EXHIBIT 4.2
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K-III COMMUNICATIONS CORPORATION
$200,000,000
10% Subordinated Exchange Debentures due 2008
Class C and Class D
_____________
INDENTURE
Dated as of _______ __, ____
_____________
THE BANK OF NEW YORK
Subordinated Debenture Trustee
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CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
----------- -----------------
310(a)(1) . . . . . . . . . . . . . . . . . . . . 7.10
(a)(2) . . . . . . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . .
7.08;7.10;
(b) . . . . . . . . . . . . . . . . . . . . . .
11.02
(c) . . . . . . . . . . . . . . . . . . . . . . N.A.
311(a) . . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . . N.A.
312(a) . . . . . . . . . . . . . . . . . . . . . . 2.05
(b) . . . . . . . . . . . . . . . . . . . . . . 11.03
(c) . . . . . . . . . . . . . . . . . . . . . . 11.03
313(a) . . . . . . . . . . . . . . . . . . . . . . 7.06
(b)(1) . . . . . . . . . . . . . . . . . . . . N.A.
(b)(2) . . . . . . . . . . . . . . . . . . . . 7.06
(c) . . . . . . . . . . . . . . . . . . . . . .
7.06;11.02
(d) . . . . . . . . . . . . . . . . . . . . . . 7.06
314(a) . . . . . . . . . . . . . . . . . . . . . .
4.03;11.02
(b) . . . . . . . . . . . . . . . . . . . . . .
N.A.
(c)(1) . . . . . . . . . . . . . . . . . . . . 11.04
(c)(2) . . . . . . . . . . . . . . . . . . . . 11.04
(c)(3) . . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . N.A.
(e) . . . . . . . . . . . . . . . . . . . . . . 11.05
(f) . . . . . . . . . . . . . . . . . . . . . . N.A.
315(a) . . . . . . . . . . . . . . . . . . . . . . 7.01(2)
(b) . . . . . . . . . . . . . . . . . . . . . .
7.05;11.02
(c) . . . . . . . . . . . . . . . . . . . . . . 7.01(1)
(d) . . . . . . . . . . . . . . . . . . . . . . 7.01(3)
(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) . . . . . . . . . . . . . . . . . . . . . . 9.04
317(a)(1) . . . . . . . . . . . . . . . . . . . . 6.08
(a)(2) . . . . . . . . . . . . . . . . . . . . 6.09
(b) . . . . . . . . . . . . . . . . . . . . . . 2.04
318(a) . . . . . . . . . . . . . . . . . . . . . . 11.01
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions . . . . . . . . . . . . . . . . . . . . 1
Section 1.02 Other Definitions . . . . . . . . . . . . . . . . . 7
Section 1.03 Incorporation by Reference of Trust Indenture
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 1.04 Rules of Construction . . . . . . . . . . . . . . . 8
ARTICLE 2
THE SECURITIES
Section 2.01 Form and Dating . . . . . . . . . . . . . . . . . . 8
Section 2.02 Execution and Authentication . . . . . . . . . . . 8
Section 2.03 Registrar and Paying Agent . . . . . . . . . . . . 9
Section 2.04 Paying Agent to Hold Money in Trust . . . . . . . . 9
Section 2.05 Holder Lists . . . . . . . . . . . . . . . . . . . 9
Section 2.06 Transfer and Exchange . . . . . . . . . . . . . . . 10
Section 2.07 Replacement Securities . . . . . . . . . . . . . . 12
Section 2.08 Outstanding Securities . . . . . . . . . . . . . . 13
Section 2.09 Treasury Securities . . . . . . . . . . . . . . . . 13
Section 2.10 Temporary Securities . . . . . . . . . . . . . . . 13
Section 2.11 Cancellation . . . . . . . . . . . . . . . . . . . 13
Section 2.12 Defaulted Interest . . . . . . . . . . . . . . . . 14
ARTICLE 3
OPTIONAL REDEMPTION OPTIONAL REDEMPTION UPON CHANGE OF
CONTROL AND OPTIONAL REDEMPTION UPON A PUBLIC EQUITY OFFERING
Section 3.01 Notices to Subordinated Debenture Trustee . . . . . 14
Section 3.02 Selection of Securities to Be Redeemed . . . . . . 14
Section 3.03 Notices to Holders . . . . . . . . . . . . . . . . 15
Section 3.04 Effect of Notice of Redemption . . . . . . . . . . 15
Section 3.05 Deposit of Redemption Price or Purchase Price . . . 16
Section 3.06 Securities Redeemed in Part . . . . . . . . . . . . 16
Section 3.07 Optional Redemption . . . . . . . . . . . . . . . . 16
Section 3.08 Optional Redemption Upon Change of Control . . . . 17
ARTICLE 4
COVENANTS
Section 4.01 Payment of Securities . . . . . . . . . . . . . . . 17
Section 4.02 Maintenance of Office or Agency . . . . . . . . . . 18
Section 4.03 SEC Reports; Financial Statements . . . . . . . . . 18
Section 4.04 Compliance Certificate . . . . . . . . . . . . . . 19
Section 4.05 Compliance With Laws, Taxes . . . . . . . . . . . . 19
Section 4.06 Stay, Extension and Usury Laws . . . . . . . . . . 20
Page
Section 4.07 Limitations on Restricted Payments . . . . . . . . 20
Section 4.08 Change of Control . . . . . . . . . . . . . . . . . 20
Section 4.09 Transactions With Affiliates . . . . . . . . . . . 21
Section 4.10 Corporate Existence. . . . . . . . . . . . . . . . 22
Section 4.11 Rule 144A Information Requirement . . . . . . . . . 22
ARTICLE 5
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of Assets . . . . . 23
Section 5.02 Successor Corporation Substituted . . . . . . . . . 23
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01 Events of Default . . . . . . . . . . . . . . . . . 23
Section 6.02 Acceleration . . . . . . . . . . . . . . . . . . . 25
Section 6.03 Other Remedies . . . . . . . . . . . . . . . . . . 26
Section 6.04 Waiver of Past Defaults . . . . . . . . . . . . . . 26
Section 6.05 Control by Majority . . . . . . . . . . . . . . . . 26
Section 6.06 Limitations on Suits . . . . . . . . . . . . . . . 26
Section 6.07 Rights of Holders to Receive Payment . . . . . . . 27
Section 6.08 Collection Suit by Subordinated Debenture
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 6.09 Subordinated Debenture Trustee May File Proofs
of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 6.10 Priorities . . . . . . . . . . . . . . . . . . . . 28
Section 6.11 Undertaking for Costs . . . . . . . . . . . . . . . 28
ARTICLE 7
SUBORDINATED DEBENTURE TRUSTEE
Section 7.01 Duties of Subordinated Debenture Trustee . . . . . 28
Section 7.02 Rights of Subordinated Debenture Trustee . . . . . 29
Section 7.03 Individual Rights of Subordinated Debenture
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 7.04 Subordinated Debenture Trustee's Disclaimer . . . . 30
Section 7.05 Notice of Defaults . . . . . . . . . . . . . . . . 30
Section 7.06 Reports by Subordinated Debenture Trustee to
Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 7.07 Compensation and Indemnity . . . . . . . . . . . . 31
Section 7.08 Replacement of Subordinated Debenture Trustee . . . 31
Section 7.09 Successor Subordinated Debenture Trustee by
Merger, etc . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 7.10 Eligibility; Disqualification . . . . . . . . . . . 33
Section 7.11 Preferential Collection of Claims Against
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE 8
DISCHARGE OF INDENTURE
Section 8.01 Termination of Company's Obligations . . . . . . . 33
Section 8.02 Application of Trust Money . . . . . . . . . . . . 34
Section 8.03 Repayment to Company . . . . . . . . . . . . . . . 34
Section 8.04 Reinstatement . . . . . . . . . . . . . . . . . . . 35
Page
ARTICLE 9
AMENDMENTS
Section 9.01 Without Consent of Holders . . . . . . . . . . . . 35
Section 9.02 With Consent of Holders . . . . . . . . . . . . . . 36
Section 9.03 Compliance with Trust Indenture Act . . . . . . . . 37
Section 9.04 Revocation and Effect of Consents . . . . . . . . . 37
Section 9.05 Notation on or Exchange of Securities . . . . . . . 37
Section 9.06 Subordinated Debenture Trustee to Sign
Amendments, etc. . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE 10
SUBORDINATION
Section 10.01 Agreement to Subordinate . . . . . . . . . . . . . 38
Section 10.02 Certain Definitions . . . . . . . . . . . . . . . 38
Section 10.03 Liquidation; Dissolution; Bankruptcy . . . . . . . 38
Section 10.04 Default on Senior Debt . . . . . . . . . . . . . . 39
Section 10.05 Acceleration of Securities . . . . . . . . . . . . 39
Section 10.06 When Distribution Must Be Paid Over . . . . . . . 39
Section 10.07 Notice by Company . . . . . . . . . . . . . . . . 40
Section 10.08 Subrogation . . . . . . . . . . . . . . . . . . . 40
Section 10.09 Relative Rights . . . . . . . . . . . . . . . . . 40
Section 10.10 Subordination May Not Be Impaired by Company . . . 41
Section 10.11 Distribution or Notice to Representative . . . . . 41
Section 10.12 Rights of Subordinated Debenture Trustee and
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 10.13 Authorization to Effect Subordination . . . . . . 41
ARTICLE 11
MISCELLANEOUS
Section 11.01 Trust Indenture Act Controls . . . . . . . . . . . 42
Section 11.02 Notices . . . . . . . . . . . . . . . . . . . . . 42
Section 11.03 Communication by Holders with Other Holders . . . 43
Section 11.04 Certificate and Opinion as to Conditions
Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 11.05 Statements Required in Certificate or
Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 11.06 Rules by Subordinated Debenture Trustee and
Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 11.07 Legal Holidays . . . . . . . . . . . . . . . . . . 44
Section 11.08 No Recourse Against Others . . . . . . . . . . . . 45
Section 11.09 Governing Law . . . . . . . . . . . . . . . . . . 45
Section 11.10 No Adverse Interpretation of Other
Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 11.11 Successors . . . . . . . . . . . . . . . . . . . . 45
Section 11.12 Severability . . . . . . . . . . . . . . . . . . . 45
Section 11.13 Counterpart Originals . . . . . . . . . . . . . . 45
Section 11.14 Subordinated Debenture Trustee as Paying
Agent and Registrar . . . . . . . . . . . . . . . . . . . . . 45
Section 11.15 Table of Contents, Headings, etc. . . . . . . . . 46
Section 11.16 Bank of New York Not Acting In Individual
Capacity. . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 11.17 Additional Rights of Holders of Transfer
Restricted Securities. . . . . . . . . . . . . . . . . . . . . 46
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Exhibit A Form of Security . . . . . . . . . . . . . . . . . . . A-1
Exhibit B Certificate to be Delivered Upon Exchange or
Registration of Transfer of Securities . . . . . . . . . . . . . B-1
INDENTURE dated as of _______ __, ____, between K-III
Communications Corporation, a Delaware corporation, and The Bank of New York, a
New York banking corporation, (the "Subordinated Debenture Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders (as defined below) of 10% Class
C Subordinated Exchange Debentures due 2008 and 10% Class D Subordinated
Debentures due 2008 (collectively, the "Securities") issued by the Company (as
defined below):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01 DEFINITIONS
"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. A Person shall be deemed to "control"
(including the correlative meanings, the terms "controlling," "controlled by,"
and "under common control with") another Person if the controlling Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management or policies, of the controlled person, whether through ownership
of voting securities, by agreement or otherwise.
"Agent" means any Registrar or Paying Agent.
"Applicable Premium" with respect to any Security is defined as the
greater of (i) 1.0% of the then outstanding principal amount thereof and
(ii) the excess of (A) the present value of the required interest and principal
payments due thereon, computed using a discount rate equal to the Treasury Rate
plus the Applicable Spread, over (B) the then outstanding principal amount of
thereof.
"Applicable Spread", for the purposes of this Indenture, means 100
basis points.
"Average Life" means, as of the date of determination, with respect
to any debt security, the quotient obtained by dividing (i) the sum of the
products of the numbers of years from the date of determination to the dates of
each successive scheduled principal payment (assuming the exercise by the
obligor of such debt security of all unconditional (other than as to the giving
of notice) extension options of each such scheduled payment date) of such debt
security multiplied by the amount of such principal payment by (ii) the sum of
all such principal payments.
"Bankruptcy Law" means Title 11 of the U.S. Code or any similar
federal or state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company or
any authorized committee of the Board of Directors of the Company.
"BONY Credit Agreement" means that certain credit agreement entered
into by and among the Company, certain financial institutions parties thereto,
and The Bank of New York, as agent, providing for a $150 million term loan
facility, as amended, modified, renewed, refunded or refinanced from time to
time.
"Business Day" means any day other than a Legal Holiday (as defined
below).
"Capital Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital lease
which would at such time be required to be capitalized on the balance sheet in
accordance with GAAP.
"Capital Stock" means any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock.
"Change of Control" means such time as (i) a "person" or "group"
(within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act), other
than KKR and its Affiliates, becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act) of more than (A) 35 percent (35%) of the total
voting power of the then outstanding voting stock of the Company and (B) the
total voting power of the then outstanding voting stock of the Company
beneficially owned by KKR and its Affiliates or (ii) during any period of two
consecutive calendar years, individuals who at the beginning of such period
constituted the Company's Board of Directors (together with any new directors
whose election by the Company's Board of Directors or whose nomination for
election by the Company's shareholders was approved by a vote of at least two-
thirds of the Directors then still in office who either were 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
directors then in office.
"Chase Credit Agreement" means that certain credit agreement
entered into by and among the Company, certain financial institutions parties
thereto, and The Chase Manhattan Bank, N.A., as agent, providing for a $150
million term loan facility, as amended, modified, renewed, refunded or
refinanced from time to time.
"Class A Subordinated Exchange Debentures" means the 11 5/8%
Class A Subordinated Exchange Debentures due 2005.
"Class B Subordinated Exchange Debentures" means the 11 5/8%
Class B Subordinated Exchange Debentures due 2005.
"Class C Subordinated Exchange Debentures" means the 10% Class C
Subordinated Exchange Debentures due 2008 described above issued under this
Indenture.
"Class D Subordinated Exchange Debentures" means the 10% Class D
Subordinated Exchange Debentures due 2008 that may be issued in the Exchange
Offer.
"Common Stock" means the common stock, par value $.01 per share, of
the Company.
"Company" means (i) K-III Communications Corporation, a Delaware
corporation and (ii) any successor of K-III Communications Corporation pursuant
to Article 5 hereof.
"Consolidated Net Worth" means, for purposes of this Indenture, at
any date of determination, the sum of the Capital Stock and additional paid-in
capital plus retained earnings (or minus accumulated deficit) of the referent
Person and its Subsidiaries on a consolidated basis, less amounts attributable
to Redeemable Stock, each item to be determined in conformity with GAAP
(excluding the effects of foreign currency exchange adjustments under Financial
2
Accounting Standards Board Statement of Financial Accounting Standards No. 52),
except that all effects of the application of Accounting Principles Board
Opinions Nos. 16 and 17 and related interpretations shall be disregarded.
"Corporate Trust Office of the Subordinated Debenture Trustee"
shall be at either of the addresses of the Subordinated Debenture Trustee
specified in Section 11.02 or such other address as the Subordinated Debenture
Trustee may give notice to the Company.
"Credit Agreements" means, collectively, the Chase Credit
Agreement, the BONY Credit Agreement, the Revolving Credit Agreement and the New
Chase Facility, including any related notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith, in each case as
amended, modified, renewed, refunded or refinanced from time to time.
"Currency Agreement" means the obligations of any Person pursuant
to any foreign exchange contract, currency swap agreement or other similar
agreement or arrangement designed to protect such Person or any of its
subsidiaries against fluctuations in currency values.
"Custodian" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
"Default" means any event, act or condition that is, or after
notice or the passage of time or both would be, an Event of Default.
"Equity Interests" means Capital Stock, warrants, options or other
rights to acquire Capital Stock (but excluding any debt security which is
convertible into, or exchangeable for, Capital Stock).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Debentures" means the 11 1/2% Exchange Debentures due
2004 of the Company issued under the Exchange Debenture Indenture.
"Exchange Debenture Indenture" means that certain Indenture to be
dated as of the date of first issuance of the Exchange Debentures, between the
Company and Chemical Bank, as Trustee, as amended or modified from time to time.
"Exchange Debenture Trustee" means Chemical Bank, as Trustee of the
Exchange Debentures, unless and until a successor replaces it accordance with
the applicable provisions thereof and thereafter means the successor serving
thereunder.
"Exchange Offer" means the offer which may be made by the Company
pursuant to the Registration Rights Agreement to exchange Class D Subordinated
Exchange Debentures for then outstanding Class C Subordinated Exchange
Debentures.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession, which are applicable to the circumstances as of the date
of this Indenture.
"Holder" means a Person in whose name a Security is registered.
3
"Indebtedness" of any Person means any indebtedness, contingent or
otherwise, in respect of borrowed money (whether or not the recourse of the
lender is to the whole of the assets of such Person or only to a portion
thereof), or evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement obligations with respect thereto) or
representing the balance deferred and unpaid of the purchase price of any
property (including pursuant to financing leases), if and to the extent any of
the foregoing indebtedness would appear as a liability upon a balance sheet of
such Person prepared in accordance with GAAP (except that any such balance that
constitutes a trade payable and/or an accrued liability arising in the ordinary
course of business shall not be considered Indebtedness), and shall also
include, to the extent not otherwise included, any Capital Lease Obligations,
the maximum fixed repurchase price of any Redeemable Stock, indebtedness secured
by a Lien to which the property or assets owned or held by such Person is
subject, whether or not the obligations secured thereby shall have been assumed,
guarantees of items that would be included within this definition to the extent
of such guarantees (exclusive of whether such items would appear upon such
balance sheet), and net liabilities in respect of Currency Agreements and
Interest Rate Agreements. For purposes of the preceding sentence, the maximum
fixed repurchase price of any Redeemable Stock which does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Redeemable Stock as if such Redeemable Stock were repurchased on any date on
which Indebtedness shall be required to be determined pursuant to this
Indenture, provided that if such Redeemable Stock is not then permitted to be
repurchased, the repurchase price shall be the book value of such Redeemable
Stock. The amount of Indebtedness of any Person at any date shall be without
duplication (i) the outstanding balance at such date of all unconditional
obligations as described above and the maximum liability of any such contingent
obligations at such date and (ii) in the case of Indebtedness of others secured
by a Lien to which the property or assets owned or held by such Person is
subject, the lesser of the fair market value at such date of any asset subject
to a Lien securing the Indebtedness of others and the amount of Indebtedness
secured. For the purpose of determining the aggregate Indebtedness of the
Company and its Restricted Subsidiaries, such Indebtedness shall exclude the
Indebtedness of any Unrestricted Subsidiary of the Company or any Unrestricted
Subsidiary of a Restricted Subsidiary.
"Indenture" means this Indenture as amended from time to time.
"Initial Purchasers" means Morgan Stanley & Co. Incorporated,
Donaldson, Lufkin & Jenrette Securities Corporation and Salomon Brothers Inc.
"Interest Payment Date" has the meaning assigned to such term in
the Security.
"Interest Rate Agreements" means the obligations of any Person
pursuant to any interest rate swap agreement, interest rate collar agreement or
other similar agreement or arrangement designed to protect such Person or any of
its subsidiaries against fluctuations in interest rates.
"KKR" means Kohlberg Kravis Roberts & Co., L.P.
"Lien" means any mortgage, lien, pledge, charge, security interest
or encumbrance of any kind, whether or not filed, recorded or otherwise
perfected under applicable law (including any conditional sale or other title
retention agreement, any lease in the nature thereof, any option or other
agreement to sell or give any security interest in and any filing or other
agreement to give any financing statement under the Uniform Commercial Code (or
equivalent statutes) of any jurisdiction).
"Liquidated Damages" means all unpaid liquidated damages owing by
the Company pursuant to Section 5 of the Registration Rights Agreement.
4
"New Chase Facility" means that certain revolving credit facility
entered into by and among the Company, certain financial institutions parties
thereto, and The Chase Manhattan Bank, N.A., as agent, providing for a $100
million revolving credit facility, as amended, modified, renewed, refunded or
refinanced from time to time.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officers" means the President, the Treasurer, any Assistant
Treasurer, Controller, Secretary or any Vice President of the Company, as
applicable.
"Officers' Certificate" means a certificate signed by two Officers,
one of whom must be the Company's chief executive officer, chief financial
officer or controller of financial accounting.
"Opinion of Counsel" means a written opinion prepared in accordance
with Section 11.05 hereof, from legal counsel who is acceptable to the
Subordinated Debenture Trustee. The counsel may be an employee of or counsel to
the Company, if applicable, or the Subordinated Debenture Trustee.
"Person" means any individual, corporation, partnership, joint
venture, incorporated or unincorporated association, joint-stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof or other entity of any kind.
"Public Equity Offering" means an underwritten public offering of
primary shares of the Company's common stock (or any other class of common stock
hereinafter duly authorized by the Company) pursuant to a registration statement
(other than a registration statement on form S-8 or S-4 or successor forms)
filed with the SEC in accordance with the Securities Act.
"Redeemable Stock" means any Equity Interest which, by its terms
(or by the terms of any security into which it is convertible or for which it is
exchangeable before the stated maturity of the Securities), or upon the
happening of any event, matures or is mandatorily redeemable, in whole or in
part, prior to the stated maturity of the Securities, or is, by its terms or
upon the happening of any event, redeemable at the option of the holder thereof,
in whole or in part, at any time prior to the stated maturity of the Securities.
"Registration Rights Agreement" means the Registration Rights
Agreement dated January 24, 1996, between the Initial Purchasers, the Company
and the subsidiaries of the Company listed on the signature page thereto, as
such agreement may be amended, modified or supplemented from time to time.
"Restricted Subsidiary" means, for the purposes of this Indenture,
a Subsidiary of the Company which at the time of determination is not an
Unrestricted Subsidiary. The Board of Directors may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary.
"Revolving Credit Agreement" means that certain credit agreement
entered into by and among the Company, certain financial institutions parties
thereto, and The Chase Manhattan Bank, N.A., as agent, providing for a $670
million revolving credit facility, as amended, modified, renewed, refunded or
refinanced from time to time.
"SEC" means the Securities and Exchange Commission.
5
"Securities" means the Securities described above issued under this
Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"8 1/2% Senior Notes" means the 8 1/2% Senior Notes due 2006 of the
Company issued under the 8 1/2% Senior Note Indenture.
"8 1/2% Senior Note Indenture" means that certain Indenture dated
as of January 24, 1996, among the Company, the corporations listed on Schedule I
thereto and The Bank of New York, as Trustee, as amended or modified from time
to time.
"10 1/4% Senior Notes" means the 10 1/4% Senior Notes due 2004 of
the Company issued under the 10 1/4% Senior Note Indenture.
"10 1/4% Senior Note Indenture" means that certain Indenture dated
as of May 31, 1994, among the Company, the corporations listed on Schedule I
thereto and Bankers Trust Company, as Trustee, as amended or modified from time
to time.
"Senior Notes" means the 8 1/2% Senior Notes, the 10 1/4% Senior
Notes and the Senior Secured Notes.
"Senior Note Indentures" means the 8 1/2% Senior Note Indenture,
the 10 1/4% Senior Note Indenture and the Senior Secured Note Indenture.
"Senior Secured Notes" means the 10 5/8% Senior Secured Notes due
2002 of the Company issued under the Senior Secured Note Indenture.
"Senior Secured Note Indenture" means that certain Indenture dated
as of May 13, 1992, among the Company, the corporations listed on Schedule I
thereto and The Bank of New York, as Trustee, as amended or modified from time
to time.
"Subordinated Debenture 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.
"Subsidiary" means 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 any Person or one or more of the other
Subsidiaries of that Person or a combination thereof.
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C.
Sec.Sec. 77aaa-77bbbb).
"Transfer Restricted Securities" means Securities that bear or are
required to bear the legend set forth in Section 2.06(b) hereof.
"Treasury Rate," for the purposes of this Indenture, is defined as
the yield to maturity at the time of computation of United States Treasury
securities with a constant maturity (as compiled by and published in the most
recent Federal Reserve Statistical Release H.15 (519) which has become publicly
6
available at least two Business Days prior to the date fixed for prepayment (or,
if such Statistical Release is no longer published, any publicly available
source of similar market data)) most nearly equal to the then remaining Average
Life of the Securities; provided that if the Average Life of the Securities is
not equal to the constant maturity of a United States Treasury security for
which a weekly average yield is given, the Treasury Rate shall be obtained by
linear interpolation (calculated to the nearest one-twelfth of a year) from the
weekly average yields of United States Treasury securities for which such yields
are given, except that if the Average Life of the Securities is less than one
year, the weekly average yield on actually traded United States Treasury
securities adjusted to a constant maturity of one year shall be used.
"Trust Officer" means any officer or assistant officer of the
Subordinated Debenture Trustee assigned by the Subordinated Debenture Trustee to
administer this Indenture.
"Unrestricted Subsidiary" means, for the purposes of this
Indenture, (i) any Subsidiary of the Company which at the time of determination
is an Unrestricted Subsidiary (as designated by the Board of Directors, as
provided below) and (ii) any Subsidiary of an Unrestricted Subsidiary. The
Board of Directors may designate any Subsidiary of the Company (including any
newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary
unless such Subsidiary owns any Capital Stock of, or owns, or holds any Lien on,
any property of, any other Subsidiary of the Company which is not a Subsidiary
of the Subsidiary to be so designated; provided that the Subsidiary to be so
designated has not at the time of designation, and does not thereafter, create,
incur, issue, assume, guarantee or otherwise become directly or indirectly
liable with respect to any Indebtedness pursuant to which the lender has
recourse to any of the assets of the Company or any of its Restricted
Subsidiaries. The Board of Directors may designate any Unrestricted Subsidiary
to be a Restricted Subsidiary.
"U.S. Government Obligations" means direct noncallable obligations
of or guaranteed by the United States of America.
SECTION 1.02 OTHER DEFINITIONS
Defined in
Term Section
---- -----------
"Affiliate Transaction" . . . . . . . . . . . . . . . . . . 4.09
"Change of Control Offer" . . . . . . . . . . . . . . . . . 4.08
"Change of Control Payment" . . . . . . . . . . . . . . . . 4.08
"Change of Control Payment Date" . . . . . . . . . . . . . . 4.08
"Legal Holiday" . . . . . . . . . . . . . . . . . . . . . . 11.07
"Paying Agent" . . . . . . . . . . . . . . . . . . . . . . . 2.03
"Registrar" . . . . . . . . . . . . . . . . . . . . . . . . 2.03
"Representative" . . . . . . . . . . . . . . . . . . . . . . 10.02
"Restricted Payments" . . . . . . . . . . . . . . . . . . . 4.07
"Senior Debt" . . . . . . . . . . . . . . . . . . . . . . . 10.02
"Successor" . . . . . . . . . . . . . . . . . . . . . . . . 5.01
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:
7
"indenture securities" means the Security;
"indenture security holder" means a Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Subordinated Debenture Trustee;
"obligor" on the Security means the Company, any other obligor upon
the Security or any successor obligor upon the Security.
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; and
(5) provisions apply to successive events and transactions.
ARTICLE 2
THE SECURITIES
SECTION 2.01 FORM AND DATING
The Class C Subordinated Exchange Debentures and the Subordinated
Debenture Trustee's certificate of authentication shall be substantially in the
form of Exhibit A to this Indenture. The Class D Subordinated Exchange
Debentures shall be substantially in the form of Exhibit A to this Indenture but
shall not include the legend preceding paragraph 1 thereof. The Securities may
have notations, legends or endorsements required by law, stock exchange rules or
usage. Each Security shall be dated the date of its authentication. The
Securities shall be in denominations of $1,000 and integral multiples thereof;
provided, however, that in connection with the payment of interest with respect
to the Securities in additional Securities and the original issuance of
Securities hereunder in exchange for shares of the Company's Series C
Exchangeable Preferred Stock, the Company may elect to pay any amount remaining
after issuance of Securities in denominations of $1,000 and/or integral
multiples thereof, in cash or in additional Securities in denominations of less
than $1,000.
The terms and provisions contained in the Securities shall
constitute, and are hereby expressly made, a part of this Indenture and, to the
extent applicable, the Company and the Subordinated Debenture
8
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.
SECTION 2.02 EXECUTION AND AUTHENTICATION
Two Officers shall sign the Securities for the Company by manual or
facsimile signature. The Company's seal shall be reproduced on the Securities
and may be in facsimile form.
If an Officer whose signature is on a Security no longer holds that
office at the time the Security is authenticated, the Security shall
nevertheless be valid.
A Security shall not be valid until authenticated by the manual
signature of the Subordinated Debenture Trustee. Such signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture.
The Subordinated Debenture Trustee shall authenticate Securities
for original issue up to the aggregate principal amount stated in paragraph 4 of
the Securities, upon a written order of the Company signed by an Officer to a
Trust Officer of the Subordinated Debenture Trustee. The aggregate principal
amount of Securities outstanding at any time may not exceed such amount except
as provided in Section 2.07 hereof.
The Subordinated Debenture Trustee may appoint an authenticating
agent acceptable to the Company to authenticate Securities. An authenticating
agent may authenticate Securities whenever the Subordinated Debenture Trustee
may do so. Each reference in this Indenture to authentication by the
Subordinated Debenture Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate of the Company.
SECTION 2.03 REGISTRAR AND PAYING AGENT
The Company shall maintain an office or agency where Securities may
be presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Securities may be presented for payment ("Paying
Agent"). The Registrar shall keep a register of the Securities and of their
transfer and exchange. The Company may appoint one or more co-registrars and
one or more additional paying agents. The term "Registrar" includes any co-
registrar and the term "Paying Agent" includes any additional paying agent. The
Company may change any Paying Agent or Registrar without notice to any Holder.
The Company shall notify the Subordinated Debenture 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
Subordinated Debenture Trustee shall act as such. The Company or any of its
Subsidiaries may act as Paying Agent or Registrar.
SECTION 2.04 PAYING AGENT TO HOLD MONEY IN TRUST
The Company shall require each Paying Agent other than the
Subordinated Debenture Trustee to agree in writing that the Paying Agent will
hold in trust for the benefit of Holders or the Subordinated Debenture Trustee
all money held by the Paying Agent for the payment of principal, premium or
Liquidated Damages, if any, or interest on the Securities, and will notify the
Subordinated Debenture Trustee of any default by the Company in making any such
payment. While any such default continues, the Subordinated Debenture Trustee
may require a Paying Agent to pay all money
9
held by it to the Subordinated Debenture Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Subordinated Debenture
Trustee. Upon payment over to the Subordinated Debenture 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 all money held by it as Paying Agent.
SECTION 2.05 HOLDER LISTS
The Subordinated Debenture Trustee shall preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of Holders and shall otherwise comply with TIA Sec. 312(a).
If the Subordinated Debenture Trustee is not the Registrar, the Company shall
furnish to the Subordinated Debenture Trustee at least seven Business Days
before each Interest Payment Date and, at such other times as the Subordinated
Debenture Trustee may request in writing, a list in such form and as of such
date as the Subordinated Debenture Trustee may reasonably require of the names
and addresses of Holders, and the Company shall otherwise comply with
TIA Sec. 312(a).
SECTION 2.06 TRANSFER AND EXCHANGE
(a) When Securities are presented to the Registrar with the
request:
(x) to register the transfer of such Securities; or
(y) to exchange such Securities for an equal principal amount
of Securities of other authorized denominations,
the Registrar shall register the transfer or make the exchange as
requested if its requirements for such transactions are met;
provided, however, that the Securities 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
and the Trustee, duly executed by the Holder thereof or by his
attorney, duly authorized in writing; and
(ii) in the case of Transfer Restricted Securities, 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 for registration in the name of
such Holder, without transfer, a certification from such
Holder to that effect (in substantially the form of Exhibit B
hereto); or
(B) if such Transfer Restricted Security is being
transferred to a qualified institutional buyer (as defined in
Rule 144A under the Securities Act) in accordance with
Rule 144A under the Securities Act or pursuant to an
exemption from registration in accordance with Rules 144 or
145 or an institutional accredited investor within the
meaning of Rule 501 (a)(1), (2), (3) or (7) or Regulation S
under the Securities Act or pursuant to an effective
registration statement under the Securities Act, a
certification to that effect (in substantially the form of
Exhibit B hereto).
10
(b) Legends.
(i) Except as permitted by the following paragraph (ii), each
Security certificate (and all Securities issued in exchange
therefor or substitution thereof) shall bear a legend in
substantially the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY,
MAY NOT BE OFFERED, SOLD 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 FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) OR (B) IT IS AN "INSTITUTIONAL ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL
ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS
ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT
WILL NOT, WITHIN THREE YEARS AFTER THE ORIGINAL ISSUANCE OF THIS
SECURITY, RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A)
TO THE COMPANY OR MORGAN STANLEY & CO. INCORPORATED, DONALDSON,
LUFKIN & JENRETTE SECURITIES CORPORATION, OR SALOMON BROTHERS
INC, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL
BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR
THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE COMPANY A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE
FORM OF WHICH LETTER CAN BE OBTAINED FROM THE COMPANY) AND IF
SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF
SECURITIES AT THE TIME OF TRANSFER OF LESS THAN $1,000,000 AN
OPINION OF COUNSEL, ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER
IS IN COMPLIANCE WITH THE SECURITIES ACT, (D) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904
UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND IN CONNECTION WITH ANY TRANSFER OF THIS
SECURITY WITHIN THREE YEARS AFTER THE ORIGINAL ISSUANCE OF THE
SECURITY. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER
FURNISH TO THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR
OTHER INFORMATION AS MAY REASONABLY BE REQUIRED TO CONFIRM THAT
SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON"
11
HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT."
(ii) Upon any sale or transfer of a Transfer Restricted
Security satisfying the conditions set forth in subclause (F) of
the legend set forth in the immediately preceding paragraph (i)
above and in connection with the Exchange Offer, the Registrar
shall permit the Holder thereof to exchange such Transfer
Restricted Security for a Security that does not bear the legend
set forth above and, upon transfer of such Transfer Restricted
Security, the restrictions contained in such legend shall be no
longer applicable.
(c) Obligations with respect to Transfers and Exchanges of
Securities.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Subordinated Debenture Trustee
shall authenticate Securities at the Registrar's request.
(ii) No service charge shall be made to a Holder for any
registration or 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 tax or similar governmental charge
payable upon exchange or transfer pursuant to Sections 3.07,
3.08 and 9.05 hereof).
(iii) The Registrar shall not be required to register the
transfer or exchange of any Security selected for redemption in
whole or in part, except the unredeemed portion of any Security
being redeemed in part.
(iv) All Securities issued upon any registration of transfer or
exchange of Securities shall be valid obligations of the
Company, evidencing the same debt, and entitled to the same
benefits under the Indenture, as the Securities surrendered upon
such registration of transfer or exchange.
(v) The Company shall not be required:
(A) to issue, register the transfer of or exchange
Securities during a period beginning at the opening of
business 15 days before the day of any selection of
Securities for redemption under Section 3.02 and ending at
the close of business on the day of selection,
(B) to register the transfer of any Security so selected
for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part, or
(C) to register the transfer of or exchange any Security
during the period between a record date and the corresponding
Interest Payment Date.
(vi) Prior to due presentment for registration of transfer of
any Security, the Subordinated Debenture Trustee, any Agent and
the Company may deem and treat the person in whose name any
Security is registered as the absolute owner of such Security
for the purpose of receiving payment of principal of and
interest on such Security, and neither the Subordinated
Debenture Trustee, any Agent nor the Company shall be affected
by notice to the contrary.
12
SECTION 2.07 REPLACEMENT SECURITIES
If any mutilated Security is surrendered to the Subordinated
Debenture Trustee, or the Company and the Subordinated Debenture Trustee receive
evidence to their satisfaction of the destruction, loss or theft of any
Security, the Company shall issue and the Subordinated Debenture Trustee, upon
the written order of the Company signed by an Officer, shall authenticate a
replacement Security if the Subordinated Debenture Trustee's requirements are
met. If required by the Subordinated Debenture Trustee or the Company, an
indemnity bond must be supplied by the Holder that is sufficient in the judgment
of the Subordinated Debenture Trustee and the Company to protect the Company,
the Subordinated Debenture Trustee, any Agent or any authenticating agent from
any loss which any of them may suffer if a Security is replaced. The Company
may charge for its expenses in replacing a Security.
Every replacement Security is an additional obligation of the
Company and shall be entitled to all benefits of this Indenture equally and
proportionately with all other Securities duly issued hereunder.
SECTION 2.08 OUTSTANDING SECURITIES
The Securities outstanding at any time are all the Securities
authenticated by the Subordinated Debenture Trustee except for those cancelled
by it, those delivered to it for cancellation and those described in this
Section as not outstanding.
If a Security is replaced pursuant to Section 2.07 hereof, it
ceases to be outstanding unless the Subordinated Debenture Trustee receives
proof satisfactory to it that the replaced Security is held by a bona fide
purchaser.
If the principal amount of any Security is considered paid under
Section 4.01 hereof, 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 Securities payable on that date, then on and after that date
such Securities shall be deemed to be no longer outstanding and shall cease to
accrue interest.
Except as set forth in Section 2.09 hereof, a Security does not
cease to be outstanding because the Company or an Affiliate holds the Security.
SECTION 2.09 TREASURY SECURITIES
In determining whether the Holders of the required principal amount
of Securities have concurred in any direction, waiver or consent, Securities
owned by the Company, or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company, shall
be considered as though not outstanding, except that for the purposes of
determining whether the Subordinated Debenture Trustee shall be protected in
relying on any such direction, waiver or consent, only Securities which a
Subordinated Debenture Trustee knows are so owned shall be so disregarded.
SECTION 2.10 TEMPORARY SECURITIES
Until definitive Securities are ready for delivery, the Company may
prepare and the Subordinated Debenture Trustee shall authenticate temporary
securities upon a written order of the Company signed by
13
an Officer and delivered or caused to be delivered to a Trust Officer.
Temporary Securities shall be substantially in the form of definitive Securities
but may have variations that the Company considers appropriate for temporary
Securities. Without unreasonable delay, the Company shall prepare and the
Subordinated Debenture Trustee shall authenticate definitive Securities in
exchange for temporary Securities.
Holders of temporary Securities shall be entitled to all benefits
of this Indenture.
SECTION 2.11 CANCELLATION
The Company at any time may deliver Securities to the Subordinated
Debenture Trustee for cancellation. The Registrar and Paying Agent shall
forward to the Subordinated Debenture Trustee any Securities surrendered to them
for registration of transfer, exchange or payment. The Subordinated Debenture
Trustee and no one else shall cancel all Securities surrendered for registration
of transfer, exchange, payment, replacement or cancellation. The Company may
not issue new Securities to replace Securities that it has paid or that have
been delivered to the Subordinated Debenture Trustee for cancellation.
SECTION 2.12 DEFAULTED INTEREST
If the Company defaults in a payment of interest on the Securities,
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 on a subsequent special record date, in each case at the rate provided
in the Securities and in Section 4.01 hereof. The Company shall, with the
consent of the Subordinated Debenture Trustee, fix each such special record date
and payment date. At least 15 days before the record date, the Company (or the
Subordinated Debenture Trustee, in the name of and at the expense of the
Company) shall mail to Holders a notice that states the special record date, the
related payment date and the amount of such interest to be paid.
ARTICLE 3
OPTIONAL REDEMPTION, OPTIONAL REDEMPTION UPON CHANGE OF
CONTROL AND OPTIONAL REDEMPTION UPON A PUBLIC EQUITY OFFERING
SECTION 3.01 NOTICES TO SUBORDINATED DEBENTURE TRUSTEE
(a) If the Company elects to redeem Securities pursuant to the
optional redemption provisions of Section 3.07 hereof, it shall
furnish to the Subordinated Debenture Trustee, at least 45 days but
not more than 60 days before a redemption date, an Officers'
Certificate stating that such redemption shall occur pursuant to
Section 3.07 hereof and stating the redemption date, the principal
amount of Securities to be redeemed and the redemption price.
(b) If the Company elects to redeem Securities pursuant to the
provisions of Section 3.08 hereof, it shall furnish to the
Subordinated Debenture Trustee, at least 45 days but not more than
60 days before the redemption date, an Officers' Certificate
stating that a Change of Control has occurred, the date of such
Change of Control and that such redemption shall occur pursuant to
Section 3.08 hereof, and further stating the principal amount of
Securities to be redeemed, the redemption price of such Securities
and the intended redemption date.
14
SECTION 3.02 SELECTION OF SECURITIES TO BE REDEEMED
If less than all of the Securities are to be redeemed at any time,
selection of the Securities for redemption will be made by the Subordinated
Debenture Trustee in compliance with the requirements of the principal national
securities exchange, if any, on which the Securities are listed, or, if the
Securities are not listed on a national securities exchange, on a pro rata
basis, by lot or by such method as the Subordinated Debenture Trustee shall deem
fair and appropriate; provided that no Securities of $1,000 or less shall be
redeemed in part. The Subordinated Debenture Trustee may select for redemption
any portion (equal to $1,000 or any integral multiple thereof) of the principal
of Securities that have denominations larger than $1,000. Except as provided in
the preceding sentence, provisions of this Indenture that apply to Securities
called for redemption also apply to portions of Securities called for
redemption.
The Subordinated Debenture Trustee shall promptly notify the
Company in writing of the Securities selected for redemption and, in the case of
any Security selected for partial redemption, the principal amount thereof to be
redeemed. The particular Securities to be redeemed shall be selected, unless
otherwise provided herein, not less than 30 nor more than 60 days prior to the
redemption date by the Subordinated Debenture Trustee from the outstanding
Securities not previously called for redemption.
SECTION 3.03 NOTICES TO HOLDERS
(a) If the Company elects to redeem Securities pursuant to either
Section 3.07 or 3.08 hereof, notice of redemption shall be mailed
by first class mail at least 30 days but not more than 60 days
before the redemption date to each Holder of Securities are to be
redeemed at its registered address.
The notice shall identify the Securities to be redeemed (including
CUSIP number) and shall state:
(1) the redemption date;
(2) the redemption price;
(3) if any Security is being redeemed in part, the portion of
the principal amount of such Security to be redeemed and that,
after the redemption date, upon surrender of such Security, a
new Security or Securities in principal amount equal to the
unredeemed portion will be issued;
(4) the name and address of the Paying Agent;
(5) that Securities called for redemption must be surrendered
to the Paying Agent at the address specified in such notice to
collect the redemption price;
(6) that interest on Securities or portions of them called for
redemption ceases to accrue on and after the redemption date;
(7) the paragraph of the Securities pursuant to which the
Securities are being redeemed; and
15
(8) the aggregate principal amount of Securities that are
being redeemed.
(b) At the Company's request, the Subordinated Debenture Trustee
shall give the notice required in Section 3.03(a) hereof in the
Company's name and at its expense and setting forth the information
to be stated in such notice as provided in Section 3.03(a) hereof.
SECTION 3.04 EFFECT OF NOTICE OF REDEMPTION
Once notice of redemption is mailed (after the Subordinated
Debenture Trustee has received the notice provided for in Section 3.01 hereof),
Securities called for redemption become due and payable on the redemption date
at the redemption price and shall cease to bear interest from and after the
redemption date (unless the Company shall fail to make payment of the redemption
price or accrued interest on the redemption date). Upon surrender to the Paying
Agent, such Securities shall be paid at the redemption price, plus premium and
Liquidated Damages, if any, plus accrued interest, if any, to the redemption
date, but interest installments whose maturity is on or prior to the redemption
date and Liquidated Damages which become payable on or prior to the redemption
date will be payable to the Holder of record at the close of business on the
relevant record dates referred to in the Securities.
SECTION 3.05 DEPOSIT OF REDEMPTION PRICE OR PURCHASE PRICE
One Business Day prior to the redemption date, the Company shall
deposit with the Subordinated Debenture Trustee or with the Paying Agent money
(in same-day funds) sufficient to pay the redemption price of, premium and
Liquidated Damages, if any, and accrued interest on, all Securities to be
redeemed on that date other than Securities or portions thereof called for
redemption on that date which previously have been delivered by the Company to
the Subordinated Debenture Trustee for cancellation. The Subordinated Debenture
Trustee or the Paying Agent shall return to the Company any such money not
required for that purpose.
If the Company complies with the preceding paragraph, interest on
the Securities or portions thereof to be redeemed, whether or not such
Securities are presented for payment, will cease to accrue on the applicable
redemption date. If any Security 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, then interest will be paid on the unpaid principal
from the redemption date until such principal is paid and on any interest not
paid on such unpaid principal, in each case, at the rate provided in the
Securities and in Section 4.01 hereof.
SECTION 3.06 SECURITIES REDEEMED IN PART
Upon surrender of a Security that is redeemed in part, the Company
shall issue and the Trustee shall authenticate for the Holder at the expense of
the Company a new Security equal in principal amount to the unredeemed portion
of the Security surrendered.
SECTION 3.07 OPTIONAL REDEMPTION
Except as otherwise provided herein, prior to February 1, 2001, the
Company may not redeem the Securities, in whole or in part. At any time on or
after February 1, 2001, the Company may redeem all or any of the Securities, in
whole or in part, at a redemption price equal to a percentage of the principal
amount thereof, as set forth in the immediately succeeding paragraph, plus
Liquidated Damages, if any, plus accrued and unpaid interest to the redemption
date.
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The redemption price as a percentage of the principal amount shall
be as follows, if the Securities are redeemed during the 12 month period
beginning February 1 of the following years:
Year Percentage
---- ----------
2001 . . . . . . . . . . . . . . 105%
2002 . . . . . . . . . . . . . . 104
2003 . . . . . . . . . . . . . . 103
2004 . . . . . . . . . . . . . . 102
2005 . . . . . . . . . . . . . . 101
2006 and thereafter . . . . . . . 100
Notwithstanding the foregoing:
(1) the Company may redeem up to 50% of the outstanding aggregate
principal amount of the Securities originally issued at a
redemption price of 110% of the principal amount thereof, plus
Liquidated Damages, if any, plus accrued and unpaid interest to the
redemption date, out of the net proceeds of any Public Equity
Offering, provided that any such redemption shall occur within 180
days of such Public Equity Offering; and
(2) upon the occurrence at any time of a Change in Control, the
Securities will be redeemable, at the option of the Company, in
whole or in part, pursuant to the provisions of Section 3.08
hereof.
Any redemption pursuant to this Section 3.07 shall be made, to the
extent applicable, pursuant to the provisions of Sections 3.01 through 3.06
hereof.
SECTION 3.08 OPTIONAL REDEMPTION UPON CHANGE OF CONTROL
In addition to any redemption pursuant to Section 3.07 hereof, the
Securities will be redeemable, at the option of the Company, in whole or in
part, at any time within 160 days after a Change of Control at a redemption
price equal to the sum of the then outstanding principal amount thereof plus
Liquidated Damages, if any, plus accrued and unpaid interest, if any, to the
redemption date plus the Applicable Premium.
ARTICLE 4
COVENANTS
SECTION 4.01 PAYMENT OF SECURITIES
The Company shall pay the principal of and interest on the
Securities on the dates and in the manner provided in the Securities, and shall
pay Liquidated Damages, if any, on the dates and in the manner provided in the
Registration Rights Agreement. Principal and interest shall be considered paid
on the date due if the Paying Agent, other than the Company or a Subsidiary of
the Company, holds on that date money deposited by the Company in available
funds and designated for and sufficient to pay all principal and interest then
due.
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The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal and premium, if
any, at the same rate per annum on the Securities to the extent lawful; it shall
pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace period) at the same rate to the extent lawful.
SECTION 4.02 MAINTENANCE OF OFFICE OR AGENCY
The Company shall maintain, in the Borough of Manhattan, The City
of New York, an office or agency (which may be an office of the Subordinated
Debenture Trustee or the Registrar) where Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Securities and this Indenture may be served. The
Company shall give prompt written notice to the Subordinated Debenture 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 Subordinated Debenture Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Subordinated Debenture Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any 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 shall
give prompt written notice to the Subordinated Debenture 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
Subordinated Debenture Trustee as one such office or agency of the Company in
accordance with Section 2.03 hereof.
SECTION 4.03 SEC REPORTS; FINANCIAL STATEMENTS
(a) The Company shall file with the Subordinated Debenture
Trustee, within 15 days after it files the same with the SEC,
copies of the annual reports and the information, documents and
other reports (or copies of such portions of any of the foregoing
as the SEC may by rules and regulations prescribe) that the Company
is required to file with the SEC pursuant to Section 13 or 15(d) of
the Exchange Act. If the Company is not subject to the
requirements of such Section 13 or 15(d), the Company shall file
with the Subordinated Debenture Trustee, within 15 days after it
would have been required to file the same with the SEC, financial
statements, including any notes thereto (and with respect to annual
reports, an auditors' report by a firm of established national
reputation), and a "Management's Discussion and Analysis of
Financial Condition and Results of Operations," both comparable to
that which the Company would have been required to include in such
annual reports, information, documents or other reports if the
Company had been subject to the requirements of such Section 13 or
15(d). The Company shall also comply with the other provisions of
TIA Sec.314(a).
(b) If the Company is required to furnish annual or quarterly
reports to its stockholders pursuant to the Exchange Act, the
Company shall cause any annual report furnished to its stockholders
generally and any quarterly or other financial reports furnished by
it to its stockholders generally to be filed with the Subordinated
Debenture Trustee and mailed to the
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Holders at their addresses appearing in the register of Securities
maintained by the Registrar. If the Company is not required to
furnish annual or quarterly reports to its stockholders pursuant to
the Exchange Act, so long as at least 5% of the original principal
amount of the Securities remain outstanding, the Company shall
cause its financial statements referred to in Section 4.03(a)
hereof, including any notes thereto (and with respect to annual
reports, an auditors' report by a firm of established national
reputation), and a "Management's Discussion and Analysis of
Financial Condition and Results of Operations" to be so mailed to
the Holders within 90 days after the end of each of the Company's
fiscal years and within 60 days after the end of each of the
Company's first three fiscal quarters. As of the date hereof, the
Company's fiscal year ends on December 31.
SECTION 4.04 COMPLIANCE CERTIFICATE
(a) The Company shall deliver to the Subordinated Debenture
Trustee, within 120 days after the end of each fiscal year of the
Company, an Officers' Certificate stating that a review of the
activities of the Company and its Subsidiaries during the preceding
fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept,
observed, performed and fulfilled its obligations under this
Indenture, and further stating, as to each such Officer signing
such certificate, that to the best of his knowledge the Company has
kept, observed, performed and fulfilled each and every covenant
contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and
conditions hereof (or, if a Default or Event of Default shall have
occurred, describing all such Defaults or Events of Default of
which he may have knowledge and what action the Company is taking
or proposes to take with respect thereto) and that to the best of
his knowledge no event has occurred and remains in existence by
reason of which payments on account of the principal of or
interest, if any, on the Securities are prohibited or, if such
event has occurred, a description of the event and what action the
Company is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations
of the American Institute of Certified Public Accountants, the
year-end financial statements delivered pursuant to Section 4.03
hereof 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 Articles 4 or 5 of this Indenture
or, if any such violation has occurred, specifying the nature and
period of existence thereof, it being understood that such
accountants shall not be liable directly or indirectly to any
Person for any failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Securities are
outstanding, (i) deliver to the Subordinated Debenture Trustee,
forthwith upon any Officer becoming aware of any Default or Event
of Default under this Indenture, an Officers' Certificate
specifying such Default or Event of Default and what action the
Company is taking or proposes to take with respect thereto and
(ii) promptly notify the Subordinated Debenture Trustee of any
Change in Control.
SECTION 4.05 COMPLIANCE WITH LAWS, TAXES
The Company shall, and shall cause each of its Subsidiaries to,
comply with all statutes, laws, ordinances, or government rules and regulations
to which it is subject, noncompliance with which would
19
materially adversely affect the business, earnings, properties, assets or
condition, financial or otherwise, of the Company and its Subsidiaries taken as
a whole.
The Company shall, and shall cause each of its Subsidiaries to, pay
prior to delinquency all taxes, assessments, and governmental levies except as
contested in good faith and by appropriate proceedings.
SECTION 4.06 STAY, EXTENSION AND USURY LAWS
The Company covenants (to the extent that it may lawfully do so)
that it shall not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law
wherever enacted, now or at any time hereafter in force, that may affect the
Company's obligation to pay the Securities; and the Company (to the extent that
it may lawfully do so) hereby expressly waives all benefit or advantage of any
such law insofar as such law applies to the Securities, 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 Subordinated Debenture Trustee, but will suffer
and permit the execution of every such power as though no such law has been
enacted.
SECTION 4.07 LIMITATIONS ON RESTRICTED PAYMENTS
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, (i) declare or pay any dividend or make
any distribution on account of the Company's or any of its Restricted
Subsidiaries' Capital Stock or other Equity Interests (other than (A) dividends
or distributions payable in Equity Interests of the Company or such Restricted
Subsidiary or (B) dividends or distributions payable to the Company or any of
its Restricted Subsidiaries) or (ii) purchase, redeem or otherwise acquire or
retire for value any Equity Interests of the Company or any Restricted
Subsidiary (other than any such Equity Interests owned by the Company or any of
its Restricted Subsidiaries) (the foregoing actions set forth in clauses (i) and
(ii) being referred to as "Restricted Payments"), if, at the time of such
Restricted Payment, a Default or Event of Default the Securities shall have
occurred and be continuing or shall occur as a consequence thereof.
SECTION 4.08 CHANGE OF CONTROL
Upon the occurrence of a Change of Control, each Holder shall have
the right to require the repurchase of such Holder's Securities pursuant to the
offer described below (the "Change of Control Offer") at a purchase price equal
to 101% of the aggregate principal amount of such Securities plus accrued and
unpaid interest, if any, to the date of purchase (the "Change of Control
Payment"). Prior to the mailing of the notice to holders provided for in the
paragraph below, the Company hereby covenants (i) (A) to repay in full all
Obligations under the Credit Agreements or to offer to repay in full all such
Obligations and to repay the Obligations of each lender who has accepted such
offer or (B) to obtain the requisite consent under the Credit Agreements to
permit the repurchase of Securities pursuant to the Change of Control Offer;
(ii) (A) to commence an offer (the "Senior Secured Note Offer") to repurchase
all Senior Secured Notes and to purchase (upon the termination of the Senior
Secured Note Offer) all Senior Secured Notes tendered pursuant to such offer or
(B) to obtain the requisite consent under the Senior Secured Note Indenture to
permit the repurchase of Securities pursuant to the Change of Control Offer;
(iii) (A) to commence an offer (the "Exchange Debenture Offer") to repurchase
all Exchange Debentures and to purchase (upon termination of the Exchange
Debenture Offer) all Exchange Debentures tendered pursuant to such offer or (B)
to obtain the requisite consent under the Exchange Debenture Indenture to permit
the repurchase of Securities pursuant to the Change of Control Offer and (iv)
with
20
respect to all other Senior Debt (as defined below) to (A) repay such Senior
Debt to the extent required by the terms thereof to permit repurchase of the
Securities pursuant to the Change of Control Offer or (B) to obtain the
requisite consents, if any, under all agreements governing all such Senior Debt
to permit the repurchase of Securities pursuant to the Change of Control Offer.
In no event shall the Company be required to offer to repurchase or repurchase
the Securities unless it shall have either repaid the outstanding Senior Debt to
the extent required by the terms thereof or obtained the requisite consents
thereunder, if any, to permit the repurchase of the Securities pursuant to the
Change of Control Offer.
Within the later of (a) 40 days following any Change of Control and
(b) the date that the foregoing conditions are satisfied, the Company shall mail
a notice to each Holder stating:
(1) that the Change of Control Offer is being made pursuant to
this Section 4.08 and that all Securities tendered will be accepted
for payment;
(2) the purchase price and the purchase date (which shall be no
earlier than 30 days nor later than 40 days from the date such
notice is mailed)(the "Change of Control Payment Date");
(3) that any Security not tendered will continue to accrue
interest;
(4) that, unless the Company defaults in the payment of the
Change of Control Payment, all Securities accepted for payment
pursuant to the Change of Control Offer shall cease to accrue
interest after the Change of Control Payment Date;
(5) that Holders electing to have any of their Securities
purchased pursuant to a Change of Control Offer will be required to
surrender the Securities, with the form entitled "Option of Holder
to Elect Purchase" on the reverse of the Security completed, to the
Paying Agent at the address specified in the notice prior to the
close of business on the Business Day preceding the Change of
Control Payment Date;
(6) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than the close of business on
the third Business Day preceding the Change of Control Payment
Date, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the
Securities delivered for purchase, and a statement that such Holder
is withdrawing his election to have such Securities purchased; and
(7) that Holders whose Securities are being purchased only in
part will be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered; provided that
each Security purchased and each such new Security issued by the
Company shall be in a principal amount of $1,000 or integral
multiples thereof.
The Change of Control Offer shall be deemed to have commenced upon mailing of
the notice described in this paragraph and shall terminate 20 Business Days
after its commencement, unless a longer offering period is required by law. If
the Change of Control Payment Date is on or after an interest payment record
date and on or before the related interest payment date, any accrued interest
will be paid to the person in whose name a Security is registered at the close
of business on such record date, and no additional interest will be payable to
Holders who tender Securities pursuant to the Change of Control Offer.
21
On the Change of Control Payment Date, the Company shall, to the
extent lawful, (1) accept for payment Securities or portions thereof tendered
pursuant to the Change of Control Offer, (2) deposit with the Paying Agent an
amount equal to the Change of Control Payment in respect of all Securities or
portions thereof so tendered and (3) deliver or cause to be delivered to the
Subordinated Debenture Trustee, the Securities so accepted together with an
Officers' Certificate stating the Securities or portions thereof tendered to the
Company. The Paying Agent shall promptly mail to each holder of Securities so
accepted, payment in an amount equal to the purchase price for such Securities,
and the Subordinated Debenture Trustee shall promptly authenticate and mail to
such holder a new Security equal in principal amount to any unpurchased portion
of the Securities surrendered; provided that each such new Security shall be in
a principal amount of $1,000 or integral multiples thereof. The Company will
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
SECTION 4.09 TRANSACTIONS WITH AFFILIATES
Neither the Company nor any of its Restricted Subsidiaries shall
make any loan, advance, guarantee or capital contribution to, or for the benefit
of, or sell, lease, transfer or otherwise dispose of any of its properties or
assets to, or for the benefit of, or purchase or lease any property or assets
from, or enter into or amend any contract, agreement or understanding with, or
for the benefit of, (i) any Person (or any Affiliate of such Person) holding 10%
or more of any class of Capital Stock of the Company or any of its Restricted
Subsidiaries or (ii) any Affiliate of the Company or any of its Restricted
Subsidiaries (each an "Affiliate Transaction"), except on terms that are no less
favorable to the Company or the relevant Restricted Subsidiary, as the case may
be, than those that could have been obtained in a comparable transaction on an
arm's length basis from a Person that is not such a holder or Affiliate;
provided that a transaction with any such holder (or Affiliate thereof) or any
Affiliate of the Company or any of its Restricted Subsidiaries shall be deemed
to be on terms that are no less favorable to the Company or such Restricted
Subsidiary than those obtainable at the time of the transaction from a Person
who is not such a holder or Affiliate if (a) the Company or such Restricted
Subsidiary delivers to the Subordinated Debenture Trustee a written opinion of a
nationally recognized investment banking firm stating that the transaction is
fair to the Company or such Restricted Subsidiary from a financial point of view
or (b) a disinterested majority of the Board of Directors of the Company or such
Restricted Subsidiary approves the transaction; and provided, further, that, the
foregoing restriction shall not apply to (i) the payment of an annual fee to KKR
for the rendering of management consulting and financial services to the Company
and its Restricted Subsidiaries in an aggregate amount which is reasonable in
relation thereto, (ii) the payment of transaction fees to KKR in amounts which
are in accordance with past practices for the rendering of financial advice and
services in connection with acquisitions, dispositions and financings by the
Company and its Subsidiaries, (iii) the payment of reasonable and customary
regular fees to directors of the Company and its Subsidiaries who are not
employees of the Company or its Restricted Subsidiaries, (iv) loans to officers,
directors and employees of the Company and its Subsidiaries for business or
personal purposes and other loans and advances to such officers, directors and
employees for travel, entertainment, moving and other relocation expenses made
in the ordinary course of business of the Company and its Subsidiaries, (v) any
Restricted Payments (as defined in the referent indenture) not prohibited by the
RESTRICTED PAYMENTS covenant in the Senior Note Indentures, the Exchange
Debenture Indenture or Series B Debenture Indenture, or any Investment (as
defined in the referent indenture) not prohibited by the INVESTMENTS IN
UNRESTRICTED SUBSIDIARIES covenant in the Senior Note Indentures,
(vi) transactions between or among any of the Company and its Restricted
Subsidiaries or (vii) allocation of corporate overhead to Unrestricted
Subsidiaries on a basis no less favorable to the Company than such allocations
to Restricted Subsidiaries.
22
SECTION 4.10 CORPORATE EXISTENCE.
Subject to Article 5 hereof, the Company shall do or cause to be
done all things necessary to preserve and keep in full force and effect its
corporate existence and the corporate, partnership or other existence of each
Restricted Subsidiary in accordance with the respective organizational documents
of each Restricted Subsidiary and the rights (charter and statutory), licenses
and franchises of the Company and its Restricted Subsidiaries; provided that the
Company shall not be required to preserve any such right, license or franchise,
or the corporate, partnership or other existence of any Restricted Subsidiary,
if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and its
Restricted Subsidiaries taken as a whole and that the loss thereof is not
adverse in any material respect to the Holders.
SECTION 4.11 RULE 144A INFORMATION REQUIREMENT.
The Company will furnish to the Holders or beneficial holders of
the Securities and prospective purchasers of the Securities designated by the
holders of Transfer Restricted Securities, upon their request, the information
required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act
until such time as the Company consummates the Exchange Offer or has registered
the Securities for resale under the Securities Act.
ARTICLE 5
SUCCESSORS
SECTION 5.01 MERGER, CONSOLIDATION, OR SALE OF ASSETS
The Company may not consolidate with, merge with or into, or
transfer all or substantially all of its assets (as an entirety or substantially
as an entirety in one transaction or a series of related transactions) to any
Person or permit any Person to merge with or into it unless:
(1) the Company shall be the continuing Person, or the Person (if
other than the Company) formed by such consolidation or into which
the Company is merged or to which the properties and assets of the
Company are transferred (collectively the "Successor") shall be a
corporation organized and existing under the laws of the United
States or any State thereof or the District of Columbia and shall
expressly assume, by a supplemental indenture, executed and
delivered to the Subordinated Debenture Trustee, in form
satisfactory to the Subordinated Debenture Trustee, all the
obligations of the Company under the Securities and this Indenture;
(2) immediately after giving effect to such transaction, no
Default and no Event of Default under this Indenture shall have
occurred and be continuing; and
(3) immediately after giving effect to such transaction on a pro
forma basis, the Consolidated Net Worth of the surviving entity is
at least equal to the Consolidated Net Worth of the Company
immediately prior to such transaction; and
(4) the Company has delivered an Officers' Certificate and an
Opinion of Counsel relating to such transaction.
SECTION 5.02 SUCCESSOR CORPORATION SUBSTITUTED
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Upon any consolidation or merger, or any sale, lease, conveyance or
other disposition of all or substantially all of the assets of the Company or
any assignment of its obligations under this Indenture or the Securities in
accordance with Section 5.01 hereof, the successor formed by such consolidation
or into or with which the Company is merged or to which such sale, lease,
conveyance or other disposition or assignment is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such Successor has been named as the
Company herein and the predecessor Company, in the case of a sale, lease,
conveyance or other disposition or assignment, shall be released from all
obligations under this Indenture and the Securities.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01 EVENTS OF DEFAULT
An "Event of Default" occurs if:
(1) the Company fails to make any payment of interest or
Liquidated Damages on any Security when the same shall become due
and payable and such default continues for a period of 30 days and
for five days after written notice of such default is given to the
Company by the Holders of at least 51% in principal amount of the
Securities following the expiration of such 30-day period;
(2) the Company fails to make any payment of the principal of or
premium on any Security when the same shall become due and payable,
whether at maturity or upon acceleration, redemption or otherwise,
and such default continues for a period of ten days;
(3) the Company fails to comply with any of its other agreements
or covenants in, or provisions of, the Securities or this Indenture
and such failure continues for the period and after the notice
specified below;
(4) an event of default under any mortgage, indenture or
instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness for money borrowed by the
Company or any of its Restricted Subsidiaries (or the payment of
which is guaranteed by the Company or any of its Restricted
Subsidiaries) whether such Indebtedness or guarantee is now
existing or thereafter created in the future, if as a result of
such event of default the maturity of such Indebtedness has been
accelerated prior to its express maturity and the principal amount
of such Indebtedness is $22.5 million or more or the principal
amount of such Indebtedness, together with the principal amount of
any other such Indebtedness the maturity of which as been
accelerated, aggregates $45 million or more, provided that an Event
of Default shall not be deemed to occur with respect to any
accelerated Indebtedness which is repaid or prepaid, or the
acceleration of which is rescinded, within 60 days after such
declaration;
(5) the Company, or any of the Restricted Subsidiaries pursuant
to or within the meaning of any Bankruptcy Law:
(a) commences a voluntary case,
(b) consents to the entry of an order for relief against it in
an involuntary case,
24
(c) consents to the appointment of a Custodian of it or for
all or substantially all of its property, or
(d) makes a general assignment for the benefit of its
creditors; or
(6) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(a) is for relief against the Company, or any of its
Restricted Subsidiaries as debtor in an involuntary case,
(b) appoints a Custodian of the Company, or any of its
Restricted Subsidiaries or a Custodian for all or substantially
all of the property of the Company, or any of its Restricted
Subsidiaries, or
(c) orders the liquidation of the Company, or any of its
Restricted Subsidiaries, and the order or decree remains
unstayed and in effect for 60 days.
The Company is required pursuant to Section 4.04(a) hereof to
deliver to the Subordinated Debenture Trustee annually a statement regarding
compliance with the provisions of this Indenture, and the Company is required
pursuant to Section 4.04(c) hereof upon becoming aware of any Default or Event
of Default to deliver a statement to the Subordinated Debenture Trustee
specifying such Default or Event of Default. The Subordinated Debenture Trustee
shall not be deemed to know of a Default unless a Responsible Officer has actual
knowledge of such Default or receives written notice of such Default with
specific reference to such Default.
In the case of any Event of Default pursuant to the provisions of
this Section 6.01 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, if any, which the Company would have had to pay if the
Company then had elected to redeem the Securities pursuant to Section 3.07
hereof, an equivalent premium shall also become and be immediately due and
payable to the extent permitted by law, anything contained in this Indenture or
in the Securities to the contrary notwithstanding.
A Default under clause (3) is not an Event of Default until the
Subordinated Debenture Trustee notifies the Company, or the Holders of at least
51% in principal amount of the then outstanding Securities notify the Company
and the Subordinated Debenture Trustee in writing, of the Default and the
Company does not cure the Default within 60 days after receipt of the notice.
The notice must specify the Default, demand that it be remedied and state that
the notice is a "Notice of Default."
SECTION 6.02 ACCELERATION
If an Event of Default (other than an Event of Default with respect
to the Company specified in clauses (5) and (6) of Section 6.01 hereof) occurs
and is continuing, the Subordinated Debenture Trustee or the Holders of at least
51% in principal amount of the then outstanding Securities, by written notice to
the Company and to the agents under the Credit Agreements, the trustees under
the Senior Note Indentures, the Exchange Debenture Indenture (and to the
Subordinated Debenture Trustee if such notice is given by the Holders) may, and
the Subordinated Debenture Trustee at the request of such Holders shall, declare
all unpaid principal of, premium and Liquidated Damages, if any, and accrued
interest on the Securities to be due and payable upon the first to occur of an
acceleration under any of the Credit
25
Agreements, any of the Senior Notes or the Exchange Debentures or 15 Business
Days after receipt by the Company, such agent and such trustees of such written
notice to the extent that the Event of Default is continuing. If an Event of
Default with respect to the Company specified in clause (5) or (6) of
Section 6.01 hereof occurs, all unpaid principal of, premium and Liquidated
Damages, if any, and accrued interest on the Securities then outstanding shall
ipso facto become and be immediately due and payable without any declaration,
notice or other act on the part of the Subordinated Debenture Trustee or any
Holder. The Holders of at least 51% in aggregate principal amount of the then
outstanding Securities by written notice to the Subordinated Debenture Trustee
may rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default
(except nonpayment of principal, premium and Liquidated Damages, if any, or
interest on the Securities that has become due solely as a result of such
acceleration) have been cured or waived.
In the event that the maturity of the Securities is accelerated
pursuant to this Section 6.02, 100% of the principal amount thereof and premium
and Liquidated Damages, if any, and accrued interest to the date of payment
shall become due and payable.
SECTION 6.03 OTHER REMEDIES
If an Event of Default occurs and is continuing, the Subordinated
Debenture Trustee may pursue any available remedy to collect the payment of
principal, premium and Liquidated Damages, if any, or interest then due on the
Securities or to enforce the performance of any provision of the Securities or
this Indenture.
The Subordinated Debenture Trustee may maintain a proceeding even
if it does not possess any of the Securities or does not produce any of them in
the proceeding. A delay or omission by the Subordinated Debenture Trustee or
any Holder 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
The Holders of at least 51% in principal amount of the then
outstanding Securities by notice to the Subordinated Debenture Trustee may waive
an existing Default or Event of Default and its consequences (including waivers
obtained in connection with a tender offer or exchange offer for Securities),
except a continuing Default or Event of Default in the payment of the principal
of, premium or Liquidated Damages, if any, or interest on, such Security
(including, without limitation, pursuant to any mandatory or optional redemption
obligation hereunder) or that resulted from the failure to comply with
Section 4.08 hereof. Upon any such waiver, such Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured
for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.
SECTION 6.05 CONTROL BY MAJORITY
The Holders of at least 51% in principal amount of the then
outstanding Securities may direct the time, method and place of conducting any
proceeding for any remedy available to the Subordinated Debenture Trustee or
exercising any trust or power conferred on it. However, the Subordinated
Debenture Trustee may refuse to follow any direction that conflicts with law or
this Indenture, that the Subordinated
26
Debenture Trustee determines may be unduly prejudicial to the rights of other
Holders, or that may involve the Subordinated Debenture Trustee in personal
liability.
SECTION 6.06 LIMITATIONS ON SUITS
A Holder may not pursue a remedy with respect to this Indenture or
the Securities unless:
(1) the Holder gives to the Subordinated Debenture Trustee
written notice of a continuing Event of Default;
(2) the Holders of at least 51% in principal amount of the then
outstanding Securities make a written request to the Subordinated
Debenture Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Subordinated Debenture
Trustee indemnity satisfactory to the Subordinated Debenture Trustee
against any loss, liability or expense (including, without limitation,
fees of counsel);
(4) the Subordinated Debenture Trustee does not comply with the
request within 30 days after receipt of the request and the offer of
indemnity; and
(5) during such 30-day period the Holders of at least 51% in
principal amount of the then outstanding Securities do not give the
Subordinated Debenture Trustee a direction which is inconsistent with
the request.
A Holder may not use this Indenture to prejudice the rights of another Holder or
to obtain a preference or priority over another Holder.
SECTION 6.07 RIGHTS OF HOLDERS TO RECEIVE PAYMENT
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Security to receive payment of principal of, premium and
Liquidated Damages, if any, and interest on the Security, on or after the
respective due dates expressed in the Security or the Registration Rights
Agreement, as the case may be, or to bring suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of the Holder.
SECTION 6.08 COLLECTION SUIT BY SUBORDINATED DEBENTURE TRUSTEE
If an Event of Default specified in Section 6.01(1), (2) or
(3) (with respect to the Company's obligations under Section 4.08 hereof) hereof
occurs and is continuing, the Subordinated Debenture Trustee is authorized to
recover judgment in its own name and as trustee of an express trust against the
Company for the amount of principal, premium and Liquidated Damages, if any, and
interest remaining unpaid on the Securities, determined in accordance with
Section 6.02 hereof and interest on overdue principal, premium, if any, 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 Subordinated Debenture
Trustee, its agents and counsel.
27
SECTION 6.09 SUBORDINATED DEBENTURE TRUSTEE MAY FILE PROOFS OF CLAIM
The Subordinated Debenture 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 Subordinated Debenture Trustee (including any
claim for the reasonable compensation, expenses, disbursements and advances of
the Subordinated Debenture Trustee, its agents and counsel) and the Holders
allowed in any judicial proceedings relative to the Company, 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 to make such payments to the Subordinated Debenture Trustee, and in the
event that the Subordinated Debenture Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Subordinated Debenture
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Subordinated Debenture Trustee, its agents and
counsel, and any other amounts due the Subordinated Debenture Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Subordinated Debenture Trustee, its
agents and counsel, and any other amounts due the Subordinated Debenture Trustee
under Section 7.07 hereof out of the estate in any such proceeding, shall be
denied for any reason, payment of the same shall be secured by a Lien on, and
shall be paid out of, any and all distributions, dividends, money, securities
and other properties which the Holders of the Securities 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 Subordinated Debenture Trustee to authorize or consent
to or accept or adopt on behalf of any Holder any plan of reorganization,
arrangement, adjustment or composition affecting the Securities or the rights of
any Holder thereof, or to authorize the Subordinated Debenture Trustee to vote
in respect of the claim of any Holder in any such proceeding.
SECTION 6.10 PRIORITIES
If the Subordinated Debenture Trustee collects any money pursuant
to this Article 6, it shall pay out the money in the following order:
First: to the Subordinated Debenture Trustee for amounts due under
Section 7.07 hereof;
Second: subject to Article 10 hereof, to Holders for amounts due
and unpaid on the Securities for principal, premium and Liquidated
Damages, if any, and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on
the Securities for principal, premium and Liquidated Damages, if
any, and interest, respectively; and
Third: to the Company.
The Subordinated Debenture Trustee may fix a record date and
payment date for any payment to Holders pursuant to this Article 6.
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 Subordinated Debenture Trustee for any
action taken or omitted by it as a Subordinated Debenture Trustee, a court in
its discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good
28
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit by the Subordinated Debenture Trustee, a suit by a
Holder pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Securities.
ARTICLE 7
SUBORDINATED DEBENTURE TRUSTEE
SECTION 7.01 DUTIES OF SUBORDINATED DEBENTURE TRUSTEE
(1) If an Event of Default has occurred and is continuing, the
Subordinated Debenture 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 such exercise, as a prudent man would exercise
or use under the circumstances in the conduct of his own affairs.
(2) Except during the continuance of an Event of Default:
(a) the Subordinated Debenture Trustee need perform only those
duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read
into this Indenture against the Subordinated Debenture Trustee;
and
(b) in the absence of bad faith on its part, the Subordinated
Debenture 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
Subordinated Debenture Trustee and conforming to the
requirements of this Indenture. However, the Subordinated
Debenture Trustee shall examine the certificates and opinions to
determine whether or not, on their face, they appear to conform
to the requirements of this Indenture.
(3) The Subordinated Debenture Trustee may not be relieved from
liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(a) this paragraph does not limit the effect of paragraph (2)
of this Section 7.01;
(b) the Subordinated Debenture Trustee shall not be liable for
any error of judgment made in good faith by a Trust Officer,
unless it is proved that the Subordinated Debenture Trustee was
negligent in ascertaining the pertinent facts; and
(c) the Subordinated Debenture Trustee shall not be liable
with respect to any action it takes or omits to take in good
faith in accordance with a direction received by it pursuant to
Section 6.05 hereof.
(4) Whether or not therein expressly so provided, every provision
of this Indenture that in any way relates to the Subordinated
Debenture Trustee is subject to paragraphs (1), (2) and (3) of this
Section 7.01.
(5) No provision of this Indenture shall require the Subordinated
Debenture Trustee to expend or risk its own funds or incur any
liability. The Subordinated Debenture Trustee is not obligated to
perform any duty or exercise any right or power under this
Indenture at the request of the
29
Holders of the Securities unless it
receives an offer from such Holders of security and indemnity
satisfactory to it against any loss, liability or expense
(including, without limitation, fees of counsel).
(6) The Subordinated Debenture Trustee shall not be liable for
interest on any money received by it except as the Subordinated
Debenture Trustee may agree in writing with the Company. Money
held in trust by the Subordinated Debenture Trustee need not be
segregated from other funds except to the extent required by law.
SECTION 7.02 RIGHTS OF SUBORDINATED DEBENTURE TRUSTEE
(1) The Subordinated Debenture Trustee may rely on any document
believed by it to be genuine and to have been signed or presented
by the proper Person. The Subordinated Debenture Trustee need not
investigate any fact or matter stated in the document.
(2) Before the Subordinated Debenture Trustee acts or refrains
from acting, it may require an Officers' Certificate or an Opinion
of Counsel or both. The Subordinated Debenture 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
Subordinated Debenture Trustee may consult with counsel and the
advice of such counsel (to be promptly confirmed in writing) or any
Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by
it hereunder and in reliance thereon.
(3) The Subordinated Debenture Trustee may act through agents and
shall not be responsible for the misconduct or negligence of any
agent, attorney, custodian or nominee appointed with due care.
(4) The Subordinated Debenture 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.
(5) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be
sufficient if signed by an Officer of the Company.
SECTION 7.03 INDIVIDUAL RIGHTS OF SUBORDINATED DEBENTURE TRUSTEE
The Subordinated Debenture Trustee in its individual or any other
capacity may become the owner or pledgee of Securities and may otherwise deal
with the Company or any of its Affiliates with the same rights it would have if
it were not Subordinated Debenture Trustee. Any Agent may do the same with like
rights. However, the Subordinated Debenture Trustee is subject to Sections 7.10
and 7.11 hereof.
SECTION 7.04 SUBORDINATED DEBENTURE TRUSTEE'S DISCLAIMER
The Subordinated Debenture Trustee makes no representation as to
the validity or adequacy of this Indenture or the Securities; it shall not be
accountable for the Company's use of the proceeds from the Securities or any
money paid to the Company or upon the Company's direction under any provision
hereof; it shall not be responsible for the use or application of any money
received by any Paying Agent
30
other than the Subordinated Debenture Trustee; and it shall not be responsible
for any statement or recital herein or any statement in the Securities 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 a trust officer of the Subordinated Debenture Trustee, the
Subordinated Debenture Trustee shall mail to each Holder a notice of the Default
or Event of Default within 90 days after it occurs, or if later, within ten days
after such Default or Event of Default becomes known to the Subordinated
Debenture Trustee unless such Default or Event of Default has been cured.
Except in the case of a Default or Event of Default in payment of principal of,
premium and Liquidated Damages, if any, or interest on any Security or that
resulted from a failure to comply with Section 4.08 hereof, the Subordinated
Debenture Trustee may withhold the notice if and so long as a committee of its
Trust Officers determines in good faith that withholding the notice is in the
interests of Holders.
SECTION 7.06 REPORTS BY SUBORDINATED DEBENTURE TRUSTEE TO HOLDERS
Within 60 days after each May 15 beginning with the first May 15 to
occur after the date of this Indenture, the Subordinated Debenture Trustee shall
mail to Holders a brief report dated as of such reporting date that complies
with TIA Sec. 313(a) (but if no event described in TIA Sec. 313(a) has occurred
within the twelve months preceding the reporting date, no report need be
transmitted). The Subordinated Debenture Trustee also shall comply with TIA
Sec. 313(b). The Subordinated Debenture Trustee shall also transmit by mail
all reports as required by TIA Sec. 313(c).
A copy of each report at the time of its mailing to Holders shall
be filed with the SEC and each stock exchange on which the Securities are
listed. The Company shall notify the Subordinated Debenture Trustee when the
Securities are listed on any stock exchange.
SECTION 7.07 COMPENSATION AND INDEMNITY
The Company shall pay to the Subordinated Debenture Trustee from
time to time reasonable compensation for its acceptance of this Indenture and
services hereunder. The Subordinated Debenture Trustee's compensation shall not
be limited by any law relating to compensation of a trustee of an express trust.
The Company shall reimburse the Subordinated Debenture Trustee upon request for
all reasonable disbursements, advances and expenses incurred by it. Such
expenses shall include the reasonable compensation, disbursements and expenses
of the Subordinated Debenture Trustee's agents and counsel.
The Company shall indemnify and hold harmless the Subordinated
Debenture Trustee and its directors, officers, employees and agents against any
loss, liability or expense (including, without limitation, fees and expenses of
counsel) incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture including, without limitation,
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of its powers and duties hereunder,
except as set forth in the next paragraph. The Subordinated Debenture Trustee
shall notify the Company promptly of any claim for which it may seek indemnity.
The Company shall defend the claim and the Subordinated Debenture Trustee shall
cooperate in the defense. The Subordinated Debenture 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.
31
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Subordinated Debenture Trustee through its
negligence or bad faith.
To secure the Company's payment obligations in this Section 7.07,
the Subordinated Debenture Trustee shall have a Lien prior to the Securities on
all money or property held or collected by the Subordinated Debenture Trustee,
except that held in trust to pay principal, premium and Liquidated Damages, if
any, and interest on particular Securities. Such Lien shall survive the
satisfaction and discharge of the Indenture.
When the Subordinated Debenture Trustee incurs expenses or renders
services after an Event of Default specified in Section 6.01(5) or (6) hereof
occurs, the expenses and the compensation for the services are intended to
constitute expenses of administration under any Bankruptcy Law.
SECTION 7.08 REPLACEMENT OF SUBORDINATED DEBENTURE TRUSTEE
The Subordinated Debenture Trustee may resign and be discharged
from the trust hereby created by so notifying the Company. The Holders of a
majority in principal amount of the then outstanding Securities may remove the
Subordinated Debenture Trustee by so notifying the Subordinated Debenture
Trustee and the Company. The Company may remove the Subordinated Debenture
Trustee if:
(1) the Subordinated Debenture Trustee fails to comply with
Section 7.10 hereof;
(2) the Subordinated Debenture Trustee is adjudged a bankrupt or
an insolvent or an order for relief is entered with respect to the
Subordinated Debenture Trustee under any Bankruptcy Law;
(3) a Custodian or public officer takes charge of the
Subordinated Debenture Trustee or its property; or
(4) the Subordinated Debenture Trustee becomes incapable of
acting.
Notwithstanding the foregoing, a resignation or removal of the Subordinated
Debenture Trustee and appointment of a successor Subordinated Debenture Trustee
shall become effective only upon the successor Subordinated Debenture Trustee's
acceptance of appointment as provided in this Section 7.08, and thereafter the
Subordinated Debenture Trustee shall have no liability for any acts or omission
of any successor Trustee.
If the Subordinated Debenture Trustee resigns or is removed or if a
vacancy exists in the office of Subordinated Debenture Trustee for any reason,
the Company shall promptly appoint a successor Subordinated Debenture Trustee.
If a successor Subordinated Debenture Trustee does not take office
within 60 days after the retiring Subordinated Debenture Trustee resigns or is
removed, the retiring Subordinated Debenture Trustee, the Company or the Holders
of at least 10% in principal amount of the then outstanding Securities may
petition any court of competent jurisdiction for the appointment of a successor
Subordinated Debenture Trustee.
If the Subordinated Debenture Trustee fails to comply with
Section 7.10 hereof, any Holder may petition any court of competent jurisdiction
for the removal of the Subordinated Debenture Trustee and the appointment of a
successor Subordinated Debenture Trustee.
A successor Subordinated Debenture Trustee shall deliver a written
acceptance of its appointment to the retiring Subordinated Debenture Trustee and
to the Company. Thereupon the resignation or removal of the retiring
Subordinated Debenture Trustee shall become effective, and the successor
Subordinated Debenture Trustee shall have all the rights, powers and duties of
the Subordinated Debenture Trustee under this Indenture. The successor
Subordinated Debenture Trustee shall mail a notice of its succession to
Holders. The retiring Subordinated Debenture Trustee shall promptly transfer
all property held by it as Subordinated Debenture Trustee to the successor
Subordinated Debenture Trustee, subject to the Lien provided for in Section 7.07
hereof. Notwithstanding replacement of the Subordinated Debenture Trustee
pursuant to this Section 7.08, the Company's obligations under Section 7.07
hereof shall continue for the benefit of the retiring Subordinated Debenture
Trustee.
32
SECTION 7.09 SUCCESSOR SUBORDINATED DEBENTURE TRUSTEE BY MERGER, ETC.
Subject to Section 7.10 hereof, if the Subordinated Debenture
Trustee consolidates, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another corporation or national banking
association, the successor entity without any further act shall be the successor
Subordinated Debenture Trustee. In case any Securities have been authenticated,
but not delivered, by the Subordinated Debenture Trustee then in office, any
succession by merger, conversion or consolidation of such authenticating trustee
may adopt such authentication and deliver the Securities so authenticated with
the same effect as if such successor trustee had itself authenticated such
Securities.
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION
There shall at all times be a Subordinated Debenture Trustee
hereunder which shall be a corporation organized and doing business under the
laws of the United States of America, any state thereof or the District of
Columbia authorized under such laws to exercise corporate trust power, shall be
subject to supervision or examination by Federal or state (or the District of
Columbia) authority and shall have a combined capital and surplus of at least
$50 million as set forth in its most recent published annual report of
condition.
This Indenture shall always have a Subordinated Debenture Trustee
who satisfies the requirements of TIA Sec. 310(a)(1). The Subordinated
Debenture Trustee is subject to TIA Sec. 310(b).
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY
The Subordinated Debenture Trustee is subject to TIA Sec. 311(a),
excluding therefrom any creditor relationship listed in TIA Sec. 311(b). A
Subordinated Debenture Trustee who has resigned or been removed shall be subject
to TIA Sec. 311(a) to the extent indicated therein.
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01 TERMINATION OF COMPANY'S OBLIGATIONS
This Indenture shall cease to be of further effect (except that the
Company's obligations under Section 7.07 hereof and the Subordinated Debenture
Trustee's and Paying Agent's obligations under Section 8.03 hereof shall
survive) when all outstanding Securities theretofore authenticated and issued
have
33
been delivered (other than destroyed, lost or stolen Securities that have been
replaced or paid) to the Subordinated Debenture Trustee for cancellation and the
Company has paid all sums payable hereunder. In addition, the Company may
terminate all of its obligations under this Indenture if:
(1) the Company irrevocably deposits, or causes to be deposited,
in trust with the Subordinated Debenture Trustee or the Paying
Agent or, at the option of the Subordinated Debenture Trustee, with
a trustee satisfactory to the Subordinated Debenture Trustee and
the Company under the terms of an irrevocable trust agreement in
form and substance satisfactory to the Subordinated Debenture
Trustee, money or U.S. Government Obligations in an amount
sufficient (without reinvestment thereof) to pay principal, premium
and Liquidated Damages, if any, and interest on the Securities to
maturity or redemption, as the case may be, as such amounts become
due, and to pay all other sums payable by it hereunder, and such
deposit, when made, does not violate the provisions of Article 10
hereof; provided that (i) the trustee of the irrevocable trust
shall have been irrevocably instructed to pay such money or the
proceeds of such U.S. Government Obligations to the Subordinated
Debenture Trustee and (ii) the Subordinated Debenture Trustee shall
have been irrevocably instructed to apply such money or the
proceeds of such U.S. Government Obligations to the payment of said
principal, premium and Liquidated Damages, if any, and interest on
the Securities;
(2) the Company delivers to the Subordinated Debenture Trustee an
Officers' Certificate stating that all conditions precedent to
satisfaction and discharge of this Indenture have been complied
with, and delivers an Opinion of Counsel to the same effect;
(3) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit; and
(4) the Company shall have delivered to the Subordinated
Debenture Trustee an Opinion of Counsel from nationally recognized
counsel acceptable to the Subordinated Debenture Trustee or a tax
ruling from the Internal Revenue Service to the effect that the
Holders of the Securities will not recognize income, gain or loss
for Federal income tax purposes as a result of the Company's
exercise of its option under this Section 8.01 and will be subject
to Federal income tax on the same amount and in the same manner and
at the same times as would have been the case if such option had
not been exercised.
In such event, this Indenture shall cease to be of further effect, except that
the Company's obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 4.01, 4.06,
7.07, 7.08 and 8.04 hereof and the Company's, the Subordinated Debenture
Trustee's and the Paying Agent's obligations in Section 8.03, and the
Subordinated Debenture Trustee's rights under Article 7 hereof, shall survive
until the Securities are no longer outstanding. Thereafter, only the Company's
obligations in Section 7.07 hereof and the Subordinated Debenture Trustee's and
the Paying Agent's obligations in Section 8.03 hereof shall survive.
After such irrevocable deposit made pursuant to this Section 8.01
and satisfaction of the other conditions set forth herein, the Subordinated
Debenture Trustee upon request shall acknowledge in writing the discharge of the
Company's obligations under this Indenture except for those surviving
obligations specified above.
In order to have money available on a payment date to pay principal
or interest on the Securities, the U.S. Government Obligations shall be payable
as to principal or interest on or before such payment
34
date in such amounts as will provide the necessary money. U.S. Government
Obligations shall not be callable at the issuer's option.
SECTION 8.02 APPLICATION OF TRUST MONEY
The Subordinated Debenture Trustee or a trustee satisfactory to the
Subordinated Debenture Trustee and the Company shall hold in trust money or U.S.
Government Obligations deposited with it pursuant to Section 8.01 hereof. It
shall apply the deposited money and the money from U.S. Government Obligations
through the Paying Agent and in accordance with this Indenture to the payment of
principal of and interest on the Securities.
SECTION 8.03 REPAYMENT TO COMPANY
The Subordinated Debenture Trustee and the Paying Agent shall
promptly pay to the Company upon written request any excess money or securities
held by them at any time.
The Subordinated Debenture Trustee and the Paying Agent shall pay
to the Company upon written request any money held by them for the payment of
principal or interest that remains unclaimed for two years after the date upon
which such payment shall have become due; provided that the Company shall have
either caused notice of such payment to be mailed to each Holder entitled
thereto no less than 30 days prior to such repayment or within such period shall
have published such notice in a financial newspaper of widespread circulation
published in The City of New York. After payment to the Company, Holders
entitled to the money must look to the Company for payment as general creditors
unless an applicable abandoned property law designates another Person, and all
liability of the Subordinated Debenture Trustee and such Paying Agent with
respect to such money shall cease.
SECTION 8.04 REINSTATEMENT
If the Subordinated Debenture Trustee or Paying Agent is unable to
apply any money or U.S. Government Obligations in accordance with Section 8.01
hereof by reason of any legal proceeding or by reason of any order or judgment
of any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, the Company's obligations under this Indenture and
the Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 8.01 hereof until such time as the Subordinated Debenture
Trustee or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with Section 8.01 hereof; provided that if the Company
has made any payment of interest on or principal of any Securities because of
the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Securities to receive such payment from the money
or U.S. Government Obligations held by the Subordinated Debenture Trustee or
Paying Agent.
ARTICLE 9
AMENDMENTS
SECTION 9.01 WITHOUT CONSENT OF HOLDERS
Without the consent of any Holder of Securities the Company and the
Subordinated Debenture Trustee may amend or supplement this Indenture or the
Securities:
35
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(3) to comply with Section 5.01 hereof;
(4) to make any change that would provide any additional rights
or benefits to the Holders or that does not adversely affect the
rights hereunder of any Holder; or
(5) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
Upon the request of the Company, accompanied by a resolution of the
Board of Directors authorizing the execution of any such supplemental indenture,
and upon receipt by the Subordinated Debenture Trustee of the documents
described in Section 9.06 hereof, the Subordinated Debenture Trustee shall join
with the Company in the execution of any supplemental indenture authorized or
permitted by the terms of this Indenture and make any further appropriate
agreements and stipulations that may be therein contained, but the Subordinated
Debenture Trustee shall not be obligated to enter into any supplemental
indenture that affects its own rights, duties or immunities under this Indenture
or otherwise. After an amendment or waiver under this Section 9.01 becomes
effective, the Company shall mail to the Holders of each Security affected
thereby a notice briefly describing the amendment 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 supplemental indenture.
SECTION 9.02 WITH CONSENT OF HOLDERS
Except as provided below in this Section 9.02, this Indenture or
the Securities may be amended or supplemented with the written consent
(including consents obtained in connection with a tender offer or exchange offer
for Securities) of the Holders of at least 51% in principal amount of the then
outstanding Securities.
Upon the request of the Company, accompanied by a resolution of the
Board of Directors authorizing the execution of any such supplemental indenture,
and upon the filing with the Subordinated Debenture Trustee of evidence of the
consent of the Holders as aforesaid, and upon receipt by the Subordinated
Debenture Trustee of the documents described in Section 9.06 hereof, the
Subordinated Debenture Trustee shall join with the Company in the execution of
such supplemental indenture unless such supplemental indenture affects the
Subordinated Debenture Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Subordinated Debenture Trustee may in
its discretion, but shall not be obligated to, enter into such supplemental
indenture.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment or waiver,
but it shall be sufficient if such consent approves the substance thereof.
The Holders of 51% in principal amount of the Securities then
outstanding may waive compliance in a particular instance by the Company with
any provision of this Indenture or the Securities (including waivers obtained in
connection with a tender offer or an exchange offer for Securities) or any
existing default. However, without the consent of each Holder affected, an
amendment or waiver under this Section may not (with respect to any Securities
held by a non-consenting Holder):
36
(1) reduce the principal amount of Securities whose Holders must
consent to an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of any
Security or alter the provisions with respect to the redemption
price in connection with repurchases under Sections 3.07, 3.08 or
4.08 hereof;
(3) reduce the rate of or change the time for payment of interest
on any Security;
(4) waive a Default or Event of Default in the payment of the
principal of, or premium or Liquidated Damages, if any, or interest
on Securities or that resulted from a failure to comply with
Section 4.08 hereof (except a rescission of acceleration of the
Securities as provided in Section 6.02 hereof);
(5) make any Security payable in money other than that stated in
the Security;
(6) make any change in Article 10 hereof that adversely affects
the rights of any Holder;
(7) make any change in Section 6.04 or 6.07 hereof or in this
sentence of this Section 9.02; or
(8) waive a redemption payment with respect to any Security.
The right of any Holder to participate in any consent required or
sought pursuant to any provision of this Indenture (and the obligation of the
Company to obtain any such consent otherwise required from such Holder) may be
subject to the requirement that such Holder shall have been the Holder of record
of any Securities with respect to which such consent is required or sought as of
a date identified by the Subordinated Debenture Trustee in a notice furnished to
Holders in accordance with the terms of this Indenture.
SECTION 9.03 COMPLIANCE WITH TRUST INDENTURE ACT
Every amendment to this Indenture or the Securities shall comply in
form and substance with the TIA as then in effect.
SECTION 9.04 REVOCATION AND EFFECT OF CONSENTS
Until an amendment (which includes any supplement) or waiver
becomes effective, a consent to it by a Holder of a Security is a continuing
consent by the Holder and every subsequent Holder of a Security or portion of a
Security that evidences the same debt as the consenting Holder's Security, even
if notation of the consent is not made on any Security. However, any such
Holder or subsequent Holder may revoke the consent as to his or her Security or
portion of a Security if the Subordinated Debenture Trustee receives written
notice of revocation before the date the amendment or waiver becomes effective.
An amendment or waiver becomes effective in accordance with its terms and
thereafter binds every Holder.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to consent
37
to any amendment or waiver. If a record date is fixed, then notwithstanding the
provisions of the immediately preceding paragraph, those Persons who were
Holders at such record date (or their duly designated proxies), and only those
Persons, shall be entitled to consent to such amendment or waiver or to revoke
any consent previously given, whether or not such Persons continue to be Holders
after such record date. No consent shall be valid or effective for more than 90
days after such record date unless consents from Holders of the principal amount
of Securities required hereunder for such amendment or waiver to be effective
shall have also been given and not revoked within such 90-day period.
After an amendment or waiver becomes effective it shall bind every
Holder, unless it is of the type described in any of clauses (1) through (8) of
Section 9.02 hereof. In such case, the amendment or waiver shall bind each
Holder of a Security who has consented to it and every subsequent Holder of a
Security that evidences the same debt as the consenting Holder's Security.
SECTION 9.05 NOTATION ON OR EXCHANGE OF SECURITIES
If an amendment, supplement or waiver changes the terms of a
Security, the Subordinated Debenture Trustee may require the Holder of the
Security to deliver it to the Subordinated Debenture Trustee. The Subordinated
Debenture Trustee may place an appropriate notation about the changed terms and
return it to the Holder and the Subordinated Debenture Trustee may place an
appropriate notation on any Security thereafter authenticated. Alternatively,
if the Company or Subordinated Debenture Trustee so determines, the Company in
exchange for all Securities shall issue and the Subordinated Debenture Trustee
shall authenticate new Securities that reflect the changed terms.
SECTION 9.06 SUBORDINATED DEBENTURE TRUSTEE TO SIGN AMENDMENTS, ETC.
The Subordinated Debenture 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
Subordinated Debenture Trustee. If it does, the Subordinated Debenture Trustee
may, but need not, sign it. In signing or refusing to sign such amendment or
supplemental indenture, the Subordinated Debenture Trustee shall be entitled to
receive and, subject to Section 7.01 hereof, shall be fully protected in relying
upon, an Officers' 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.
ARTICLE 10
SUBORDINATION
SECTION 10.01 AGREEMENT TO SUBORDINATE
The Company agrees, and each Holder by accepting a Security agrees,
that the indebtedness evidenced by the Security is subordinated in right of
payment, to the extent and in the manner provided in this Article 10, to the
prior payment in full of all "Senior Debt" (as defined below) and that the
subordination is for the benefit of the holders of Senior Debt. The
Indebtedness evidenced by the Security shall be pari passu with the Series B
Subordinated Debentures.
SECTION 10.02 CERTAIN DEFINITIONS
38
"Representative" means (i) with respect to the Credit Agreement,
the Agent (as defined therein) and (ii) with respect to any other Senior Debt,
the indenture trustee or other trustee, agent or representative for such Senior
Debt.
"Senior Debt" means all present and future Indebtedness created,
assumed, incurred or guaranteed by the Company (and all renewals, extensions and
refundings thereof), other than any such Indebtedness which by the terms of the
instrument or agreement creating or evidencing the same is not senior in right
of payment to the Securities, provided that (i) in no event shall Senior Debt
include any Indebtedness of the Company to (a) any of its Subsidiaries or
(b) any trade creditors incurred for the purchase of goods or materials or for
services obtained in the ordinary course of business and (ii) Senior Debt in all
events shall include all Indebtedness incurred under the Credit Agreements, all
Indebtedness incurred under the Senior Note Indentures and all Indebtedness
incurred under the Exchange Debenture Indenture.
A distribution may consist of cash, securities or other property,
by set-off or otherwise.
For the purposes of this Article 10, Obligations with respect to
Senior Debt shall not be deemed to have been paid in full unless the holders
thereof shall have received payment in full in cash.
SECTION 10.03 LIQUIDATION; DISSOLUTION; BANKRUPTCY
Upon any distribution to creditors of the Company in a liquidation
or dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property or in
an assignment for the benefit of creditors or any marshalling of the assets and
liabilities of the Company:
(1) holders of Senior Debt shall be entitled to receive payment
in full of all Obligations with respect to the Senior Debt
(including interest after the commencement of any such proceeding
at the rate specified in the applicable Senior Debt whether or not
such interest is an allowed claim enforceable against the Company
in any such bankruptcy, reorganization, insolvency, receivership or
similar proceeding) before Holders shall be entitled to receive any
payment of any Obligations with respect to the Securities; and
(2) until all Obligations with respect to Senior Debt (as
provided in subsection (1) of this Section 10.03) are paid in full,
any distribution to which Holders would be entitled but for this
Article 10 shall be made to holders of Senior Debt, as their
interests may appear.
SECTION 10.04 DEFAULT ON SENIOR DEBT
No direct or indirect payment or distribution by or on behalf of
the Company of principal of, premium, if any, or interest on the Securities,
whether pursuant to the terms of the Securities or otherwise, may be made (i) if
a default of any Obligations to the holders Senior Debt occurs and has not been
cured or waived, (ii) for a period of 180 days upon the occurrence of a default
(other than a payment default) in respect of Senior Debt and for successive
periods of 180 days if the default is continuing at the end of such 180 day
period or another default (other than a payment default) in respect of Senior
Debt has occurred or (iii) upon the maturity of any Senior Debt, prior to the
payment of all Obligations with respect to Senior Debt that is then due and
payable. In addition, upon the acceleration of the Securities prior to their
stated maturity, holders of the Senior Debt shall receive payment in full before
any payment shall be made to Holders of the Securities.
39
SECTION 10.05 ACCELERATION OF SECURITIES
If payment of the Securities is accelerated because of an Event of
Default, the Company shall promptly notify the Representatives of Senior Debt of
the acceleration.
SECTION 10.06 WHEN DISTRIBUTION MUST BE PAID OVER
In the event that the Subordinated Debenture Trustee or any Holder
receives any payment of any Obligations (other than, in the case of the
Subordinated Debenture Trustee, fees, expenses and all other amounts payable
pursuant to Section 7.07 hereof) with respect to the Securities at a time when
such payment is prohibited by Section 10.04 hereof, then and in such event (but
with respect to the Subordinated Debenture Trustee, subject to the provisions of
Section 10.12 hereof) such payment shall be held by the Subordinated Debenture
Trustee or such Holder, in trust for the benefit of, and shall be paid forthwith
over and delivered, upon written request, to, the holders of Senior Debt as
their interests may appear or their Representative under the indenture or other
agreement (if any) pursuant to which Senior Debt may have been issued, as their
respective interests may appear, for application to the payment of all
Obligations due to the holders of Senior Debt remaining unpaid to the extent
necessary to pay such Obligations in full in accordance with their terms, after
giving effect to any concurrent payment or distribution to or for the holders of
Senior Debt.
If a distribution is made to the Subordinated Debenture Trustee or
any Holder (other than, in the case of the Subordinated Debenture Trustee, fees,
expenses and all other amounts payable pursuant to Section 7.07 hereof) that
because of this Article 10 should not have been made to it, the Subordinated
Debenture Trustee (subject to the provision of Section 10.12 hereof) or such
Holder who receives the distribution shall hold it in trust for the benefit of,
and, upon written request, pay it over to, the holders of Senior Debt as their
interests may appear, or their Representative under the indenture or other
agreement (if any) pursuant to which Senior Debt may have been issued, as their
respective interests may appear, for application to the payment of all
Obligations due to the holders of Senior Debt remaining unpaid to the extent
necessary to pay such Obligations in full in accordance with their terms, after
giving effect to any concurrent payment or distribution to or for the holders of
Senior Debt.
With respect to the holders of Senior Debt, the Subordinated
Debenture Trustee undertakes to perform only such obligations on the part of the
Subordinated Debenture Trustee as are specifically set forth in this Article 10,
and no implied covenants or obligations with respect to the holders of Senior
Debt shall be read into this Indenture against the Subordinated Debenture
Trustee. The Subordinated Debenture Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt, and shall not be liable to any
such holders if the Subordinated Debenture Trustee shall pay over or distribute
to or on behalf of Holders or the Company or any other Person money or assets to
which any holders of Senior Debt shall be entitled by virtue of this Article 10,
unless such payment or distribution is made as a result of the willful
misconduct or gross negligence of the Subordinated Debenture Trustee.
SECTION 10.07 NOTICE BY COMPANY
The Company shall promptly notify the Subordinated Debenture
Trustee and the Paying Agent of any facts known to the Company that would cause
a payment of any Obligations with respect to the Securities to violate this
Article 10, but failure to give such notice shall not affect the subordination
of the Securities to the Senior Debt provided in this Article 10.
40
SECTION 10.08 SUBROGATION
After all Obligations with respect to all Senior Debt are paid in
full and until the Securities are paid in full, Holders shall be subrogated
(equally and ratably with all other Indebtedness ranking pari passu with the
Securities) to the rights of holders of Senior Debt to receive distributions
applicable to Senior Debt to the extent that distributions otherwise payable to
the Holders have been applied to the payment of Senior Debt. A distribution
made under this Article 10 to holders of Senior Debt which otherwise would have
been made to Holders is not, as between the Company and Holders, a payment by
the Company on the Securities.
SECTION 10.09 RELATIVE RIGHTS
This Article 10 defines the relative rights of Holders and holders
of Senior Debt. Nothing in this Indenture shall:
(1) impair, as between the Company and the Holders, the
obligation of the Company, which is absolute and unconditional, to
pay principal of, premium and Liquidated Damages, if any, and
interest on the Securities in accordance with their terms;
(2) affect the relative rights of the Holders and creditors of
the Company other than their rights in relation to holders of
Senior Debt; or
(3) prevent the Subordinated Debenture Trustee or any Holder from
exercising its available remedies upon a Default or Event of
Default, subject to the rights of holders and owners of Senior Debt
to receive distributions and payments otherwise payable to Holders.
If the Company fails because of this Article 10 to pay principal
of, premium or Liquidated Damages, if any, or interest on a Security on the due
date, the failure is still a Default or Event of Default.
SECTION 10.10 SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY
No right of any holder of Senior Debt to enforce the subordination
of the indebtedness evidenced by the Securities shall be impaired by any act or
failure to act by the Company or by its failure to comply with this Indenture.
SECTION 10.11 DISTRIBUTION OR NOTICE TO REPRESENTATIVE
Whenever a distribution is to be made or a notice given to holders
of Senior Debt, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company referred
to in this Article 10, the Subordinated Debenture Trustee and the Holders shall
be entitled to rely upon any order or decree made by any court of competent
jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other Person making any distribution to the
Subordinated Debenture Trustee or to the Holders for the purpose of ascertaining
the Persons entitled to participate in such distribution, the holders of the
Senior Debt and other Indebtedness of the Company, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article 10.
41
SECTION 10.12 RIGHTS OF SUBORDINATED DEBENTURE TRUSTEE AND PAYING AGENT
Notwithstanding the provisions of this Article 10 or any other
provisions of this Indenture, the Subordinated Debenture Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment or distribution by the Subordinated Debenture Trustee, or
the taking of any action by the Subordinated Debenture Trustee, and the
Subordinated Debenture Trustee and the Paying Agent may continue to make
payments on the Securities unless it shall have received at its Corporate Trust
Office at least three Business Days prior to the date of such payment written
notice of facts that would cause the payment of any Obligations with respect to
the Securities to violate this Article 10. Only the Company, a Representative
of Senior Debt or a holder of an issue of Senior Debt that has no Representative
may give the notice. Nothing in this Article 10 shall impair the claims of, or
payments to, the Subordinated Debenture Trustee under or pursuant to
Section 7.07 hereof. Except as set forth in the immediately preceding sentence,
nothing in this Section 10.12 shall limit the rights of holders of Senior Debt
to recover payments as contemplated by Section 10.06 hereof.
The Subordinated Debenture Trustee in its individual or any other
capacity may hold Senior Debt with the same rights it would have if it were not
Subordinated Debenture Trustee. Any Agent may do the same with like rights.
SECTION 10.13 AUTHORIZATION TO EFFECT SUBORDINATION
Each Holder of a Security by its acceptance thereof authorizes and
directs the Subordinated Debenture Trustee on its behalf to take such action as
may be necessary or appropriate to effectuate the subordination as provided in
this Article 10 and appoints the Subordinated Debenture Trustee his attorney-in-
fact for any and all such purposes.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01 TRUST INDENTURE ACT CONTROLS
If any provision of this Indenture limits, qualifies or conflicts
with another provision which is required to be included herein by any of
Sections 310 to 317 inclusive of the TIA, such required provisions shall
control.
SECTION 11.02 NOTICES
Any notice or communication to the Company, the Subordinated
Debenture Trustee, the agents under the Credit Agreements, the Senior Secured
Note Trustee or the Exchange Debenture Trustee is duly given if in writing and
delivered in person or mailed by first-class mail (registered or certified,
return receipt requested), telex, telecopier or overnight air courier
guaranteeing next day delivery, to the other's address:
If to the Company:
K-III Communications Corporation
745 Fifth Avenue
New York, New York 10151
42
Attention: General Counsel
Telecopier No.: (212) 745-0199
With a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: Gary I. Horowitz, Esq.
Telecopier No.: (212) 455-2502
If to the Subordinated Debenture Trustee:
The Bank of New York
101 Barclay Street -- 21W
New York, New York 10286
Attention: Corporate Trust Administration
Telecopier No.: (212) 815-5915/5917
If to the agents under the Credit Agreements:
The Chase Manhattan Bank, N.A.
1 Chase Manhattan Plaza
New York, New York 10081
Attention: William K. Luby
Telecopier No.: (212) 552-1159
The Bank of New York
101 Barclay Street
New York, New York 10286
Attention: _____________________
Telecopier No.: (212) __________
If to the Outstanding Notes Trustee:
The Bank of New York
101 Barclay Street - 21W
New York, New York 10286
Attention: Corporate Trust Department
Telecopier No.: (212) 815-5915/5917
If to the Exchange Debenture Trustee:
Chemical Bank
450 West 33rd Street
New York, New York 10001
Attention: Vice President Corporate Trust Administration - 15th
Floor
Telecopier No.: (212) 613-7799/7800
43
The Company, the Subordinated Debenture Trustee, the agents under
the Credit Agreements, the Outstanding Note Trustee and the Exchange Debenture
Trustee by notice to the others may designate additional or different addresses
for subsequent notices or communications.
All notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if telecopied; and the
next Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by
first-class mail, certified or registered, return receipt requested, to the
Holder's address shown on the register kept by the Registrar. Failure to mail a
notice or communication to a Holder or any defect in it shall not affect its
sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Subordinated Debenture Trustee and each Agent at the same
time.
SECTION 11.03 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS
Holders may communicate pursuant to TIA Sec. 312(b) with other
Holders with respect to their rights under this Indenture or the Securities. The
Company, the Subordinated Debenture Trustee, the Registrar and anyone else shall
have the protection of TIA Sec. 312(c).
SECTION 11.04 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT
Upon any request or application by the Company to the Subordinated
Debenture Trustee to take any action under this Indenture, the Company shall
furnish to the Subordinated Debenture Trustee:
(1) an Officers' Certificate (which shall include the statements
set forth in Section 11.05 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
(2) an Opinion of Counsel (which shall include the statements set
forth in Section 11.05 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been
complied with.
SECTION 11.05 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Sec. 314(a)(4)) shall include:
(1) a statement that the Person making such certificate or
opinion has read and understands such covenant or condition;
44
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has made
such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with; provided
that with respect to matters of fact Opinions of Counsel may rely
on an Officers' Certificate or certificates of public officials.
SECTION 11.06 RULES BY SUBORDINATED DEBENTURE TRUSTEE AND AGENTS
The Subordinated Debenture Trustee may make reasonable rules for
action by or at a meeting of Holders. The Registrar or Paying Agent may make
reasonable rules and set reasonable requirements for its functions.
SECTION 11.07 LEGAL HOLIDAYS
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in The City of New York or at a place of payment are authorized or
obligated by law, regulation or executive order to remain closed. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period.
SECTION 11.08 NO RECOURSE AGAINST OTHERS
No director, officer, employee, incorporator or shareholder of the
Company, as such, shall have any liability for any obligations of the Company
under the Securities or this Indenture or for any claim based on, in respect of,
or by reason of, such obligations of their creation. Each Holder of the
Securities by accepting a Security waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the Security.
SECTION 11.09 GOVERNING LAW
This Indenture and the Securities shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to principles of conflicts of law.
SECTION 11.10 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS
This Indenture may not be used to interpret another indenture, loan
or debt agreement of the Company or a Subsidiary. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.
SECTION 11.11 SUCCESSORS
All agreements of the Company in this Indenture and the Securities
shall bind its successor. All agreements of the Subordinated Debenture Trustee
in this Indenture shall bind its successor.
45
SECTION 11.12 SEVERABILITY
In case any provision in this Indenture or in the Securities shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 11.13 COUNTERPART ORIGINALS
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 11.14 SUBORDINATED DEBENTURE TRUSTEE AS PAYING AGENT AND REGISTRAR
The Company initially appoints the Subordinated Debenture Trustee
as Paying Agent and Registrar.
SECTION 11.15 TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
SECTION 11.16 BANK OF NEW YORK NOT ACTING IN INDIVIDUAL CAPACITY
Notwithstanding anything to the contrary contained herein, this
Indenture has been accepted by The Bank of New York not in its individual
capacity but solely as Trustee and in no event shall The Bank of New York have
any liability for the representations, warranties, covenants, agreements or
other obligations of the Company herein or in any of the certificates, notices
or agreements delivered by the Company pursuant hereto, as to all of which
recourse shall be had solely to the assets of the Company, and under no
circumstances shall The Bank of New York be personally liable for the payment of
any indebtedness or expenses of the Company.
SECTION 11.17 ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES
In addition to the rights provided to Holders of Securities under
the Indenture, Holders of Transfer Restricted Securities shall have all the
rights set forth in the Registration Rights Agreement.
[Signatures on Next Page]
46
SIGNATURES
K-III COMMUNICATIONS CORPORATION
Dated as of , 1996 By:
---------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Subordinated Debenture Trustee
Dated as of , 1996 By:
---------------------------------
Name:
Title:
47
EXHIBIT A
10% [CLASS C] [CLASS D] SUBORDINATED EXCHANGE DEBENTURE DUE 2008
No. $__________
K-III COMMUNICATIONS CORPORATION
promises to pay to
or registered assigns,
the principal sum of
Dollars on May 1, 2008.
Interest Payment Dates: February 1, May 1, August 1, and November 1.
Record Dates: January 15, April 15, July 15 and October 15.
Dated: ,
------------------ ------
Certificate of Authentication:
This is one of the Securities
issued pursuant to the within-
mentioned Indenture.
THE BANK OF NEW YORK K-III COMMUNICATIONS CORPORATION
as Subordinated Debenture Trustee
By By:
---------------------- ------------------------------------
Authorized Officer
By:
------------------------------------
(SEAL)
10% [CLASS C] [CLASS D] SUBORDINATED EXCHANGE DEBENTURE DUE 2008
[Unless and until it is exchanged in whole or in part for Debentures
in definitive form, this Debenture may not be transferred except as a whole by
the Depository to a nominee of the Depository or by a nominee of the Depository
to the Depository or another nominee of the Depository or by the Depository or
any such nominee to a successor Depository or a nominee of such successor
Depository. 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 SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT
BE OFFERED, SOLD 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 FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
"INSTITUTIONAL ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1),
(2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN
"INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON
AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT
IT WILL NOT, WITHIN THREE YEARS AFTER THE ORIGINAL ISSUANCE OF THIS
SECURITY, RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE
COMPANY OR MORGAN STANLEY & CO. INCORPORATED, DONALDSON, LUFKIN &
JENRETTE SECURITIES CORPORATION, OR SALOMON BROTHERS INC, (B) INSIDE
THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE
WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES
TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER,
FURNISHES TO THE COMPANY A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON
TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED
FROM THE COMPANY) AND IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE
PRINCIPAL AMOUNT OF SECURITIES AT THE TIME OF TRANSFER OF LESS THAN
$1,000,000 AN OPINION OF COUNSEL, ACCEPTABLE TO THE COMPANY THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (D) OUTSIDE THE
UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904
UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND (3)
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND IN
CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN THREE
--------------------
1. This paragraph should be included only if the Debenture is
issued in global form.
A-2
YEARS AFTER THE ORIGINAL ISSUANCE OF THE SECURITY. IF THE PROPOSED
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER FURNISH TO THE COMPANY SUCH CERTIFICATIONS,
LEGAL OPINIONS OR OTHER INFORMATION AS MAY REASONABLY BE REQUIRED TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.2/
-
Capitalized terms used herein shall have the meanings ascribed to
them in the Indenture unless otherwise indicated.
1. INTEREST; LIQUIDATED DAMAGES. K-III Communications
Corporation, a Delaware corporation (the "Company"), promises to pay interest on
the principal amount of this Security at 10% per annum from _____________, ____
until maturity and shall pay the Liquidated Damages payable pursuant to Section
5 of the Registration Rights Agreement. The Company will pay interest and
Liquidated Damages, if any, quarterly on February 1, May 1, August 1, and
November 1 of each year, or if any such day is not a Business Day, on the next
succeeding Business Day (each an "Interest Payment Date"). Interest on the
Securities will accrue from the most recent date on which interest has been paid
or, if no interest has been paid, from the date of issuance; provided that if
there is no existing Default in the payment of interest, and if this Security is
authenticated between a record date referred to on the face hereof and the next
succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; provided, further, that the first Interest
Payment Date shall be _____________, ____. The Company shall pay interest
(including post-petition interest in any proceeding under Bankruptcy Law) on
overdue principal and premium, if any, from time to time on demand at the same
rate per annum on the Securities then in effect; it shall pay interest
(including post-petition interest in any proceeding under Bankruptcy Law) on
overdue installments of interest (without regard to any applicable grace
periods) from time to time on demand at the same rate to the extent lawful.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. METHOD OF PAYMENT. The Company will pay interest on the
Securities (except defaulted interest) and premium and Liquidated Damages, if
any, to the Persons who are registered Holders of Securities at the close of
business on the January 15, April 15, July 15 or October 15 next preceding the
Interest Payment Date, even if such Securities are cancelled after such record
date and on or before such Interest Payment Date. Prior to May 1, 1998,
interest shall be payable, at the option of the Company, in (i) cash or (ii)
additional Securities with a principal amount equal to such interest, in
denominations of $1,000 or integral multiples thereof. Any amount not in
denominations of $1,000 or integral multiples thereof, shall, at the Company's
option, be payable in cash or additional Securities in denominations of less
than $1,000. On and after May 1, 1998, interest shall be paid only in cash.
The Securities will be payable as to principal, premium, interest and Liquidated
Damages at the office or agency of the Company maintained for such purpose
within or without the City of New York, or, at the option of the Company,
payment of interest, premium and Liquidated Damages may be made by check mailed
to the Holders of the Securities at their addresses set forth in the register of
Holders of Securities.
--------------------
2. This legend applies only to the Class C Subordinated
Debentures, not the Class D Subordinated Debentures.
A-3
3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York,
the Subordinated Debenture 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. The Company or any of its subsidiaries may act in any
such capacity.
4. INDENTURE. The Company issued the Securities under an
Indenture dated as of ___________ __, ____ (the "Indenture") between the Company
and the Subordinated Debenture Trustee. The terms of the Securities include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939, as amended (15 U.S. Code Sec.Sec.
77aaa-77bbbb). The Securities are subject to all such terms, and Holders are
referred to the Indenture and such Act for a statement of such terms. The
Securities are general unsecured obligations of the Company limited to $200
million in aggregate principal amount, plus amounts, if any, sufficient to pay
premium and Liquidated Damages, if any, and interest on outstanding Securities
as set forth in Paragraph 2 hereof.
5. SUBORDINATION. The Company's payment of the principal of,
premium and Liquidated Damages, if any, and interest on the Securities is
subordinated to the prior payment in full of the Company's Senior Debt. Each
Holder of Securities by his acceptance hereof covenants and agrees that all
payments of the principal of, premium and Liquidated Damages, if any, and
interest on the Securities by the Company shall be subordinated in accordance
with the provisions of Article 10 of the Indenture, and each Holder accepts and
agrees to be bound by such provisions.
6. OPTIONAL REDEMPTION.
On and after February 1, 2001 and on and after a Change of Control
of the Company, the Securities will be subject to redemption at the option of
the Company, in whole or in part, upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed as percentages of the principal
amount) set forth below plus accrued and unpaid interest thereon to the
applicable redemption date, if redeemed during the twelve-month period beginning
February 1 of the years indicated below.
Year Percentage
---- ----------
2001 . . . . . . . . . . . . . . 105%
2002 . . . . . . . . . . . . . . 104
2003 . . . . . . . . . . . . . . 103
2004 . . . . . . . . . . . . . . 102
2005 . . . . . . . . . . . . . . 101
2006 and thereafter. . . . . . . . .100
Notwithstanding the foregoing:
(1) the Company may redeem up to 50% of the outstanding aggregate
principal amount of the Securities originally issued at a
redemption price of 110% of the principal amount thereof, plus
Liquidated Damages, if any, plus accrued and unpaid interest to the
redemption date, out of the net proceeds of any Public Equity
Offering, provided that any such redemption shall occur within 180
days of such Public Equity Offering; and
(2) upon the occurrence at any time of a Change in Control, the
Securities will be redeemable, at the option of the Company, in
whole or in part, pursuant to the provisions of Section 3.08
hereof.
A-4
7. MANDATORY OFFERS TO REPURCHASE; MANDATORY REDEMPTION.
Subject to repayment of all then outstanding Senior Debt (to the
extent required by the terms thereof) or receipt by the Company of all consents
with respect thereto required to permit such an offer, following the occurrence
of any Change of Control, the Company will be required to offer (a "Change of
Control Offer") to purchase all outstanding Securities at a purchase price equal
to 101% of the aggregate principal amount of such Securities, plus Liquidated
Damages and accrued and unpaid interest, if any, to the date of purchase (the
"Change of Control Payment"), in each case in accordance with and to the extent
provided in the Indenture. The Change of Control Offer shall remain open for a
period of 20 Business Days after its commencement unless a longer offering
period is required by law. No earlier than 30 days nor later than 40 days after
the notice of the Change of Control Offer has been mailed (the "Change of
Control Payment Date"), the Company shall deposit, to the extent lawful, with
the Paying Agent an amount equal to the Change of Control Payment in respect of
all Securities or portions thereof tendered by Holders. The Paying Agent shall
promptly mail or deliver payment for all Securities tendered in the Change of
Control Offer.
A Holder of Securities may tender or refrain from tendering all or
any portion of his Securities at his discretion by completing the form entitled
"OPTION OF HOLDER TO ELECT PURCHASE" appearing on this Security. Any portion of
Securities tendered must be in integral multiples of $1,000.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed by
first class mail at least 30 days but not more than 60 days before the
redemption date to each Holder whose Securities are to be redeemed at its
registered address. Securities in denominations larger than $1,000 may be
redeemed in part but only in integral multiples of $1,000, unless all of the
Securities held by a Holder are to be redeemed. On and after the redemption
date interest ceases to accrue on Securities or portions thereof called for
redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Securities are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000; provided, however, that in connection with the payment of
interest with respect to the Securities in additional Securities and the
original issuance of Securities hereunder in exchange for shares of the
Company's Series A Exchangeable Preferred Stock, the Company may elect to pay
any amount not in denominations of $1,000 and/or integral multiples thereof, in
cash or in additional Securities in denominations of less than $1,000. The
transfer of Securities may be registered and Securities may be exchanged as
provided in the Indenture. The Registrar and the Subordinated Debenture 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. The Company need not
exchange or register the transfer of any Security or portion of a Security
selected for redemption, except for the unredeemed portion of any Security being
redeemed in part. Also, it need not exchange or register the transfer of any
Securities for a period of 15 days before a selection of Securities to be
redeemed or during the period between a record date and the corresponding
Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Security
may be treated as its owner for all purposes.
11. AMENDMENTS AND WAIVERS. Subject to certain exceptions, the
Indenture or the Securities may be amended or supplemented and any existing
Default under, or compliance with any provision of, the Indenture may be waived
with the written consent of the Holders of at least 51% in principal amount
A-5
of the Securities then outstanding (including consents obtained in connection
with a tender offer or exchange offer for Securities). Without the consent of
any Holder, the Company and the Subordinated Debenture Trustee may amend or
supplement the Indenture or the Securities to cure any ambiguity, defect or
inconsistency; to provide for uncertificated Securities in addition to or in
place of certificated Securities; to comply with Section 5.01 of the Indenture;
to make any change that would provide any additional rights or benefits to the
Holders or that does not adversely affect the rights under the Indenture of any
Holder; or to comply with requirements of the SEC in order to effect or maintain
the qualification of the Indenture under the TIA.
Without the consent of each Holder affected, an amendment or waiver
may not (with respect to any Securities held by a non-consenting Holder): (i)
reduce the principal amount of Securities whose Holders must consent to an
amendment, supplement or waiver; (ii) reduce the principal of or change the
fixed maturity of any Security or alter the provisions with respect to the
redemption or purchase price in connection with repurchases under Sections 3.07,
3.08 or 4.08 of the Indenture; (iii) reduce the rate of or change the time for
payment of interest on any Security; (iv) waive a Default or Event of Default in
the payment of the principal of, premium or Liquidated Damages, if any, or
interest on Securities or that resulted from a failure to comply with Section
4.08 of the Indenture, (except a rescission of acceleration of the Securities by
Holders of at least 51% in aggregate principal amount of the Securities); (v)
make any Security payable in money other than that stated in the Security; (vi)
make any change in Article 10 of the Indenture that adversely affects the rights
of any Holder; (vii) make any change in Section 6.04 or 6.07 of the Indenture or
the last sentence of the fourth paragraph of Section 9.02 of the Indenture; or
(viii) waive a redemption payment with respect to any Security.
The right of any Holder to participate in any consent required or
sought pursuant to any provision of the Indenture (and the obligation of the
Company to obtain any such consent otherwise required from such Holder) may be
subject to the requirement that such Holder shall have been the Holder of record
of any Securities with respect to which such consent is required or sought as of
a date identified by the Subordinated Debenture Trustee in a notice furnished to
Holders in accordance with the terms of this Indenture.
12. DEFAULTS AND REMEDIES. Events of Default include: default in
payment of interest or Liquidated Damages on any Security for 30 days and for
five days after written notice of such default is given to the Company by the
Holders of at least 51% in principal amount of any Security following the
expiration of such 30-day period; default in payment of the principal or premium
of the Securities at maturity or upon acceleration, redemption or otherwise, and
such default continues for a period of ten days; failure by the Company for 60
days after written notice to it from the Trustee, or after written notice to it
and the Trustee from Holders of at least 51% in principal amount of the then
outstanding Securities, to comply with any of its other agreements in the
Indenture or the Securities; certain defaults under other Indebtedness; and
certain events of bankruptcy or insolvency. If an Event of Default occurs and
is continuing, the Trustee or the Holders of at least 51% in principal amount of
the then outstanding Securities by written notice to the Company, to the agent
under the Credit Agreements, the trustees under the Senior Notes and the
Exchange Debenture Trustee (and to the Trustee if such notice is given by the
Holders) may, and the Trustee at the request of the Holders shall, declare all
of the Securities to be immediately due and payable for an amount equal to 100%
of the principal amount of the Securities plus premium and Liquidated Damages,
if any, and accrued interest to the date of payment upon the first to occur of
an acceleration under the Credit Agreements, the Senior Notes or the Exchange
Debentures or 15 Business Days after receipt by the Company, such agent and such
trustees of such written notice to the extent such Event of Default is
continuing, except that in the case of an Event of Default arising from certain
events of bankruptcy or insolvency, all outstanding Securities shall become due
and payable
A-6
immediately without further action or notice. Holders may not enforce the
Indenture or the Securities except as provided in the Indenture. The Trustee
may require indemnity satisfactory to it before it enforces the Indenture or the
Securities. Subject to certain limitations, Holders of a majority in principal
amount of the then outstanding Securities may direct the Trustee in its exercise
of any trust or power. The Trustee may withhold from Holders notice of any
continuing Default or Event of Default (except a Default or Event of Default in
payment of principal, premium or Liquidated Damages, if any, or interest or that
resulted from a failure to comply with Section 4.08 of the Indenture) if and so
long as a committee of its Trust Officers determines in good faith that
withholding notice is in their interests. The Company must furnish an annual
compliance certificate to the Trustee.
13. SUBORDINATED DEBENTURE TRUSTEE DEALINGS WITH COMPANY. The
Subordinated Debenture Trustee, in its individual or any other capacity, may
make loans to, accept deposits from, and perform services for the Company or its
Affiliates, and may otherwise deal with the Company or its Affiliates, as if it
were not Subordinated Debenture Trustee.
14. NO RECOURSE AGAINST OTHERS. No director, officer, employee,
incorporator or shareholder of the Company, as such, shall have any liability
for any obligations of the Company under the Securities or the Indenture or for
any claim based on, in respect of, or by reason of, such obligations of their
creation. Each Holder of the Securities by accepting a Security waives and
releases all such liability. The waiver and release are part of the
consideration for issuance of the Securities.
15. AUTHENTICATION. This Security shall not be valid until
authenticated by the manual signature of the Subordinated Debenture 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 Securities under
the Indenture, Holders of Transfer Restricted Securities shall have all the
rights set forth in the Registration Rights Agreement.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to:
K-III COMMUNICATIONS CORPORATION
745 Fifth Avenue
New York, New York 10151
Attention: Treasurer
A-7
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we) assign
and transfer this Security to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------
to transfer this Security on the books of the Company. The agent may substitute
another to act for him.
- --------------------------------------------------------------------------------
Date:
----------------
Your Signature:
----------------------
(Sign exactly as your name appears on the face of this Security)
Signature Guarantee.
A-8
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.08 of the Indenture, check the box below:
Section 4.08
If you want to elect to have only part of the Security purchased by
the Company pursuant to Section 4.08 of the Indenture, state the amount you
elect to have purchased: $___________
Date: Your Signature:
----------------- ----------------------------
(Sign exactly as your name appears on the Security)
Tax Identification No.:
-----------------
- -
Signature Guarantee.
A-9
SCHEDULE OF EXCHANGES FOR DEFINITIVE DEBENTURES3/
-
The following exchanges of a part of this Global Debenture for
definitive Debentures have been made:
Amount of Principal Amount of this Signature of
Amount of decrease in increase in Global Debenture Authorized officer of
Date of Principal Amount of Principal Amount of following such decrease Trustee or Debenture
Exchange this Global Debenture this Global Debenture (or increase) Custodian
- -------- --------------------- --------------------- ------------------------ ---------------------
--------------------
3. This should be included only if the Debenture is issued in
global form.
A-10
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: 10% [Class C] [Class D] Subordinated Exchange Debentures due 2008 of
K-III Communications Corporation (the "Securities").
This Certificate relates to $_____ principal amount of Securities
held by ______ (the "Transferor").
The Transferor has requested the Subordinated Debenture Trustee by
written order to exchange or register the transfer of a Security or Securities.
In connection with such request and in respect of each such
Security, the Transferor does hereby certify that Transferor is familiar with
the Indenture relating to the above captioned Securities and as provided in
Section 2.06 of such Indenture, the transfer of this Security does not require
registration under the Securities Act (as defined below) because:*
[ ] Such Security is being acquired for the Transferor's own
account, without transfer (in satisfaction of Section 2.06(a)(ii)(A) of the
Indenture).
[ ] Such Security is being transferred to a qualified institutional
buyer (as defined in Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act")) or an institutional accredited investor within the meaning of
Rule 501 (a)(1), (2), (3) or (7) under the Securities Act, in reliance on Rule
144A (in satisfaction of Section 2.06(a)(ii)(B) of the Indenture).
[ ] Such Security is being transferred in accordance with Rule 144
or Rule 145 or Regulation S under the Securities Act, or pursuant to an
effective registration statement under the Securities Act (in satisfaction of
Section 2.06(a)(ii)(B) of the Indenture).
-----------------------------------
[INSERT NAME OF TRANSFEROR]
By:
--------------------------------
Date:
----------------------
*Check applicable box.
B-1