10 3/8% Series A Senior
Subordinated Notes due 2007 (the "Series A Notes") and the 10 3/8% Series B
Senior Subordinated Notes due 2007 (the "Series B Notes" and, together with the
Series A Notes, the "Notes") of the Company:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions
"Acquired Indebtedness" means, with respect to the Company or any
Restricted Subsidiary, (i) Indebtedness of any other Person existing at the time
such other Person is merged with or into or becomes a Restricted Subsidiary of
the Company or another Restricted Subsidiary, including, without limitation,
Indebtedness Incurred in connection with, or in contemplation of, such other
Person merging with or into or becoming a Restricted Subsidiary of the Company
or another Restricted Subsidiary and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by the Company or any Restricted Subsidiary.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
Beneficial Ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"Agent" means any Registrar or Paying Agent.
"Agent Members" means any member of, or participant in, the
Depositary.
"Applicable Procedures" means, with respect to any transfer or
exchange of beneficial interests in a Global Note, the rules and procedures of
the Depositary that are applicable to such transfer or exchange.
1
"Asset Sale" means (a) the direct or indirect sale, lease, license,
conveyance, transfer or other disposition of any assets or rights (including,
without limitation, by way of a sale and leaseback or similar arrangement, by
merger or consolidation) by the Company or a Restricted Subsidiary (a
"disposition"), in one transaction or a series of transactions; provided that
the disposition of all or substantially all of the assets of the Company and its
Restricted Subsidiaries taken as a whole will be governed by the provisions of
Section 4.06 and/or the provisions of Section 5.01 and not by the provisions of
Section 4.07 and (b) the issuance or disposition by the Company or any of its
Restricted Subsidiaries of Equity Interests of the Company's Restricted
Subsidiaries. Notwithstanding the foregoing, none of the following will be
deemed an Asset Sale: (i) a disposition of assets by the Company to a Wholly
Owned Restricted Subsidiary or by a Restricted Subsidiary to the Company or to a
Wholly Owned Restricted Subsidiary; (ii) an issuance of Equity Interests by a
Restricted Subsidiary to the Company or to a Wholly Owned Restricted Subsidiary;
(iii) a Restricted Payment that is permitted by Section 4.08; (iv) dispositions
of $250,000 or less; (v) dispositions of assets or rights in the ordinary course
of business consistent with past practices; (vi) a disposition of assets on or
before the second anniversary of the Issue Date which meets the requirements of
Section 4.07(a) the proceeds of which are used for Shelter Transition
Expenditures on or before the second anniversary of the Issue Date; (vii) the
grant in the ordinary course of business of any non-exclusive license of
intellectual property rights; (viii) any liquidation of any Cash Equivalents;
(ix) any disposition of defaulted receivables for collection; and (x) the grant
of any Lien securing Indebtedness (or any foreclosure thereon) to the extent
that such Lien is granted in compliance with Section 4.10.
"Attributable Debt" in respect of a sale and leaseback transaction
means, at the time of determination, the present value (discounted at the rate
of interest implicit in such transaction, determined in accordance with GAAP) of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in such sale and leaseback transaction (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended).
"Authentication Order" means an Officer's Certificate ordering the
Trustee to authenticate Notes.
"Average Life" means, as of the date of determination, with respect to
any security or instrument, the quotient obtained by dividing (i) the sum of the
products (a) of the number of years from the date of determination to the date
or dates of each successive scheduled principal (or redemption) payment of such
security or instrument and (b) the amount of each such respective principal (or
redemption) payment by (ii) the sum of all such principal (or redemption)
payments.
"Bankruptcy Law" means Title II, U.S. Code or any similar federal or
state law for the relief of debtors.
"Beneficial Owner" or "beneficial owner" (including, with correlative
meanings, the terms "Beneficial Ownership" and "Beneficially Owns") for purposes
of the definition of Change of Control has the meaning attributed to it in Rules
13d-3 and 13d-5 under the Exchange Act (as in
2
effect on the Issue Date), whether or not applicable, except that a "person" (as
such term is used in Sections 13(d)(3) of the Exchange Act) shall be deemed to
have "Beneficial Ownership" of all shares that any such person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time or is exercisable only upon the occurrence of a subsequent condition.
"Board of Directors" means, with respect to any Person, the board of
directors of such Person or any committee of the Board of Directors of such
Person authorized, with respect to any particular matter, to exercise the power
of the board of directors of such Person.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors of the Company and to be in full force and effect on the
date of such certification and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York, New York
are authorized or obligated by law or executive order to close.
"Capitalized Lease Obligation" means, as to any Person, the
obligations of such Person under a lease that are required to be classified and
accounted for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited) and (iv) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cash Equivalents" means (i) Government Securities having maturities
of not more than twelve months from the date of acquisition, (ii) certificates
of deposit and eurodollar time deposits with maturities of twelve months or less
from the date of acquisition, bankers' acceptances with maturities not exceeding
six months and overnight bank deposits, in each case with any member bank of the
U.S. Federal Reserve System having capital and surplus in excess of
$500,000,000, (iii) 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 financial institution meeting the qualifications specified
in clause (ii) above, and (iv) commercial paper having the rating of at least P-
1 from Moody's Investors Services, Inc. ("Moody's"), or any successor to its
rating business, or at least A-1 from Standard & Poor's Ratings Services
("S&P"), or any successor to its rating business, and in each case maturing
within 180 days after the date of acquisition.
3
"CEDEL" means Cedel Bank, societe anonyme (or any successor securities
clearing agency).
"Certificated Notes" means Notes that are in the form of the Notes
attached hereto as Exhibit A, that do not include the information called for by
footnotes 1 and 3 thereof.
"Change of Control" means the occurrence of any of the following: (i)
the sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Subsidiaries taken as a
whole to any "person" (as such term is used in Section 13(d)(3) of the Exchange
Act), except to the Existing Majority Stockholder, (ii) the adoption of a plan
relating to the liquidation or dissolution of the Company, (iii) the
consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any "person" (as defined above),
other than the Existing Majority Stockholder, becomes the Beneficial Owner,
directly or indirectly, of more than 50% of the Voting Stock of the Company
(measured by voting power rather than number of shares), or (iv) during any
period of 24 consecutive months after the Issue Date, individuals who at the
beginning of any such 24-month 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 shareholders of the Company
was approved by a vote of a majority of the directors then still in office who
were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors of the Company then in office.
"Commission" or "SEC" means the Securities and Exchange Commission.
"Company" means Kevco, Inc., a Texas corporation, and any successor
thereto permitted pursuant to Section 5.01 hereof.
"Consolidated Coverage Ratio" of any Person on any date of
determination (the "Transaction Date") means the ratio, on a pro forma basis, of
(a) the aggregate amount of Consolidated EBITDA of such Person attributable to
continuing operations and businesses (exclusive of amounts attributable to
operations and businesses discounted or disposed of) for the Reference Period to
(b) the aggregate Consolidated Fixed Charges of such Person (exclusive of
amounts attributable to operations and businesses discontinued or disposed of,
but only to the extent that the obligations giving rise to such Consolidated
Fixed Charges would no longer be obligations contributing to such Person's
Consolidated Fixed Charges subsequent to the Transaction Date) during the
Reference Period; provided, that for purposes of such calculation, (i)
acquisitions which occurred during the Reference Period or subsequent to the
Reference Period and on or prior to the Transaction Date shall be assumed to
have occurred on the first day of the Reference Period, (ii) transactions giving
rise to the need to calculate the Consolidated Coverage Ratio shall be assumed
to have occurred on the first day of the Reference Period, (iii) the Incurrence
of any Indebtedness or issuance of any Disqualified Stock during the Reference
Period or subsequent to the Reference Period and on or prior to the Transaction
Date (and the application of the proceeds therefrom to the
4
extent used to refinance or retire other Indebtedness) shall be assumed to have
occurred on the first day of such Reference Period, and (iv) the Consolidated
Fixed Charges of such Person attributable to interest on any Indebtedness or
dividends on any Disqualified Stock bearing a floating interest (or dividend)
rate shall be computed on a pro forma basis as if the average rate in effect
from the beginning of the Reference Period to the Transaction Date had been the
applicable rate for the entire period, unless such Person or any of its
Subsidiaries is a party to a Hedging Obligation (which by its terms will remain
in effect for the 12-month period immediately following the Transaction Date)
that has the effect of fixing the interest rate on the date of computation, in
which case such rate (whether higher or lower) shall be used. For purposes of
this definition whenever pro forma effect is to be given to a transaction, the
pro forma calculations of Consolidated EBITDA and Consolidated Fixed Charges
shall be made in accordance with Article 11 of Regulation S-X of the Commission
and subject to agreed-upon procedures to be performed by the Company's
independent accountants to determine whether the pro forma calculations are made
in accordance with Article 11 of Regulations S-X.
"Consolidated EBITDA" means, with respect to the Company, for any
period, the Consolidated Net Income of the Company for such period adjusted to
add thereto (to the extent deducted in determining Consolidated Net Income),
without duplication, the sum of (i) consolidated income tax expense, (ii)
consolidated depreciation and amortization expense, and other non-cash charges
required to be reflected as expenses for such period on the books and records of
the Company and (iii) Consolidated Fixed Charges, less the amount of all cash
payments made by the Company or any of its Restricted Subsidiaries during such
period to the extent such payments relate to non-cash charges that were added
back in determining Consolidated EBITDA for such period or any prior period.
"Consolidated Fixed Charges" means, with respect to the Company for
any period, the sum of (i) the consolidated interest expense of the Company and
its Restricted Subsidiaries for such period, whether paid or accrued (including,
without limitation, amortization of debt issuance costs and original issue
discount, non cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capitalized Lease Obligations, imputed interest with respect to Attributable
Debt, interest payments in respect of Indebtedness of another Person that is
Guaranteed by the Company or one of its Restricted Subsidiaries or secured by a
Lien on assets of the Company or one of its Restricted Subsidiaries,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financings, and net payments (if any) pursuant
to Hedging Obligations), (ii) the consolidated interest expense of the Company
and its Restricted Subsidiaries that was capitalized during such period, in each
case, on a consolidated basis and in accordance with GAAP, and (iii) the product
of (A) the aggregate amount of dividends paid (to the extent not accrued in a
prior period) or accrued on Disqualified Stock of the Company and its Restricted
Subsidiaries or preferred stock of the Company's Restricted Subsidiaries, to the
extent such Disqualified Stock or preferred stock is owned by Persons other than
the Company and its Restricted Subsidiaries and (B) a fraction, the numerator of
which is one and the denominator of which is one minus the then current combined
federal, state, local and foreign statutory tax rate of the Company, expressed
as a decimal.
5
"Consolidated Net Income" means, with respect to the Company for any
period, the aggregate of the Net Income of the Company and the Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that (i) the Net Income (but not loss) of any Person that is
not a Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the Company or any Restricted Subsidiary as to
which Consolidated Net Income is being calculated, (ii) the Net Income of any
Restricted Subsidiary shall be excluded to the extent that the declaration or
payment of dividends or similar distributions by such Restricted Subsidiary of
such Net Income would not be permitted at the date of determination or, directly
or indirectly, pursuant to the terms of its charter and bylaws and all
agreements, instruments, judgments, decrees, orders, statutes, rules or
governmental regulations applicable to such Restricted Subsidiary or its
stockholders, (iii) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition shall
be excluded, (iv) the cumulative effect of a change in accounting principles
shall be excluded, (iv) income or loss attributable to discounted operations
shall be excluded, and (vi) any gain (but not loss) realized upon the sale or
other disposition of any property, plant or equipment of the Company or its
Restricted Subsidiaries (including pursuant to any sale and leaseback
transaction) which is not sold or otherwise disposed of in the ordinary course
of business and any gain (but not loss) realized upon the sale or other
disposition of any Capital Stock of any Person shall be excluded.
"Consolidated Net Worth" means, with respect to the Company as of any
date, the sum of (i) the consolidated equity of the common equity holders of the
Company and its consolidated Restricted Subsidiaries as of such date plus (ii)
the respective amounts reported on the Company's balance sheet as of such date
with respect to any series of preferred equity (other than Disqualified Stock)
that by its terms is not entitled to the payment of dividends or other
distributions, unless such dividends or other distributions may be declared and
paid only out of net earnings in respect of the year of such declaration and
payment, but only to the extent of any cash received by the Company upon
issuance of such preferred equity, less (x) all write-ups (other than write-ups
resulting from foreign currency translations and write-ups of tangible assets of
a going concern business made within 12 months after the acquisition of such
business) subsequent to the Issue Date in the book value of any asset owned by
the Company or a consolidated Restricted Subsidiary, (y) all investments as of
such date in Persons that are not Restricted Subsidiaries (except, in each case,
Permitted Investments), and (z) all unamortized debt discount and expense and
unamortized deferred charges, as of such date, all of the foregoing determined
in accordance with GAAP.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 12.02 or such other address as the Trustee may give
notice to the Company.
"Default" means any event or condition the occurrence of which is, or
with the lapse of time or the giving of notice or both would be, an Event of
Default.
6
"Depositary" means, with respect to the Global Notes, the Person
specified in Section 2.03 hereof as the Depositary with respect to such Notes,
until a successor shall have been appointed and become such Depositary pursuant
to the applicable provision of this Indenture, and, thereafter, "Depositary"
shall mean or include such successor.
"Designated Senior Indebtedness" means (i) any Indebtedness
outstanding under the Senior Credit Facility and (ii) any other Senior
Indebtedness permitted under this Indenture the principal amount of which is
$25,000,000 or more and that has been designated by the Company as "Designated
Senior Indebtedness" by the filing with the Trustee of a Board Resolution giving
effect to such designation.
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to the date
that is 91 days after the date on which the Notes mature.
"Dollars" and "$" means lawful money or currency of the United States
of America.
"Eligible Receivables" means the trade receivables of the Company and
its Restricted Subsidiaries less the allowance for doubtful accounts, each of
the foregoing determined in accordance with GAAP.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Escrow Agent" means United States Trust Company of New York, as
escrow agent under the Escrow Agreement, and any successor.
"Escrow Agreement" means the Escrow Agreement, dated as of the Issue
Date, by and among the Company, the Trustee and the Escrow Agent, as the same
may be amended from time to time pursuant to the terms hereof and thereof.
"Euroclear" means the Euroclear Clearance System (or any successor
securities clearing agency).
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
"Exchange Offer" means the offer that may be made by the Company
pursuant to the Registration Rights Agreement to exchange Series B Notes for
Series A Notes.
7
"Existing Indebtedness" means Indebtedness of the Company and its
Restricted Subsidiaries in existence on the Issue Date after application of the
net proceeds from the Company's sale of the Notes.
"Existing Majority Stockholder" means (i) Jerry E. Kimmel; (ii) his
beneficiaries, estates, spouse and lineal descendants, legal representatives of
any of the foregoing and the trustee of any bona fide trust of which any of the
foregoing are the sole beneficiaries or grantors and (iii) all Affiliates
controlled by Jerry E. Kimmel (provided that, for purposes of this clause (iii)
only, the proviso set forth in the definition of the term "Affiliate" shall be
deemed modified to provide that Beneficial Ownership of 50% or more of the
voting securities of a Person shall constitute, and shall be necessary to
constitute, control).
"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 that if such value exceeds
$1,000,000, such determination shall be made in good faith by the Board of
Directors of the Company.
"GAAP" means United States 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 approved by a significant segment of the
accounting profession in the United States as in effect on the Issue Date.
"Global Notes" means the Rule 144A Global Notes and the Regulation S
Global Notes.
"Government Securities" means direct obligations of, or obligations
fully guaranteed by, or participations in pools consisting solely of obligations
of or obligations guaranteed by, the United States of America for the payment of
which guarantee or obligations the full faith and credit of the United States of
America is pledged.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) interest or currency exchange rate swap
agreements, interest or currency exchange rate cap agreements and interest or
currency exchange rate collar agreements and (ii) other agreements or
arrangements, in any case, designed to protect such Person against fluctuations
in interest or currency exchange rates (as appropriate, "Interest Rate Hedges"
and "Currency Hedges").
8
"Holder" means a Person in whose name a Note is registered.
"Incur" means, with respect to any Indebtedness or other obligation of
any Person, to create, issue, incur (by conversion, exchange or otherwise),
assume, Guarantee or otherwise become liable in respect of such Indebtedness or
other obligation or the recording, as required pursuant to GAAP or otherwise, of
any such Indebtedness or other obligation on the balance sheet of such Person
(and "Incurrence," "Incurred," "Incurrable" and "Incurring" shall have meanings
correlative to the foregoing); provided, however, that a change in GAAP that
results in an obligation of such Person that exists at such time, and is not
theretofore classified as Indebtedness, becoming Indebtedness shall not be
deemed an Incurrence of such Indebtedness.
"Indebtedness" means, with respect to any Person, (a) any liability of
such Person, whether or not contingent (i) for borrowed money, or under any
reimbursement obligation relating to a letter of credit, bankers' acceptance or
note purchase facility; (ii) evidenced by a bond, note, debenture or similar
instrument (including a purchase money obligation); (iii) for the payment of
money relating to a Capitalized Lease Obligation; (iv) for or pursuant to
Disqualified Stock; (v) for or pursuant to preferred stock of any Subsidiary of
such Person (other than preferred stock held by such Person or any of its
Subsidiaries or in the case of the Company, any of its Restricted Subsidiaries);
(vi) representing the balance deferred and unpaid of the purchase price of any
property or services (except any such balance that constitutes a trade payable
or accrued liability in the ordinary course of business that is not overdue by
more than 90 days or is being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted); or (vii) under or in respect of
Hedging Obligations; (b) any liability of others described in the preceding
clause (a) that such Person has Guaranteed, that is recourse to such Person or
that is otherwise its legal liability, or the payment of which is secured by (or
for which the holder of such liability has an existing right to be secured by)
any Lien upon property owned by such Person, even though such Person has not
assumed or become liable for the payment of such liability; and (c) any
amendment, supplement, modification, deferral, renewal, extension or refunding
of any liability of the types referred to in clauses (a) and (b) above. The
amount of any non-interest bearing or other discount Indebtedness shall be
deemed to be the principal amount thereof that would be shown on the balance
sheet of the issuer dated such date prepared in accordance with GAAP, but such
Indebtedness shall be deemed to have been Incurred only on the date of the
original issuance thereof.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Initial Purchasers" means Donaldson, Lufkin & Jenrette Securities
Corporation and NationsBanc Montgomery Securities, Inc.
"Interest Payment Date" means each June 1 and December 1 of each year
or if any such day is not a Business Day, the next succeeding Business Day.
9
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations (but
excluding endorsements of negotiable instruments for collection in the ordinary
course of business)), advances or capital contributions (excluding commissions,
travel and similar advances to directors, officers and employees made in the
ordinary course of business), purchases or other acquisitions (for
consideration) of Indebtedness, Equity Interest or other securities, together
with all items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP.
"Issue Date" means December 1, 1997, the date on which the Series A
Notes are originally issued.
"Junior Securities" means, with respect to the Company or any of the
Restricted Subsidiaries, securities (including Capital Stock but excluding
Disqualified Stock) issued by the Company or any of the Restricted Subsidiaries
to a Holder on account of the Notes that (a) has an Average Life and maturity or
mandatory redemption obligation, if any, longer than, or occurring after the
final maturity date of, all Designated Senior Indebtedness of the Company, (b)
by their terms or by law are subordinated to Designated Senior Indebtedness of
the Company outstanding on the date of issuance of such Junior Securities at
least to the same extent as the Notes and (c) are not secured by any assets or
property of the Company or any of its Restricted Subsidiaries. As used herein,
"Designated Senior Indebtedness of the Company outstanding on the date of
issuance of such Junior Securities" shall include securities issued in
connection with a reorganization pursuant to the bankruptcy laws of any
jurisdiction to Persons which held "Designated Senior Indebtedness" in such
reorganization proceeding.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof).
"Liquidated Damages" means all liquidated damages owing pursuant to
Section 5 of the Registration Rights Agreement.
"Net Income" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP.
"Net Proceeds" means, with respect to any Asset Sale, the aggregate
amount of cash proceeds (including any cash received by way of deferred payment
pursuant to a note receivable issued in connection with such Asset Sale, other
than the portion of such deferred payment constituting interest, and including
any amounts received as disbursements or withdrawals from any escrow or similar
account established in connection with any such Asset Sale, but, in either case,
only as and when so received) received by the Company or any of its Restricted
Subsidiaries in respect of such Asset Sale, net of: (i) the cash expenses of
such Asset Sale (including, without
10
limitation, the payment of principal of, and premium, if any, and interest on,
Indebtedness required to be paid as a result of such Asset Sale (other than the
Notes) and legal, accounting, management and advisory and investment banking
fees and sales commissions), (ii) taxes paid or payable as a result thereof,
(iii) any portion of cash proceeds that the Company determines in good faith
should be reserved for post-closing adjustments, it being understood and agreed
that on the day that all such post-closing adjustments have been determined, the
amount (if any) by which the reserved amount in respect of such Asset Sale
exceeds the actual post-closing adjustments payable by the Company or any of its
Restricted Subsidiaries shall constitute Net Proceeds on such date, (iv) any
relocation expenses and pension, severance and shutdown costs incurred as a
result thereof and (v) any cash amounts actually set aside by the Company or any
Restricted Subsidiary as a reserve in accordance with GAAP against any retained
liabilities associated with the asset disposed of in such transaction,
including, without limitation, pension and other post-employment benefit
liabilities and liabilities related to environmental matters or against any
indemnification obligations associated with such transaction.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the
Company nor any of its Restricted Subsidiaries (a) provides credit support of
any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable (as a guarantor
or otherwise), or (c) constitutes the lender, (ii) no default with respect to
which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any of its Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity and (iii) as to which the lenders have expressly waived any
recourse which they may have, in law, equity or otherwise, whether based on
misrepresentations, control, ownership or otherwise, to the Company or any of
its Restricted Subsidiaries, including, without limitation, a waiver of the
benefit of the provisions of Section 1111(b) of the U.S. Bankruptcy Code (Title
11, United States Code), as amended.
"Note Custodian" means the Trustee, as custodian with respect to the
Global Note, or any successor entity thereto.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officer" means, with respect to any Person, the Chief Executive
Officer, the President, the Chief Operating Officer, the Chief Financial
Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary,
any Assistant Secretary or any Vice President thereof.
"Officer's Certificate" means a certificate signed on behalf of the
Company by two Officers of such Person, one of whom must be the principal
executive officer, the principal financial officer or the principal accounting
officer of such Person.
11
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee. Except with respect to any opinion
delivered pursuant to Article 8, the counsel may be an employee of the Company.
"Permitted Investments" means (i) any Investment in the Company or in
a Restricted Subsidiary of the Company; (ii) any Investment in Cash Equivalents;
(iii) any Investment by the Company or any of its Restricted Subsidiaries in a
Person engaged in a Related Business if, as a result of such Investment, (A)
such Person becomes a Restricted Subsidiary of the Company or (B) such Person is
merged, consolidated or amalgamated with or into, or transfers or conveys all or
substantially all of its assets to, or is liquidated into, the Company or a
Restricted Subsidiary of the Company; (iv) Investments the payment for which
consists exclusively of Equity Interests (excluding Disqualified Stock) of the
Company; (v) Investments in shares of money market mutual or similar funds
having assets in excess of $500,000,000; and (vi) Investments in negotiable
instruments held for collection in the ordinary course of business and lease,
utility and similar deposits.
"Permitted Liens" means (i) Liens securing Permitted Indebtedness
Incurred pursuant to clause (i) of the definition of such term; (ii) Liens in
favor of the Company and/or its Restricted Subsidiaries; (iii) Liens on property
of a Person existing at the time such Person is merged into or consolidated with
the Company or any of its Restricted Subsidiaries, provided that such Liens were
in existence prior to the contemplation of such merger or consolidation and do
not extend to any assets other than those of the Person merged into or
consolidated with the Company or any such Restricted Subsidiary; (iv) Liens
securing any Acquired Indebtedness and which exist at the time of acquisition
thereof by the Company or any of its Restricted Subsidiaries, provided that such
Liens were in existence prior to the contemplation of such acquisition; (v)
Liens arising under the Indenture in favor of the Trustee; (vi) Liens existing
on the date of the Indenture; (vii) Liens arising by reason of (1) any judgment,
decree or order of any court not constituting an Event of Default; (2) taxes not
yet delinquent or which are being contested in good faith by appropriate
proceedings which suspend the collection thereof, promptly instituted and
diligently conducted, and for which adequate reserves have been established to
the extent required by GAAP; (3) security for payment of workers' compensation
or other insurance; (4) good faith deposits in connection with tenders, leases
and contracts (other than contracts for the payment of money), bids, licenses,
performance or similar bonds and other obligations of a like nature, in the
ordinary course of business; (5) zoning restrictions, easements, licenses,
reservations, provisions, covenants, conditions, waivers, restrictions on the
use of property or minor irregularities of title (and with respect to leasehold
interests, mortgages, obligations, Liens and other encumbrances incurred,
created, assumed or permitted to exist and arising by, through or under a
landlord or owner of the leased property, with or without consent of the
lessees), none of which materially impairs the use of any parcel of property
material to the operation of the business of the Company or any Restricted
Subsidiary or the value of such property for the purpose of such business; (6)
deposits to secure public or statutory obligations or in lieu of surety or
appeal bonds; (7) surveys, exceptions, title defects, encumbrances, easements,
reservations of, or rights or others for, rights of way, sewers, electric lines,
telegraph or telephone lines and other similar purposes or zoning or other
restrictions as to the use of real property not interfering with the ordinary
conduct of the business of the Company or any of its Restricted
12
Subsidiaries; or (8) operation of law or statute and incurred in the ordinary
course of business, including without limitation, those in favor of mechanics,
materialmen, suppliers, laborers or employees, and, if securing sums of money,
for sums which are not yet delinquent or are being contested in good faith by
appropriate proceedings which suspend the collection thereof, promptly
instituted and diligently conducted, and for which adequate reserves have been
established to the extent required by GAAP; (viii) Liens resulting from the
deposit of funds in trust for the purpose of decreasing or defeasing
Indebtedness of the Company and its Restricted Subsidiaries so long as such
deposit of funds and such decreasing or defeasing of Indebtedness are permitted
under Section 4.08; and (ix) any extension, renewal or replacement (or
successive extensions, renewals or replacements), in whole or in part, of any
Lien referred to in the foregoing clauses (iii), (iv) and (vi) above; provided
that the principal amount of the Indebtedness secured thereby shall not exceed
the principal amount of Indebtedness secured thereby immediately prior to the
time of such extension, renewal or replacement, and that such extension, renewal
or replacement Lien shall be limited to all or a part of the property that
secured the Lien so extended, renewed or replaced (plus improvements on such
property).
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used by such Person to extend, refinance, renew, replace,
defease or refund other Indebtedness of such Person ("Old Indebtedness");
provided that: (i) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal amount (or
accreted value, if applicable) of the Old Indebtedness plus any premium or
penalty payable thereon and any reasonable expenses incurred in connection
therewith; (ii) such Permitted Refinancing Indebtedness has a final maturity
date equal to or later than the final maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted Average Life to
Maturity of, the Old Indebtedness; (iii) if the Old Indebtedness is subordinated
in right of payment to the Notes, such Permitted Refinancing Indebtedness is
subordinated in right of payment to the Notes on terms at least as favorable to
the Holders as those contained in the documentation governing the Old
Indebtedness; (iv) such Permitted Refinancing Indebtedness is on terms that are
no more restrictive, as a whole, than those governing such Old Indebtedness; and
(v) such Permitted Refinancing Indebtedness is Incurred only by the Company or
the Restricted Subsidiary that is the obligor on the Old Indebtedness.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Public Equity Offering" means an underwritten offering of Equity
Interests (other than Disqualified Stock) of the Company for cash pursuant to an
effective registration statement under the Securities Act.
13
"Purchase Agreement" means the Purchase Agreement, dated as of the
Issue Date, among the Company, the Subsidiary Guarantors and the Initial
Purchasers, as such agreement may be amended, modified or supplemented from time
to time.
"Purchase Money Indebtedness" means, with respect to the Company or
any Restricted Subsidiary, any Indebtedness of the Company or any Restricted
Subsidiary to any seller or other Person incurred to finance the acquisition
(including in the case of a Capitalized Lease Obligation, the lease) of any real
or personal tangible property acquired after the Issue Date which, in the
reasonable good faith judgment of the Board of Directors of the Company or the
board of directors of any Restricted Subsidiary, as applicable, is directly
related to a Related Business of the Company or a Restricted Subsidiary and
which is Incurred within 180 days of such acquisition and is secured only by the
assets so financed.
"Qualified Tender Offer Purchase" means the purchase by the Company
pursuant to the Tender Offer of such number of Shelter Shares as constitute on a
fully-diluted basis at least a majority of the total number of outstanding
Shelter Shares.
"Reference Period" with regard to any Person means the four full
fiscal quarters for which financial statements are available at the time of
determination (or such lesser period during which such Person has been in
existence) ended immediately preceding any date upon which any such
determination is to be made pursuant to the terms of the Notes or the Indenture.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the Issue Date, by and among the Company, the Subsidiary
Guarantors and the Initial Purchasers, as such agreement may be amended,
modified or supplemented from time to time.
"Regulation S Global Note" means a permanent Global Note that contains
the paragraph referred to in footnote 1 and the additional schedule referred to
in footnote 3 to the form of the Note attached hereto as Exhibit A, and that is
deposited with and registered in the name of the Depositary, representing Notes
sold in reliance on Regulation S.
"Related Business" means the business conducted by the Company and its
Restricted Subsidiaries as of the Issue Date and any and all businesses that in
the good faith judgment of the Board of Directors of the Company are materially
related businesses.
"Responsible Officer" when used with respect to the Trustee, means any
officer within the Corporate Trust Office of the Trustee (or any successor group
of the Trustee) assigned by the Trustee to administer the Indenture in its
corporate trust department.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" means any direct or indirect Subsidiary of the
Company that is not an Unrestricted Subsidiary.
14
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 144A Global Note" means a permanent global note that contains
the paragraph referred to in footnote 1 and the additional schedule referred to
in footnote 3 to the form of the Note attached hereto as Exhibit A, and that is
deposited with and registered in the name of the Depositary, representing Notes
sold in reliance on Rule 144A.
"Securities Act" means the Securities Act of 1933, as amended from
time to time.
"Senior Credit Facility" means the Credit Agreement to be entered into
on the Issue Date among the Company, the guarantors named therein, and
NationsBank of Texas, N.A., as agent and lender, and the other lenders party
thereto, or any refinancing or increases thereof made in accordance with Section
4.09.
"Senior Indebtedness" means, with respect to any Person, (i) all
Indebtedness of such Person outstanding under the Senior Credit Facility and all
Hedging Obligations with respect thereto, (ii) any other Indebtedness of such
Person permitted to be issued under the Indenture, provided, however, that
Senior Indebtedness shall not include any Indebtedness which by the terms of the
instrument creating or evidencing the same is on parity with or is subordinated
or junior in right of payment in any respect to any other Indebtedness of such
Person or its Restricted Subsidiaries or Affiliates and (iii) all Obligations
with respect to the foregoing. Notwithstanding anything to the contrary in the
foregoing, Senior Indebtedness will not include (i) any liability for Federal,
state, local, foreign or other taxes, (ii) any Indebtedness of any such Person
to any of its Subsidiaries or other Affiliates, (iii) any accounts payable or
trade liabilities arising in the ordinary course of business (including
Guarantees thereof or instruments evidencing such liabilities), (iv) any
Indebtedness that is incurred in violation of the Indenture, (v) Indebtedness of
the Person to any shareholder of the Person, (vi) Indebtedness to, or guaranteed
by the Person or any of its Subsidiaries for the benefit of, any director,
officer or employee of the Person or any Subsidiary of the Person (including,
without limitation, amounts owed for compensation), (vii) Capital Stock of such
Person and Indebtedness represented by Disqualified Stock, (viii) Indebtedness
which, when incurred and without respect to any election under Section 1111(b)
of Title 11, United States Code, is without recourse to such Person and (ix) any
Indebtedness or obligation which is subordinated in right of payment to any
other Indebtedness or obligation of such Person. "Senior Indebtedness," when
used with respect to a Subsidiary Guarantor, shall have a meaning substantially
identical to that applied to the Indebtedness of the Person or its Subsidiaries.
"Shelter" means Shelter Components Corporation, an Indiana
corporation.
"Shelter Shares" means all of the outstanding shares of common stock,
par value $.01 per share, of Shelter.
15
"Shelter Transition Expenditures" means costs and expenses incurred by
the Company and its Restricted Subsidiaries to facilitate the consolidation of
the distribution and manufacturing businesses of the Company and the Restricted
Subsidiaries with Shelter.
"Special Redemption Consideration" has the meaning set forth in the
Escrow Agreement.
"Stated Maturity" means December 1, 2007.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of such Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof). Unless indicated to
the contrary, "Subsidiary" refers to a direct or indirect Subsidiary of the
Company.
"Subsidiary Guarantee" means any guarantee of the obligations of the
Company under this Indenture and the Notes by any Person in accordance with the
provisions of this Indenture, including pursuant to a supplemental indenture
substantially in the form attached hereto as Exhibit C.
"Subsidiary Guarantors" means (i) as of the Issue Date, SCC
Acquisition Corp., Kevco Delaware, Inc., Sunbelt Wood Components, Inc.,
Consolidated Forest Products, Inc., Bowen Supply, Inc. and Encore Industries,
Inc. and (ii) thereafter, all future Subsidiaries (other than Unrestricted
Subsidiaries) that become guarantors of the Notes in compliance with the
provisions of this Indenture and execute a supplemental indenture agreeing to be
bound by the terms of this Indenture; in each case until such time, if any, as
such Subsidiary is released from its Subsidiary Guarantee as permitted by this
Indenture.
"Tender Offer" means the tender offer commenced by the Company on
October 28, 1997 pursuant to which it offered to acquire all of the Shelter
Shares.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-
77bbbb) and the rules and regulations thereunder, as in effect on the date on
which this Indenture is qualified under the TIA (except as provided in Sections
9.01(h) and 9.03); provided, however, that, in the event the Trust Indenture Act
of 1939 is amended after such date, "TIA" means, to the extent required by any
such amendments, the Trust Indenture Act of 1939 as so amended.
16
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"Unrestricted Subsidiary" means any Subsidiary that is designated by
the Board of Directors of the Company as an Unrestricted Subsidiary pursuant to
a resolution of the Board of Directors of the Company, but only to the extent
that such Subsidiary and each of the Subsidiaries of such Subsidiary (i) has no
Indebtedness at the time of designation, and does not thereafter Incur any
Indebtedness, other than Non-Recourse Debt, (ii) does not own any Equity
Interests of, or own or hold any Lien on, any property of the Company or any
Restricted Subsidiary of the Company (other than any Subsidiary of the
Subsidiary to be so designated), (iii) is not party to any material agreement,
contract, rearrangement or understanding with the Company or any of its
Restricted Subsidiaries unless the terms of any such agreement, contract,
rearrangement or understanding are no less favorable to the Company or such
Restricted Subsidiary than those that might be obtained at the time from Persons
who are not Affiliates of the Company, (iv) is a Person with respect to which
neither the Company nor any of its Restricted Subsidiaries has any direct or
indirect obligation (a) to subscribe for additional Equity Interests or (b) to
maintain or preserve such Person's financial condition or to cause such Person
to achieve any specified levels of operating results, (v) has not guaranteed or
otherwise directly or indirectly provided credit support for any Indebtedness of
the Company or any of its Restricted Subsidiaries and (vi) has at least one
director on its board of directors that is not a director or executive officer
of the Company or any of its Restricted Subsidiaries and has at least one
executive officer that is not a director or executive officer of the Company or
any of its Restricted Subsidiaries.
"Voting Stock" means any class or classes of Capital Stock of any
Person pursuant to which the holders thereof have the general voting power under
ordinary circumstances to elect the board of directors (or Persons performing
similar functions) of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (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 a Restricted Subsidiary all
of the outstanding Capital Stock or other ownership interests of which (other
than directors' qualifying shares) shall at the time be owned by the Company or
by one or more Wholly Owned Restricted Subsidiaries.
17
Section 1.02 Other Definitions
Defined in
Term Section
---- -----------
"Acceleration Notice" 6.02
"Affiliate Transaction" 4.15
"Asset Sale Offer" 4.07
"Benefitted Party" 10.01
"Change of Control Offer" 4.06
"Change Of Control Offer Period" 4.06
"Change of Control Purchase Date" 4.06
"Change of Control Purchase Price" 4.06
"Covenant Defeasance" 8.03
"Custodian" 6.01
"Debt Incurrence Ratio" 4.09
"DTC" 2.03
"Escrowed Amounts" 4.21
"Event of Default" 6.01
"Excess Proceeds" 4.07
"Excess Proceeds Offer" 4.22
"Excess Proceeds Trigger Date" 4.22
"Incurrence Date" 4.09
"Legal Defeasance" 8.02
"Net Offering Proceeds" 4.21
"Offer Amount" 4.22
"Offering Period" 4.22
"Paying Agent" 2.03
"Payment Blockage Notice" 11.02
"Payment Blockage Period" 11.02
"Payment Default" 6.01
"Permitted Indebtedness" 4.09
"Purchase Date" 4.22
"QIB" 2.01
"Register" 2.03
"Registrar" 2.03
"Regulation S" 2.01
"Repurchase Offer" 4.22
"Restricted Payments" 4.08
"Special Redemption Trigger Date" 4.21
"Transfer Restricted Security" 2.06
18
Section 1.03 Incorporation by Reference of Trust Indenture Act
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Notes means the Company, each Subsidiary Guarantor
and any successor obligor upon the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
Section 1.04 Rules of Construction
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions;
(6) references to sections of or rules under the Exchange Act or the
Securities Act shall be deemed to include substitute, replacement of successor
sections or rules adopted by the SEC from time to time; and
19
(7) "herein," "hereof" and other words of similar import refer to this
Indenture as a whole (as amended and supplemented from time to time) and not to
any particular Article, Section or other subdivision.
ARTICLE 2
THE NOTES
Section 2.01 Form and Dating
The Notes, the Subsidiary Guarantees and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A, which is part of
this Indenture. The Notes may have notations, legends or endorsements required
by law, stock exchange rule or usage. Each Note shall be dated the date of its
authentication. The Notes shall be issued only in registered form without
coupons and only in minimum denominations of $1,000 and integral multiples
thereof.
The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Indenture and the Company, the
Subsidiary Guarantors and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.
(a) Rule 144A Global Notes. Notes offered and sold within the United
States to qualified institutional buyers as defined in Rule 144A ("QIBs")
in reliance on Rule 144A shall be issued initially in the form of one or
more Rule 144A Global Notes, which shall be deposited on behalf of the
purchasers of the Notes represented thereby with the Depositary or a
custodian of the Depositary at its New York office, and registered in the
name of the Depositary or a nominee of the Depositary. The aggregate
principal amount of the Rule 144A Global Notes may from time to time be
increased or decreased by adjustments made on the records of the Trustee
and the Depositary or its nominee as hereinafter provided.
(b) Regulation S Global Notes. Notes offered and sold in reliance on
Regulation S under the Securities Act ("Regulation S") shall be issued
initially in the form of one or more Regulation S Global Notes, which shall
be deposited on behalf of the purchasers of the Notes represented thereby
with the Depositary or a custodian of the Depositary at its New York
office, and registered in the name of the Depositary or a nominee of the
Depositary, provided that upon such deposit all such Notes shall be
credited to or through accounts maintained at the Depository by or on
behalf of Euroclear or CEDEL. The aggregate principal amount of the
Regulation S Global Notes may from time to time be increased or decreased
by adjustments made on the records of the Trustee and the Depositary or its
nominee as hereinafter provided.
20
(c) Global Notes in General. Each Global Note shall be duly executed
by the Company and authenticated by the Trustee as hereinafter provided.
The Global Notes shall represent the outstanding Notes registered in the
name of the Depositary or its nominee, and shall provide that they shall
represent the aggregate amount of outstanding Notes from time to time
endorsed thereon and that the aggregate amount of outstanding Notes
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of the
Global Notes to reflect the amount of any increase or decrease in the
amount of outstanding Notes represented thereby shall be made by the
Trustee or the Note Custodian, at the direction of the Trustee, in
accordance with instructions given by the Holder thereof as required by
Section 2.06 hereof.
The Company shall cause the Rule 144A Global Notes and the Regulation
S Global Notes to have separate CUSIP numbers.
Except as set forth in Section 2.06 hereof, the Global Notes may be
transferred, in whole and not in part, only to another nominee of the
Depositary or to a successor of the Depositary or its nominee.
(d) Book-Entry Provisions for Global Notes. The Company shall execute
and the Trustee shall, in accordance with this Section 2.01(d) and Section
2.02, authenticate and deliver the Global Notes that (i) shall be
registered in the name of the Depositary or the nominee of the Depositary
and (ii) shall be delivered by the Trustee to the Depositary or pursuant to
the Depositary's instructions or held by the Trustee as custodian for the
Depositary.
Agent Members shall have no rights either under this Indenture with
respect to the Global Notes held on their behalf by the Depositary or by the
Note Custodian or under the Global Notes, and the Depositary may be treated by
the Company, the Subsidiary Guarantors, the Trustee and any agent of the Company
or the Trustee as the absolute owner of the Global Notes for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Subsidiary Guarantors, the Trustee or any agent of the Company or
the Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or impair, as between the Depositary
and its Agent Members, the operation of customary practices of such Depositary
governing the exercise of the rights of an owner of a beneficial interest in the
Global Notes.
Section 2.02 Execution and Authentication
Two Officers shall sign the Notes for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Note no longer holds that office
at the time a Note is authenticated, the Note shall nevertheless be valid.
21
A Note shall not be valid or obligatory for any purpose or entitled to
the benefits of this Indenture until authenticated by the manual signature of
the Trustee or its authenticating agent. The signature shall be conclusive
evidence that the Note has been authenticated under this Indenture.
The Trustee shall, upon delivery to the Trustee of an Authentication
Order, from time to time, authenticate Notes for original issue up to the
aggregate principal amount of $105,000,000. The aggregate principal amount of
Notes outstanding at any time may not exceed such amount, except as provided in
Section 2.07.
The Trustee may appoint an authenticating agent to authenticate Notes.
An authenticating agent may authenticate Notes whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as an
Agent to deal with the Company or an Affiliate of the Company.
Neither the Company nor the Trustee shall have any responsibility for
any defect in the CUSIP number that appears on any Note, check, advice of
payment or redemption notice, and any such document may contain a statement to
the effect that CUSIP numbers have been assigned by an independent service for
convenience of reference and that neither the Company nor the Trustee shall be
liable for any inaccuracy in such numbers.
Section 2.03 Registrar and Paying Agent
The Company shall maintain in the Borough of Manhattan, The City of
New York, State of New York, and in such other locations as it shall determine,
(i) an office or agency where Notes may be presented for registration of
transfer or for exchange ("Registrar") and (ii) an office or agency where Notes
may be presented for payment ("Paying Agent"). The Registrar shall keep a
register ("Register") of the Notes and of their transfer and exchange. The
Company may appoint one or more co-registrars and one or more additional paying
agents. The term "Registrar" includes any co-registrar and the term "Paying
Agent" includes any additional paying agent. The Company may change any Paying
Agent or Registrar upon notice to the Trustee and the Holders of Notes. The
Company shall notify the Trustee in writing of the name and address of any Agent
not a party to this Indenture. If the Company fails to appoint or maintain
another entity as Registrar or Paying Agent, the Trustee shall act, subject to
the last paragraph of this Section 2.03, as such. The Company or any of its
Subsidiaries may act as Paying Agent or Registrar; provided, however, that none
of the Company, its Subsidiaries or the Affiliates of the foregoing shall act
(i) as Paying Agent in connection with any redemption, offer to purchase,
discharge or defeasance or as otherwise specified in this Indenture, and (ii) as
Paying Agent or Registrar if a Default or Event of Default has occurred and is
continuing.
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes.
22
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Note Custodian with respect to the Global Notes. The
Company initially appoints the Trustee to act as the Registrar and Paying Agent
with respect to the Certificated Notes.
All of the terms and provisions with respect to such powers and
authority contained in the Notes are subject to and governed by the terms and
provisions hereof.
The Trustee may resign as Registrar or Paying Agent upon 30 days prior
written notice to the Company.
Section 2.04 Paying Agent to Hold Money in Trust
The Company shall require each Paying Agent, other than the Trustee,
to agree in writing that the Paying Agent will hold in trust for the benefit of
Holders and the Trustee all money held by the Paying Agent for the payment of
principal of, premium, if any, interest and Liquidated Damages, if any, on the
Notes, and shall notify the Trustee of any default by the Company in making any
such payment. While any such default continues, the Trustee may require a
Paying Agent to pay all money held by it to the Trustee. The Company at any
time may require a Paying Agent to pay all money held by it to the Trustee. Upon
payment over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of the Holders of Notes all money held by it as Paying
Agent. Upon the occurrence of events specified in Section 6.01(h) or (i), the
Trustee shall serve as Paying Agent for the Notes.
Section 2.05 Holder Lists
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders of Notes and shall otherwise comply with TIA (S) 312(a). If the
Trustee is not the Registrar, the Company shall furnish to the Trustee at least
ten Business Days before each Interest Payment Date and at such other times as
the Trustee may request in writing, a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of the Holders of
Notes and, after qualification of the Indenture under the TIA, the Company shall
otherwise strictly comply with TIA (S) 312(a).
Section 2.06 Transfer and Exchange
(a) Transfer and Exchange of Beneficial Interests in Global Notes.
Subject to the provisions of this Section 2.06 and Section 2.01(d), the transfer
and exchange of any beneficial interest in a Global Note shall be effected
through the Depositary, in accordance with this Indenture and the procedures of
the Depositary therefor, which shall include restrictions on transfer comparable
to those set forth herein to the extent required by the Securities Act.
Beneficial interests in any Global Notes may be transferred to Persons who take
delivery thereof in the form of a beneficial interest in such Global Note or any
other Global Notes in accordance with and subject to the transfer
23
restrictions set forth in the legend in subsection (g)(i) of this Section 2.06.
Upon receipt by the Registrar of written instructions, or such other instruction
as is customary for the Depositary, from the Depositary or its nominee,
requesting the registration of transfer of an interest in a Rule 144A Global
Note or Regulation S Global Note, as the case may be, to another type of Global
Note, together with the applicable Global Notes (or, if the applicable type of
Global Note required to represent the interest as requested to be transferred is
not then outstanding, only the Global Note representing the interest being
transferred), the Registrar shall make an endorsement on such Global Notes (or
Global Note) to reflect the applicable increase and decrease of the principal
amount of Notes represented thereby, giving effect to such transfer. If the
applicable type of Global Note required to represent the interest as requested
to be transferred is not outstanding at the time of such request, the Company
shall issue and the Trustee shall, upon receipt of an Authentication Order in
accordance with Section 2.02, authenticate a new Global Note of such type in
principal amount equal to the principal amount of the interest requested to be
transferred.
(b) Transfer and Exchange of Certificated Notes. When Certificated
Notes are presented by a Holder of Notes to the Registrar with a request:
(x) to register the transfer of the Certificated Notes; or
(y) to exchange such Certificated Notes for an equal principal
amount of Certificated Notes of other authorized denominations, the
Registrar shall register the transfer or make the exchange as requested if
the requirements under this Indenture as set forth in this Section 2.06 for
such transactions are met; provided that the Certificated Notes presented
or surrendered for register of transfer or exchange:
(i) shall be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Registrar duly
executed by such Holder of Notes or by his attorney, duly authorized
in writing with the signature guaranteed; and
(ii) in the case of a Certificated Note that is a Transfer
Restricted Security, such request shall be accompanied by the
following additional information and documents, as applicable:
(A) if such Transfer Restricted Security is being
delivered to the Registrar by a Holder of Notes for registration
in the name of such Holder of Notes, without transfer, or such
Transfer Restricted Security is being transferred to the Company
or any of its Subsidiaries, a certification to that effect from
such Holder of Notes (in substantially the form of Exhibit B-1
hereto);
24
(B) if such Transfer Restricted Security is being
transferred (i) to a QIB in a transaction meeting the
requirements of Rule 144A under the Securities Act, (ii) in a
transaction meeting the requirements of an exemption from
registration provided by Rule 144 under the Securities Act, (iii)
in reliance on Rule 903 or 904 of Regulation S or (iv) pursuant
to an effective registration statement under the Securities Act,
a certification to that effect from such Holder of Notes (in
substantially the form of Exhibit B-1 hereto); or
(C) if such Transfer Restricted Security is being
transferred in reliance on any exemption from the registration
requirements of the Securities Act (other than those referred to
paragraphs (A) and (B) above), a certification to that effect
from such Holder of Notes (in substantially the form of Exhibit
B-1 hereto) and an Opinion of Counsel from such Holder of Notes
or the transferee reasonably acceptable to the Company and to the
Registrar to the effect that such transfer is in compliance with
the Securities Act.
(c) Transfer of a Beneficial Interest in a Global Note for a
Certificated Note.
(i) Any Person having a beneficial interest in a Global Note may
upon request, subject to the Applicable Procedures, exchange such
beneficial interest for a Certificated Note. Upon receipt by the Trustee of
written instructions or such other form of instructions as is customary for
the Depositary, from the Depositary or its nominee on behalf of any Person
having a beneficial interest in a Global Note, and, in the case of a
Transfer Restricted Security, the following additional information and
documents (all of which may be submitted by facsimile):
(A) if such beneficial interest is being transferred to the
Person designated by the Depositary as being the beneficial owner, a
certification to that effect from such Person (in substantially the
form of Exhibit B-2 hereto);
(B) if such beneficial interest is being transferred (i) to a
QIB in a transaction meeting the requirements of Rule 144A under the
Securities Act, (ii) in a transaction meeting the requirements of an
exemption from registration provided by Rule 144 under the Securities
Act, (iii) in reliance on Rule 903 or 904 of Regulation S or (iv)
pursuant to an effective registration statement under the Securities
Act, a certification to that effect from such Person (in substantially
the form of Exhibit B-2 hereto); or
(C) if such beneficial interest is being transferred in
reliance on any exemption from the registration requirements of the
Securities Act (other than those referred to in paragraphs (A) and (B)
above), a certification to that effect from
25
the transferor (in substantially the form of Exhibit B-2 hereto)
and an Opinion of Counsel from the transferee or the transferor
reasonably acceptable to the Company and to the Registrar to the
effect that such transfer is in compliance with the Securities Act;
in which case the Trustee or the Note Custodian, at the direction of the
Trustee, shall, in accordance with the standing instructions and procedures
existing between the Depositary and the Note Custodian, make an endorsement
on such Global Note to reflect a decrease in the aggregate principal amount
of Notes represented by such Global Note and, following such reduction, the
Company shall execute and the Trustee shall authenticate and deliver to the
transferee a Certificated Note in the appropriate principal amount.
(ii) Certificated Notes issued in exchange for a beneficial
interest in the Global Notes pursuant to this Section 2.06(c) shall be
registered in such names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall
deliver such Certificated Notes to the Persons in whose names such Notes
are so registered.
(d) Restrictions on Transfer and Exchange of Global Notes.
Notwithstanding any other provision of this Indenture (other than the provisions
set forth in subsection (f) of this Section 2.06), the Global Notes may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary.
(e) Transfer and Exchange of a Certificated Note for a Beneficial
Interest in a Global Note. When Certificated Notes are presented by a Holder of
Notes to the Registrar with a request to cancel any Certificated Notes in
exchange for a beneficial interest in the Global Notes, the Registrar shall
register the transfer or make the exchange as requested if its requirements for
such transactions are met; provided that the Certificated Notes presented or
surrendered for register of transfer or exchange:
(i) shall be duly endorsed or accompanied by a written instruction
of transfer in form satisfactory to the Registrar duly executed by such
Holder of Notes or by his attorney, duly authorized in writing, which
instructions, if applicable, shall direct the Trustee (A) to cancel any
Certificated Note being exchanged for a beneficial interest in the Global
Notes in accordance with Section 2.11 hereof, and (B) to make, or to direct
the Registrar to make, an endorsement on the Global Notes to reflect an
increase in the aggregate principal amount of the Notes represented by the
Global Notes; and
(ii) in the case of a Certificated Note that is a Transfer
Restricted Security, such request shall be accompanied by the following
additional information and documents, as applicable:
26
(A) if such Transfer Restricted Security is being delivered
to the Registrar by a Holder for registration in the name of the
Depositary or a nominee of the Depositary for the account, directly or
indirectly, of such Holder, without transfer, a certification to that
effect from such Holder (in substantially the form of Exhibit B-3
hereto);
(B) if such Transfer Restricted Security is being transferred
(i) to a QIB in a transaction meeting the requirements of Rule 144A
under the Securities Act, (ii) in a transaction meeting the
requirements of an exemption from registration provided by Rule 144
under the Securities Act, (iii) in reliance on Rule 903 or 904 of
Regulation S or (iv) pursuant to an effective registration statement
under the Securities Act, a certification to that effect from such
Holder (in substantially the form of Exhibit B-3 hereto); or
(C) if such Transfer Restricted Security is being transferred
in reliance on any other exemption from the registration requirements
of the Securities Act, a certification to that effect from such Holder
(in substantially the form of Exhibit B-3 hereto) and an Opinion of
Counsel from such Holder or the transferee reasonably acceptable to
the Company and to the Registrar to the effect that such transfer is
in compliance with the Securities Act.
If no Rule 144A Global Note or Regulation S Global Note, as the case
may be, is then outstanding, the Company shall issue and the Trustee shall, upon
receipt of an Authentication Order of the Company in accordance with Section
2.02 hereof, authenticate such Global Note in the appropriate principal amount.
(f) Authentication of Certificated Notes in Absence of Depositary. If
at any time:
(i) the Depositary for the Notes notifies the Company that the
Depositary is unwilling or unable to continue as Depositary for the Global
Notes and a successor Depositary for the Global Notes is not appointed by
the Company within 90 days after delivery of such notice; or
(ii) the Depositary for the Notes notifies the Company that the
Depositary has ceased to be a clearing agency registered under the Exchange
Act; or
(iii) the Company delivers to the Trustee an Officer's Certificate
notifying the Trustee that it elects to cause the issuance of Certificated
Notes in exchange for all outstanding Global Notes issued under the
Indenture; or
(iv) there shall have occurred and be continuing an Event of
Default with respect to the Notes and one or more Holders or the Trustee
requests the issuance of Certificated Notes;
27
then the Company shall execute, and the Trustee shall, upon receipt of an
Authentication Order of the Company in accordance with Section 2.02 hereof,
authenticate and deliver, Certificated Notes in an aggregate principal
amount equal to the principal amount of the Global Notes in exchange for
the Global Notes.
(g) Legends.
(i) Except as permitted by the following paragraphs (ii), (iii)
and (iv), each Note certificate evidencing the Global Notes and
Certificated Notes (and all Notes issued in exchange therefor or
substitution thereof) shall bear a legend in substantially the following
form (each a "Transfer Restricted Security"):
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
WITHIN THE UNITED STATES OR TO OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS, EXCEPT AS SET FORTH IN THE SECOND SENTENCE HEREOF. BY ITS
ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), OR (B) IT IS ACQUIRING THIS
NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT, AND (2) AGREES THAT IT WILL NOT, RESELL OR OTHERWISE
TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES,
(B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE
REQUIREMENTS OF RULE 903 OR 904 OF THE SECURITIES ACT, (D) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (E) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY, IF REQUESTED BY THE COMPANY) OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION"
AND "UNITED STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF
REGULATION S UNDER
28
THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE
TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE
FOREGOING."
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by the Global
Notes) pursuant to Rule 144 under the Securities Act or pursuant to an
effective registration statement under the Securities Act:
(A) in the case of any Transfer Restricted Security that is
a Certificated Note, the Registrar shall permit the Holder thereof to
exchange such Transfer Restricted Security for a Certificated Note
that does not bear the legend set forth in (i) above and rescind any
restriction on the transfer of such Transfer Restricted Security upon
receipt of a certification from the transferring Holder substantially
in the form of Exhibit B-1 hereto; and
(B) in the case of any Transfer Restricted Security
represented by the Global Notes, such Transfer Restricted Security
shall not be required to bear the legend set forth in (i) above, but
shall continue to be subject to the provisions of Section 2.06(a)
hereof; provided that with respect to any request for an exchange of a
Transfer Restricted Security that is represented by a Global Note for
a Certificated Note that does not bear the legend set forth in (i)
above, which request is made in reliance upon Rule 144, the Holder
thereof shall certify in writing to the Registrar that such request is
being made pursuant to Rule 144 (such certification to be
substantially in the form of Exhibit B-2 hereto).
(iii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by the Global
Notes) in reliance on any exemption from the registration requirements of
the Securities Act (other than exemptions pursuant to Rule 144A, Rule 144,
Rule 903 or Rule 904 under the Securities Act) in which the Holder or the
transferee provides an Opinion of Counsel to the Company and the Registrar
in form and substance reasonably acceptable to the Company and the
Registrar (which Opinion of Counsel shall also state that the transfer
restrictions contained in the legend are no longer applicable):
(A) in the case of any Transfer Restricted Security that is
a Certificated Note, the Registrar shall permit the Holder thereof to
exchange such Transfer Restricted Security for a Certificated Note
that does not bear the legend set forth in (i) above and rescind any
restriction on the transfer of such Transfer Restricted Security; and
29
(B) in the case of any Transfer Restricted Security
represented by the Global Notes, such Transfer Restricted Security
shall not be required to bear the legend set forth in (i) above, but
shall continue to be subject to the provisions of Section 2.06(a) and
(c) hereof.
(iv) Notwithstanding the foregoing, upon consummation of the
Exchange Offer, or following the effectiveness of a shelf registration
statement filed by the Company, in each case in accordance with the
Registration Rights Agreement, the Company shall issue and, upon receipt of
an Authentication Order of the Company in accordance with Section 2.02
hereof, the Trustee shall authenticate Series B Notes in exchange for
Series A Notes accepted for exchange in the Exchange Offer, or surrendered
to the Company in connection with such shelf registration statement, which
Series B Notes shall not bear the legend set forth in (i) above, and the
Registrar shall rescind any restriction on the transfer of such Series B
Notes, in each case unless the Holder of such Series A Notes has certified
to the Trustee that it is either (A) a broker-dealer, (B) a Person
participating in the distribution of the Series A Notes or (C) a Person who
is an affiliate (as defined in Rule 144) of the Company.
(h) Cancellation and/or Adjustment of Global Notes. At such time as
all beneficial interests in the Global Notes have been exchanged for
Certificated Notes, redeemed, repurchased or canceled, the Global Notes shall be
returned to or retained and canceled by the Trustee in accordance with Section
2.11 hereof. At any time prior to such cancellation, if any beneficial interest
in the Global Notes is exchanged for an interest in Certificated Notes,
redeemed, repurchased or cancelled, the principal amount of Notes represented by
the Global Notes shall be reduced accordingly and an endorsement shall be made
on the Global Notes, by the Trustee or the Note Custodian, at the direction of
the Trustee, to reflect such reduction.
(i) General Restrictions on Transfer and Exchange of Transfer
Restricted Securities. Holders of Transfer Restricted Securities may offer,
resell, pledge or otherwise transfer such Notes only (i) to the Company or any
of its Subsidiaries, (ii) to a QIB purchasing for its own account or for the
account of another QIB in a transaction meeting the requirements of Rule 144A,
(iii) in an offshore transaction meeting the requirements of Rule 903 or 904 of
the Securities Act, (iv) in a transaction meeting the requirements of Rule 144
under the Securities Act, (v) in accordance with another exemption from the
registration requirements of the Securities Act, or (vi) pursuant to an
effective registration statement under the Securities Act, inside the United
States, in each case in compliance with any applicable securities laws of any
State of the United States or any other applicable jurisdiction. The Trustee
shall refuse to register the transfer of any Note in violation of the foregoing.
(j) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Certificated Notes
and the Global Notes at the Registrar's request.
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(ii) No service charge shall be made to a Holder of Notes for any
registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes
or similar governmental charge payable upon exchange or transfer pursuant
to Sections 2.10, 3.07, 3.08, 4.06, 4.07 and 9.05 hereof).
(iii) The Certificated Notes and the Global Notes issued upon any
registration of transfer or exchange of Certificated Notes or the Global
Notes shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the
Certificated Notes or the Global Notes surrendered upon such registration
of transfer or exchange.
(iv) Neither the Company nor the Registrar shall be required:
(A) to issue, to register the transfer of or to exchange
Notes during a period beginning at the opening of business on a
Business Day fifteen (15) days before the day of any selection of
Notes for redemption under Section 3.02 hereof and ending at the close
of business on the day of selection; or
(B) to register the transfer of or to exchange any Note so
selected for redemption in whole or in part, except the unredeemed
portion of any Note being redeemed in part; or
(C) to register the transfer of or to exchange a Note between
a record date and the next succeeding Interest Payment Date.
(v) Prior to due presentment for the registration of a transfer of
any Note, the Trustee, any Agent and the Company may deem and treat the
Person in whose name any Note is registered as the absolute owner of such
Note for the purpose of receiving payment of principal of, premium, if any,
interest and Liquidated Damages, if any, on such Notes, and neither the
Trustee, any Agent nor the Company shall be affected by notice to the
contrary.
The Registrar may conclusively rely on information set forth in a
certificate substantially in the form of Exhibit B-1, B-2 or B-3 hereto, and
other certificates and opinions received pursuant to this Section 2.06 and, in
the absence of receipt of such a certificate or opinion, shall not be deemed to
have knowledge of a transfer of an interest in the Global Notes absent actual
knowledge of such transfer.
(k) Certain Transfers in Connection with and after the Exchange Offer.
Notwithstanding any other provision of this Indenture: (i) no Series B Note may
be exchanged by the Holder thereof for a Series A Note; (ii) accrued and unpaid
interest on the Series A Notes being exchange in the Exchange Offer shall be due
and payable on the next Interest Payment Date for the
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Series B Notes following the Exchange Offer; and (iii) interest on the Series B
Notes to be issued in the Exchange Offer shall accrue from the date of the
Exchange Offer.
Section 2.07 Replacement Notes
If any mutilated Note is surrendered to the Trustee or the Company and
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, the Company shall issue and the Trustee, upon an
Authentication Order of the Company, shall authenticate a replacement Note if
the Trustee's requirements are met. If required by the Trustee or the Company,
an indemnity bond must be supplied by the Holder of such replacement Note that
is sufficient in the judgment of the Trustee and the Company to protect the
Company, the Trustee, any Agent and any authenticating agent from any loss that
any of them may suffer if a Note is replaced. The Company may charge the Holder
of a replacement Note for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
Section 2.08 Outstanding Notes
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest in the Global Notes effected by
the Trustee in accordance with the provisions hereof, and those described in
this Section as not outstanding. Except as set forth in Section 2.09, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note.
If a Note is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section
4.01, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay the principal amount of any Notes due and payable on that
date, then on and after that date such Notes shall be deemed to be no longer
outstanding and shall cease to accrue interest.
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Section 2.09 Treasury Notes
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, any Restricted Subsidiary or any Affiliate of the Company or any
Restricted Subsidiary, shall be considered as though not outstanding, except
that for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Notes that a Responsible
Officer of the Trustee knows are so owned shall be so disregarded.
Section 2.10 Temporary Notes
Until Certificated Notes are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Notes upon receipt of an
Authentication Order. Temporary Notes shall be substantially in the form of
Certificated Notes but may have variations that the Company considers
appropriate for temporary Notes and as shall be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company shall prepare and the Trustee
shall authenticate Certificated Notes in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.
Section 2.11 Cancellation
The Company at any time may deliver Notes to the Trustee for
cancellation, which the Company may have acquired in any manner whatsoever, and
all Notes so delivered shall be promptly canceled by the Trustee. The Registrar
and Paying Agent shall forward to the Trustee any Notes surrendered to them for
registration of transfer, exchange or payment. The Trustee and no one else
shall cancel all Notes surrendered for registration of transfer, exchange,
payment, replacement or cancellation and shall destroy canceled Certificated
Notes or the canceled Global Notes in accordance with its customary procedures
(subject to the record retention requirement of the Exchange Act).
Certification of the destruction of all canceled Notes shall be delivered to the
Company. The Company may not issue new Notes to replace Notes that it has
redeemed or paid or that have been delivered to the Trustee for cancellation.
Section 2.12 Defaulted Interest
If the Company or any Subsidiary Guarantor defaults in a payment of
interest on the Notes, it shall pay the defaulted interest in any lawful manner
plus, to the extent lawful, interest payable on the defaulted interest, to the
Persons who are Holders of Notes on a subsequent special record date, in each
case at the rate provided in the Notes and in Section 4.01 hereof. The Company
shall 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. The Company
shall fix or cause to be fixed each such special record date and payment date;
provided that no such special record date shall be less than ten (10) days prior
to the related payment date for such defaulted interest. At least fifteen (15)
days
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before the special record date, the Company (or, upon the written request of the
Company, the Trustee in the name and at the expense of the Company) shall mail
or cause to be mailed to Holders a notice that states the special record date,
the related payment date and the amount of such interest to be paid.
Section 2.13 Record Date
The record date for purposes of determining the identity of Holders of
Notes or consent to any action by vote or consent authorized or permitted under
this Indenture shall be determined as provided for in TIA (S) 316(c).
Section 2.14 Computation of Interest
Interest on the Notes shall be computed on the basis of a 360-day year
comprised of twelve 30-day months.
Section 2.15 CUSIP Number
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company in issuing the Notes may use a
"CUSIP" number, and if it does so, the Trustee may use the CUSIP number in
notices of redemption or exchanges as a convenience to Holders of Notes;
provided, however, that any such notice may state that no representation is made
as the correctness or accuracy of the CUSIP number printed in the notice or on
the Notes and that reliance may be placed only on the other identification
numbers printed on the Notes, and any such redemption or purchase shall not be
affected by any defect or omission in such numbers. The Company shall promptly
notify the Trustee of any change in the CUSIP number.
Section 2.16 Deposit of Moneys
Prior to 10:00 a.m. New York City time on each Interest Payment Date,
redemption date and the final maturity date, the Company shall deposit with the
Paying Agent in immediately available funds money sufficient to make cash
payments, if any, due on such Interest Payment Date, redemption date or final
maturity date, as the case may be, in a timely manner which permits the Paying
Agent to remit payment to the Holders on such Interest Payment Date, redemption
date or final maturity date, as the case may be.
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ARTICLE 3
REDEMPTION
Section 3.01 Notices to Trustee
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07, it shall furnish to the Trustee, at least
30 days but not more than 60 days before a redemption date (unless a shorter
notice is acceptable to the Trustee), an Officer's Certificate setting forth (i)
the Section of this Indenture pursuant to which the redemption shall occur, (ii)
the redemption date, (iii) the principal amount of Notes to be redeemed, (iv)
the redemption price and accrued and unpaid interest and (v) subject to Section
3.03, whether it requests the Trustee to give notice of such redemption.
Section 3.02 Selection of Notes to be Redeemed
If less than all of the Notes are to be redeemed at any time pursuant
to the optional redemption provisions of Section 3.07, the Trustee shall select
the Notes to be redeemed among the Holders of the Notes in compliance with the
requirements of the principal national securities exchange, if any, on which the
Notes are listed or, if the Notes are not so listed, on a pro rata basis, by lot
or by such other method as the Trustee shall deem fair and appropriate; provided
that no Notes of $1,000 principal amount or less shall be redeemed in part. In
the event of partial redemption by lot, the Trustee shall make the selection not
less than 30 nor more than 60 days prior to the redemption date from the
outstanding Notes not previously called for redemption. Notices of redemption
may not be conditional.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the portion of the principal amount thereof to be redeemed. Notes
and portions of Notes selected to be redeemed shall be in principal amounts of
$1,000 or whole multiples of $1,000; except that if all of the Notes of a Holder
are to be redeemed, the entire outstanding amount of Notes held by such Holder,
even if not a multiple of $1,000, shall be redeemed. Except as provided in the
preceding sentence, provisions of this Indenture that apply to Notes called for
redemption also apply to portions of Notes called for redemption.
Section 3.03 Notice of Redemption
At least 30 days but not more than 60 days before the date upon which
an optional redemption of Notes is to be effected pursuant to Section 3.07, the
Company shall mail or cause to be mailed, by first class mail, a notice of
redemption to each Holder whose Notes are to be redeemed at such Holder's
registered address.
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The notice shall identify the Notes to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price and the accrued and unpaid interest and
Liquidated Damages, if any, per $1,000 of principal;
(3) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption
date, upon surrender of such Note, a new Note or Notes in principal amount
equal to the unredeemed portion will be issued upon cancellation of the
original Note;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(6) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the redemption date and the only remaining right of the Holders of
such Notes is to receive payment of the redemption price upon surrender to
the Paying Agent of the Notes redeemed;
(7) the paragraph of the Notes pursuant to which the Notes called for
redemption are being redeemed; and
(8) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 40 days prior to the
redemption date (unless a shorter period is acceptable to the Trustee), an
Officers' Certificate requesting that the Trustee give such notice and setting
forth the information to be stated in such notice as provided in the preceding
paragraph.
Section 3.04 Effect of Notice of Redemption
Once notice of redemption is mailed, Notes called for redemption
become irrevocably due and payable on the redemption date at the price set forth
in the Note.
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Section 3.05 Deposit of Redemption Price
On or before the redemption date, the Company shall deposit with the
Trustee or with the Paying Agent (other than the Company or any of its
Subsidiaries) money sufficient in same day funds to pay the redemption price of
and accrued interest and Liquidated Damages, if any, on all Notes to be redeemed
on that date. The Trustee or the Paying Agent shall return to the Company any
money deposited with the Trustee or the Paying Agent by the Company in excess of
the amounts necessary to pay the redemption price of, and accrued interest and
Liquidated Damages, if any, on all Notes to be redeemed. If the money is
deposited on the redemption date, such deposit shall be made by 10:00 a.m. New
York City time.
Interest on the Notes to be redeemed will cease to accrue on the
applicable redemption date, whether or not such Notes are presented for payment,
if the Company makes the redemption payment and otherwise complies with the
provisions of the preceding paragraph. If any Note called for redemption shall
not be so paid upon surrender for redemption because of the failure of the
Company to comply with the preceding paragraph, interest will be paid on the
unpaid principal, from the redemption date until such principal is paid, and to
the extent lawful on any interest not paid on such unpaid principal, in each
case at the rate provided in the Notes and in Section 4.01. Section 8.06 shall
apply to any Notes not redeemed within two years from the redemption date. If a
Note is redeemed on or after an interest record date but on or prior to the
related Interest Payment Date, then on such Interest Payment Date any accrued
and unpaid interest and Liquidated Damages, if any, shall be paid to the Person
in whose name such Note was registered at the close of business on such record
date.
Section 3.06 Notes Redeemed in Part
Upon surrender of a Note that is redeemed in part, the Company shall
issue and, upon receipt of an Authentication Order, the Trustee shall
authenticate for the Holder at the expense of the Company a new Note equal in
principal amount to the unredeemed portion of the Note surrendered.
Section 3.07 Optional Redemption
(a) Except as set forth in clause (b) of this Section 3.07, the
Company shall not have the option to redeem any Notes prior to December 1, 2002.
Thereafter, the Notes shall be subject to redemption at any time at the option
of the Company, in whole or in part, at the following redemption prices
(expressed as percentages of principal amount of the Notes) if redeemed during
the twelve-month period commencing December 1 of the years indicated below
(subject to the right of Holders of Notes on an interest record date to receive
interest on the related Interest Payment Date), in each case, together with
accrued and unpaid interest and Liquidated Damages, if any, thereon to the
applicable redemption date:
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Year Percentage
---- ----------
2002 105.188%
2003 103.458%
2004 101.729%
2005 and thereafter 100.000%
(b) Until December 1, 2000, if the Company consummates a Public Equity
Offering of Common Stock for cash, up to 35% of the aggregate principal amount
of the Notes originally outstanding may be redeemed at the option of the Company
within 90 days of such Public Equity Offering, upon not less than 30 days nor
more than 60 days notice to each Holder of Notes to be redeemed, using the net
cash proceeds of such Public Equity Offering, at a redemption price equal to
110.375% of the principal amount of the Notes (subject to the right of Holders
of Notes on an interest record date to receive interest due on the related
Interest Payment Date that is on or prior to such date of redemption), together
with accrued and unpaid interest and Liquidated Damages, if any, thereon to the
date of redemption; provided, however, that at least 65% of the aggregate
principal amount of the Notes originally outstanding remain outstanding
immediately following such redemption.
(c) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Sections 3.01 through 3.06 hereof.
Section 3.08 Special Redemption
If the Company does not consummate a Qualified Tender Offer Purchase
prior to the close of business on December 31, 1997 (the "Special Redemption
Trigger Date"), the Company shall be obligated to redeem all of the outstanding
Notes at a redemption price equal to 101% of the principal amount of the Notes,
together with accrued and unpaid interest thereon to the date of redemption.
Any such redemption shall be effected in accordance with the provisions set
forth below.
On or prior to the date upon which the Notes are to be redeemed
pursuant to this Section 3.08, the Company shall take all action on its part (if
any) required to cause the Escrow Agent to release the Special Redemption
Consideration to the Trustee pursuant to Section 5(c) of the Escrow Agreement.
The date upon which the redemption of Notes pursuant to this Section
3.08 shall be effected shall be a date selected by the Company which is not more
than five Business Days after the Special Redemption Trigger Date. The Company
shall provide the Trustee and the Paying Agent with written notice of the
redemption date no later than the first Business Day immediately following the
Special Redemption Trigger Date.
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On the Business Day immediately following the Special Redemption
Trigger Date, the Company shall mail or cause to be mailed, by first class mail,
a notice of redemption to each Holder of Notes at such Holder's registered
address.
The notice shall identify the Notes to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price and the accrued and unpaid interest per
$1,000 of principal;
(3) the name and address of the Paying Agent;
(4) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(5) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the redemption date and the only remaining right of the Holders of
such Notes is to receive payment of the redemption price upon surrender to
the Paying Agent of the Notes redeemed;
(6) that the Notes are being called for redemption pursuant to this
Section 3.08; and
(7) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the Notes.
Section 3.09 Mandatory Redemption
Except as set forth in Section 3.08, the Company shall have no
mandatory redemption or sinking fund obligations with respect to the Notes.
Nothing contained in this Section 3.09 shall affect the obligations of the
Company to repurchase Notes pursuant to a Change of Control Offer or an Asset
Sale Offer made in accordance with the provisions of Sections 4.06 or 4.07, as
applicable.
ARTICLE 4
COVENANTS
Section 4.01 Payment of Notes
The Company will pay or cause to be paid the principal of, premium, if
any, and interest and Liquidated Damages, if any, on the Notes on the dates and
in the manner provided herein, in the Notes and in the Registration Rights
Agreement. Principal, premium, if any, and
39
interest and Liquidated Damages, if any, shall be considered paid on the date
due if the Paying Agent (other than the Company or a Subsidiary), holds as of
10:00 a.m. (New York City time) on the due date money deposited by the Company
in immediately available funds and designated for and sufficient to pay all
principal, premium, if any, and interest and Liquidated Damages, if any, then
due. The Paying Agent shall return to the Company, no later than two Business
Days following the due date for payment, any money that exceeds such amount of
principal, premium, if any, and interest and Liquidated Damages, if any,
required for payment on the Notes.
The Company will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the applicable
interest rate on the Notes to the extent lawful; it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law to
the extent that such interest is an allowed claim against the debtor under such
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace period) at the same rate to the extent lawful.
Section 4.02 Maintenance of Office or Agency
The Company will maintain in the Borough of Manhattan, The City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee or Registrar) where Notes may be surrendered for registration of
transfer or for exchange and where notices and demands to or upon the Company in
respect of the Notes and this Indenture may be served. The Company shall give
prompt written notice to the Trustee of the location, and any change in the
location, of 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.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided
that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the Borough of Manhattan,
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 of any change in
the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.03.
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Section 4.03 Compliance Certificate
(a) The Company and each Subsidiary Guarantor will deliver to the
Trustee, within 90 days after the end of each fiscal year, an Officer's
Certificate stating that a review of the activities of the Company and its
Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officer with a view to determining whether it has
kept, observed, performed and fulfilled in all respects its obligations under
this Indenture and further stating, as to such Officer signing such certificate,
that to the best of his or her knowledge, the Company and the Restricted
Subsidiaries have kept, observed, performed and fulfilled each and every
covenant contained in this Indenture and no Default or Event of Default has
occurred during such year (or, if such Default or Event of Default shall have
occurred, describing all such Defaults or Events of Default of which he or she
may have knowledge and what action is being taken or proposed to be taken with
respect thereto).
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.17 shall be accompanied by a written
statement of the Company's independent public accountants (who shall be a firm
of established national reputation) that in making the examination necessary for
certification of such financial statements, nothing has come to their attention
that would lead them to believe that the Company has violated any provisions of
Article 4 or Article 5 hereof or, if any such violation has occurred, specifying
the nature and period of existence thereof, it being understood that such
accountants shall not be liable directly or indirectly to any Person for any
failure to obtain knowledge of any such violation. In the event that such
written statement of the Company's independent public accountants cannot be
obtained, the Company shall deliver to the Trustee an Officer's Certificate
certifying that it has used its best efforts to obtain such statement but was
unable to do so.
(c) The Company will, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officer's Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.
Section 4.04 Taxes
The Company will, and will cause each of its Subsidiaries to, pay
prior to delinquency all material taxes, assessments, and governmental levies
except as contested in good faith and by appropriate proceedings.
41
Section 4.05 Stay, Extension and Usury Laws
The Company covenants (to the extent that it may lawfully do so) that
it will not and will not permit any of its Restricted Subsidiaries to at any
time insist upon, plead, or in any manner whatsoever claim or take the benefit
or advantage of, any stay, extension or usury law wherever enacted, now or at
any time hereafter in force, which may affect the covenants or the performance
of this Indenture; and the Company (to the extent it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law has been enacted.
Section 4.06 Offer to Repurchase Upon Change of Control
(a) Upon the occurrence of a Change of Control, each Holder of Notes
shall have the right, pursuant to an irrevocable and unconditional offer by the
Company (the "Change of Control Offer"), to require the Company to repurchase
all or any part of the Notes held by such Holder (provided, that the principal
amount of such Notes must be $1,000 or an integral multiple thereof) on a date
(the "Change of Control Purchase Date") that is no later than 45 Business Days
after the occurrence of such Change of Control, at a cash price equal to 101% of
the principal amount thereof (the "Change of Control Purchase Price"), together
with accrued and unpaid interest and Liquidated Damages, if any, to the Change
of Control Purchase Date, pursuant to the procedures required by this Indenture,
including Section 4.22 and as described in the notice of a Change of Control
Offer.
(b) Notwithstanding anything in this Section 4.06 to the contrary,
prior to the commencement of a Change of Control Offer, but in any event within
30 days following any Change of Control, the Company shall (i) repay in full and
terminate all commitments under Indebtedness under the Senior Credit Facility
and all other Senior Indebtedness the terms of which require repayment upon a
Change of Control or (ii) obtain the requisite consents under the Senior Credit
Facility and all such other Senior Indebtedness to permit the repurchase of the
Notes as provided herein.
(c) Any such Change of Control Offer shall comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of the Notes pursuant to a Change
of Control Offer. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Indenture relating to a Change of
Control, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under such
provisions of this Indenture by virtue thereof.
(d) On or before the Change of Control Purchase Date, the Company
shall (i) accept for payment Notes or portions thereof properly tendered
pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent
(other than the Company or any of its Subsidiaries) cash
42
sufficient to pay the Change of Control Purchase Price (together with accrued
and unpaid interest and Liquidated Damages, if any) of all Notes so tendered and
(iii) deliver to the Trustee Notes so accepted together with an Officers'
Certificate listing the Notes or portions thereof being purchased by the
Company. The Paying Agent promptly will pay the Holders of Notes so accepted an
amount equal to the Change of Control Purchase Price (together with accrued and
unpaid interest and Liquidated Damages, if any), and upon receipt of an
Authentication Order the Trustee promptly will authenticate and deliver (or
cause to be transferred by book entry) to such Holders new Notes equal in
principal amount to any unpurchased portion of the Notes surrendered. Any Notes
not so accepted will be delivered promptly by the Company to the Holder thereof.
The Company publicly will announce the results of the Change of Control Offer on
or as soon as practicable after the Change of Control Purchase Date.
(e) The Company shall not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Indenture applicable to a Change of Control Offer
made by the Company, including any requirement to repay in full any Senior
Indebtedness or obtain the consents of any of the Company's lenders to such
Change of Control Offer, and purchases all Notes validly tendered and not
withdrawn under such Change of Control Offer.
Section 4.07 Limitation on Sale of Assets and Restricted Subsidiary Stock
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, engage in an Asset Sale, unless (i) the Company or such
Restricted Subsidiary, as the case may be, receives consideration at the time of
such Asset Sale at least equal to the Fair Market Value (which, if it exceeds
$1,000,000, shall be determined by the Board of Directors of the Company and set
forth in a Board Resolution delivered to the Trustee) of the assets (including,
if appropriate, Equity Interests) disposed of or issued, as appropriate, and
(ii) at least 75% of the consideration therefor received by the Company or such
Restricted Subsidiary is in the form of cash or Cash Equivalents; provided, that
the 75% limitation referred to above shall not apply to any Asset Sale in which
the cash portion of the consideration received therefor, determined in
accordance with the following sentence, is equal to or greater than what the
after-tax net proceeds would have been had such transaction complied with the
aforementioned 75% limitation. For purposes of this covenant (and not for
purposes of any other provision of the Indenture), the term "cash" shall be
deemed to include (a) any notes or other obligations received by the Company or
such Restricted Subsidiary as consideration as part of such Asset Sale that are
immediately converted by the Company or such Restricted Subsidiary into actual
cash or Cash Equivalents (to the extent of the actual cash or Cash Equivalents
so received), and (b) any liabilities of the Company or such Restricted
Subsidiary (as shown on the most recent balance sheet of the Company or such
Restricted Subsidiary) that (1) are assumed by the transferee of the assets
which are the subject of such Asset Sale as consideration therefor in a
transaction the result of which is that the Company and all of its Subsidiaries
are released from all liability for such assumed liability, (2) are not by their
terms subordinated in right
43
of payment to the Notes, (3) are not owed to the Company or any Subsidiary of
the Company, and (4) constitute short-term liabilities (as determined in
accordance with GAAP).
(b) Within 360 days after the receipt of any Net Proceeds from an
Asset Sale, the Company may apply, directly or indirectly, such Net Proceeds (i)
to repay permanently Senior Indebtedness of the Company or of the Restricted
Subsidiaries, or (ii) to the making of a capital expenditure or the acquisition
of other long-term assets, in each case, in a Related Business. Pending the
final application of any such Net Proceeds, the Company or the Restricted
Subsidiaries, as the case may be, may temporarily reduce Indebtedness under the
Senior Credit Facility or otherwise invest such Net Proceeds in any manner that
is not prohibited by this Indenture. Any Net Proceeds from Asset Sales that are
not applied or invested as provided in the first sentence of this paragraph will
be deemed to constitute "Excess Proceeds." When the aggregate amount of Excess
Proceeds exceeds $10,000,000, the Company shall make an offer to all Holders of
Notes (an "Asset Sale Offer") to purchase the maximum principal amount of Notes
that may be purchased out of the Excess Proceeds, at an offer price in cash in
an amount equal to 100% of the principal amount thereof, plus accrued and unpaid
interest and Liquidated Damages, if any, to the date of purchase, in accordance
with the procedures set forth in this Indenture, including Section 4.22 and as
described in the notice of an Asset Sale Offer. If the aggregate principal
amount of Notes tendered by Holders thereof is less than the amount of Excess
Proceeds, the Company may use any remaining Excess Proceeds for general
corporate purposes. Upon completion of such offer to purchase, the amount of
Excess Proceeds shall be reset at zero.
(c) The Company will not, and will not permit any of its Restricted
Subsidiaries to, transfer, convey, sell, lease or otherwise dispose of any
Capital Stock of any Restricted Subsidiary to any Person (other than the Company
or a Wholly Owned Restricted Subsidiary of the Company), unless (i) such
transfer, conveyance, sale, lease or other disposition is of all of the Capital
Stock of such Restricted Subsidiary owned by the Company and its Restricted
Subsidiaries or is otherwise permitted under Section 4.14 and (ii) such
transaction is conducted in accordance with clauses (a) and (b) above.
(d) The Company will comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes using Excess Proceeds.
Section 4.08 Limitation on Restricted Payments
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, (i) declare or pay any dividend or make
any other payment or distribution on account of the Company's or any Restricted
Subsidiary's Equity Interests (including, without limitation, any payment in
connection with any merger or consolidation) other than dividends or
distributions (A) paid or payable in Equity Interests (other than Disqualified
Stock) of the Company or (B) paid or payable to the Company or any Wholly Owned
Restricted Subsidiary of the Company; (ii) purchase, redeem or otherwise acquire
or retire for value any Equity Interests of the Company
44
or any direct or indirect parent of the Company or other Affiliate of the
Company or any Restricted Subsidiary of the Company (other than any such Equity
Interests owned by the Company or any Wholly Owned Restricted Subsidiary of the
Company); (iii) make any principal payment on, or purchase, redeem, defease or
otherwise acquire or retire for value prior to the scheduled maturity, scheduled
repayment or scheduled sinking fund payment, any Subordinated Indebtedness
(except, if no Default or Event of Default is continuing or would result
therefrom, any such payment, purchase, redemption, defeasance or other
acquisition or retirement for value made (A) out of Excess Proceeds available
for general corporate purposes if (1) such payment or other action is required
by the indenture or other agreement or instrument pursuant to which such
Subordinated Indebtedness was issued and (2) the Company has purchased all Notes
properly tendered pursuant to an Asset Sale Offer required under Section 4.07 or
(B) upon the occurrence of a Change of Control if (1) such payment or other
action is required by the indenture or other agreement or instrument pursuant to
which such Subordinated Indebtedness was issued and (2) the Company has
purchased all Notes properly tendered pursuant to the Change of Control Offer
resulting from such Change of Control); or (iv) make any Restricted Investment
(all such payments and other actions set forth in clauses (i) through (iv) above
being collectively referred to as "Restricted Payments"), unless, at the time of
and after giving effect to such Restricted Payment:
(i) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(ii) the Company would, at the time of such Restricted Payment
and after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable Reference Period, have been
permitted to Incur at least $1.00 of additional Indebtedness pursuant to
the Debt Incurrence Ratio test set forth in the first paragraph of Section
4.09; and
(iii) such Restricted Payment, together with the aggregate amount
of all other Restricted Payments declared or made by the Company and its
Restricted Subsidiaries after the Issue Date shall not exceed, at the date
of determination, the sum of (1) 50% of aggregate Consolidated Net Income
of the Company 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 for such
period is a deficit, less 100% of such deficit), plus (2) 100% of the
aggregate net cash proceeds received by the Company from the issue or sale
after the Issue Date of Equity Interests of the Company or of Disqualified
Stock or debt securities of the Company that have been converted into such
Equity Interests (other than Equity Interests (or Disqualified Stock or
convertible debt securities) sold to a Subsidiary of the Company and other
than Disqualified Stock or debt securities that have been converted into
Disqualified Stock), plus (3) the aggregate net cash proceeds received by
the Company as capital contributions to the Company (other than from a
Subsidiary of the Company) after the Issue Date, plus (4) the amount equal
to the net reduction in Restricted Investments made after the Issue Date
resulting from a sale or
45
liquidation of a Restricted Investment for cash, to the extent such amount
is not included in the Consolidated Net Income of the Company, not to
exceed the lesser of (A) the Net Proceeds from such sale or liquidation to
the extent received by the Company or any Restricted Subsidiary, and (B)
the initial amount of such Restricted Investment, plus (5) in the event an
Unrestricted Subsidiary is redesignated as a Restricted Subsidiary, an
amount equal to the net reduction in Restricted Investments made in
Unrestricted Subsidiaries, not to exceed the lesser of (A) the Fair Market
Value of such Unrestricted Subsidiary, and (B) the amount of Restricted
Investments which were made in such Unrestricted Subsidiary.
(b) The foregoing provisions will not prohibit the following
Restricted Payments:
(i) the payment of any dividend or other distribution within 60
days after the date of declaration thereof, if at said date of declaration
such payment would have complied with the provisions of this Indenture;
(ii) the redemption, repurchase, retirement or other acquisition
of any Equity Interests of the Company (other than Disqualified Stock) in
exchange for, or out of the proceeds of, the substantially concurrent sale
(other than to a Subsidiary of the Company) of other Equity Interests of
the Company (other than Disqualified Stock); provided that the amount of
any such net cash proceeds that are utilized for any such redemption,
repurchase, retirement or other acquisition shall be excluded from clause
(iii) of the preceding subsection 4.08(a) (both for purposes of determining
the aggregate amount of Restricted Payments made and for purposes of
determining the aggregate amount of Restricted Payments permitted);
(iii) the payment, purchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated Indebtedness with the
net cash proceeds from a substantially concurrent Incurrence of Permitted
Refinancing Indebtedness or the substantially concurrent sale (in each case
other than to a Subsidiary of the Company) of Equity Interests of the
Company (other than Disqualified Stock); provided that the amount of any
such net cash proceeds that are utilized for any such payment, purchase,
redemption, defeasance or other acquisition or retirement shall be excluded
from clause (iii) of the preceding subsection 4.08(a) (both for purposes of
determining the aggregate amount of Restricted Payments made and for
purposes of determining the aggregate amount of Restricted Payments
permitted);
(iv) so long as no Default or Event of Default is continuing,
the repurchase of Equity Interests of the Company from former employees of
the Company or any Restricted Subsidiary thereof (or the estates, heirs or
legatees of such former employees) for consideration which does not exceed
$500,000 in the aggregate in any fiscal year;
(v) any Restricted Investment made with the net cash proceeds
from a substantially concurrent sale (other than to a Subsidiary of the
Company) of Equity Interests of the Company (other than Disqualified
Stock); and
46
(vi) so long as no Default or Event of Default is continuing,
any Restricted Investment which, together with all other Restricted
Investments outstanding made pursuant to this clause (vi) does not exceed
$5,000,000. Except to the extent specifically noted above, Restricted
Payments made pursuant to this Section 4.08(b) shall be included in
calculating the amount of Restricted Payments made after the Issue Date.
(c) The amount of all Restricted Payments not made in cash shall be
the Fair Market Value (which, if it exceeds $1,000,000, shall be determined by
the Board of Directors of the Company and set forth in a Board Resolution
delivered to the Trustee) on the date of the Restricted Payment of the asset(s)
proposed to be transferred by the Company or any Restricted Subsidiary, as the
case may be, pursuant to the Restricted Payment. Not later than the date of
making any Restricted Payment, the Company shall deliver to the Trustee an
Officers' Certificate stating that such Restricted Payments were permitted and
setting forth the basis upon which the calculations required by this Section
4.08 were computed, which calculations may be based upon the Company's latest
available financial statements.
Section 4.09 Limitation on Incurrence of Indebtedness
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, Incur any Indebtedness (including
Acquired Indebtedness), except for Permitted Indebtedness; provided, however,
that the Company and its Restricted Subsidiaries may Incur Indebtedness
(including Acquired Indebtedness) if, at the time of Incurrence of such
Indebtedness, after giving pro forma effect to such Incurrence as of such date
and to the use of proceeds therefrom (including the application or the use of
the net proceeds therefrom to repay Indebtedness or make any Restricted Payment)
(i) no Default or Event of Default shall have occurred and be continuing at the
time of, or would occur after giving effect on a pro forma basis to, such
Incurrence of Indebtedness and (ii) on the date of such Incurrence (the
"Incurrence Date"), the Consolidated Coverage Ratio of the Company for the
Reference Period immediately preceding the Incurrence Date, after giving effect
on a pro forma basis to such Incurrence of Indebtedness and, to the extent set
forth in the definition of Consolidated Coverage Ratio, the use of proceeds
thereof, would exceed 2.25 to 1 if such date is on or prior to the date which is
the second anniversary of the Issue Date, or 2.50 to 1 for any date thereafter
(the "Debt Incurrence Ratio").
(b) "Permitted Indebtedness" means any and all of the following:
(i) (A) Indebtedness of the Company and its Restricted
Subsidiaries pursuant to the Senior Credit Facility (including all
Guarantees thereof) up to an amount at any time Incurred equal to the
greater of (1) $35,000,000, less the aggregate amount of all Net Proceeds
of Asset Sales applied to permanently repay any such Indebtedness or, in
the case of any such revolving Indebtedness, permanently reduce the
commitments therefor, in each case pursuant to Section 4.07 and (2) 75% of
Eligible Receivables and (B) Indebtedness of the Company and its Restricted
Subsidiaries pursuant to the Senior Credit Facility (including all
Guarantees thereof) in an aggregate amount not to exceed $90,000,000
(which,
47
in the event that and for so long as less than 100% but more than 50% (on a
fully diluted basis) of the Shelter Common Stock is acquired in the Tender
Offer, shall be reduced by an amount equal to the cash consideration
necessary to purchase the amount of Shelter Common Stock not so acquired
until such Shelter Common Stock is so acquired or until the merger is
consummated with Kevco owning 100% of Shelter), less the aggregate amount
of all repayments thereof;
(ii) Indebtedness represented by the Notes, the Indenture and
the Subsidiary Guarantees;
(iii) intercompany Indebtedness between or among the Company and
any of its Restricted Subsidiaries; provided that (A) if the Company is an
obligor on such Indebtedness, such Indebtedness is expressly subordinate to
the payment in full of all Obligations with respect to the Notes and (B)
any subsequent issuance or transfer of Equity Interests that results in any
such Indebtedness being held by a Person other than the Company or a
Restricted Subsidiary of the Company, or any sale or other transfer of any
such Indebtedness to a Person that is not either the Company or a
Restricted Subsidiary of the Company, shall be deemed to constitute a new
Incurrence of such Indebtedness by the Company or such Restricted
Subsidiary, as the case may be;
(iv) Permitted Refinancing Indebtedness Incurred in exchange
for, or the net proceeds of which are used to extend, refinance, renew,
replace, defease or refund, (A) Indebtedness (other than Permitted
Indebtedness) that was Incurred in compliance with the Indenture, (B)
Indebtedness referred to in clauses (b)(i) or (b)(ii) of this Section 4.09
or (C) Existing Indebtedness, other than Existing Indebtedness, if any,
related to the Indebtedness refinanced by the Senior Credit Facility;
(v) Indebtedness of a Restricted Subsidiary of the Company
constituting a Guarantee of Indebtedness of the Company or a Restricted
Subsidiary which Indebtedness was Incurred pursuant to this Section 4.09(b)
or the Debt Incurrence Ratio test set forth in Section 4.09(a);
(vi) the Incurrence by the Company or any Restricted Subsidiary
of Hedging Obligations of the following types: (A) Interest Rate Hedges
with respect to any Indebtedness of such Person that is permitted by the
terms of the Indenture to be outstanding, the notional principal amount of
which does not exceed the principal amount of the Indebtedness to which
such Interest Rate Hedge relates, and (B) Currency Hedges that do not
increase the outstanding loss potential or liabilities other than as a
result of fluctuations in foreign currency exchange rates;
(vii) the Incurrence by the Company or any Restricted Subsidiary,
if no Default or Event of Default shall have occurred and be continuing, of
Indebtedness (in addition to Indebtedness permitted by any other clause of
this paragraph) in an aggregate
48
principal amount at any time outstanding not to exceed $25,000,000 (which
amount may, but need not, be incurred under the Senior Credit Facility);
and
(viii) Existing Indebtedness.
(c) Indebtedness of any Person which is outstanding at the time such
Person becomes a Restricted Subsidiary of the Company (including upon
designation of any Unrestricted Subsidiary or other Person as a Restricted
Subsidiary) or is merged with or into or consolidated with the Company or a
Restricted Subsidiary of the Company shall be deemed to have been Incurred at
the time such Person becomes such a Restricted Subsidiary of the Company or is
merged with or into or consolidated with the Company or a Restricted Subsidiary,
as applicable.
Section 4.10 Limitation on Liens
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, affirm, assume or suffer
to exist any Liens of any kind, other than Liens securing Senior Indebtedness
and Permitted Liens, against or upon any assets or property now owned or
hereafter acquired or any income or profits therefrom or assign or convey any
right to receive income therefrom, unless (i) in the case of Liens securing
Subordinated Indebtedness, the Notes are secured by a valid, perfected Lien on
such assets, property or proceeds that is senior in priority to such Liens, (ii)
in the case of Liens securing obligations subordinate to a Subsidiary Guarantee,
such Subsidiary Guarantee is secured by a valid, perfected Lien on such assets,
property or proceeds that is senior in priority to such Liens, and (iii) in all
other cases, the Notes (and, if such Lien secures obligations of a Restricted
Subsidiary, a Subsidiary Guarantee of such Restricted Subsidiary) are equally
and ratably secured.
Section 4.11 Limitation on Dividends and Other Payment Restrictions Affecting
Restricted Subsidiaries
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, assume or otherwise cause or
suffer to exist or become effective any consensual encumbrance or restriction on
the ability of any such Restricted Subsidiary to (i) (a) pay dividends or make
any other distributions to the Company or any of its Restricted Subsidiaries on
its Capital Stock or with respect to any other interest or participation in, or
measured by, its profits or (b) pay any Indebtedness owed to the Company or any
of its Restricted Subsidiaries, (ii) make loans or advances to the Company or
any of its Restricted Subsidiaries, (iii) transfer any of its properties to the
Company or any of its Restricted Subsidiaries, (iv) grant any Liens in favor of
the Holders of the Notes and the Trustee or (v) guarantee the Notes or any
renewals or refinancings thereof, except for such encumbrances or restrictions
existing under or by reason of (A) Existing Indebtedness, (B) the Senior Credit
Facility, (C) applicable law, (D) any instrument governing Indebtedness or
Capital Stock of a Person acquired by the Company or any of its Restricted
Subsidiaries as in effect at the time of such acquisition (except to the extent
such Indebtedness was Incurred in connection with or in contemplation of such
acquisition), which encumbrance or
49
restriction is not applicable to any Person, or the properties of any Person,
other than the Person, or the property of the Person, so acquired, provided that
in the case of Indebtedness, such Indebtedness was permitted by the terms of
this Indenture to be Incurred, (E) customary non-assignment provisions in
leases, licenses, sales agreements or other contracts (but excluding contracts
related to the extension of credit) entered into in the ordinary course of
business and consistent with past practices, (F) restrictions imposed pursuant
to a binding agreement for the sale or disposition of all or substantially all
of the Equity Interests or assets of any Restricted Subsidiary, provided such
restrictions apply solely to the Equity Interests or assets being sold, (G)
restrictions imposed by Permitted Liens on the transfer of the assets that are
subject to such Liens, (H) Permitted Refinancing Indebtedness Incurred to
refinance Existing Indebtedness or Indebtedness of the type described in clause
(D) above, provided that the restrictions contained in the agreements governing
such Permitted Refinancing Indebtedness are no more restrictive, as a whole,
than those contained in the agreements governing the Indebtedness being
refinanced, and (I) the terms of Purchase Money Indebtedness, but only to the
extent such Purchase Money Indebtedness encumbers or restricts the property
acquired with such Purchase Money Indebtedness.
Section 4.12 Limitation on Layering Indebtedness
Notwithstanding the provisions of Section 4.09 hereof, the Company
will not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, Incur any Indebtedness (other than the Notes) that is subordinate in
right of payment to any other Indebtedness of the Company or a Restricted
Subsidiary unless, by its terms, such Indebtedness is subordinate in right of
payment to, or ranks pari passu with, the Notes or the Subsidiary Guarantees, as
applicable.
Section 4.13 Designation of Restricted and Unrestricted Subsidiaries
(a) The Board of Directors may designate any Restricted Subsidiary to
be an Unrestricted Subsidiary if (i) such designation would not cause a Default
or Event of Default, (ii) at the time of and after giving effect to such
designation, the Company could incur $1.00 of additional Indebtedness pursuant
to the Debt Incurrence Ratio test set forth in Section 4.09(a) and (iii) each of
the other requirements of the definition of the term "Unrestricted Subsidiary"
are satisfied. For purposes of making such determination, all outstanding
Investments by the Company and its Restricted Subsidiaries (except to the extent
repaid in cash) in the Subsidiary so designated will be deemed to be Restricted
Payments at the time of such designation and will reduce the amount available
for Restricted Payments under Section 4.08(a). All such outstanding Investments
will be deemed to constitute Restricted Payments in an amount equal to the
greater of (i) the net book value of such Investments at the time of such
designation and (ii) the Fair Market Value of such Investments at the time of
such designation. Such designation will only be permitted if such Restricted
Payment would be permitted at such time and if such Subsidiary to be designated
as an Unrestricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary. Upon being so designated as an Unrestricted Subsidiary, any
Subsidiary Guarantee that was previously executed by such Unrestricted
Subsidiary shall be deemed terminated. Any Subsidiary not designated as an
50
Unrestricted Subsidiary pursuant to and in accordance with the terms and
conditions of this Indenture shall be a Restricted Subsidiary and shall promptly
comply with the provisions of Section 10.09.
(b) Any such designation of an Unrestricted Subsidiary by the Board of
Directors of the Company shall be evidenced to the Trustee by filing with the
Trustee a Board Resolution giving effect to such designation and an Officers'
Certificate certifying that (i) such designation complied with the foregoing
conditions, (ii) such designation was permitted by Section 4.08, (iii)
immediately after giving effect to such designation, the Company could Incur at
least $1.00 of additional Indebtedness pursuant to the Debt Incurrence Ratio
test set forth in Section 4.09(a) and (iv) no Default or Event of Default would
be in existence immediately following such designation. If, at any time, any
Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness, Liens or
agreements of such Subsidiary shall be deemed to be Incurred or created by a
Restricted Subsidiary as of such date (and, if such Indebtedness, Liens or
agreements are not permitted to be Incurred or created as of such date under the
covenants of this Indenture, the Company shall be in default of such covenants).
(c) The Board of Directors of the Company may at any time designate
any Unrestricted Subsidiary to be a Restricted Subsidiary, provided that such
designation shall be deemed to be an Incurrence of Indebtedness and a creation
of Liens and agreements by a Restricted Subsidiary of the Company of any
outstanding Indebtedness, Liens or agreements of such Unrestricted Subsidiary
and such designation shall only be permitted if (i) such Indebtedness, Liens and
agreements are permitted under the covenants of this Indenture, and (ii) no
Default or Event of Default would be in existence immediately following such
designation. Upon being so designated as a Restricted Subsidiary, such
Restricted Subsidiary shall comply with the provisions of Section 10.09.
(d) Any such designation of a Restricted Subsidiary by the Board of
Directors of the Company pursuant to Section 4.13(c) shall be evidenced to the
Trustee by filing with the Trustee a Board Resolution giving effect to such
designation and an Officer's Certificate certifying that (A) such designation
complied with the foregoing conditions and (B) no Default or Event of Default
would be in existence immediately following such designation.
Section 4.14 Limitation on Issuance, Sale and Ownership of Capital Stock of
Restricted Subsidiaries
The Company will not, and will not permit any of its Restricted
Subsidiaries to, (i) sell, assign, transfer, convey or otherwise dispose of, any
Equity Interests of any Restricted Subsidiary, other than to the Company or a
Wholly Owned Restricted Subsidiary, (ii) permit any Restricted Subsidiary to
issue any Equity Interests (including, without limitation, pursuant to any
merger, consolidation, recapitalization or similar transaction) other than to
the Company or a Wholly Owned Restricted Subsidiary or (iii) permit any Person
other than the Company or a Wholly Owned Restricted Subsidiary to own any Equity
Interests of any Restricted Subsidiary, except that (A) the
51
Company or a Restricted Subsidiary may consummate a sale to a Person of all of
the Equity Interests of a Restricted Subsidiary, if such sale is made by the
Company or a Restricted Subsidiary subject to, and in compliance with, Section
4.07, (B) the Company may issue and permit the subsequent ownership by directors
of, directors' qualifying shares, (C) in the event that a Qualified Tender Offer
Purchase results in the acquisition by the Company of less than 100% (on a fully
diluted basis) of the Equity Interests of Shelter, such unacquired Equity
Interests may be owned by other Persons until such unacquired Equity Interests
are so acquired by the Company or a Wholly Owned Restricted Subsidiary of the
Company or until the merger of Shelter with the Company or a Wholly Owned
Restricted Subsidiary is consummated and (D) the Company may permit the Persons
(other than the Company and its Restricted Subsidiaries) who own Equity
Interests in Encore Industries, Inc. to continue to own the number of shares of
Equity Interests owned by such other Persons as of the Issue Date.
Section 4.15 Limitation on Transactions With Affiliates
The Company will not, and will not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any contract, agreement,
understanding, loan, advance or guarantee with, or for the benefit of, any
Affiliate of the Company (other than the Company or a Restricted Subsidiary), in
one transaction or a series of transactions (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 would have been obtained in a comparable transaction with an unrelated
Person and (ii) the Company delivers to the Trustee (a) with respect to any
Affiliate Transaction or series of related Affiliate Transactions after the
Issue Date involving aggregate consideration in excess of $1,000,000, a
resolution described in an Officers' Certificate, certifying that such Affiliate
Transaction complies with clause (i) above and such Affiliate Transaction has
been approved by a majority of the disinterested members of the Board of
Directors of the Company and (b) with respect to any Affiliate Transaction or
series of related Affiliate Transactions after the Issue Date involving
aggregate consideration in excess of $5,000,000, an opinion as to the fairness
to the Company of such Affiliate Transaction from a financial point of view
issued by an independent nationally recognized investment banking firm or
appraisal firm experienced in the appraisal or similar review of similar types
of transactions; provided that the following types of transactions shall not
constitute Affiliate Transactions: (1) any transaction with an officer or
director of the Company or any Restricted Subsidiary in connection with such
individual's compensation (including directors' fees), employee benefits,
severance arrangements or indemnification (to the extent consistent with
applicable law and the charter and bylaws of the Company or such Restricted
Subsidiary), in each case entered into by the Company or any of its Restricted
Subsidiaries in the ordinary course of business, (2) transactions between or
among the Company and its Restricted Subsidiaries, (3) Restricted Payments that
are permitted by the provisions of Section 4.08; (4) sales of Capital Stock of
the Company made at
52
prevailing market rates; (5) transactions or agreements existing as of the Issue
Date; and (6) loans to officers, directors and employees of the Company or its
Restricted Subsidiaries made in the ordinary course of business and in
furtherance of the Company's business in an aggregate amount not to exceed
$1,000,000 at any one time outstanding.
Section 4.16 Sale and Leaseback Transactions
The Company will not, and will not permit any of its Restricted
Subsidiaries to, enter into any sale and leaseback transaction; provided that
the Company and any Restricted Subsidiary may enter into a sale and leaseback
transaction if (a) the Company or such Restricted Subsidiary could have (i)
Incurred Indebtedness in an amount equal to the Attributable Debt relating to
such sale and leaseback transaction pursuant to the Debt Incurrence Ratio test
set forth in Section 4.09(a) and (ii) incurred a Lien to secure such
Indebtedness pursuant to Section 4.10, (b) the gross cash proceeds of such sale
and leaseback transaction are at least equal to the Fair Market Value (as
determined in good faith by the Board of Directors and set forth in an Officers'
Certificate delivered to the Trustee) of the property that is the subject of
such sale and leaseback transaction and (c) the transfer of assets in such sale
and leaseback transaction is permitted by, and the proceeds of such sale and
leaseback transaction are applied in compliance with, Section 4.07.
Section 4.17 Reports
(a) Whether or not required by the rules and regulations of the
Commission, so long as any Notes are outstanding, the Company will furnish to
the Trustee and, to each Holder of Notes and to prospective purchasers of Notes
identified to the Company by an Initial Purchaser, within 15 days after it is or
would have been (if it were subject to such reporting obligations) required to
file such with the Commission, (i) all quarterly and annual financial
information that would be required to be contained in a filing with the
Commission on Forms 10-Q and 10-K filed with the Commission if the Company were
required to file such Forms, including a "Management's Discussion and Analysis
of Financial Condition and Results of Operations" that describes the financial
condition and results of operations of the Company and its Subsidiaries and,
with respect to the annual information only, a report thereon by the Company's
certified independent auditors and (ii) all current reports that would be
required to be filed with the Commission on Form 8-K if the Company were
required to file such reports. In addition, whether or not required by the
rules and regulations of the Commission, the Company will file a copy of all
such information and reports with the Commission for public availability (unless
the Commission will not accept such a filing) and make such information
available to securities analysts and prospective investors upon request.
(b) In addition, the Company has agreed that, for so long as any
Transfer Restricted Securities remain outstanding, the Company will furnish to
Holders of Notes and to prospective purchasers designated by such Holders, upon
their request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act.
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(c) The financial information to be distributed to Holders of Notes
will be filed with the Trustee and mailed to Holders of Notes within 15 days
after it is or would have been (if it were subject to such reporting
obligations) required to file such with the Commission, at their addresses
appearing in the register of the Notes maintained by the Registrar.
(d) The Company will provide the Trustee with a sufficient number of
copies of all reports and other documents and information and, if required by
the Company, the Trustee will deliver such reports to Holders of Notes under
this Section 4.17.
Section 4.18 Limitation on Lines of Business
Neither the Company nor any of its Restricted Subsidiaries will
directly or indirectly engage in any line or lines of business activity other
than a Related Business.
Section 4.19 Payments for Consent
The Company will not and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Holder of
any Notes for or as an inducement or any consent, waiver or amendment of any of
the terms or provisions of the Indenture or the Notes or the Subsidiary
Guarantees, unless such consideration is offered to be paid or agreed to be paid
to all Holders of the Notes that consent, waive or agree to amend in the time
frame set forth in the solicitation documents relating to such consent, waiver
or agreement.
Section 4.20 Limitation on Status as Investment Company
The Company will not and will not permit any of its Restricted
Subsidiaries to be required to register as an "investment company" (as that term
is defined in the Investment Company Act of 1940, as amended), or from otherwise
becoming subject to regulation under the Investment Company Act.
Section 4.21 Escrow of Proceeds of Notes on Issue Date
On the Issue Date, pursuant to the Escrow Agreement, the Company will
deposit with the Escrow Agent, the entire purchase price payable by the Initial
Purchasers to the Company in respect of the issuance and sale of the Notes
pursuant to the Purchase Agreement (the "Net Offering Proceeds"), together with
an additional amount in cash such that the total amounts held by the Escrow
Agent (the "Escrowed Amounts") will equal 101% of the aggregate principal amount
of the Notes originally outstanding, plus the amount that will accrue as
interest on the Notes from the Issue Date to December 31, 1997 (the "Special
Redemption Trigger Date"). The Escrow Agent will hold the Escrowed Amounts and
release such amounts to the Company or the Trustee in accordance with the terms
of the Escrow Agreement. The Trustee is authorized and directed to execute and
deliver the Escrow Agreement and to perform its duties and obligations
thereunder.
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Section 4.22 Repurchase Offers For Change of Control and Asset Sales
In the event that the Company shall be required to commence an offer
to repurchase Notes from Holders of Notes (a "Repurchase Offer") pursuant to a
Change of Control Offer under Section 4.06 or an Asset Sale Offer under Section
4.07, the Company shall follow the procedures specified below. The Company
shall provide the Trustee and the Paying Agent with written notice of the
Repurchase Offer at least five Business Days before the commencement of any such
Repurchase Offer.
A Repurchase Offer shall commence no later than 20 Business Days after
a Change of Control or the date that Excess Proceeds exceed an amount equal to
$10,000,000 (the "Excess Proceeds Trigger Date"), as the case may be, and remain
open for a period of 20 Business Days following its commencement and no longer,
except to the extent that a longer period is required by applicable law (the
"Offering Period"). No later than five Business Days after the termination of
the Offer Period (the "Purchase Date"), the Company shall purchase the principal
amount of Notes required to be purchased pursuant to Section 4.06, in the case
of a Change of Control Offer, or Section 4.07, in the case of an Asset Sale
Offer (the "Offer Amount") or, if less than the Offer Amount has been tendered,
all Notes tendered in response to the Repurchase Offer. Payment for any Notes
so purchased shall be made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related Interest Payment Date, any accrued and unpaid interest and
Liquidated Damages, if any, shall be paid on such Interest Payment Date to the
Person in whose name a Note is registered at the close of business on such
interest record date and no additional interest or Liquidated Damages, if any,
shall be payable to Holders of Notes who tender Notes pursuant to the Repurchase
Offer.
Upon the commencement of a Repurchase Offer, the Company shall send,
by first class mail, a notice of such Repurchase Offer to each Holder of Notes
(which to the extent consistent with this Indenture) shall govern the terms of
the Repurchase Offer. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to such Repurchase
Offer. The Repurchase Offer shall be made to all Holders of Notes. The notice
will give a brief description of the events resulting in the Change of Control
or which gave rise to the Asset Sale Offer, as the case may be, and shall state:
(a) that the Repurchase Offer is being made pursuant to this
Section 4.22 and Section 4.06 or 4.07, as the case may be, and the length
of time the Repurchase Offer shall remain open;
(b) the redemption price (including the amount of accrued but
unpaid interest and Liquidated Damages, if any) and the Purchase Date;
(c) that any Note, or portion thereof, not tendered or accepted
for payment shall continue to accrue interest;
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(d) that, unless the Company defaults in making such redemption
payment any Note, or portion thereof, accepted for payment pursuant to the
Repurchase Offer shall cease to accrue interest and Liquidated Damages, if
any, after the Purchase Date and the only remaining right of Holders of
such Notes is to receive payment of the redemption price upon surrender to
the Paying Agent of the Notes redeemed;
(e) that Holders electing to have a Note, or portion thereof,
purchased pursuant to a Repurchase Offer will be required to surrender the
Note, with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Note, duly completed, or to transfer by book-entry transfer,
to the Paying Agent (which may not for purposes of this Section 4.22 be the
Company or a Subsidiary) at the address specified in the notice not later
than the close of business on the last day of the Offering Period;
(f) that Holders shall be entitled to withdraw their election
if the Paying Agent receives, prior to the expiration of the Offer Period,
a facsimile transmission or letter setting forth the name of the Holder,
the principal amount of the Notes the Holder is withdrawing and a statement
containing a facsimile signature and stating that such Holder is
withdrawing its election to have such Notes purchased;
(g) that, if the aggregate principal amount of Notes
surrendered by Holders exceeds the redemption price, the Company shall
select the Notes to be purchased on a pro rata basis (with such adjustments
as may be deemed appropriate by the Company so that only Notes in
denominations of $1,000, or integral multiples thereof, shall be
purchased); and
(h) that Holders whose Notes were purchased only in part shall
be issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered (or transferred by book-entry transfer).
On or before 10:00 a.m. (New York City time) on each Purchase Date,
the Company shall irrevocably deposit with the Trustee or Paying Agent (other
than the Company or any of its Subsidiaries) in immediately available funds the
aggregate purchase price with respect to a principal amount of Notes equal to
the Offer Amount, together with accrued and unpaid interest and Liquidated
Damages, if any, thereon, to be held for payment in accordance with the terms of
this Section 4.22. On the Purchase Date, the Company shall, to the extent
lawful, (i) accept for payment, on a pro rata basis to the extent necessary, the
Offer Amount of Notes or portions thereof tendered pursuant to the Repurchase
Offer, or if less than the Offer Amount has been tendered, all Notes tendered,
(ii) deliver or cause the Paying Agent or Depositary, as the case may be, to
deliver to the Trustee the Notes so accepted and (iii) deliver to the Trustee an
Officer's Certificate stating that such Notes or portions thereof were accepted
for payment by the Company in accordance with the terms of this Section 4.22.
The Company, the Depositary or the Paying Agent, as the case may be, shall mail
or deliver to each tendering Holder on the Purchase Date an amount equal to the
purchase price of the Notes tendered by such Holder and accepted by the Company
for purchase, plus any accrued
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and unpaid interest and Liquidated Damages, if any, thereon (subject to the
rights of Holders of Notes on interest record dates to receive interest on the
related Interest Payment Date), and the Company shall promptly issue a new Note,
and upon receipt of a written order of the Company signed by two Officers, the
Trustee shall authenticate and mail or deliver such new Note, to such Holder
equal to the principal amount of any unpurchased portion of such Holder's Notes
surrendered. Any Note not so accepted shall be promptly mailed or delivered by
the Company to the Holder thereof. The Company shall publicly announce in a
newspaper of general circulation or in a press release provided to a nationally
recognized financial wire service the results of the Repurchase Offer on the
Purchase Date.
Other than as specifically provided in this Section 4.22, any purchase
pursuant to this Section 4.22 shall be made pursuant to the provisions of
Sections 3.01, 3.02, 3.05 and 3.06.
ARTICLE 5
SUCCESSORS
Section 5.01 Limitations on Merger, Consolidation or Sale of Substantially All
Assets
The Company may not consolidate or merge with or into (whether or not
the Company is the surviving entity), or sell, assign, transfer, lease, convey
or otherwise dispose of all or substantially all of its properties or assets in
one or more related transactions to, another Person, unless (i) the Company is
the surviving entity, or the Person formed by or surviving any such
consolidation or merger (if other than the Company) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made is a corporation organized or existing under the laws of the United States,
any state thereof or the District of Columbia; (ii) the Person formed by or
surviving any such consolidation or merger (if other than the Company) or the
Person to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made assumes all the obligations of the Company
under the Notes and the Indenture pursuant to a supplemental indenture in a form
reasonably satisfactory to the Trustee; (iii) immediately after giving effect to
such transaction, no Default or Event of Default exists or would exist; (iv)
except in the case of a merger of the Company with or into a Wholly Owned
Restricted Subsidiary of the Company, the Company or the Person formed by or
surviving any such consolidation or merger (if other than the Company) or to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made (A) will (treating any Indebtedness not previously an
obligation of the Company or any of its Restricted Subsidiaries as a result of
such transaction as having been Incurred at the time of such transaction) have
Consolidated Net Worth immediately after the transaction equal to or greater
than the Consolidated Net Worth of the Company immediately preceding the
transaction and (B) will, at the time of such transaction and after giving pro
forma effect thereto as if such transaction had occurred at the beginning of the
applicable Reference Period, be permitted to Incur at least $1.00 of additional
Indebtedness pursuant to the Debt Incurrence Ratio test set forth in Section
4.09(a); and (v) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger or transfer and
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such supplemental indenture (if any) comply with this Indenture. For purposes of
the foregoing, the transfer (by lease, assignment, sale or otherwise, in a
single transaction or series of transactions) of all or substantially all of the
properties or assets of one or more of the Restricted Subsidiaries of the
Company, the Capital Stock of which constitutes all or substantially all of the
properties and assets of the Company, shall be deemed to be the transfer of all
or substantially all of the properties and assets of the Company.
Section 5.02 Successor Corporation Substituted
Upon any consolidation or merger, or any sale, lease, conveyance or
other disposition of all or substantially all of the assets of the Company, in
accordance with Section 5.01, the successor Person formed by such consolidation
or into or with which the Company is merged or to which such sale, lease,
conveyance or other disposition is made shall succeed to, and be substituted for
(so that from and after the date of such consolidation, merger, sale, lease,
conveyance or other disposition, the provisions of this Indenture referring to
the "Company" shall refer instead to the successor Person and not to the
Company), and may exercise every right and power of the Company under this
Indenture with the same effect as if such successor Person had been named as the
Company herein; provided, that the Company shall not be released or discharged
from the obligation to pay the principal of or interest on the Notes. The
Trustee shall enter into a supplemental indenture to evidence the succession and
substitution of such successor Person.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01 Events of Default
Each of the following constitutes an "Event of Default":
(a) default for 30 days in the payment when due of interest on,
or Liquidated Damages with respect to, the Notes (whether or not prohibited
by Article 11 hereof);
(b) default in payment when due of the principal of or premium,
if any, on the Notes (whether or not prohibited by Article 11 hereof);
(c) failure by the Company to comply with any of the provisions
of Sections 3.08, 4.06, 4.07, 4.21, 5.01 or 5.02 or any statement made in
the Qualified Tender Offer Purchase Release Certificate or the Acceptance
Confirmation (as such terms are defined in the Escrow Agreement) is untrue;
(d) failure by the Company for 30 days after written notice by
the Trustee to the Company or by Holders of at least 25% in principal
amount of the then outstanding Notes to the Company and the Trustee to
comply with any other covenant or agreement (except as provided in clauses
(a), (b) and (c) above) in this Indenture or the Notes;
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(e) except as permitted by this Indenture, any Subsidiary
Guarantee shall be held in any judicial proceeding to be unenforceable or
invalid or shall cease for any reason to be in full force and effect or any
Subsidiary Guarantor, or any Person acting on behalf of any Subsidiary
Guarantor, shall deny or disaffirm its obligations under its Subsidiary
Guarantee;
(f) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness of the Company or any Restricted Subsidiary (or the payment of
which is Guaranteed by the Company or any Restricted Subsidiary) whether
such Indebtedness or Guarantee now exists, or is created after the Issue
Date, which default (i) is caused by a failure to pay principal when due at
final stated maturity (a "Payment Default") or (ii) results in the
acceleration of such Indebtedness prior to its express maturity and, in
each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been
a Payment Default or the maturity of which has been so accelerated,
aggregates $10,000,000 or more;
(g) failure by the Company or any Restricted Subsidiary to pay
final judgments aggregating in excess of $10,000,000, which judgments are
not paid, discharged or stayed for a period of 60 days and are not covered
by insurance;
(h) the Company or any Restricted Subsidiary pursuant to or
within the meaning of any Bankruptcy Law (i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in an
involuntary case, (iii) consents to the appointment of a Custodian of it or
for all or substantially all of its property, (iv) makes a general
assignment for the benefit of its creditors, or (v) generally is unable to
pay its debts as the same become due; or
(i) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that (i) is for relief against the Company or any
Restricted Subsidiary in an involuntary case, (ii) appoints a Custodian of
the Company or any Restricted Subsidiary or for all or substantially all of
their property, or (iii) orders the liquidation of the Company or any
Restricted Subsidiary, and the order or decree remains unstayed and in
effect for 60 days.
To the extent that the last day of the period referred to in clause
(a) or (d) of the immediately preceding paragraph is not a Business Day, then
the first Business Day following such day shall be deemed to be the last day of
the period referred to in such clauses. Any "day" will be deemed to end as of
11:59 p.m., New York City time.
The term "Custodian" means any receiver, trustee, assignee, liquidator
or similar official under any Bankruptcy Law.
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Section 6.02 Acceleration
If any Event of Default occurs and is continuing (other than an Event
of Default specified in clauses (h) or (i) of Section 6.01), then either the
Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes by notice in writing to the Company (and to the Trustee if
given by Holders of Notes) (an "Acceleration Notice") may declare all
outstanding Notes to be due and payable, and the same (i) shall become
immediately due and payable; or (ii) if there are any amounts outstanding under
the Senior Credit Facility, shall become immediately due and payable upon the
first to occur of an acceleration under the Senior Credit Facility or five
Business Days after receipt by the Company and the representatives of the
holders of the Indebtedness under the Senior Credit Facility of such
Acceleration Notice, but only if such Event of Default is then continuing.
Notwithstanding the foregoing, in the case of an Event of Default specified in
clauses (h) or (i) of Section 6.01, all outstanding Notes will be immediately
due and payable without declaration or other action or notice on the part of the
Trustee or the Holders of Notes. Holders of Notes may not enforce this
Indenture or the Notes, except as provided in this Indenture. Subject to the
provisions of this Indenture, Holders of a majority in principal amount of the
then outstanding Notes may direct the Trustee in its exercise of any trust or
power. In the event of a declaration of acceleration of the Notes because an
Event of Default has occurred and is continuing as a result of the acceleration
of any Indebtedness described in clause (f) of Section 6.01, the declaration of
acceleration of the Notes shall be automatically annulled if the holders of any
such Indebtedness described in clause (f) of Section 6.01 have rescinded the
declaration of acceleration in respect of such Indebtedness within thirty (30)
days of the date of such declaration and the Trustee has received written notice
of such rescission and if (a) the annulment of the acceleration of the Notes
would not conflict with any judgment or decree of a court of competent
jurisdiction, (b) all existing Events of Default, except nonpayment of
principal, premium, or interest or Liquidated Damages that became due solely
because of the acceleration of the Notes, have been cured or waived and (c) all
amounts due to the Trustee under Section 7.07 have been paid.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have had
to pay if the Company then had elected to redeem the Notes pursuant to Section
3.07, an equivalent premium shall also become and be immediately due and payable
to the extent permitted by law upon the acceleration of the Notes. If an Event
of Default occurs prior to December 1, 2002, by reason of any willful action (or
inaction) taken (or not taken) by or on behalf of the Company with the intention
of avoiding the prohibition on redemption of the Notes prior to December 1,
2002, then the premium specified Section 3.07 shall also become immediately due
and payable to the extent permitted by law upon the acceleration of the Notes.
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Section 6.03 Other Remedies
Subject to Section 6.02, if an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy by proceeding at law or
in equity to collect the payment of principal, premium, if any, interest or
Liquidated Damages, if any, on the Notes or to enforce the performance of any
provision of this Indenture, the Notes, the Subsidiary Guarantees or the Escrow
Agreement, including but not limited to notifying the Escrow Agent, pursuant to
Section 5(a) or 5(b) of the Escrow Agreement, of the existence of such Event of
Default and thereby prohibiting the release of any Escrowed Funds (as defined in
the Escrow Agreement) to the Company.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of Notes in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
Section 6.04 Waiver of Past Defaults
Subject to Section 9.02, Holders of a majority in aggregate principal
amount of the then outstanding Notes by notice to the Trustee may, on behalf of
the Holders of all of the Notes, waive an existing Default or Event of Default
and its consequences under this Indenture, except a continuing Default or Event
of Default in the payment of the principal of, premium, if any, interest or
Liquidated Damages, if any, on the Notes which may only be waived with the
consent of each Holder of Notes affected.
Section 6.05 Control by Majority
The Holders of a majority in aggregate principal amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it. However, the Trustee may refuse to follow any direction
that conflicts with law or this Indenture or that the Trustee determines may be
unduly prejudicial to the rights of other Holders, or that may involve the
Trustee in personal liability. The Trustee may take any other action which is
proper which is not inconsistent with any such direction. Notwithstanding any
provision to the contrary in this Indenture, the Trustee shall not be obligated
to take any action with respect to the provisions of the last paragraph of
Section 6.02 hereof unless directed to do so pursuant to this Section 6.05.
Section 6.06 Limitation on Suits
Subject to the provisions of Section 6.07, no Holder of a Note may
pursue any remedy with respect to this Indenture, the Escrow Agreement, the
Subsidiary Guarantees or the Notes (including without limitation the institution
of any proceeding, judicial or otherwise, with respect to the Notes, the Escrow
Agreement, the Subsidiary Guarantees or this Indenture or for the
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appointment of a receiver or trustee for the Company and/or any of its
Restricted Subsidiaries) unless:
(a) the Holder has given to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in aggregate principal amount
of the then outstanding Notes have made a written request to the Trustee to
pursue the remedy;
(c) such Holder or Holders have offered and, if requested, have
provided to the Trustee indemnity reasonably satisfactory to the Trustee
against any loss, liability or expense;
(d) the Trustee has not complied with the request within 60
calendar days after receipt of the request and the offer and, if requested,
the provision of indemnity; and
(e) during such 60-day period, the Holders of a majority in
aggregate principal amount of the then outstanding Notes have not given the
Trustee a direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights
of another Holder or to obtain a preference or priority over another Holder of a
Note.
Section 6.07 Rights of Holders to Receive Payment
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Note to receive payment of principal, premium, if any, interest
and Liquidated Damages, if any, on the Note, on or after the respective due
dates expressed in the Note (including in connection with an offer to purchase),
or to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or adversely affected without the
consent of such Holder.
Section 6.08 Collection Suit by Trustee
If an Event of Default specified in Section 6.01(a), (b) or (c) occurs
and is continuing, the Trustee is authorized to recover judgment in its own name
and as trustee of an express trust against the Company for the whole amount of
principal of, premium, if any, interest, Liquidated Damages, if any, on the
Notes and interest on overdue principal and, to the extent lawful, interest and
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.07.
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Section 6.09 Trustee May File Proofs of Claim
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of Notes allowed in any judicial proceedings relative to the Company (or
any other obligor upon the Notes), its creditors or its property and shall be
entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder of Notes to make such
payments to the Trustee, and in the event that the Trustee shall consent to the
making of such payments directly to the Holders of Notes, to pay to the Trustee
any amount due to it for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel, and any other amounts due
the Trustee under Section 7.07. To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 out of the
estate in any such proceeding, shall be denied for any reason, payment of the
same shall be secured by a Lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other properties which the
Holders of Notes may be entitled to receive in such proceeding whether in
liquidation or under any plan of reorganization or arrangement or otherwise.
Nothing herein contained shall be deemed to authorize the Trustee to authorize
or consent to or accept or adopt on behalf of any Holder of Notes any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder of Notes thereof, or to authorize the Trustee to vote
in respect of the claim of any Holder of Notes in any such proceeding.
Section 6.10 Priorities
If the Trustee collects any money pursuant to this Article 6, it shall
pay out the money in the following order:
First: to the Trustee, its agents and counsel, for amounts due under
Section 7.07, including payment of all compensation, expenses,
disbursements and liabilities incurred, and all advances made, by the
Trustee, its agents and counsel, and the costs and expenses of collection;
Second: subject to Article 11, to Holders of Notes for amounts due
and unpaid on the Notes for principal, premium, if any, interest and
Liquidated Damages, if any, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for principal,
premium, if any, interest, and Liquidated Damages, if any, respectively;
Third: subject to Article 11, without duplication, to Holders of
Notes for any other Obligations owing to the Holders of Notes under this
Indenture, the Notes, the Subsidiary Guarantees or the Escrow Agreement;
and
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Fourth: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
Section 6.11 Undertaking for Costs
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, each party to this Indenture agrees, and each Holder of Notes
by its acceptance of its Notes shall be deemed to have agreed, that any court in
its discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section does not apply to a
suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07, or a
suit by Holders of Notes of more than 10% in principal amount of the then
outstanding Notes.
Section 6.12 Notices to Escrow Agent
If at any time on or prior to the termination of the Escrow Agreement,
the Trustee is notified or becomes aware (i) of any Default or Event of Default
or (ii) that any statement in either of the Qualified Tender Offer Purchase
Release Certificate or the Acceptance Confirmation (as such terms are defined in
the Escrow Agreement) is untrue, then the Trustee shall notify the Escrow Agent
not to release any Escrowed Funds (as defined in the Escrow Agreement) to the
Company as provided in Section 5(a) or 5(b) of the Escrow Agreement.
ARTICLE 7
TRUSTEE
Section 7.01 Duties of Trustee
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise, as a prudent Person would
exercise or use under the circumstances in the conduct of its own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee shall not be liable hereunder except for such
duties of the Trustee which shall be determined solely by the express
provisions of this Indenture and the Escrow Agreement and the Trustee need
perform only those duties that are specifically set
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forth in this Indenture and the Escrow Agreement and no others, and no
implied covenants or obligations shall be read into this Indenture or the
Escrow Agreement against the Trustee.
(ii) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture or the
Escrow Agreement. In the case of any such certificates or opinions which by
any provision hereof or of the Escrow Agreement are specifically required
to be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Indenture or the Escrow Agreement (but need not
confirm or investigate the accuracy of mathematic calculations or other
facts stated therein).
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b) and (c) of this Section 7.01.
(e) No provision of this Indenture or the Escrow Agreement shall
require the Trustee to expend or risk its own funds or incur any liability
whatsoever in the performance of any of its duties hereunder or thereunder or in
the exercise of any of its rights or powers hereunder or thereunder. The
Trustee shall be under no obligation to exercise any of its rights and powers
under this Indenture or the Escrow Agreement at the request of any Holders of
Notes, unless such Holder shall have offered to the Trustee security and
indemnity satisfactory to it in its sole subjective discretion (which discretion
shall be exercised in good faith) against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
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(g) All indemnifications and releases from liability granted herein to
the Trustee shall extend to the directors, officers, employees and agents of the
Trustee and to the Paying Agent and Registrar. Every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section
7.01 and to the provisions of the TIA.
Section 7.02 Rights of Trustee
(a) Subject to Section 7.01, the Trustee may conclusively rely upon
any document believed by it to be genuine and to have been signed or presented
by the proper Person. The Trustee need not investigate any fact or matter stated
in the document, but the Trustee may, in its discretion, 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.
(b) Before the Trustee acts or refrains from acting, it may consult
with counsel and require an Officers' Certificate or an Opinion of Counsel or
both. The Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on such Officers' Certificate or Opinion of Counsel.
The Trustee may consult with counsel of its selection and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection from liability in respect of any action taken, suffered or omitted by
it hereunder in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers conferred upon it by this Indenture or the Escrow Agreement.
(e) Unless otherwise specifically provided in this Indenture or the
Escrow Agreement, any demand, request, direction or notice from the Company
shall be sufficient if signed by an Officer of the Company.
(f) The permissive rights of the Trustee to do things enumerated in
this Indenture or the Escrow Agreement shall not be construed as a duty unless
so specified herein or therein.
(g) The Trustee shall not be required to take notice or deemed to have
notice of any Default or Event of Default, except for failure by the Company to
make any of the payments to the Trustee pursuant to Section 6.01(a) (except with
respect to the payments of Liquidated Damages) or (b), unless the Trustee shall
be specifically notified in writing of such Default or Event of Default by the
Company or by one or more of the Holders of Notes.
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(h) 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 of Notes (including, without limitation, pursuant to the
provisions of Section 6.05 hereof) unless such Holders of Notes shall have
offered to the Trustee security or indemnity satisfactory to the Trustee in its
sole subjective discretion (which discretion shall be exercised in good faith)
against the costs, expenses and liabilities that might be incurred by it in
compliance with such request or direction.
Section 7.03 Individual Rights of Trustee
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or any
Subsidiary Guarantor or any Affiliate of the Company or any Subsidiary Guarantor
with the same rights it would have if it were not Trustee. However, in the
event that the Trustee acquires any "conflicting interest" (as such term is
defined in TIA (S) 310(b)), it must eliminate such conflict within 90 days,
apply to the SEC for permission to continue as trustee (to the extent permitted
under TIA (S) 310(b)) or resign. Any Agent may do the same with like rights and
duties. The Trustee is also subject to Sections 7.10 and 7.11.
Section 7.04 Trustee's Disclaimer
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture, the Subsidiary Guarantees, the
Escrow Agreement or the Notes, it shall not be accountable for the Company's use
of the proceeds from the Notes or any money paid to the Company or upon the
Company's written direction under any provision of this Indenture or the Escrow
Agreement. The Trustee shall not be responsible for the use or application of
any money received by any Paying Agent other than the Trustee and it shall not
be responsible for any statement or recital herein or in the Escrow Agreement or
any statement in the Notes or any other document in connection with the sale of
the Notes or pursuant to this Indenture or the Escrow Agreement other than its
certificate of authentication.
Section 7.05 Notice of Defaults
If a Default or Event of Default occurs and is continuing and if it is
actually known to the Trustee, the Trustee shall mail to Holders of Notes a
notice of the Default or Event of Default within 90 days after it obtains
knowledge of the existence of such Default or Event of Default. Except in the
case of a Default or Event of Default under Sections 6.01(a), (b) or (c), the
Trustee may withhold the notice if it determines that withholding the notice is
in the interests of the Holders of Notes.
Section 7.06 Reports by Trustee to Holders
Within 60 days after each December 31 beginning with the December 31
following the Issue Date, and for so long as Notes remain outstanding, the
Trustee shall mail to the Holders of Notes a brief report dated as of such
reporting date that complies with TIA (S) 313(a) (but if no
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event described in TIA (S) 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA (S) 313(b)(2). The Trustee shall also transmit by mail all
reports as required by TIA (S) 313(c).
Commencing at the time this Indenture is qualified under the TIA, a
copy of each report at the time of its mailing to the Holders of Notes shall be
filed with the SEC and each stock exchange, if any, on which the Company has
informed the Trustee that the Notes are listed in accordance with and to the
extent required by TIA (S) 313(d). The Company shall promptly notify the
Trustee when the Notes are listed on any stock exchange or automatic quotation
system.
Section 7.07 Compensation and Indemnity
The Company shall pay to the Trustee from time to time reasonable
compensation, as the Company and the Trustee shall from time to time agree, for
its acceptance of this Indenture and the Escrow Agreement and services hereunder
and thereunder. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee promptly upon request for all reasonable disbursements, advances and
expenses incurred or made by it in addition to the compensation for its
services. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee and its agents, employees,
officers and directors against any and all losses, liabilities, expenses or
taxes (other than taxes based upon, measured by or determined by the income of
the Trustee) incurred by it arising out of or in connection with the acceptance
or administration of its duties under this Indenture and the Escrow Agreement,
including the costs and expenses of enforcing this Indenture and/or the Escrow
Agreement against the Company (including this Section 7.07) and defending itself
against any claim (whether asserted by the Company or any Holder of Notes or any
other Person) or liability in connection with the exercise or performance of any
of its powers or duties hereunder or under the Escrow Agreement, except to the
extent that such loss, damage, claim, liability or expense is due to its own
negligence or bad faith. The Trustee shall notify the Company promptly of any
claim for which it may seek indemnity. Failure by the Trustee to so notify the
Company shall not relieve the Company of its obligations hereunder. The Company
shall defend the claim and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel and the Company shall pay the reasonable fees
and expenses of such counsel. The Company need not pay for any settlement made
without its consent, which consent shall not be unreasonably withheld.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through its own negligence or bad
faith.
The obligations of the Company under this Section 7.07 shall survive
the resignation or removal of the Trustee and the satisfaction and discharge of
this Indenture and the Escrow Agreement.
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To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal, premium,
if any, interest and Liquidated Damages, if any, on particular Notes. Such Lien
shall survive the satisfaction and discharge of this Indenture and the Escrow
Agreement.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(h) or (i) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA (S) 313(b)(2).
Section 7.08 Replacement of Trustee
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.
The Trustee may resign in writing upon 60 days notice and be
discharged from the trust hereby created by so notifying the Company. The
Holders of Notes of a majority in principal amount of the then outstanding Notes
may remove the Trustee by so notifying the Trustee and the Company. The Company
may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(c) a receiver, Custodian or public officer takes charge of the
Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of Notes of a majority in principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of Notes of at least 10% in principal amount of the then outstanding
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
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If the Trustee, after written request by any Holder of a Note who has
been a Holder of a Note for at least six months, fails to comply with Section
7.10, such Holder of a Note may petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of Notes. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, provided all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section 7.07. Notwithstanding replacement of the Trustee pursuant to
this Section 7.08, the Company's obligations under Section 7.07 hereof shall
continue for the benefit of the retiring Trustee.
Section 7.09 Successor Trustee by Merger, Etc.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee.
Section 7.10 Eligibility; Disqualification
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America or of any state thereof authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and shall have (or in the case of a corporation included in a bank
holding company system, the related bank holding company shall have) a combined
capital and surplus of at least $100,000,000 as set forth in its most recent
published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA (S) 310(a)(1), (2) and (5). The Trustee is subject to TIA
(S) 310(b).
Section 7.11 Preferential Collection of Claims Against the Company
The Trustee is subject to TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated therein.
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ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Defeasance or Covenant Defeasance
The Company may, at its option by Board Resolution, at any time, with
respect to the Notes, elect to have either Section 8.02 or Section 8.03 hereof
be applied to all Notes and Subsidiary Guarantees then outstanding upon
compliance with the conditions set forth below in this Article Eight.
Section 8.02 Legal Defeasance and Discharge
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company and the Restricted Subsidiaries
will, subject to the satisfaction of the conditions set forth in Section 8.04,
be deemed to have been discharged from their respective obligations with respect
to all Notes and Subsidiary Guarantees then outstanding on the date the
conditions set forth below are satisfied ("Legal Defeasance"). For this purpose
such Legal Defeasance means that the Company and each Restricted Subsidiary will
be deemed to have paid and discharged the entire Indebtedness represented by the
Notes and any Subsidiary Guarantees outstanding, which will thereafter be deemed
to be "outstanding" only for the purposes of Section 8.05 and the other Sections
of this Indenture referred to in clauses (i) and (ii) of this Section 8.02, and
to have satisfied all their other obligations under such Notes, Subsidiary
Guarantees and this Indenture (and the Trustee, on demand of and at the expense
of the Company, shall execute proper instruments acknowledging the same), except
for the following which shall survive until otherwise terminated or discharged
pursuant to this Indenture: (i) the rights of Holders of outstanding Notes to
receive payments in respect of the principal of, premium, if any, interest and
Liquidated Damages, if any, on such Notes when such payments are due or on any
redemption date, as the case may be, solely from amounts deposited with the
Trustee as provided in Section 8.04, (ii) the Company's obligations with respect
to the Notes under Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.10, 4.01 and 4.02
hereof, (iii) the rights, powers, trusts, duties, indemnities and immunities of
the Trustee and the Company's obligations in connection therewith and (iv) this
Article 8.
Section 8.03 Covenant Defeasance
Upon the Company's exercise under Section 8.01 of the option
applicable to this Section 8.03, the Company and the Subsidiary Guarantors will
be released from their obligations under the covenants contained in Sections
4.03, 4.04, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16,
4.17, 4.18, 4.21, 5.01 and 5.02 and Article 10 with respect to the outstanding
Notes, on and after the date the conditions set forth below are satisfied
(hereinafter, "Covenant Defeasance"), and the Notes shall thereafter be deemed
not "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
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hereunder (it being understood that such Notes shall not be deemed outstanding
for financial accounting purposes). For this purpose, such Covenant Defeasance
means that, with respect to the outstanding Notes, the Company may omit to
comply with and will have no liability in respect of any term, condition or
limitation set forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or by reason of
any reference in any such covenant to any other provision herein or in any other
document and such omission to comply shall not constitute a Default or an Event
of Default under Section 6.01, but, except as specified above, the remainder of
this Indenture and such Notes, shall be unaffected thereby. In addition, upon
the Company's exercise under Section 8.01 of the option applicable to this
Section 8.03, Sections 6.01(e), 6.01(f) and 6.01(g) shall not constitute Events
of Default.
Section 8.04 Conditions to Defeasance or Covenant Defeasance
The following shall be the conditions to application of either Section
8.02 or Section 8.03:
(a) the Company shall have irrevocably deposited with the
Trustee, in trust, for the benefit of the Holders of Notes and without
retaining any legal interest corpus of such trust, cash in U.S. dollars,
non-callable Government Securities, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally recognized
firm of independent public accountants, to pay the principal of, premium,
if any, interest and Liquidated Damages, if any, on the outstanding Notes
on the stated maturity or on the applicable redemption date, as the case
may be, together with all other amounts payable by the Company under the
Indenture and the Holders of Notes must have a valid, perfected exclusive
security interest in such trust and the Company must specify whether the
Notes are being defeased to maturity or to a particular redemption date;
(b) in the case of Legal Defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that (i) the Company has
received from, or there has been published by, the United States Internal
Revenue Service a ruling or (ii) since the Issue Date, there has been a
change in the applicable U.S. federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel in the United States
shall confirm that, subject to customary assumptions and exclusions, the
Holders of the outstanding Notes will not recognize income, gain or loss
for U.S. federal income tax purposes as a result of such Legal Defeasance
and will be subject to U.S. federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such Legal
Defeasance had not occurred;
(c) in the case of Covenant Defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that, subject to customary
assumptions and exclusions, the Holders of the outstanding Notes will not
recognize income, gain or loss for U.S. federal income tax
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purposes as a result of such Covenant Defeasance and will be subject to
such U.S. federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such Covenant Defeasance had
not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or, insofar as Events of Default set
forth in Sections 6.01(h) and (i), at any time in the period ending on the
91st day after the date of such deposit (it being understood that this
condition shall not be satisfied until the expiration of such period);
(e) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under, this
Indenture or any other material agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which the Company or
any of its Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Opinion
of Counsel to the effect that, as of the date of such opinion and subject
to customary assumptions and exclusions (which assumptions and exclusions
shall not relate to the operation of Section 547 of the United States
Bankruptcy Code or any analogous New York State law provision or related
judicial decisions) after the 91st day following the deposit, the trust
funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally, and that the Trustee has a perfected security interest in such
trust funds for the ratable benefit of the Holders of Notes;
(g) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the Company
with the intent of preferring the Holders of Notes over the other creditors
of the Company with the intent of defeating, hindering, delaying or
defrauding any creditors of the Company or others;
(h) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel in the United States (which
Opinion of Counsel may be subject to customary assumptions and exclusions)
each stating that all conditions precedent provided for in, in the case of
the Officer's Certificate, clauses (a) through (g) and, in the case of the
Opinion of Counsel, clauses (a) (with respect to the validity and
perfection of the security interest), (b), (c), (e) and (f) of this Section
8.04 have been complied with; and
(i) the Trustee shall have received such other documents and
assurances as the Trustee shall reasonably require.
Section 8.05 Deposited Money and U.S. Government Obligations to be Held in
Trust; Other Miscellaneous Provisions
Subject to the provisions of Section 8.06, all money and Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively
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for purposes of this Section 8.05, the "Trustee") pursuant to Section 8.04 in
respect of the Notes then outstanding 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
or any of its Subsidiaries 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, premium, if any, interest and Liquidated
Damages, if any, but such money need not be segregated from other funds except
to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or Government Securities
deposited pursuant to Section 8.04 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of Notes then outstanding.
Anything in this Article 8 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time at the Company's
request any money or Government Securities held by it as provided in this
Article 8 which, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to the
Trustee (which may be the opinion delivered under Section 8.04(a)), are in
excess of the amount thereof which would then be required to be deposited to
effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06 Repayment to Company
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company or any of its Subsidiaries, in trust for the payment of the
principal of, premium, if any, interest or Liquidated Damages, if any, on any
Note and remaining unclaimed for one year after such principal, premium, if any,
interest and Liquidated Damages, if any, have become due and payable shall be
paid to the Company on its request or (if then held by the Company or any of its
Subsidiaries) 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 or any of its
Subsidiaries as trustee thereof, shall thereupon cease.
Section 8.07 Reinstatement
If the Trustee or Paying Agent is unable to apply any United States
dollars or Government Securities in accordance with Section 8.02 or Section
8.03, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's and any Subsidiary Guarantor's obligations under
this Indenture, the Notes and the Subsidiary Guarantees shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.02 or Section
8.03, 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 8.02 or Section
8.03, as the case may be; provided, however, that if the
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Company or any Subsidiary Guarantor makes any payment of principal of, premium,
if any, interest or Liquidated Damages, if any, on any Note following the
reinstatement of its obligations, the Company or any such Subsidiary Guarantor
shall be subrogated to the rights of the Holders of such Notes to receive such
payment from the money held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders
The Company and the Subsidiary Guarantors (when authorized by a
resolution of the Board of Directors and the boards of directors of the
Subsidiary Guarantors) and the Trustee may amend or supplement this Indenture,
the Notes or the Escrow Agreement without notice to or consent of any Holder of
Notes:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(c) to provide for the assumption by a successor Person of the
obligations of the Company to the Holders of Notes under the Notes, this
Indenture, the Escrow Agreement and the Registration Rights Agreement in
connection with any transaction complying with Article 5 of this Indenture;
(d) to add further Subsidiary Guarantees with respect to the
Notes;
(e) to release Subsidiary Guarantors when permitted by the
Indenture;
(f) to secure the Notes;
(g) to add to the covenants of the Company and any Restricted
Subsidiary for the benefit of the Holders of Notes or to surrender any right or
power conferred upon the Company or any Restricted Subsidiary;
(h) to comply with any requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the TIA as then in
effect; or
(i) to make any change that does not materially adversely affect
the legal rights of any Holder of Notes under this Indenture;
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provided, however, that the Company shall deliver to the Trustee an Opinion of
Counsel stating that such amendment or supplement complies with the provisions
of this Section 9.01. Subject to Section 9.06, upon the request of the Company
and the Subsidiary Guarantors, accompanied by a Board Resolution of the Company
and a board resolution of each Subsidiary Guarantor authorizing the execution of
any such amended or supplemental Indenture and upon receipt by the Trustee of
the documents described in Section 9.06, the Trustee shall join with the Company
and the Subsidiary Guarantors in the execution of any amended or supplemental
Indenture authorized or permitted by the terms of this Indenture and to make any
further appropriate agreements and stipulations that may be therein contained.
After an amendment or supplement under this Section 9.01 becomes effective, the
Company shall mail to the Holders of Notes a notice briefly describing the
amendment or supplement. Any failure of the Company to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such amended or supplemental Indenture.
Section 9.02 With Consent of Holders
Except as provided below in this Section 9.02, this Indenture, the
Notes or the Escrow Agreement may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the Notes then
outstanding and, subject to Sections 6.04 and 6.07, any existing Default or
Event of Default and its consequences under this Indenture (other than a Default
or Event of Default in the payment of principal of, premium, if any, interest or
Liquidated Damages, if any, on, the Notes) or compliance with any provision of
this Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes.
Upon the request of the Company and the Subsidiary Guarantors,
accompanied by a Board Resolution of the Company and a board resolution of each
Subsidiary Guarantor authorizing the execution of any such amendment, supplement
or waiver, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 9.06 hereof, the Trustee shall
join with the Company and the Subsidiary Guarantors in the execution of such
amendment, supplement or waiver and to make any further appropriate agreements
and stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into such amendment, supplement or waiver that adversely
affects its own rights, duties, liabilities or immunities under this Indenture
or otherwise.
It shall not be necessary for the consent of the Holders of Notes
under this Section 9.02 to approve the particular form of any proposed
amendment, supplement or waiver, but it shall be sufficient if such consent
approves the substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders of Notes a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such amendment, supplement or waiver.
Subject to Sections 6.04 and 6.07 hereof, the Holders of a majority in principal
amount of the Notes
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then outstanding may waive compliance in a particular instance by the Company
with any provision of this Indenture, the Notes or the Escrow Agreement.
However, without the consent of each Holder affected, an amendment, supplement
or waiver may not (with respect to any Notes held by a non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must consent to
an amendment, supplement or waiver;
(b) reduce the rate of or change the interest payment time on any Note
or alter the provisions with respect to the redemption of the Notes (other
than provisions relating to Sections 4.06 and 4.07);
(c) reduce the principal of or change the fixed maturity of the Notes;
(d) change currency of payment of the principal of, premium, if any,
interest on, Liquidated Damages, if any, or any other sums relating to the
Notes;
(e) modify any provision of Section 4.01, 6.04, 6.07 or 11.05;
(f) waive any Default or Event of Default in the payment of principal
of, premium, if any, or unpaid interest on, and Liquidated Damages, if any,
with respect to the Notes (except a rescission of acceleration of the Notes
by the Holders of at least a majority in aggregate principal amount of the
Notes and a waiver of the payment default that resulted from such
acceleration);
(g) make any change to Article 11 or Section 10.08 of this Indenture
or paragraph 11 of the Notes in a manner that materially adversely affects
the legal rights of any Holder of Notes;
(h) waive a redemption or repurchase payment with respect to any Note
(other than a payment required under Section 4.06 or 4.07);
(i) make any change in this Section 9.02; or
(j) release any Subsidiary Guarantor from its obligations under any
Subsidiary Guarantee, other than in accordance with this Indenture.
Notwithstanding the foregoing, any amendment, supplement or waiver to
Sections 4.06 or 4.07 will require the consent of the Holders of at least two-
thirds in aggregate principal amount of the Notes then outstanding if such
amendment, supplement or waiver would adversely affect the rights of Holders of
Notes .
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Section 9.03 Compliance With Trust Indenture Act
Every amendment to or supplement of this Indenture, the Subsidiary
Guarantees or the Notes shall be set forth in an amended or supplemental
Indenture that complies with the TIA as then in effect.
Section 9.04 Revocation and Effect of Consents
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of Notes is a continuing consent by the Holder of such Notes
and every subsequent Holder of that Note or Notes or portion of that Note or
Notes that evidences the same debt as the consenting Holder's Note or Notes,
even if notation of the consent is not made on any Note. Subject to the
following paragraph, any such Holder of Notes or subsequent Holder may revoke
the consent as to such Holder's Notes or portion of such Notes by written notice
to the Trustee or the Company received before the date on which the amendment,
supplement or waiver becomes effective.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders of Notes entitled to consent to any
amendment, supplement or waiver. If a record date is fixed, then,
notwithstanding the last sentence of the immediately preceding paragraph, those
persons who were Holders of Notes at such record date (or their duly designated
proxies), and only those persons, shall be entitled to consent to such
amendment, supplement or waiver or to revoke any consent previously given,
whether or not such Persons continue to be Holders of such Notes after such
record date. No such consent shall be valid or effective for more than 90 days
after such record date.
After an amendment, supplement or waiver becomes effective, in
accordance with its terms it shall bind every Holder of Notes, unless it makes a
change described in any of clauses (a) through (j) of Section 9.02. In that
case, the amendment, supplement or waiver shall bind each Holder of a Note who
has consented to it and every subsequent Holder of a Note or portion of a Note
that evidences the same debt as the consenting Holder's Note.
Section 9.05 Notation on or Exchange of Notes
If an amendment, supplement or waiver changes the terms of a Note, the
Trustee may require the Holder of the Note to deliver it to the Trustee. The
Trustee may place an appropriate notation on the Note about the changed terms
and return it to the Holder of such Note. Alternatively, if the Company or the
Trustee so determines, the Company in exchange for the Note shall issue and the
Trustee shall, upon receipt of an Authentication Order in accordance with
Section 2.02, authenticate a new Note that reflects the changed terms. Failure
to make the appropriate notation or issue a new Note shall not affect the
validity and effect of such amendment, supplement or waiver.
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Section 9.06 Trustee to Sign Amendments, Etc.
The Trustee shall sign any amendment or supplemental indenture
authorized pursuant to this Article 9 if the amendment does not adversely affect
the rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may, but need not, sign it. In signing or refusing to sign such
amendment or supplemental indenture, the Trustee shall be entitled to receive,
if requested, an indemnity reasonably satisfactory to it and to receive and,
subject to Section 7.01, shall be fully protected in relying upon, in addition
to the documents required by Section 12.04, an Officer's Certificate and an
Opinion of Counsel as conclusive evidence that such amendment or supplemental
indenture is authorized or permitted by this Indenture, that it is not
inconsistent herewith, and that it will be valid and binding upon the Company in
accordance with its terms. The Company may not sign an amendment or
supplemental indenture until the Board of Directors approves it.
ARTICLE 10
SUBSIDIARY GUARANTEES
Section 10.01 Subsidiary Guarantees
Subject to the provisions of this Article 10, each Subsidiary
Guarantor, jointly and severally, hereby irrevocably unconditionally guarantees
to each Holder of a Note authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, that: (i) the principal of, premium, if
any, interest and Liquidated Damages, if any, on the Notes shall be duly and
punctually paid in full when due, whether at stated maturity, by acceleration,
call for redemption, upon a Change of Control Offer, upon an Asset Sale Offer,
pursuant to the Escrow Agreement or otherwise, and interest on overdue
principal, premium, if any, (to the extent permitted by law) interest on any
interest, if any, and Liquidated Damages, if any, on the Notes and all other
obligations of the Company to Holders of Notes or the Trustee hereunder or under
the Notes (including fees, expenses or otherwise) will be promptly paid in full
or performed, all in accordance with the terms hereof and thereof, (ii) in case
of any extension of time of payment or renewal of any Notes or any of such other
obligations, the same shall be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration, call for redemption, upon a Change of Control Offer,
upon an Asset Sale Offer, pursuant to the Escrow Agreement or otherwise and
(iii) the prompt payment of any and all costs and expenses (including reasonable
attorneys' fees) incurred by the Trustee or any Holder of Notes in enforcing any
rights hereunder or under the Notes. Failing payment when due of any amount so
guaranteed or failing performance of any other obligation of the Company to the
Holders of Notes, for whatever reason, each Subsidiary Guarantor shall be
jointly and severally obligated to pay, or to perform or to cause the
performance of, the same immediately. An Event of Default under this Indenture
or the Notes shall constitute an event of default under the Subsidiary
Guarantees, and shall entitle the Trustee or the Holders of Notes to accelerate
the obligations of each Subsidiary Guarantor hereunder in the same manner and to
the same extent as the obligations of the Company. Each Subsidiary Guarantor
hereby agrees that
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its obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of the Notes or this Indenture, the absence of any
action to enforce the same, any waiver or consent by any Holder of Notes with
respect to any thereof, the entry of any judgment against the Company, any
action to enforce the same or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a Subsidiary Guarantor.
Each Subsidiary Guarantor hereby waives and relinquishes: (a) any right to
require the Trustee, the Holders of Notes or the Company (each, a "Benefitted
Party") to proceed against the Company, the Subsidiary Guarantors or any other
Person or to proceed against or exhaust any security held by a Benefitted Party
at any time or to pursue any other remedy in any secured party's power before
proceeding against the Subsidiary Guarantor; (b) any defense that may arise by
reason of the incapacity, lack of authority, death or disability of any other
Person or Persons or the failure of a Benefitted Party to file or enforce a
claim against the estate (in administration, bankruptcy or any other proceeding)
of any other Person or Persons; (c) demand, protest and notice of any kind
(except as expressly required by this Indenture), including but not limited to
notice of the existence, creation or incurring of any new or additional
Indebtedness or obligation or of any action or non-action on the part of the
Subsidiary Guarantors, the Company, any Benefitted Party, any creditor of the
Subsidiary Guarantors, the Company or on the part of any other Person whomsoever
in connection with any obligations the performance of which are hereby
guaranteed; (d) any defense based upon an election of remedies by a Benefitted
Party, including but not limited to an election to proceed against the
Subsidiary Guarantors for reimbursement; (e) any defense based upon any statute
or rule of law which provides that the obligation of a surety must be neither
larger in amount nor in other respects more burdensome than that of the
principal; (f) any defense arising because of a Benefitted Party's election, in
any proceeding instituted under the Bankruptcy Law, of the application of
Section 1111(b)(2) of the Bankruptcy Code; and (g) any defense based on any
borrowing or grant of a security interest under Section 364 of the Bankruptcy
Code. The Subsidiary Guarantors hereby covenant that the Subsidiary Guarantors
shall not be discharged except by payment in full of all principal, premium, if
any, interest and Liquidated Damages, if any, on the Notes and all other costs
provided for under this Indenture or as provided in Section 8.02.
If any Holder of Notes or the Trustee is required by any court or
otherwise to return to either the Company or the Subsidiary Guarantors, or any
trustee or similar official acting in relation to either the Company or the
Subsidiary Guarantors, any amount paid by the Company or the Subsidiary
Guarantors to the Trustee or such Holder of Notes, the Subsidiary Guarantors, to
the extent theretofore discharged, shall be reinstated in full force and effect.
Each of the Subsidiary Guarantors agrees that it shall not be entitled to any
right of subrogation in relation to the Holders of Notes in respect of any
obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby. Each Subsidiary Guarantor agrees that, as between it, on the
one hand, and the Holders of Notes and the Trustee, on the other hand, (x) the
maturity of the obligations guaranteed hereby may be accelerated as provided in
Article 6 hereof for the purposes hereof, notwithstanding any stay, injunction
or other prohibition preventing such acceleration in respect of the obligations
Guaranteed hereby, and (y) in the event of any acceleration of such obligations
as provided in Article 6 hereof, such obligations (whether or not due and
payable) shall forthwith become due and payable by such Subsidiary Guarantor for
the purpose of its Subsidiary Guarantee.
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Section 10.02 Execution and Delivery of Subsidiary Guarantees
To evidence its Subsidiary Guarantee set forth in Section 10.01
hereof, each of the Subsidiary Guarantors agrees that a notation of the
Subsidiary Guarantees substantially in the form included in Exhibit A hereto
shall be endorsed on each Note authenticated and delivered by the Trustee and
that this Indenture shall be executed on behalf of the Subsidiary Guarantors by
an Officer of each of such Subsidiary Guarantors.
Each of the Subsidiary Guarantors agrees that the Subsidiary
Guarantees set forth in this Article 10 will remain in full force and effect and
apply to all the Notes, notwithstanding any failure to endorse on each Note a
notation of the Subsidiary Guarantees.
If an Officer whose facsimile signature is on a Subsidiary Guarantee
no longer holds that office at the time the Trustee authenticates the Note on
which the Subsidiary Guarantees are endorsed, the Subsidiary Guarantees shall be
valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Subsidiary Guarantees
set forth in this Indenture on behalf of the Subsidiary Guarantors.
Section 10.03 Subsidiary Guarantors May Consolidate, Etc., on Certain Terms
Subject to Section 10.04, no Subsidiary Guarantor may consolidate or
merge with or into (whether or not such Subsidiary Guarantor is the surviving
Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its properties or assets in one or more related
transactions, to another Person unless (i) the Person formed by or surviving any
such consolidation or merger (if other than such Subsidiary Guarantor) or the
Person to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made assumes all the obligations of such Subsidiary
Guarantor under the Subsidiary Guarantee, pursuant to a supplemental indenture
in form satisfactory to the Trustee; (ii) immediately after such transaction, no
Default or Event of Default exists; (iii) the Company and its Restricted
Subsidiaries would, at the time of such transaction and after giving pro forma
effect thereto as if such transaction had occurred at the beginning of the
applicable Reference Period, be permitted to Incur at least $1.00 of additional
Indebtedness pursuant to the Debt Incurrence Ratio test set forth in Section
4.09(a); (iv) if required by the Trust Indenture Act, the Company shall have
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel,
each stating that such consolidation, merger or transfer complies with the
provisions of this Indenture; and (v) such Subsidiary Guarantor (if such
Subsidiary Guarantor is the surviving Person) shall have delivered a written
instrument in form satisfactory to the Trustee confirming its Subsidiary
Guarantee and its other obligations under this Indenture after giving effect to
such consolidation, merger or transfer. Notwithstanding the foregoing, any
Subsidiary Guarantor may merge into, consolidate with or transfer all or part of
its properties or assets to the Company or one or more Subsidiary Guarantors or
one or more Subsidiaries which become Subsidiary Guarantors which are Wholly
Owned Restricted Subsidiaries concurrently therewith.
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Section 10.04 Releases Following Sale of Assets and Restricted Subsidiary Stock
In the event of a sale, assignment, transfer, lease, conveyance or
other disposition of all of the Equity Interests in, or all or substantially all
of the assets of, a Subsidiary Guarantor to any Person that is not the Company
or any of its Restricted Subsidiaries, whether by way of merger, consolidation
or otherwise, if (i) the Net Proceeds of such sale or other disposition are
applied in accordance with the provisions of Section 4.07, (ii) no Default or
Event of Default exists or would exist under this Indenture after giving effect
to such transaction, (iii) all obligations of such Subsidiary Guarantor under
any other Indebtedness of the Company or any of its Restricted Subsidiaries
shall have been terminated (including, without limitation, all Guarantees of any
such Indebtedness), (iv) all Liens on assets of such Restricted Subsidiary that
secure any other Indebtedness of the Company or any of its Restricted
Subsidiaries shall have been terminated, and (v) all obligations of the Company
and its Restricted Subsidiaries under other Indebtedness of such Subsidiary
Guarantor shall have been terminated (including, without limitation, all
Guarantees of such Indebtedness), then (A) in the case of such a sale or other
disposition, whether by way of merger, consolidation or otherwise, of all of the
Equity Interests in such former Subsidiary Guarantor, such former Subsidiary
Guarantor will be released and relieved of any obligations under its Subsidiary
Guarantee, or (B) in the case of a sale or other disposition of all or
substantially all of the assets of such Subsidiary Guarantor, the Person
acquiring such assets will not be required to assume the obligations of such
Subsidiary Guarantor under its Subsidiary Guarantee.
Section 10.05 Limitation of Subsidiary Guarantor's Liability
Each Subsidiary Guarantor, and by its acceptance hereof each Holder of
Notes, hereby confirms that it is the intention of all such parties that the
guarantee by such Subsidiary Guarantor pursuant to its Subsidiary Guarantee not
constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy
Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act
or any similar federal or state law. To effectuate the foregoing intention, the
Holders of Notes and each Subsidiary Guarantor hereby irrevocably agree that the
obligations of such Subsidiary Guarantor under this Article 10 shall be limited
to the maximum amount as will, after giving effect to all other contingent and
fixed liabilities of such Subsidiary Guarantor and after giving effect to any
collections from or payments made by or on behalf of any other Subsidiary
Guarantor in respect of the obligations of such other Subsidiary Guarantor under
this Article 10, result in the obligations of such Subsidiary Guarantor under
the Subsidiary Guarantee of such Subsidiary Guarantor not constituting a
fraudulent transfer or conveyance.
Section 10.06 Application of Certain Terms and Provisions to the Subsidiary
Guarantors
(a) For purposes of any provision of this Indenture which provides for
the delivery by any Subsidiary Guarantor of an Officer's Certificate and/or an
Opinion of Counsel, the definitions of such terms in Section 1.01 shall apply to
such Subsidiary Guarantor as if references therein to the Company were
references to such Subsidiary Guarantor.
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(b) Any request, direction, order or demand which by any provision of
this Indenture is to be made by any Subsidiary Guarantor, shall be sufficient if
evidenced as described in Section 12.02 as if references therein to the Company
were references to such Subsidiary Guarantor.
(c) Any notice or demand which by any provision of this Indenture is
required or permitted to be given or served by the Trustee or by the Holders of
Notes to or on any Subsidiary Guarantor may be given or served as described in
Section 12.02 as if references therein to the Company were references to such
Subsidiary Guarantor.
(d) Upon any demand, request or application by any Subsidiary
Guarantor to the Trustee to take any action under this Indenture, such
Subsidiary Guarantor shall furnish to the Trustee such certificates and opinions
as are required in Section 12.04 hereof as if all references therein to the
Company were references to such Subsidiary Guarantor.
(e) In the case at any time any Paying Agent other than the Trustee
shall have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article 10 shall in each case (unless the context
shall otherwise require) be construed as extending to and including such Paying
Agent.
Section 10.07 Release of Subsidiary Guarantees
Upon the sale or disposition of a Subsidiary Guarantor (or
substantially all of its assets) or the designation of a Subsidiary Guarantor as
an Unrestricted Subsidiary, in each case pursuant to and in compliance with the
terms of this Indenture, including but not limited to the provisions of Sections
4.07, 4.13, 4.14, 10.03 and 10.04, as applicable, such Subsidiary Guarantor will
be released from and relieved of its obligations under its Subsidiary Guarantee
upon execution and delivery of a supplemental indenture satisfactory to the
Trustee. Such supplemental indenture shall be accompanied by an Officers'
Certificate and an Opinion of Counsel, each stating that such supplemental
indenture and release of the Subsidiary Guarantee complies with the provisions
of this Indenture and that all conditions precedent to such supplemental
indenture and release of the Subsidiary Guarantee have been complied with.
Section 10.08 Subordination of Subsidiary Guarantees
The obligations of each Subsidiary Guarantor under its Subsidiary
Guarantee pursuant to this Article 10 is subordinated in right of payment to the
prior payment in full in cash or Cash Equivalents of all Senior Indebtedness of
the Subsidiary Guarantor on the same basis as the Notes are subordinated to
Senior Indebtedness of the Company. For the purposes of the foregoing sentence,
the Trustee and the Holders of Notes shall have the right to receive and/or
retain payments by any of the Subsidiary Guarantors only at such times as they
may receive and/or retain payments in respect of the Notes pursuant to this
Indenture, including Article 11 hereof. In the event that the Trustee receives
any Subsidiary Guarantor payment at a time when such payment is prohibited by
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the foregoing sentence, such Subsidiary Guarantor payment shall be paid over and
delivered to the holders of the Senior Indebtedness of the Subsidiary Guarantor
remaining unpaid, to the extent necessary to pay in full in cash or Cash
Equivalents all such Senior Indebtedness of the Subsidiary Guarantor. In the
event that a Holder of Notes receives any Subsidiary Guarantor payment at a time
when such payment is prohibited by the foregoing sentence, the Subsidiary
Guarantor payment shall be paid over and delivered to the holders of the Senior
Indebtedness of such Subsidiary Guarantor remaining unpaid, to the extent
necessary to pay in full in cash or Cash Equivalents all such Senior
Indebtedness.
Each Holder of a Note by its acceptance thereof (a) agrees to and
shall be bound by the provisions of this Section 10.08, (b) authorizes and
directs the Trustee on the Holder's behalf to take such action as may be
necessary and appropriate to effectuate the subordination so provided, and (c)
appoints the Trustee as the Holder's attorney-in-fact for any and all such
purposes.
Section 10.09 Future Subsidiary Guarantors
The Company shall cause any Person that becomes a Subsidiary (other
than an Unrestricted Subsidiary) after the Issue Date (including a Subsidiary
that was previously an Unrestricted Subsidiary and which becomes a Restricted
Subsidiary) to promptly execute and deliver to the Trustee a supplemental
indenture in form and substance substantially similar to Exhibit C pursuant to
which such Subsidiary (other than an Unrestricted Subsidiary) shall become a
Subsidiary Guarantor under this Article 10 and shall Guarantee the prompt
payment in full and performance of all obligations of the Company to the Holders
of Notes and to the Trustee hereunder, under the Notes and under the Escrow
Agreement pursuant to the terms hereof and thereof. Concurrently with the
execution and delivery of such supplemental indenture, the Company shall deliver
to the Trustee an Opinion of Counsel to the effect that such supplemental
indenture has been duly authorized, executed and delivered by such Subsidiary
and that, subject to the application of bankruptcy, insolvency, moratorium,
fraudulent conveyance or transfer and other similar laws relating to creditors'
rights generally and to the principles of equity, whether considered in a
proceeding at law or in equity, the Subsidiary Guarantee of such Subsidiary
Guarantor is a legal, valid and binding obligation of such Subsidiary Guarantor,
enforceable against such Subsidiary Guarantor in accordance with its terms.
ARTICLE 11
SUBORDINATION
Section 11.01 Notes Subordinated to Senior Indebtedness
The Company covenants and agrees, and the Trustee and each Holder of
Notes by its acceptance thereof likewise covenant and agree, that all Notes
shall be issued subject to the provisions of this Article 11; and each Person
holding any Note, whether upon original issue or upon transfer, assignment or
exchange thereof, accepts and agrees that all payments of the principal of and
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premium, if any, interest and Liquidated Damages, if any, on the Notes will, to
the extent and in the manner set forth in this Article 11, be subordinated in
right of payment to the prior payment in full in cash or Cash Equivalents of all
Senior Indebtedness, whether outstanding on the date of the Indenture or
thereafter incurred.
Section 11.02 No Payment on Notes in Certain Circumstances
(a) No direct or indirect payment by or on behalf of the Company of
principal of, premium, if any, interest and Liquidated Damages, if any, on the
Notes, whether pursuant to the terms of the Notes, upon acceleration, pursuant
to an Asset Sale Offer, a Change of Control Offer, pursuant to the Escrow
Agreement or otherwise, shall be made to the Holders of Notes (except that
Holders of Notes may receive payments made in Junior Securities or from the
defeasance trust described under Sections 8.04(a) and 8.05) if (i) a default in
the payment of the principal of or premium, if any, or interest on Designated
Senior Indebtedness occurs and is continuing beyond any applicable period of
grace or (ii) any other default occurs and is continuing with respect to
Designated Senior Indebtedness that permits holders of the Designated Senior
Indebtedness as to which such default relates to accelerate its maturity and the
Trustee receives a written notice (with a copy to the Company) of such other
default (a "Payment Blockage Notice") from the Company or the holders of any
Designated Senior Indebtedness. Payments on the Notes may and shall be resumed
(a) in the case of a payment default, upon the date on which such default is
cured or waived and (b) in case of a nonpayment default, on the earlier of the
date on which such nonpayment default is cured or waived or 179 days after the
date on which the applicable Payment Blockage Notice is received by the Trustee
(such period being referred to herein as the "Payment Blockage Period"), unless
the maturity of any Designated Senior Indebtedness has been accelerated (and
written notice of such acceleration has been received by the Trustee).
Notwithstanding anything herein or in the Notes to the contrary, (x)
in no event shall a Payment Blockage Period extend beyond 179 days from the date
the Payment Blockage Notice in respect thereof was given, (y) there shall be a
period of at least 181 consecutive days in each 360-day period when no Payment
Blockage Period is in effect and (z) not more than one Payment Blockage Period
may be commenced with respect to the Notes during any period of 360 consecutive
days. No new Payment Blockage Period may be commenced unless and until all
scheduled payments of principal, premium, if any, interest and Liquidated
Damages, if any, on the Notes that have come due have been paid in cash. No
nonpayment default that existed or was continuing on the date of delivery of any
Payment Blockage Notice to the Trustee shall be, or be made, the basis for a
subsequent Payment Blockage Notice (it being understood that any subsequent
action, or any breach of any covenant for a period commencing after the date of
receipt by the Trustee of such Payment Blockage Notice, that, in either case,
would give rise to such a default pursuant to any provisions under which a
default previously existed or was continuing shall constitute a new default for
this purpose).
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(b) In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee or any Holder of Notes when such payment is
prohibited by Section 11.02(a), such payment shall be held for the benefit of,
and shall be paid over or delivered to, the holders of Designated Senior
Indebtedness or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Designated Senior Indebtedness
may have been issued, as their respective interests may appear, but only to the
extent that, upon notice from the Trustee to the holders of Designated Senior
Indebtedness that such prohibited payment has been made, the holders of the
Designated Senior Indebtedness (or their representative or representatives or a
trustee) notify the Trustee in writing of the amounts then due and owing on the
Designated Senior Indebtedness, if any, and only the amounts specified in such
notice to the Trustee shall be paid to the holders of Designated Senior
Indebtedness.
Section 11.03 Payment Over of Proceeds Upon Dissolution, Etc.
(a) Upon any distribution to creditors of the Company in a liquidation
or dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, an
assignment for the benefit of creditors or any marshaling of the Company's
assets and liabilities, the holders of Senior Indebtedness will be entitled to
receive payment in full in cash or Cash Equivalents of all obligations due in
respect of such Senior Indebtedness (including interest after the commencement
of any such proceeding at the rate specified in the applicable Senior
Indebtedness) before the Holders of Notes will be entitled to receive any
payment with respect to the Notes, and until all obligations with respect to
Senior Indebtedness are paid in full in cash or Cash Equivalents, any
distribution to which the Holders of Notes would be entitled shall be made to
the holders of Senior Indebtedness (except that Holders of Notes may receive
Junior Securities and payments made from the defeasance trust described under
Sections 8.04(a) 8.05.
(b) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution of assets
or securities of the Company of any kind or character, whether in cash, property
or securities, shall be received by the Trustee or any Holder of Notes at a time
when such payment or distribution is prohibited by Section 11.03(a) and before
all obligations in respect of Senior Indebtedness are paid in full in cash or
Cash Equivalents, or payment provided for, such payment or distribution shall be
received and held for the benefit of, and shall be paid over or delivered to,
the holders of Senior Indebtedness (pro rata to such holders on the basis of the
respective amounts of Senior Indebtedness held by such holders) or their
respective representatives, or to the trustee or trustees or agent or agents
under any indenture pursuant to which any of such Senior Indebtedness may have
been issued, as their respective interests may appear, for application to the
payment of Senior Indebtedness remaining unpaid until all such Senior
Indebtedness has been paid in full in cash or Cash Equivalents after giving
effect to any prior or concurrent payment, distribution or provision therefor to
or for the holders of such Senior Indebtedness.
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The consolidation of the Company with, or the merger of the Company
with or into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another Person upon the terms and conditions
provided in Article 5 shall not be deemed a dissolution, winding-up, liquidation
or reorganization for the purposes of this Section 11.03 if such other Person
shall, as a part of such consolidation, merger, conveyance or transfer, comply
with the conditions stated in Article 5.
Section 11.04 Subrogation
Upon the payment in full in cash or Cash Equivalents of all Senior
Indebtedness, or provision for payment, the Holders of the Notes shall be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Company made on
such Senior Indebtedness until the principal of, premium, if any, interest and
Liquidated Damages, if any, on the Notes shall be paid in full in cash; and, for
the purposes of such subrogation, no payments or distributions to the holders of
the Senior Indebtedness of any cash, property or securities to which the Holders
of Notes or the Trustee on their behalf would be entitled except for the
provisions of this Article 11, and no payment over pursuant to the provisions of
this Article 11 to the holders of Senior Indebtedness by Holders of Notes or the
Trustee on their behalf shall, as between the Company, its creditors other than
holders of Senior Indebtedness, and the Holders of Notes, be deemed to be a
payment by the Company to or on account of the Senior Indebtedness. It is
understood that the provisions of this Article 11 are and are intended solely
for the purpose of defining the relative rights of the Holders of Notes, on the
one hand, and the holders of the Senior Indebtedness, on the other hand.
If any payment or distribution to which the Holders of Notes would
otherwise have been entitled but for the provisions of this Article 11 shall
have been applied, pursuant to the provisions of this Article 11, to the payment
of all amounts payable under Senior Indebtedness, then and in such case, the
Holders of Notes shall be entitled to receive from the holders of such Senior
Indebtedness any payments or distributions received by such holders of Senior
Indebtedness in excess of the amount required to make payment in full, or
provision for payment, of such Senior Indebtedness.
Section 11.05 Obligations of Company Unconditional
Nothing contained in this Article 11 or elsewhere in this Indenture or
in the Notes is intended to or shall impair, as between the Company and the
Holders of Notes, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders of Notes the principal of, premium, if any,
interest and Liquidated Damages, if any, on the Notes as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the Holders of Notes and creditors of the
Company other than the holders of the Senior Indebtedness, nor shall anything
herein or therein prevent the Holder of any Note or the Trustee on their behalf
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article 11 of
the holders of the Senior
87
Indebtedness in respect of cash, property or securities of the Company received
upon the exercise of any such remedy.
Without limiting the generality of the foregoing, nothing contained in
this Article 11 shall restrict the right of the Trustee or the Holders of Notes
to take any action to declare the Notes to be due and payable prior to their
stated maturity pursuant to Article 6 or to pursue any rights or remedies
hereunder; provided, however, that all Senior Indebtedness then due and payable
shall first be paid in full before the Holders of Notes or the Trustee are
entitled to receive any direct or indirect payment from the Company of principal
of, premium, if any, interest or Liquidated Damages, if any, on the Notes.
Section 11.06 Notice to Trustee
The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Notes pursuant to the provisions of this
Article 11. The Trustee shall not be charged with knowledge of the existence of
any event of default with respect to any Senior Indebtedness or of any other
facts which would prohibit the making of any payment to or by the Trustee unless
and until the Trustee shall have received notice in writing at its Corporate
Trust Office to that effect signed by an Officer of the Company, or by a holder
of Senior Indebtedness or trustee or agent therefor; and prior to the receipt of
any such written notice, the Trustee shall, subject to Article 7, be entitled to
assume that no such facts exist; provided that if the Trustee shall not have
received the notice provided for in this Section 11.06 at least two Business
Days prior to the date upon which by the terms of this Indenture any moneys
shall become payable for any purpose (including, without limitation, the payment
of the principal of, premium, if any, interest or Liquidated Damages, if any, on
any Note), then, regardless of anything herein to the contrary, the Trustee
shall have full power and authority to receive any moneys from the Company or
any Subsidiary Guarantor and to apply the same to the purpose for which they
were received, and shall not be affected by any notice to the contrary which may
be received by it on or after such prior date. Nothing contained in this
Section 11.06 shall limit the right of the holders of Senior Indebtedness to
recover payments as contemplated by Section 11.03. The Trustee shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself or itself to be a holder of any Senior Indebtedness (or a
trustee on behalf of, or other representative of, such holder) to establish that
such notice has been given by a holder of such Senior Indebtedness or a trustee
or representative on behalf of any such holder.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article 11, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under this Article 11, and if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
88
Section 11.07 Reliance on Judicial Order or Certificate of Liquidating Agent
Upon any payment or distribution of assets or securities referred to
in this Article 11, the Trustee and the Holders of Notes shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction in
which bankruptcy, dissolution, winding-up, liquidation or reorganization
proceedings are pending, or upon a certificate of the receiver, trustee in
bankruptcy, liquidating trustee, agent or other person making such payment or
distribution, delivered to the Trustee or to the Holders of Notes for the
purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Indebtedness and other Indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this
Article 11.
Section 11.08 Trustee's Relation to Senior Indebtedness
The Trustee and any Paying Agent shall be entitled to all the rights
set forth in this Article 11 with respect to any Senior Indebtedness which may
at any time be held by it in its individual or any other capacity to the same
extent as any other holder of Senior Indebtedness, and nothing in this Indenture
shall deprive the Trustee or any Paying Agent of any of its rights as such
holder.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article 11, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness. The Trustee shall not
be liable to any such holders if the Trustee shall in good faith mistakenly pay
over or distribute to Holders of Notes or to the Company or to any other person
cash, property or securities to which any holders of Senior Indebtedness shall
be entitled by virtue of this Article 11 or otherwise.
Section 11.09 Subordination Rights Not Impaired by Acts or Omissions of the
Company or Holders of Senior Indebtedness
No right of any present or future holders of any Senior Indebtedness
to enforce subordination as provided herein shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms of this Indenture, regardless of any
knowledge thereof which any such holder may have or otherwise be charged with.
The provisions of this Article 11 are intended to be for the benefit of, and
shall be enforceable directly by, the holders of Senior Indebtedness.
89
Section 11.10 Holders of Notes Authorize Trustee to Effectuate Subordination of
Notes
Each Holder of Notes by its acceptance of such Notes authorizes and
expressly directs the Trustee on its or his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article 11, and appoints the Trustee its or his attorney-in-fact for such
purposes, including, in the event of any dissolution, winding-up, liquidation or
reorganization of the Company or any Subsidiary Guarantor (whether in
bankruptcy, insolvency, receivership, reorganization or similar proceedings or
upon an assignment for the benefit of creditors or otherwise) tending towards
liquidation of the business and assets of the Company or any Subsidiary
Guarantor, the filing of a claim for the unpaid balance of its Notes in the form
required in those proceedings.
Section 11.11 This Article Not to Prevent Event of Default
The failure to make a payment on account of principal of, premium, if
any, interest or Liquidated Damages, if any, on the Notes by reason of any
provision of this Article 11 shall not be construed as preventing the occurrence
of an Event of Default specified in clauses (a) or (b) of Section 6.01.
Section 11.12 Trustee's Compensation Not Prejudiced
Nothing in this Article 11 shall apply to amounts due to the Trustee
pursuant to other sections in this Indenture.
Section 11.13 No Waiver of Subordination Provisions
Without in any way limiting the generality of Section 11.09, the
holders of Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to the Trustee or the Holders of Notes, without
incurring responsibility to the Holders of Notes and without impairing or
releasing the subordination provided in this Article 11 or the obligations
hereunder of the Holders of Notes to the holders of Senior Indebtedness, do any
one or more of the following: (a) change the manner, place or terms of payment
or extend the time of payment of, or renew or alter, Senior Indebtedness or any
instrument evidencing the same or any agreement under which Senior Indebtedness
is outstanding or secured; (b) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing Senior Indebtedness; (c)
release any Person liable in any manner for the collection of Senior
Indebtedness; and (d) exercise or refrain from exercising any rights against the
Company and any other Person.
90
Section 11.14 Subordination Provisions Not Applicable to Collateral Held in
Trust for Holders of Notes; Payments May be Paid Prior to
Dissolution
All money and Government Securities deposited in trust with the
Trustee pursuant to and in accordance with Article 8 shall be for the sole
benefit of the Holders of Notes and shall not be subject to this Article 11.
Nothing contained in this Article 11 or elsewhere in this Indenture
shall prevent (i) the Company, except under the conditions described in Section
11.02, from making payments of principal of, premium, if any, interest and
Liquidated Damages, if any, on the Notes, or from depositing with the Trustee
any moneys for such payments or from effecting a termination of the Company's
and the Subsidiary Guarantors' obligations under the Notes and this Indenture as
provided in Article 8, or (ii) the application by the Trustee of any moneys
deposited with it for the purpose of making such payments of principal of,
premium, if any, interest and Liquidated Damages, if any, on the Notes, to the
Holders entitled thereto unless at least two Business Days prior to the date
upon which such payment becomes due and payable, the Trustee shall have received
the written notice provided for in Section 11.06. The Company shall give prompt
written notice to the Trustee of any dissolution, winding-up, liquidation or
reorganization of the Company or any Subsidiary Guarantor.
Section 11.15 Acceleration of Notes
If payment of the Notes is accelerated because of an Event of Default,
the Company shall promptly notify holders of the Senior Indebtedness of the
acceleration.
ARTICLE 12
MISCELLANEOUS
Section 12.01 Trust Indenture Act Controls
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA (S) 318(c), the duties imposed by TIA (S) 318(c) shall
control.
Section 12.02 Notices
Any notice or communication by the Company, any Subsidiary Guarantor
or the Trustee to the other is duly given if in writing and delivered in Person
or mailed by first-class mail, telecopier or overnight air courier guaranteeing
next day delivery, to the other's address:
91
If to the Company or a Subsidiary Guarantor:
Kevco, Inc
1300 South University Drive
Suite 200
Fort Worth, Texas 76107
Attention: Jerry E. Kimmel
Telecopier No.: (817) 332-2765
with a copy of any notice given pursuant to Article 6 to:
Jackson Walker, LLP
777 Main Street
Suite 1800
Fort Worth, Texas 76102
Attention: Richard S. Tucker
Telecopier No.: (817) 334-7290
If to the Trustee:
United States Trust Company of New York
114 West 47th Street, 25th Floor
New York, New York 10036-1532
Attention: Corporate Trust Division
Telecopier: (212) 852-1626/7
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders of
Notes) shall be deemed to have been duly given: at the time delivered by hand,
if personally delivered; five days after being deposited in the mail, postage
prepaid, if mailed; when receipt acknowledged, if telecopied; and the next
Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
Any notice or communication to a Holder of Notes shall be mailed by
first-class mail to its address shown on the Register kept by the Registrar.
Any notice or communication shall also be so mailed to any Person described in
TIA (S) 313(c), to the extent required by the TIA. Failure to mail a notice or
communication to a Holder or any defect in it shall not affect its sufficiency
with respect to other Holders of Notes.
92
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders of Notes, it
shall mail a copy to the Trustee and each Agent at the same time.
Section 12.03 Communication by Holders With Other Holders
Holders of Notes may communicate pursuant to TIA (S) 312(b) with
other Holders of Notes with respect to their rights under this Indenture or the
Notes. The Company, the Trustee, the Registrar and anyone else shall have the
protection of TIA (S) 312(c).
Section 12.04 Certificate and Opinion as to Conditions Precedent
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officer's Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 12.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 12.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been complied with.
Section 12.05 Statements Required in Certificate or Opinion
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA (S) 314(a)(4)) shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been complied with.
Section 12.06 Rules By Trustee and Agents
The Trustee may make reasonable rules for action by or at a meeting of
Holders of Notes. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
Section 12.07 Legal Holidays
If a payment date is not a Business Day at a place of payment, payment
may be made at that place on the next succeeding Business Day, and no interest
shall accrue on such payment for the intervening period.
Section 12.08 No Recourse Against Others
No director, officer, employee, incorporator or stockholder of the
Company or any Restricted Subsidiary, as such, shall have any liability for any
obligations of the Company or any Restricted Subsidiary under the Notes, this
Indenture or any Subsidiary Guarantee or for any claim based on, in respect of,
or by reason of, such obligations or their creation. Each Holder of Notes by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes and Subsidiary
Guarantees.
Section 12.09 Duplicate Originals
The parties may sign any number of copies of this Indenture. One
signed copy is enough to prove this Indenture.
Section 12.10 Governing Law
The internal law of the State of New York shall govern and be used to
construe this Indenture, the Notes and the Subsidiary Guarantees (without regard
to conflicts of law provisions). Each party hereto irrevocably submits itself
to the non-exclusive jurisdiction of the state and federal courts of New York
for purposes of this Indenture and agrees and consents that service of process
may be made upon it in any legal proceeding relating to this Indenture by any
means allowed under federal or New York law. The parties hereto hereby waive
and agree not to assert, by way of motion, as a defense or otherwise, that any
such proceeding is brought in an inconvenient forum or that the venue thereof is
improper.
Section 12.11 No Adverse Interpretation of Other Agreements
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or its Subsidiaries. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.
Section 12.12 Successors
This Indenture shall inure to the benefit of and be binding upon the
parties hereto and each of their respective successors and assigns, except that
the Company may not assign this Indenture or its obligations hereunder except as
expressly permitted by Sections 5.01 and 5.02. Without limiting the generality
of the foregoing, this Indenture shall inure to the benefit of all Holders of
Notes from time to time. Nothing expressed or mentioned in this Indenture is
intended or shall be construed to give any Person, other than the parties
hereto, their respective successors and assigns, and the Holders of Notes, any
legal or equitable right, remedy or claim under or in respect of this Indenture
or any provision herein contained.
Section 12.13 Severability
In case any provision in this Indenture, the Notes or the Subsidiary
Guarantees shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby, and in order to manifest the intent of the parties, effect
shall be given to such invalid, illegal or unenforceable provision to the
maximum extent possible.
Section 12.14 Counterpart Originals
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
Section 12.15 Table of Contents, Headings, Etc.
The Table of Contents and Headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not to
be considered a part hereof and shall in no way modify or restrict any of the
terms or provisions hereof.
THE COMPANY:
KEVCO, INC.
By: /s/ Jerry E. Kimmel
-------------------------------------
Name: Jerry E. Kimmel
Title: Chairman, CEO and President
SUBSIDIARY GUARANTORS:
SCC ACQUISITION CORP.
By: /s/ Jerry E. Kimmel
-------------------------------------
Name: Jerry E. Kimmel
Title: President
KEVCO DELAWARE, INC.
By: /s/ Jerry E. Kimmel
-------------------------------------
Name: Jerry E. Kimmel
Title: Chairman, CEO and President
SUNBELT WOOD COMPONENTS, INC.
By: /s/ Jerry E. Kimmel
-------------------------------------
Name: Jerry E. Kimmel
Title: Chairman and CEO
96
CONSOLIDATED FOREST PRODUCTS,
INC.
By: /s/ Jerry E. Kimmel
-----------------------------------
Name: JERRY E. KIMMEL
---------------------------------
Title: CHAIRMAN & CEO
--------------------------------
BOWEN SUPPLY, INC.
By: /s/ Jerry E. Kimmel
-----------------------------------
Name: JERRY E. KIMMEL
---------------------------------
Title: CHAIRMAN OF THE BOARD
--------------------------------
ENCORE INDUSTRIES, INC.
By: /s/ Jerry E. Kimmel
-----------------------------------
Name: JERRY E. KIMMEL
---------------------------------
Title: CHAIRMAN OF THE BOARD
--------------------------------
TRUSTEE:
UNITED STATES TRUST COMPANY OF
NEW YORK, as Trustee
By: /s/ G. F. Ganey
-----------------------------------
Name: G. F. GANEY
---------------------------------
Title: SENIOR VICE PRESIDENT
--------------------------------
97
EXHIBIT A
(Face of Note)
10(3/8)% [Series A] [Series B] Senior Subordinated Notes due 2007
CUSIP No. _________ $__________
KEVCO, INC., a Texas corporation, promises to pay to Cede & Co. or
registered assigns, the principal sum of _______________________________ Dollars
($_________), or such greater or lesser amount as may from time to time be
endorsed on Schedule A hereto, on December 1, 2007.
Interest Payment Dates: June 1 and December 1, commencing June 1, 1998
Record Dates: May 15 and November 15 (whether or not a Business Day)
Reference is hereby made to the further provisions of this Senior
Subordinated Note set forth on the following pages, which further provisions
shall for all purposes have the same effect as if set forth at this place.
Dated:_____________________________
KEVCO, INC.
By:________________________________
Name:______________________________
Title:_____________________________
By:________________________________
Name:______________________________
Title:_____________________________
A-1-1
TRUSTEE CERTIFICATE OF
AUTHENTICATION
This is one of the
Notes referred to in the
within-mentioned Indenture
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
By:________________________________
(Authorized Signatory)
A-1-2
(Back of Note)
10 3/8% [Series A] [Series B] Senior Subordinated Notes due 2007
[Unless and until it is exchanged in whole or in part for Notes in
definitive form, this Note may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) ("DTC") to the issuer or its agent for registration of transfer, exchange
or payment, and any certificate issued is registered in the name of Cede & Co.
or such other name as may be requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or such other entity as may be requested
by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.]/1/
[THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES
OR TO OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE
SECOND SENTENCE HEREOF. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST
HEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), OR (B) IT
IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION
S UNDER THE SECURITIES ACT, OR (2) AGREES THAT IT WILL NOT, RESELL OR OTHERWISE
TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO
A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903
OR 904 OF THE SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144 UNDER THE SECURITIES ACT, (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION
OF COUNSEL ACCEPTABLE TO THE COMPANY, IF REQUESTED BY THE COMPANY) OR (F)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE
WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON
TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF
- ------------------
/1/ This paragraph shall be included only if the Note is a Global Note.
A-1-3
THIS LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND
"UNITED STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S
UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE
TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE
FOREGOING.]/2/
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. Interest. Kevco, Inc., a Texas corporation (the "Company"), promises
to pay interest on the principal amount of this Note at the rate and in the
manner specified below and shall pay the Liquidated Damages, if any, payable
pursuant to Section 5 of the Registration Rights Agreement referred to below.
Interest on the Notes will accrue at the rate of 10 3/8% per annum and will be
payable semi-annually in arrears on June 1 and December 1 in each year,
commencing on June 1, 1998, or if any such day is not a Business Day, the next
succeeding Business Day (each an "Interest Payment Date"), to Holders of record
on the immediately preceding May 15 and November 15, respectively.
Interest will be computed on the basis of a 360-day year of twelve 30-
day months. Interest on the Notes shall accrue from the most recent date to
which interest has been paid or duly provided for or, if no interest has been
paid or duly provided for, from the Issue Date of original issuance of the
Notes. To the extent lawful, the Company shall pay interest (including post-
petition interest in any proceeding under any Bankruptcy Law) on overdue
principal at the applicable interest rate on the Notes plus one percent; it
shall pay interest on overdue installments of interest (without regard to
applicable grace periods) at the same rate, to the extent lawful, (i) if payment
is made during the period of five Business Days following the date on which such
interest was due, to the Persons who were to receive payment on the date such
interest was due or (ii) if payment is made after such period, to the Persons
who are Holders on a subsequent special record date, which date shall be at the
earliest practicable date but in all events at least five Business Days prior to
the payment date.
2. Method of Payment. The Company shall pay interest on the Notes
(except defaulted interest) and Liquidated Damages, if any, to the Persons who
are registered Holders of Notes at the close of business on the record date next
preceding the Interest Payment Date, even if such Notes are cancelled after such
record date and on or before such Interest Payment Date. Principal, premium, if
any, interest and Liquidated Damages, if any, on the Notes shall be payable at
the office or agency of the Company maintained for such purpose within the City
and State of New York, or at the option of the Company, payment of interest and
Liquidated Damages, if any, may be made by check mailed to the Holders of the
Notes at their respective addresses set forth in the
- ------------------
/2/ This paragraph shall be removed upon the exchange of Series A Notes for
Series B Notes in the Exchange Offer or upon the sale of the Series A
Notes under a Shelf Registration Statement pursuant to the Registration
Rights Agreement.
A-1-4
register of Holders of Notes; provided that all payments with respect to Notes
the Holders of which have given wire transfer instructions to the Company and
the Trustee shall be required to be made by wire transfer of immediately
available funds to the accounts specified by the Holders thereof. The Company
shall pay principal, premium, if any, interest and Liquidated Damages, if any,
on the Notes in money of the United States that at the time of payment is legal
tender for payment of public and private debts.
3. Paying Agent and Registrar. Initially, the Trustee under the
Indenture will act as Paying Agent and Registrar. The Company may change any
Paying Agent or Registrar without notice to any Holder of Notes. The Company or
any of its Subsidiaries may act as Paying Agent or Registrar.
4. Indenture. The Company issued the Notes under an Indenture dated as
of December 1, 1997 ("Indenture") among the Company, the Subsidiary Guarantors
and United States Trust Company of New York, as Trustee (the "Trustee"). The
terms of the Notes include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code
Sections 77aaa-77bbbb) as in effect on the date of the Indenture. The Notes are
subject to all such terms, and Holders of Notes are referred to the Indenture
and such Trust Indenture Act for a statement of such terms. The terms of the
Indenture shall govern any inconsistencies between the Indenture and the Notes.
Terms not otherwise defined herein shall have the meanings assigned in the
Indenture. The Notes are general unsecured obligations of the Company limited
to $105,000,000 in aggregate principal amount.
5. Optional Redemption.
Except as set forth in the next paragraph, the Notes are not
redeemable at the Company's option prior to December 1, 2002. Thereafter, the
Notes will be subject to redemption for cash at any time at the option of the
Company, in whole or in part, upon not less than 30 nor more than 60 days
notice, at the redemption prices (expressed as percentages of principal amount)
if redeemed during the 12-month period commencing December 1 of the years
indicated below (subject to the right of Holders of Notes of record on an
interest record date to receive interest due on an Interest Payment Date that is
on or prior to such date of redemption), plus accrued and unpaid interest and
Liquidated Damages, if any, to the applicable redemption date:
Year Percentage
---- ----------
2002 105.188%
2003 103.458%
2004 101.729%
2005 and thereafter 100.000%
Notwithstanding the foregoing, at any time prior to December 1, 2000,
the Company may on any one or more occasions redeem up to an aggregate 35% of
the original aggregate principal
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amount of the Notes at a redemption price of 110.375% of the principal amount of
the Notes (subject to the right of Holders of Notes of record on an interest
record date to receive interest due on an Interest Payment Date that is on or
prior to such date of redemption), together with accrued and unpaid interest and
Liquidated Damages, if any, to the redemption date, with the Net Proceeds of one
or more Public Equity Offerings; provided that at least 65% of the aggregate
principal amount of the Notes originally outstanding remain outstanding
immediately after such redemption; and provided, further, that such redemption
shall occur within 90 days of the date of the closing of any such Public Equity
Offering.
6. Mandatory Redemption.
Except as set forth in Section 3.08 of the Indenture and as provided
in paragraph 7 below, the Company is not required to make mandatory redemption
or sinking fund payments with respect to the Notes.
7. Repurchase at Option of Holders.
(a) If there is a Change of Control, the Company shall be required to
offer to purchase all or any part (equal to $1,000 or an integral multiple
thereof) of each Holder's Notes at a purchase price in cash equal to 101% of the
aggregate principal amount thereof plus accrued and unpaid interest and
Liquidated Damages, if any, to the date of purchase. Holders of Notes that are
subject to an offer to purchase will receive an offer to purchase from the
Company prior to any related purchase date, and may elect to have such Notes
purchased by completing the form entitled "Option of Holder to Elect Purchase"
appearing below.
(b) If the Company consummates any Asset Sale, the Company shall be
required, under certain circumstances, to apply the Excess Proceeds thereof to
an offer to all Holders of Notes to purchase the maximum principal amount of
Notes that may be purchased out of the Excess Proceeds at an offer price in cash
equal to 100% of the principal amount of the Notes, plus accrued and unpaid
interest and Liquidated Damages, if any, to the date of purchase, in accordance
with the procedures set forth in the Indenture. Holders of Notes that are
subject to an offer to purchase will receive an offer to purchase from the
Company prior to any related purchase date, and may elect to have such Notes
purchased by completing the form entitled "Option of Holder to Elect Purchase"
appearing below.
8. Denominations, Transfer, Exchange. The Notes are in face
denominations of $1,000 and integral multiples of $1,000. The Notes may be
transferred and exchanged as provided in the Indenture. The Registrar and the
Trustee may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and the Company may require a Holder to pay
any taxes and fees required by law or permitted by the Indenture. Neither the
Company nor the Registrar will be required to issue, register the transfer of,
or exchange (i) any Note or portion of a Note selected for redemption or
tendered pursuant to an offer, except the unredeemed portion of any Note being
redeemed in part or (ii) any Notes during the period between (a) beginning on
the date the
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Trustee receives a notice of a redemption from the Company and ending at the
close of business on the date the Notes to be redeemed are selected by the
Trustee or (b) an interest record date and ending at the close of business on
the next succeeding Interest Payment Date.
9. Subordination. The Notes and the Subsidiary Guarantees are
subordinated in right of payment, to the extent and in the manner provided in
Article 11 and Section 10.08 of the Indenture, to the prior payment in full of
all Senior Indebtedness. The Company agrees, and each Holder of Notes by
accepting a Note consents and agrees, to the subordination provided in the
Indenture and authorizes the Trustee to give it effect.
10. Persons Deemed Owners. Prior to due presentment to the Trustee for
registration of the transfer of this Note, the Trustee, any Agent and the
Company may deem and treat the Person in whose name this Note is registered as
its absolute owner for the purpose of receiving payment of principal of and
interest on this Note and for all other purposes whatsoever, whether or not this
Note is overdue, and neither the Trustee, any Agent nor the Company shall be
affected by notice to the contrary. The registered Holder of a Note shall be
treated as its owner for all purposes.
11. Amendment, Supplement and Waiver. Subject to certain exceptions, the
Indenture, the Notes, the Subsidiary Guarantees and the Escrow Agreement may be
amended or supplemented with the written consent of the Holders of Notes of at
least a majority in principal amount of the then outstanding Notes, and any
existing Default or Event of Default (other than a Default or Event of Default
relating to the payment of principal, premium, if any, interest or Liquidated
Damages, if any, except a payment default resulting from an acceleration that
has been rescinded) or compliance with any provision of the Indenture, the
Notes, the Subsidiary Guarantees or the Escrow Agreement may be waived with the
written consent of the Holders of Notes of at least a majority in principal
amount of the then outstanding Notes. Without the consent of any Holder of
Notes, the Indenture, the Notes or the Escrow Agreement may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of Certificated Notes, to
provide for the assumption of the Company's or a Subsidiary Guarantor's
obligations to Holders of Notes in case of a merger or consolidation, to provide
for additional Subsidiary Guarantors, to make any change that would provide any
additional rights or benefits to the Holders of Notes or that does not
materially adversely affect the legal rights of any such Holder under the
Indenture, or to comply with the requirements of the Commission in order to
effect or maintain the qualification of the Indenture under the Trust Indenture
Act or to allow any Restricted Subsidiary to guarantee the Notes.
12. Defaults and Remedies. Events of Default include: (i) default for 30
days in the payment when due of interest on, or Liquidated Damages with respect
to, the Notes (whether or not prohibited by the subordination provisions of the
Indenture); (ii) default in payment when due of the principal of or premium, if
any, on the Notes (whether or not prohibited by the subordination provisions of
the Indenture); (iii) failure by the Company to comply with the provisions of
Sections 3.08, 4.06, 4.07, 4.21, 5.01 or 5.02 of the Indenture; (iv) failure by
the Company for 30 days after written notice from the Trustee or the Holders of
at least 25% in principal amount of the then
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outstanding Notes to comply with any other covenant or agreement (except as
provided in clause (i), (ii) and (iii) above) in the Indenture or herein, (v)
except as permitted by the Indenture, any Subsidiary Guarantee shall be held in
any judicial proceeding to be unenforceable or invalid or shall cease for any
reason to be in full force and effect or any Subsidiary Guarantor, or any Person
acting on behalf of any Subsidiary Guarantor, shall deny or disaffirm its
obligations under its Subsidiary Guarantee; (vi) default under any mortgage,
indenture or instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness of the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any of its
Restricted Subsidiaries) whether such Indebtedness or Guarantee now exists, or
is created after the Issue Date, which default (a) is caused by a failure to pay
principal when due at final stated maturity (a "Payment Default") or (b) results
in the acceleration of such Indebtedness prior to its express maturity and, in
each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$10,000,000 or more; (vii) failure by the Company or any of its Restricted
Subsidiaries to pay final judgments aggregating in excess of $10,000,000, which
judgments are not paid, discharged or stayed for a period of 60 days and are not
covered by insurance; or (viii) certain events of bankruptcy or insolvency with
respect to the Company or any Restricted Subsidiary. If any Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable immediately. Notwithstanding the foregoing, in the case of an
Event of Default arising from certain events of bankruptcy or insolvency, with
respect to the Company or any Restricted Subsidiary, all outstanding Notes will
become due and payable without further action or notice. Holders of Notes 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 a majority in
principal amount of the then outstanding Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of Notes
notice of any continuing Default or Event of Default (except a Default or Event
of Default relating to the payment of principal, premium, if any, interest or
Liquidated Damages, if any) if it determines that withholding notice is in their
interest. The Company is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Company is required upon
becoming aware of any Default or Event of Default, to deliver to the Trustee a
statement specifying such Default or Event of Default.
13. Trustee Dealings With the Company. Subject to the provisions of the
Indenture, the Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee.
14. No Recourse Against Others. No director, officer, employee,
incorporator or stockholder of the Company or any Restricted Subsidiary, as
such, shall have any liability for any obligations of the Company or any
Subsidiary Guarantor under the Notes, the Indenture or any Subsidiary Guarantee
or for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder of Notes, by accepting a Note waives and releases
all such liability. The
A-1-8
waiver and release are part of the consideration for the issuance of the Notes
and Subsidiary Guarantees.
15. Authentication. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
16. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
17. Additional Rights of Holders of Transfer Restricted Securities. In
addition to the rights provided to Holders of Notes under the Indenture, Holders
of Transfer Restricted Securities shall have all the rights set forth in the
Registration Rights Agreement dated as of the date of the Indenture, between the
Company and the parties named on the signature pages thereof (the "Registration
Rights Agreement").
18. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company shall furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to:
Kevco, Inc.
1300 South University Drive
Suite 200
Fort Worth, Texas 76107
Attention: Ellis L. McKinley, Jr.
Telecopier No.: (817) 332-2765
A-1-9
[FORM OF NOTATION ON NOTE RELATING TO SUBSIDIARY GUARANTEE]
SUBSIDIARY GUARANTEE
The Subsidiary Guarantors listed below (hereinafter referred to as the
"Subsidiary Guarantors," which term includes any successors or assigns under the
hereinafter defined Indenture and any additional Subsidiary Guarantors), jointly
and severally have irrevocably and unconditionally guaranteed to each Holder of
a Note authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns (i) the due and punctual payment of the principal of,
premium, if any, interest and Liquidated Damages, if any, on the 10 3/8% Senior
Subordinated Notes due December 1, 2007 (the "Notes") of Kevco, Inc., a Texas
corporation (the "Company"), whether at stated maturity, by acceleration, call
for redemption, upon a Change of Control Offer, upon an Asset Sale Offer,
pursuant to the Escrow Agreement or otherwise, the due and punctual payment of
interest on the overdue principal, and premium, if any, and (to the extent
permitted by law) interest on any interest, if any, and Liquidated Damages, if
any, on the Notes, and the due and punctual performance of all other obligations
of the Company to the Holders of Notes or the Trustee under the Notes or the
Indenture, dated as of December 1, 1997, among the Company, the Subsidiary
Guarantors and United States Trust Company of New York, as Trustee (the
"Indenture"), all in accordance with the terms set forth in Article 10 of the
Indenture, (ii) in case of any extension of time of payment or renewal of any
Notes or any 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, call for redemption, upon an offer
to purchase or otherwise, and (iii) the payment of any and all costs and
expenses (including reasonable attorneys' fees) incurred by the Trustee or any
Holder of Notes in enforcing any rights under the Notes or the Indenture.
The obligations of the Subsidiary Guarantors to the Holders of Notes
and to the Trustee pursuant to this Subsidiary Guarantee and the Indenture are
expressly set forth in Article 10 of the Indenture and reference is hereby made
to such Indenture for the precise terms of this Subsidiary Guarantee.
No director, officer, employee, incorporator or stockholder of any
Subsidiary Guarantor, as such, shall have any liability for any obligations of
the Company or any Restricted Subsidiary under the Notes, the Indenture or
hereunder or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Notes by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes and Subsidiary Guarantees.
This is a continuing Guarantee and shall remain in full force and
effect and shall be binding upon the Subsidiary Guarantors and their respective
successors and assigns until full and final payment of all of the Company's
obligations under the Notes and the Indenture and shall inure to the benefit of
the successors and assigns of the Trustee and the Holders of Notes, and, in the
event
A-1-10
of any transfer or assignment of rights by any Holder of Notes or the Trustee,
the rights and privileges herein conferred upon that party shall automatically
extend to and be vested in such transferee or assignee, all subject to the terms
and conditions hereof. This is a Guarantee of payment and not of collectibility.
This Subsidiary Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Note upon which this
Subsidiary Guarantee is noted shall have been executed by the Trustee under the
Indenture by the manual signature of one of its authorized officers.
The obligations of the Subsidiary Guarantors under their Subsidiary
Guarantees shall be limited to the extent necessary to insure that it does not
constitute a fraudulent conveyance under applicable law.
Each Subsidiary Guarantor covenants (to the extent 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, extension or
usury law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of the Indenture or its Subsidiary
Guarantee; and each Subsidiary Guarantor (to the extent it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and covenants
that it will not hinder, delay or impede the execution of any power granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
THE TERMS OF ARTICLE 10 OF THE INDENTURE ARE INCORPORATED HEREIN BY
REFERENCE.
Capitalized terms used herein and not otherwise defined herein shall
have the same meanings given them in the Indenture unless otherwise indicated.
SUBSIDIARY GUARANTORS:
SCC ACQUISITION CORP.
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
A-1-11
KEVCO DELAWARE, INC.
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
SUNBELT WOOD COMPONENTS, INC.
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
CONSOLIDATED FOREST PRODUCTS, INC.
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
BOWEN SUPPLY, INC.
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
A-1-12
ENCORE INDUSTRIES, INC.
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
A-1-13
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint _____________________________________________________
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Date:_____________ Your Name:___________________________________________________
(Print your name as it appears on the face of this Note)
Your Signature:______________________________________________
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee:_________________________________________
A-1-14
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Note purchased by
the Company pursuant to Section 4.06 or 4.07 of the Indenture, check the box
below:
[_] Section 4.06 [_] Section 4.07
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.06 or 4.07 of the Indenture, state the amount you
elect to have purchased (if all, write "ALL"): $___________
Date:_____________ Your Name:___________________________________________________
(Print your name as it appears on the face of this Note)
Your Signature:______________________________________________
(Sign exactly as your name appears on the face of this Note)
Social Security or Tax Identification No.:___________________
Signature Guarantee:_________________________________________
A-1-15
SCHEDULE OF EXCHANGES OF INTERESTS IN GLOBAL NOTES/3/
The following exchanges of a part of this Global Note for interests in
another Global Note or for Certificated Notes, or exchanges of a part of another
Global Note or Certificated Note for an interest in this Global Note, have been
made:
Principal Amount of Signature of
Amount of Decrease Amount of Increase in This Global Note Authorized Officer of
in Principal Amount Principal Amount of Following Such Trustee or Note
Date of Exchange of this Global Note this Global Note Decrease (or Increase) Custodian
- ----------------------------
/3/ This schedule should be included only if the Note is issued in global form.
A-1-16
EXHIBIT B-1
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION
OF TRANSFER OF CERTIFICATED NOTES
(Pursuant to Section 2.06(b) of the Indenture)
United States Trust Company of New York
114 West 47th Street, 25th Floor
New York, New York 10036-1532
Attention: Corporate Trust Division
Re: 10 3/8% Senior Subordinated Notes due 2007 of Kevco, Inc.
Reference is hereby made to the Indenture, dated as of December 1,
1997 (the "Indenture"), among Kevco, Inc., as issuer (the "Company"), the
Subsidiary Guarantors identified therein and United States Trust Company of New
York, as trustee. Capitalized terms used but not defined herein shall have the
meanings given to them in the Indenture.
This letter relates to $_________ principal amount of Notes which are
evidenced by a Certificated Note (CUSIP No. ___________) registered in the name
of __________________(the "Transferor"). The Transferor has requested a transfer
of such Certificated Note to a Person who will take delivery thereof in the form
of an equal principal amount of Notes evidenced by one or more Certificated
Notes, which Notes, immediately after such transfer, are to be delivered to the
transferor at the address set forth below.
In connection with such request and in respect of the Notes
surrendered to the Trustee herewith (the "Surrendered Notes"), the Holder of
such Surrendered Notes hereby certifies that:
[CHECK ONE]
[_] the Surrendered Notes are being surrendered for registration in the
name of the Transferor;
or
[_] the Surrendered Notes are being transferred to the Company or its
Subsidiaries;
or
B-1-1
[_] the Surrendered Notes are being transferred pursuant to and in
accordance with Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act"), and, accordingly, the Transferor hereby
further certifies that the Surrendered Notes are being transferred to
a Person that the Transferor reasonably believes is purchasing the
Surrendered Notes for its own account, or for one or more accounts
with respect to which such Person exercises sole investment
discretion, and such Person and each such account is a "qualified
institutional buyer" within the meaning of Rule 144A, in each case in
a transaction meeting the requirements of Rule 144A;
or
[_] the Surrendered Notes are being transferred in a transaction permitted
by Rule 144 under the Securities Act;
or
[_] the Surrendered Notes are being transferred pursuant to an effective
registration statement under the Securities Act;
or
[_] the Surrendered Notes are being transferred pursuant to an exemption
from registration in accordance with Rule 903 or 904 under the
Securities Act, provided that the transferor understands that any
Notes issued pursuant to Regulation S under the Securities Act may
only be transferred in accordance with the provisions of Regulation S;
or
[ ] such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A,
Rule 144, Rule 903 or Rule 904, and the Transferor hereby further
certifies that the Notes are being transferred in compliance with the
transfer restrictions applicable to the Surrendered Notes and in
accordance with the requirements of the exemption claimed, which
certification is supported by an Opinion of Counsel, provided by the
transferor or the transferee (a copy of which the Transferor has
attached to this certification) in form reasonably acceptable to the
Company and to the Registrar, to the effect that such transfer is in
compliance with the Securities Act;
and the Surrendered Notes are being transferred in compliance with any
applicable blue sky securities laws of any state of the United States. The
Holder of the Surrendered Notes further certifies that it has delivered, or will
cause to be delivered, to each Person to whom the Surrendered
B-1-2
Notes or an interest therein are transferred, a notice substantially to the
effect of the legend set forth in Section 2.06(g) of the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and Donaldson, Lufkin & Jenrette
Securities Corporation and NationsBank Montgomery Securities, Inc., as the
initial purchasers of such Notes being transferred. Terms used in this
certificate and not otherwise defined in the Indenture have the meanings set
forth in Rule 144A under the Securities Act.
_____________________________________
[Insert Name of Transferor]
By:__________________________________
Name:
Title:
Dated:_______________________________
cc: Kevco, Inc.
B-1-3
EXHIBIT B-2
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION
OF TRANSFER FROM GLOBAL NOTE TO CERTIFICATED NOTE
(Pursuant to Section 2.06(c) of the Indenture)
United States Trust Company of New York
114 West 47th Street, 25th Floor
New York, New York 10036-1532
Attention: Corporate Trust Division
Re: 10 3/8% Senior Subordinated Notes due 2007 of Kevco, Inc.
Reference is hereby made to the Indenture, dated as of December 1,
1997 (the "Indenture"), among Kevco, Inc., as issuer (the "Company"), the
Subsidiary Guarantors identified therein and United States Trust Company of New
York, as trustee. Capitalized terms used but not defined herein shall have the
meanings given to them in the Indenture.
This letter relates to $_______ principal amount of Notes which are
evidenced by a Global Note (CUSIP No. _________) registered in the name of the
nominee of the Depositary for the account, directly or indirectly, of
____________________________ (the "Transferor"). The Transferor has requested a
transfer of such beneficial interest in the Notes to a Person who will take
delivery thereof in the form of an equal principal amount of Notes evidenced by
one or more Certificated Notes, which Notes, immediately after such transfer,
are to be delivered to the transferor at the address set forth below.
In connection with such request and in respect of the Notes
surrendered to the Trustee herewith (the "Surrendered Notes"), the Holder of
such Surrendered Notes hereby certifies that:
[CHECK ONE]
[_] the Surrendered Notes are being surrendered for registration in the
name of the beneficial owner of such Notes, without transfer;
or
[_] the Surrendered Notes are being transferred pursuant to and in
accordance with Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act"), and, accordingly, the Transferor hereby
further certifies that the Surrendered Notes are being transferred to
a Person that the Transferor reasonably believes is purchasing the
Surrendered Notes for its own account, or for one or more accounts
with respect to
B-2-1
which such Person exercises sole investment discretion, and such
Person and each such account is a "qualified institutional buyer"
within the meaning of Rule 144A, in each case in a transaction meeting
the requirements of Rule 144A;
or
[_] the Surrendered Notes are being transferred in a transaction permitted
by Rule 144 under the Securities Act;
or
[_] the Surrendered Notes are being transferred pursuant to an effective
registration statement under the Securities Act;
or
[_] the Surrendered Notes are being transferred pursuant to an exemption
from registration in accordance with Rule 903 or 904 under the
Securities Act, provided that the transferor understands that any
Notes issued pursuant to Regulation S under the Securities Act may
only be transferred in accordance with the provisions of Regulation S;
or
[_] such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A,
Rule 144, Rule 903 or Rule 904, and the Transferor hereby further
certifies that the Notes are being transferred in compliance with the
transfer restrictions applicable to the Surrendered Notes and in
accordance with the requirements of the exemption claimed, which
certification is supported by an Opinion of Counsel, provided by the
transferor or the transferee (a copy of which the Transferor has
attached to this certification) in form reasonably acceptable to the
Company and to the Registrar, to the effect that such transfer is in
compliance with the Securities Act;
and the Surrendered Notes are being transferred in compliance with any
applicable blue sky securities laws of any state of the United States. The
Holder of the Surrendered Notes further certifies that it has delivered, or will
cause to be delivered, to each Person to whom the Surrendered Notes or an
interest therein are transferred, a notice substantially to the effect of the
legend set forth in Section 2.06(g) of the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and Donaldson, Lufkin & Jenrette
Securities Corporation and NationsBank
B-2-2
Montgomery Securities, Inc., the initial purchasers of such Notes being
transferred. Terms used in this certificate and not otherwise defined in the
Indenture have the meanings set forth in Rule 144A under the Securities Act.
_____________________________________
[Insert Name of Transferor]
By:__________________________________
Name:
Title:
Dated:_______________________________
_____________________________________
_____________________________________
[Address of Transferor]
cc: Kevco, Inc.
B-2-3
EXHIBIT B-3
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM CERTIFICATED NOTE TO GLOBAL NOTE
(Pursuant to Section 2.06(e) of the Indenture)
United States Trust Company of New York
114 West 47th Street, 25th Floor
New York, New York 10036-1532
Attention: Corporate Trust Division
Re: 10 3/8% Senior Subordinated Notes due 2007 of Kevco, Inc.
Reference is hereby made to the Indenture, dated as of December 1,
1997 (the "Indenture"), among Kevco, Inc., as issuer (the "Company"), the
Subsidiary Guarantors identified therein and United States Trust Company of New
York, as trustee. Capitalized terms used but not defined herein shall have the
meanings given to them in the Indenture.
This letter relates to $_________ principal amount of Notes which are
evidenced by a Certificated Note (CUSIP No. ___________) registered in the name
of _____________________ (the "Transferor"). The Transferor has requested a
transfer of such Certificated Note to a Person who will take delivery thereof in
the form of a beneficial interest in a Global Note.
In connection with such request and in respect of the Notes
surrendered to the Trustee herewith (the "Surrendered Notes"), the Holder of
such Surrendered Notes hereby certifies that:
[CHECK ONE]
[_] the Surrendered Notes are being transferred for registration in the
name of the nominee of the Depositary for the account, directly or
indirectly, of the Transferor, without transfer;
or
[_] the Surrendered Notes are being transferred pursuant to and in
accordance with Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act"), and, accordingly, the Transferor hereby
further certifies that the Surrendered Notes are being transferred to
a Person that the Transferor reasonably believes is purchasing the
Surrendered Notes for its own account, or for one or more accounts
with respect to which such Person exercises sole investment
discretion, and such Person and each
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such account is a "qualified institutional buyer" within the meaning
of Rule 144A, in each case in a transaction meeting the requirements
of Rule 144A;
or
[_] the Surrendered Notes are being transferred in a transaction permitted
by Rule 144 under the Securities Act;
or
[_] the Surrendered Notes are being transferred pursuant to an effective
registration statement under the Securities Act;
or
[_] the Surrendered Notes are being transferred pursuant to an exemption
from registration in accordance with Rule 903 or 904 under the
Securities Act, provided that the transferor understands that any
Notes issued pursuant to Regulation S under the Securities Act may
only be transferred in accordance with the provisions of Regulation S;
or
[_] such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A,
Rule 144, Rule 903 or Rule 904, and the Transferor hereby further
certifies that the Notes are being transferred in compliance with the
transfer restrictions applicable to the Surrendered Notes and in
accordance with the requirements of the exemption claimed, which
certification is supported by an Opinion of Counsel, provided by the
transferor or the transferee (a copy of which the Transferor has
attached to this certification) in form reasonably acceptable to the
Company and to the Registrar, to the effect that such transfer is in
compliance with the Securities Act;
and the Surrendered Notes are being transferred in compliance with any
applicable blue sky securities laws of any state of the United States. The
Holder of the Surrendered Notes further certifies that it has delivered, or will
cause to be delivered, to each Person to whom the Surrendered Notes or an
interest therein are transferred, a notice substantially to the effect of the
legend set forth in Section 2.06(g) of the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and Donaldson, Lufkin & Jenrette
Securities Corporation and NationsBank Montgomery Securities, Inc., as the
initial purchaser of such Notes being transferred. Terms used
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in this certificate and not otherwise defined in the Indenture have the meanings
set forth in Rule 144A under the Securities Act.
_____________________________________
[Insert Name of Transferor]
By:__________________________________
Name:
Title:
Dated:_______________________________
cc: Kevco, Inc.
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EXHIBIT C
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
____________, ____ between ___________________ (the "New Subsidiary Guarantor"),
a Subsidiary of Kevco, Inc., a Texas corporation (the "Company"), and United
States Trust Company of New York, as trustee under the indenture referred to
below (the "Trustee"). Capitalized terms used herein and not defined herein
shall have the meanings ascribed to them in the Indenture (as defined below).
WITNESSETH:
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an Indenture (the "Indenture"), dated as of December 1, 1997, providing
for the issuance of an aggregate principal amount of $105,000,000 of 10 3/8%
Senior Subordinated Notes due 2007 (the "Notes");
WHEREAS, Section [10.09 OR 10.03] of the Indenture provides that under
certain circumstances the Company may cause certain of its Subsidiaries to
execute and deliver to the Trustee a supplemental indenture pursuant to which
such Subsidiaries shall unconditionally Guarantee all of the Company's
obligations under the Indenture and the Notes pursuant to a Subsidiary Guarantee
on the terms and conditions set forth herein; and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the New
Subsidiary Guarantor and the Trustee mutually covenant and agree for the equal
and ratable benefit of the Holders of Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings ascribed to them in the Indenture.
2. INDENTURE PROVISION PURSUANT TO WHICH SUBSIDIARY GUARANTEE IS
GIVEN. This Supplemental Indenture is being executed and delivered pursuant to
Section [10.09 OR 10.03] of the Indenture.
3. AGREEMENT TO GUARANTEE. The New Subsidiary Guarantor hereby
agrees, jointly and severally with all other Subsidiary Guarantors, to
irrevocably and unconditionally guarantees that (i) the principal of, premium,
if any, interest and Liquidated Damages, if any, on the Notes shall be duly and
punctually paid in full when due, whether at stated maturity, by acceleration,
call for redemption, upon a Change of Control Offer, upon an Asset Sale Offer,
pursuant to the
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Escrow Agreement or otherwise, and interest on overdue principal, premium, if
any, (to the extent permitted by law) interest on any interest, if any, and
Liquidated Damages, if any, on the Notes and all other obligations of the
Company to Holders of Notes or the Trustee under the Indenture or under the
Notes (including fees, expenses or otherwise) will be promptly paid in full or
performed, all in accordance with the terms thereof, (ii) in case of any
extension of time of payment or renewal of any Notes or any of such other
obligations, the same shall be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration, call for redemption, upon a Change of Control Offer,
upon an Asset Sale Offer, pursuant to the Escrow Agreement or otherwise and
(iii) the prompt payment of any and all costs and expenses (including reasonable
attorneys' fees) incurred by the Trustee or any Holder of Notes in enforcing any
rights under the Indenture or under the Notes, on the terms and subject to the
conditions set forth in Article 10 of the Indenture and to be bound by all other
applicable provisions of the Indenture applicable to a Restricted Subsidiary
and/or Subsidiary Guarantor thereunder.
4. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEES
(a) To evidence its Subsidiary Guarantee, the New Subsidiary
Guarantor hereby agrees that a notation of such Subsidiary Guarantee
substantially in the form set forth in Exhibit A to the Indenture shall be
endorsed by an officer of such New Subsidiary Guarantor on each Note
authenticated and delivered by the Trustee after the date hereof.
(b) Notwithstanding the foregoing, the New Subsidiary Guarantor
hereby agrees that its Subsidiary Guarantee shall remain in full force and
effect notwithstanding any failure to endorse on each Note a notation of such
Subsidiary Guarantee.
(c) If an officer whose signature is on this Supplemental Indenture
or on the notation of the Subsidiary Guaranty no longer holds that office at the
time the Trustee authenticates the Note on which a Subsidiary Guarantee is
endorsed, the Subsidiary Guarantee shall be valid nevertheless.
(d) The New Subsidiary Guarantor hereby agrees that its Subsidiary
Guarantee shall be unconditional, regardless of the validity, regularity or
enforceability of the Notes or the Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of Notes with respect to
any provisions hereof or thereof, the recovery of any judgement against the
Company, any action to enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of a guarantor.
(e) The New Subsidiary Guarantor covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of the Indenture or its Subsidiary
Guarantee; and the New Subsidiary Guarantor (to the extent that it may lawfully
do so) hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not
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hinder, delay or impede the execution of any power granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
5. NO RECOURSE AGAINST OTHERS. No director, officer, employee,
incorporator or stockholder of any Subsidiary Guarantor, as such, shall have any
liability for any obligations of the Company or any Subsidiary Guarantor under
the Notes, any Subsidiary Guarantees, the Indenture or this Supplemental
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Notes by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes and the Subsidiary Guarantees.
6. NEW YORK LAW TO GOVERN. The internal law of the State of New
York shall govern and be used to construe this Supplemental Indenture.
7. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
8. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not effect the construction hereof.
9. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the correctness of the recitals of fact
contained herein, all of which recitals are made solely by the New Subsidiary
Guarantor.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated:____________________ (NAME OF NEW SUBSIDIARY GUARANTOR)
By:_______________________________________________
Name:
Title:
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Dated:____________________ UNITED STATES TRUST COMPANY OF
NEW YORK, as Trustee
By:_______________________________________________
Name:
Title:
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