Exhibit 4.1
EXECUTION COPY
BUFFETS, INC.
Issuer
Certain Subsidiary Guarantors
Guarantors
11 1/4% Senior Subordinated Notes Due 2010
--------------------
INDENTURE
Dated as of June 28, 2002
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U.S. BANK NATIONAL ASSOCIATION
Trustee
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
- ------- -------
310(a)(1) .............................. 7.10
(a)(2) .............................. 7.10
(a)(3) .............................. N.A.
(a)(4) .............................. N.A.
(b) .............................. 7.08; 7.10
(c) .............................. N.A.
311(a) .............................. 7.11
(b) .............................. 7.11
(c) .............................. N.A.
312(a) .............................. 2.05
(b) .............................. 11.03
(c) .............................. 11.03
313(a) .............................. 7.06
(b)(1) .............................. N.A.
(b)(2) .............................. 7.06
(c) .............................. 11.02
(d) .............................. 7.06
314(a) .............................. 4.02; 4.11; 11.02
(b) .............................. N.A.
(c)(1) .............................. 11.04
(c)(2) .............................. 11.04
(c)(3) .............................. N.A.
(d) .............................. N.A.
(e) .............................. 11.05
(f) .............................. 4.11
315(a) .............................. 7.01
(b) .............................. 7.05; 11.02
(c) .............................. 7.01
(d) .............................. 7.01
(e) .............................. 6.11
316(a)(last sentence) .............................. 11.06
(a)(1)(A) .............................. 6.05
(a)(1)(B) .............................. 6.04
(a)(2) .............................. N.A.
(b) .............................. 6.07
317(a)(1) .............................. 6.08
(a)(2) .............................. 6.09
(b) .............................. 2.04
318(a) .............................. 11.01
N.A. means Not Applicable.
- ----------
Note: This Cross-Reference Table shall not, for any purpose, be deemed
to be part of the Indenture.
TABLE OF CONTENTS
ARTICLE 1 Page
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Definitions and Incorporation by Reference
SECTION 1.01. Definitions ............................ 1
SECTION 1.02. Other Definitions ...................... 32
SECTION 1.03. Incorporation by Reference of Trust
Indenture Act ........................ 32
SECTION 1.04. Rules of Construction .................. 33
ARTICLE 2
The Securities
SECTION 2.01. Form and Dating ........................ 34
SECTION 2.02. Execution and Authentication ........... 34
SECTION 2.03. Registrar and Paying Agent ............. 35
SECTION 2.04. Paying Agent To Hold Money in Trust..... 36
SECTION 2.05. Securityholder Lists ................... 36
SECTION 2.06. Transfer and Exchange .................. 36
SECTION 2.07. Replacement Securities ................. 36
SECTION 2.08. Outstanding Securities ................. 37
SECTION 2.09. Temporary Securities ................... 37
SECTION 2.10. Cancellation ........................... 38
SECTION 2.11. Defaulted Interest ..................... 38
SECTION 2.12 CUSIP Numbers........................... 38
SECTION 2.13. Issuance of Additional Securities ...... 38
ARTICLE 3
Redemption
SECTION 3.01. Notices to Trustee ..................... 39
SECTION 3.02. Selection of Securities To Be
Redeemed ............................. 40
SECTION 3.03. Notice of Redemption ................... 40
SECTION 3.04. Effect of Notice of Redemption ......... 41
SECTION 3.05. Deposit of Redemption Price ............ 41
SECTION 3.06. Securities Redeemed in Part ............ 41
ii
ARTICLE 4
Covenants
SECTION 4.01. Payment of Securities .................. 41
SECTION 4.02. SEC Reports ............................ 42
SECTION 4.03. Limitation on Indebtedness ............. 43
SECTION 4.04. Limitation on Restricted Payments ...... 46
SECTION 4.05. Limitation on Restrictions on
Distributions from Restricted
Subsidiaries ......................... 51
SECTION 4.06. Limitation on Sales of Assets and
Subsidiary Stock ..................... 53
SECTION 4.07. Limitation on Transactions with
Affiliates ........................... 57
SECTION 4.08. Limitation on the Sale or Issuance
of Capital Stock of Restricted
Subsidiaries ......................... 58
SECTION 4.09. Change of Control ...................... 59
SECTION 4.10 Offer to Purchaser Upon Initial
Public Offering....................... 60
SECTION 4.11. Future Guarantors ...................... 63
SECTION 4.12. Compliance Certificate ................. 64
SECTION 4.13. Further Instruments and Acts ........... 64
ARTICLE 5
Successor Company
SECTION 5.01. When Company May Merge or Transfer
Assets ............................... 64
ARTICLE 6
Defaults and Remedies
SECTION 6.01. Events of Default ...................... 66
SECTION 6.02. Acceleration ........................... 69
SECTION 6.03. Other Remedies ......................... 69
SECTION 6.04. Waiver of Past Defaults ................ 70
SECTION 6.05. Control by Majority .................... 70
SECTION 6.06. Limitation on Suits .................... 70
SECTION 6.07. Rights of Holders To Receive Payment ... 71
SECTION 6.08. Collection Suit by Trustee ............. 71
SECTION 6.09. Trustee May File Proofs of Claim ....... 71
SECTION 6.10. Priorities ............................. 72
SECTION 6.11. Undertaking for Costs .................. 72
SECTION 6.12. Waiver of Stay or Extension Laws ....... 72
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ARTICLE 7
Trustee
SECTION 7.01. Duties of Trustee ...................... 73
SECTION 7.02. Rights of Trustee ...................... 74
SECTION 7.03. Individual Rights of Trustee ........... 75
SECTION 7.04. Trustee's Disclaimer ................... 75
SECTION 7.05. Notice of Defaults ..................... 76
SECTION 7.06. Reports by Trustee to Holders .......... 76
SECTION 7.07. Compensation and Indemnity ............. 76
SECTION 7.08. Replacement of Trustee ................. 77
SECTION 7.09. Successor Trustee by Merger ............ 78
SECTION 7.10. Eligibility; Disqualification .......... 78
SECTION 7.11. Preferential Collection of Claims
Against Company ...................... 79
ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Securities;
Defeasance ........................... 79
SECTION 8.02. Conditions to Defeasance ............... 80
SECTION 8.03. Application of Trust Money ............. 82
SECTION 8.04. Repayment to Company ................... 82
SECTION 8.05. Indemnity for Government
Obligations .......................... 82
SECTION 8.06. Reinstatement .......................... 82
ARTICLE 9
Amendments
SECTION 9.01. Without Consent of Holders ............. 83
SECTION 9.02. With Consent of Holders ................ 84
SECTION 9.03. Compliance with Trust Indenture ........ 85
SECTION 9.04. Revocation and Effect of Consents
and Waivers .......................... 85
SECTION 9.05. Notation on or Exchange of
Securities ........................... 86
iv
SECTION 9.06. Trustee To Sign Amendments ........................ 86
SECTION 9.07. Payment for Consent ............................... 86
ARTICLE 10
Subordination
SECTION 10.01. Agreement To Subordinate .......................... 86
SECTION 10.02. Liquidation, Dissolution,
Bankruptcy .............................. 87
SECTION 10.03. Default on Senior Indebtedness
of the Company ......................... 87
SECTION 10.04. Acceleration of Payment of
Securities .............................. 89
SECTION 10.05. When Distribution Must Be Paid
Over .................................... 89
SECTION 10.06. Subrogation ....................................... 89
SECTION 10.07. Relative Rights ................................... 90
SECTION 10.08. Subordination May Not Be Impaired
by Company .......................... 90
SECTION 10.09. Rights of Trustee and Paying
Agent ............................... 90
SECTION 10.10. Distribution or Notice to
Representative ...................... 91
SECTION 10.11. Article 10 Not To Prevent Events of
Default or Limit Right To
Accelerate .......................... 91
SECTION 10.12. Trust Moneys Not Subordinated ..................... 91
SECTION 10.13. Trustee Entitled To Rely .......................... 91
SECTION 10.14. Trustee To Effectuate
Subordination ....................... 92
SECTION 10.15. Trustee Not Fiduciary for Holders
of Senior Indebtedness of the
Company ............................. 92
SECTION 10.16. Reliance by Holders of Senior
Indebtedness of the Company
on Subordination Provisions ......... 92
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ARTICLE 11
Subsidiary Guaranties
SECTION 11.01. Guaranties ........................................ 93
SECTION 11.02. Limitation on Liability ........................... 95
SECTION 11.03. Successors and Assigns ............................ 95
SECTION 11.04. No Waiver ......................................... 96
SECTION 11.05. Modification ...................................... 96
SECTION 11.06. Release of Subsidiary Guarantor.................... 96
SECTION 11.07. Contribution from Other Subsidiary
Guarantors................................. 96
ARTICLE 12
Subordination of Subsidiary Guaranties
SECTION 12.01. Agreement to Subordinate .......................... 97
SECTION 12.02. Liquidation, Dissolution,
Bankruptcy ................................ 97
SECTION 12.03. Default on Senior Indebtedness of
Subsidiary Guarantor ..................... 98
SECTION 12.04. Demand for Payment ................................ 99
SECTION 12.05. When Distribution Must Be Paid Over ............... 100
SECTION 12.06. Subrogation ....................................... 100
SECTION 12.07. Relative Rights ................................... 100
SECTION 12.08. Subordination May Not Be Impaired
by a Subsidiary Guarantor ................. 100
SECTION 12.09. Rights of Trustee and Paying Agent ................ 101
SECTION 12.10. Distribution or Notice to
Representative ............................ 101
SECTION 12.11. Article 12 Not to Prevent Defaults
Under a Subsidiary Guarantor
or Limit Right to Demand Payment .......... 101
SECTION 12.12. Trustee Entitled to Rely .......................... 102
SECTION 12.13. Trustee to Effectuate Subordination ............... 102
SECTION 12.14. Trustee Not Fiduciary for
Holders of Senior Indebtedness
of Subsidiary Guarantor ................... 102
SECTION 12.15. Reliance by Holders of Senior
Indebtedness of Subsidiary
Guarantor on Subordination Provisions ..... 103
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ARTICLE 13
Miscellaneous
SECTION 13.01. Trust Indenture Act Controls ...................... 103
SECTION 13.02. Notices ........................................... 103
SECTION 13.03. Communication by Holders with Other
Holders ................................... 104
SECTION 13.04. Certificate and Opinion as to
Conditions Precedent ...................... 104
SECTION 13.05. Statements Required in Certificate
or Opinion ................................ 105
SECTION 13.06. When Securities Disregarded ....................... 105
SECTION 13.07. Rules by Trustee, Paying Agent and
Registrar ................................. 105
SECTION 13.08. Legal Holidays .................................... 106
SECTION 13.09. Governing Law ..................................... 106
SECTION 13.10. No Recourse Against Others ........................ 106
SECTION 13.11. Successors ........................................ 106
SECTION 13.12. Multiple Originals ................................ 106
SECTION 13.13. Table of Contents; Headings ....................... 106
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Rule 144A/Regulation S Appendix
Exhibit 1 - Form of Initial Security
Exhibit A - Form of Exchange Security or Private Exchange Security
Exhibit I to the Indenture - Form of Parent Guaranty
Agreement
Schedule A to the Indenture - Specified Sale/Leaseback
Transaction Property
INDENTURE dated as of June 28, 2002, among Buffets,
Inc., a Minnesota corporation (the "Company"), the
Subsidiary Guarantors and U.S. Bank National
Association (the "Trustee").
Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders of the Company's Initial
Securities, Exchange Securities and Private Exchange Securities (collectively,
the "Securities")
ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions.
"Additional Assets" means (1) any property, plant or equipment useful
in a Related Business; (2) the Capital Stock of a Person that becomes a
Restricted Subsidiary as a result of the acquisition of such Capital Stock by
the Company or another Restricted Subsidiary; or (3) Capital Stock constituting
a minority interest in any Person that at such time is a Restricted Subsidiary;
provided, however, that any such Restricted Subsidiary described in clauses (2)
or (3) above is primarily engaged in a Related Business.
"Additional Securities" means, subject to the Company's compliance with
Section 4.03, 11 1/4% Senior Subordinated Notes due 2010 issued from time to
time after the Issue Date under the terms of this Indenture (other than pursuant
to Section 2.06, 2.07, 2.09 or 3.06 of this Indenture and other than Exchange
Securities or Private Exchange Securities issued pursuant to an exchange offer
for other Securities outstanding under this Indenture).
"Affiliate" of any specified Person means any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of
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such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing. For purposes of
Sections 4.04, 4.06 and 4.07 only, "Affiliate" shall also mean any beneficial
owner of Capital Stock representing 10% or more of the total voting power of the
Voting Stock (on a fully diluted basis) of the Company or of rights or warrants
to purchase such Capital Stock (whether or not currently exercisable) and any
Person who would be an Affiliate of any such beneficial owner pursuant to the
first sentence hereof.
"Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) by
the Company or any Restricted Subsidiary, including any disposition by means of
a merger, consolidation or similar transaction (each referred to for the
purposes of this definition as a "disposition"), of:
(1) any shares of Capital Stock of a Restricted Subsidiary
(other than directors' qualifying shares or shares required by
applicable law to be held by a Person other than the Company or a
Restricted Subsidiary);
(2) all or substantially all the assets of any division or
line of business of the Company or any Restricted Subsidiary; or
(3) any other assets of the Company or any Restricted
Subsidiary outside of the ordinary course of business of the Company or
such Restricted Subsidiary;
other than, in the case of (1), (2) and (3) above, (A) a disposition by a
Restricted Subsidiary to the Company or by the Company or a Restricted
Subsidiary to a Wholly Owned Subsidiary, (B) for purposes of Section 4.06 only,
(x) a disposition that constitutes a Restricted Payment permitted by Section
4.04 or a Permitted Investment and (y) a disposition of all or substantially all
the assets of the Company in accordance with Section 5.01, (C) a disposition of
assets with a fair market value of less than $1,000,000, (D) entering into
Hedging Obligations and (E) the granting of a lien permitted under this
Indenture.
3
"Attributable Debt" in respect of a Sale/Leaseback Transaction means,
as at the time of determination, the present value (discounted at the interest
rate borne by the Securities, compounded annually) of the total obligations of
the lessee for net rental payments during the remaining term of the lease
included in such Sale/Leaseback Transaction (including any period for which such
lease has been extended); provided, however, that if such Sale/Leaseback
Transaction results in a Capital Lease Obligation, the amount of Indebtedness
represented thereby will be determined in accordance with the definition of
Capital Lease Obligation.
"Average Life" means, as of the date of determina tion, with respect to
any Indebtedness, the quotient obtained by dividing (1) the sum of the products
of the numbers of years from the date of determination to the dates of each
successive scheduled principal payment of or redemption or similar payment with
respect to such Indebtedness multiplied by the amount of such payment by (2) the
sum of all such payments.
"Bank Indebtedness" means all Obligations pursuant to the Credit
Agreement.
"Board of Directors" means with respect to a Person means the Board of
Directors of such Person or any committee thereof duly authorized to act on
behalf of such Board.
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligation" means an obligation that is required to be
classified and accounted for as a capital lease for financial reporting purposes
in accordance with GAAP, and the amount of Indebtedness represented by such
obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in
4
(however designated) equity of such Person, including any Preferred Stock, but
excluding any debt securities convertible into such equity.
"Change of Control" means the occurrence of any of the following
events:
(1) prior to the earlier to occur of (A) the first public
offering of common stock of Parent or (B) the first public offering of
common stock of the Company, the Permitted Holders cease to be the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act), directly or indirectly, of a majority in the aggregate
of the total voting power of the Voting Stock of the Company, whether
as a result of issuance of securities of Parent or the Company, any
merger, consolidation, liquidation or dissolution of the Company, or
any direct or indirect transfer of securities by Parent or otherwise
(for purposes of this clause (1) and clause (2) below, the Permitted
Holders shall be deemed to beneficially own any Voting Stock of a
Person (the "specified Person") held by any other Person (the "parent
entity") so long as the Permitted Holders beneficially own (as so
defined), directly or indirectly, in the aggregate a majority of the
voting power of the Voting Stock of the parent entity);
(2) any "person" (as such term is used in Sec tions 13(d) and
14(d) of the Exchange Act), other than one or more Permitted Holders,
is or becomes the beneficial owner (as defined in clause (1) above,
except that for purposes of this clause (2) such person shall be deemed
to have "beneficial ownership" of all shares that any such person has
the right to acquire, whether such right is exercisable immediately or
only after the passage of time), directly or indirectly, of more than
35% of the total voting power of the Voting Stock of the Company;
provided, however, that the Permitted Holders beneficially own (as
defined in clause (1) above), directly or indirectly, in the aggregate
a lesser percentage of the total voting power of the Voting Stock of
the Company than such other person and do not have the right or ability
by voting power, contract or otherwise to elect or designate for
election a majority of the Board of Directors (for the purposes of this
clause (2), such other person shall be deemed to beneficially own any
Voting Stock of a
5
specified Person held by a parent entity, if such other person is the
beneficial owner (as defined in this clause (2)), directly or
indirectly, of more than 35% of the voting power of the Voting Stock of
such parent entity and the Permitted Holders beneficially own (as
defined in clause (1) above), directly or indirectly, in the aggregate
a lesser percentage of the voting power of the Voting Stock of such
parent entity and do not have the right or ability by voting power,
contract or otherwise to elect or designate for election a majority of
the board of directors of such parent entity);
(3) individuals who on the Issue Date constituted the Board of
Directors of the Company or, so long as Parent owns a majority of the
total voting power of the Voting Stock of the Company, the Parent Board
(together with any new directors whose election by such Board of
Directors of the Company or Parent or whose nomination for election by
the shareholders of the Company or Parent, as the case may be, was
approved by a vote of 66-2/3% of the directors of the Company or of
Parent, as the case may be, then still in office who were either
directors on the Issue Date or whose election or nomination for
election was previously so approved by the Permitted Holders) cease for
any reason to constitute a majority of the Board of Directors of the
Company or the Parent Board then in office; or
(4) the merger or consolidation of Parent or the Company with
or into another Person or the merger of another Person with or into
Parent or the Company, or the sale of all or substantially all the
assets of Parent or the Company (determined on a consolidated basis) to
another Person (other than, in all such cases, a Person that is
controlled by the Permitted Holders), other than a transaction
following which (A) in the case of a merger or consolidation
transaction, holders of securities that represented 100% of the Voting
Stock of Parent or the Company immediately prior to such transaction
(or other
6
securities into which such securities are converted as part of such
merger or consolidation transaction) own, directly or indirectly, at
least a majority of the voting power of the Voting Stock of the
surviving Person in such merger or consolidation transaction
immediately after such transaction, and (B) in the case of a sale of
assets transaction, the transferee Person becomes the obligor in
respect of the Securities and a Subsidiary of the transferor of such
assets; provided, however, that (i) it shall not constitute a Change of
Control under this clause (4) if, after giving effect to such
transaction, the Permitted Holders beneficially own (as defined in
clause (1) above) 35% or more of the total voting power of the Voting
Stock of the surviving Person in such transaction immediately after
such transaction and (ii) this clause (4) shall not apply to Parent if
at the time of the transaction, Parent owns less than a majority of the
total voting power of the Voting Stock of the Company.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained herein and required by the TIA, each other obligor on
the indenture securities.
"Consolidated Coverage Ratio" as of any date of determination means the
ratio of
(x) the aggregate amount of EBITDA for the period of the most recent
four consecutive fiscal quarters for
7
which internal financial statements are available prior to the date of such
determination to
(y) Consolidated Interest Expense for such four fiscal quarters;
provided, however, that
(1) if the Company or any Restricted Subsidiary has Incurred any
Indebtedness since the beginning of such period that remains outstanding or
if the transaction giving rise to the need to calculate the Consolidated
Coverage Ratio is an Incurrence of Indebtedness, or both, EBITDA and
Consolidated Interest Expense for such period shall be calculated after
giving effect on a pro forma basis to such Indebtedness as if such
Indebtedness had been Incurred on the first day of such period (except
that, in making such computation, the amount of Indebtedness under any
revolving credit facility outstanding on the date of such calculation shall
be computed based on (A) the average daily balance of such Indebtedness
during such four fiscal quarters or such shorter period when such facility
was outstanding or (B) if such facility was created after the end of such
four fiscal quarters, the average balance of such Indebtedness during the
period from the date of creation of such facility to the date of the
computation);
(2) if the Company or any Restricted Subsidiary has repaid,
repurchased, defeased or otherwise discharged any Indebtedness since the
beginning of such period or if any Indebtedness is to be repaid,
repurchased, defeased or otherwise discharged (in each case other than
Indebtedness Incurred under any revolving credit facility unless such
Indebtedness has been permanently repaid and has not been replaced) on the
date of the transaction giving rise to the need to calculate the
Consolidated Coverage Ratio, EBITDA and Consolidated Interest Expense for
such period shall be calculated on a pro forma basis as if such discharge
had occurred on the first day of such period and as if the Company or such
Restricted Subsidiary has not earned the interest income actually earned
during such period in respect of cash or Temporary Cash Investments used to
repay, repurchase, defease or otherwise discharge such Indebtedness;
8
(3) if since the beginning of such period the Company or any Restricted
Subsidiary shall have made any Asset Disposition, EBITDA for such period shall
be reduced by an amount equal to EBITDA (if positive) directly attributable to
the assets which are the subject of such Asset Disposition for such period, or
increased by an amount equal to EBITDA (if negative), directly attributable
thereto for such period and Consolidated Interest Expense for such period shall
be reduced by an amount equal to the Consolidated Interest Expense directly
attributable to any Indebtedness of the Company or any Restricted Subsidiary
repaid, repurchased, defeased or otherwise discharged with respect to the
Company and its continuing Restricted Subsidiaries in connection with such Asset
Disposition for such period (or, if the Capital Stock of any Restricted
Subsidiary is sold, the Consolidated Interest Expense for such period directly
attributable to the Indebtedness of such Restricted Subsidiary to the extent the
Company and its continuing Restricted Subsidiaries are no longer liable for such
Indebtedness after such sale);
(4) if since the beginning of such period the Company or any Restricted
Subsidiary (by merger or otherwise) shall have made an Investment in any
Restricted Subsidiary (or any person which becomes a Restricted Subsidiary) or
an acquisition of assets, including any acquisition of assets occurring in
connection with a transaction requiring a calculation to be made hereunder,
which constitutes all or substantially all of an operating unit of a business,
EBITDA and Consolidated Interest Expense for such period shall be calculated
after giving pro forma effect thereto (including the Incurrence of any
Indebtedness) as if such Investment or acquisition occurred on the first day of
such period; and
(5) if since the beginning of such period any Person (that subsequently
became a Restricted Subsidiary or was merged with or into the Company or any
Restricted Subsidiary since the beginning of such period) shall have made any
Asset Disposition, any Investment or acquisition of assets that would have
required an adjustment pursuant to clause (3) or (4) above if made by the
Company or a Restricted Subsidiary
9
during such period, EBITDA and Consolidated Interest Expense for such
period shall be calculated after giving pro forma effect thereto as if
such Asset Disposition, Investment or acquisition occurred on the first
day of such period.
For purposes of this definition, whenever pro forma effect is to be given to an
acquisition of assets, the amount of income or earnings relating thereto and the
amount of Consolidated Interest Expense associated with any Indebtedness
Incurred in connection therewith, the pro forma calculations shall be determined
in good faith by a responsible financial or accounting Officer of the Company
(and may include any applicable Pro forma Cost Savings). If any Indebtedness
bears a floating rate of interest and is being given pro forma effect, the
interest on such Indebtedness shall be calculated as if the rate in effect on
the date of determination had been the applicable rate for the entire period
(taking into account any Interest Rate Agreement applicable to such Indebtedness
if such Interest Rate Agreement has a remaining term in excess of 12 months).
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its consolidated Restricted Subsidiaries,
plus, to the extent not included in such total interest expense, and to the
extent incurred by the Company or its Restricted Subsidiaries, without
duplication:
(1) interest expense attributable to capital leases and the
interest expense attributable to leases constituting part of a
Sale/Leaseback Transaction;
(2) amortization of debt discount and debt issuance cost;
(3) capitalized interest;
(4) non-cash interest expenses;
(5) commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing;
(6) net payments pursuant to Hedging Obligations;
(7) dividends paid in cash or Disqualified Stock in respect of
all Preferred Stock of Restricted
10
Subsidiaries and Disqualified Stock of the Company held by Persons
other than the Company or a Wholly Owned Subsidiary;
(8) interest incurred in connection with Investments in
discontinued operations;
(9) interest actually paid by the Company or a Restricted
Subsidiary under a Guarantee or Indebtedness of any other Person; and
(10) the cash contributions to any employee stock ownership
plan or similar trust to the extent such contributions are used by such
plan or trust to pay interest or fees to any Person (other than the
Company) in connection with Indebtedness Incurred by such plan or
trust; and
less, to the extent included in such total interest expense, (A) the
amortization during such period of capitalized financing costs associated with
the Refinancing Transactions and (B) the amortization during such period of
other capitalized financing costs; provided, however, that, in the case of (B),
the aggregate amount of amortization relating to such capitalized financing
costs deducted in calculating Consolidated Interest Expense shall not exceed 5%
of the aggregate amount of the financing giving rise thereto.
"Consolidated Net Income" means, for any period, the net income of the
Company and its consolidated Subsidi aries; provided, however, that there shall
not be included in such Consolidated Net Income:
(1) any net income of any Person (other than the Company) if
such Person is not a Restricted Subsidiary, except that:
(A) subject to the exclusion contained in clause (4)
below, the Company's equity in the net income of any such
Person for such period shall be included in such Consolidated
Net Income up to the aggregate amount of cash actually
distributed by such Person during such period to the Company
or a Restricted Subsidiary as a dividend or other distribution
(subject, in the case of a dividend or other distribution paid
to a Restricted Subsidiary, to the limitations contained in
11
clause (3) below); and
(B) the Company's equity in a net loss of any such
Person for such period shall be included in determining such
Consolidated Net Income but only to the extent the Company or
a Restricted Subsidiary funded such net loss with cash;
(2) solely for purposes of determining the aggregate amount
available for Restricted Payments under Section 4.04(a)(3), any net
income (or loss) of any Person acquired by the Company or a Subsidiary
in a pooling of interests transaction for any period prior to the date
of such acquisition;
(3) any net income of any Restricted Subsidiary if such
Restricted Subsidiary is subject to restrictions, directly or
indirectly, on the payment of dividends or the making of distributions
by such Restricted Subsidiary, directly or indirectly, to the Company,
except that;
(A) subject to the exclusion contained in clause (4)
below, the Company's equity in the net income of any such
Restricted Subsidiary for such period shall be included in
such Consolidated Net Income up to the aggregate amount of
cash actually distributed by such Restricted Subsidiary during
such period to the Company or another Restricted Subsidiary as
a dividend or other distribution (subject, in the case of a
dividend or other distribution paid to another Restricted
Subsidiary, to the limitation contained in this clause); and
(B) the Company's equity in a net loss of any such
Restricted Subsidiary for such period shall be included in
determining such Consolidated Net Income;
(4) any gain or loss realized upon the sale or other
disposition of any assets of the Company, its consolidated Subsidiaries
or any other Person (including pursuant to any sale-and-leaseback
arrangement) which is not sold or otherwise disposed of in the ordinary
course of business and any gain or loss realized upon the sale or other
disposition of any Capital Stock of any Person;
12
(5) extraordinary gains or losses;
(6) to the extent included in total interest expense, any
amortization or write-offs of debt issuance costs and prepayment
penalties realized during such period to the extent attributable to the
Indebtedness being Refinanced in connection with the Refinancing
Transactions; and
(7) the cumulative effect of a change in accounting
principles.
Notwithstanding the foregoing, for the purpose of Section 4.04 only, there shall
be excluded from Consolidated Net Income any repurchases, repayments or
redemptions of Investments, proceeds realized on the sale of Investments or
return of capital to the Company or a Restricted Subsidiary to the extent such
repurchases, repayments, redemptions, proceeds or returns increase the amount of
Restricted Payments permitted under Section 4.04(a)(3)(D).
"Credit Agreement" means the Credit Agreement to be entered into by and
among the Company, the guarantors referred to therein, the lenders referred to
therein and Credit Suisse First Boston, together with the related documents
thereto (including the term loans, revolving loans and letter of credit facility
thereunder, any guarantees and security documents), as amended, extended,
renewed, replaced, restated, supplemented or otherwise modified (in whole or in
part, and without limitation as to amount, terms, conditions, covenants and
other provisions) from time to time, and any agreement (and related document or
instrument) governing Indebtedness incurred to Refinance, in whole or in part,
the borrowings and commitments then outstanding or permitted to be outstanding
under such Credit Agreement or a successor Credit Agreement, whether by the same
or any other lender or group of lenders.
"Currency Agreement" means in respect of a Person any foreign exchange
contract, currency swap agreement or other similar agreement designed to protect
such Person against fluctuations in currency values.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
13
"Designated Excess Asset Sale Proceeds" means the sum of (i) the
amount, if any, by which the Net Available Cash received by the Company from the
sale of Original Roadhouse Grill restaurants exceeds 3.7 times the pro forma
reduction in EBITDA associated with such sale for the period of the most recent
four consecutive fiscal quarters for which internal financial statements are
available prior to the date of the sale and (ii) the amount, if any, by which
the Net Available Cash received by the Company from the Specified Sale/Leaseback
Transaction exceeds 3.7 times the scheduled average annual cash rent expense
over the life of the Securities.
"Designated Senior Indebtedness" means, with respect to a Person, (1)
the Bank Indebtedness; and (2) any other Senior Indebtedness of such Person
which, at the date of determination, has an aggregate principal amount
outstanding of, or under which, at the date of determination, the holders
thereof are committed to lend up to, at least $25.0 million and is specifically
designated by such Person in the instrument evidencing or governing such Senior
Indebtedness as "Designated Senior Indebtedness" for purposes of this Indenture.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable at the option of the holder) or upon
the happening of any event:
(1) matures or is mandatorily redeemable pursuant to a sinking
fund obligation or otherwise;
(2) is convertible or exchangeable at the option of the holder
for Indebtedness or Disqualified Stock; or
(3) is mandatorily redeemable or must be purchased upon the
occurrence of certain events or otherwise, in whole or in part;
in each case on or prior to the first anniversary of the Stated Maturity of the
Securities; provided, however, that any Capital Stock that would not constitute
Disqualified Stock but for provisions thereof giving holders thereof the right
to require such Person to purchase or redeem such
14
Capital Stock upon the occurrence of an "asset sale" or "change of control"
occurring prior to the first anniversary of the Stated Maturity of the
Securities shall not constitute Disqualified Stock if (1) the "asset sale" or
"change of control" provisions applicable to such Capital Stock are not more
favorable to the holders of such Capital Stock than the terms applicable to the
Securities described in Sections 4.06 and 4.09 of this Indenture and (2) any
such requirement only becomes operative after compliance with such terms
applicable to the Securities, including the purchase of any Securities tendered
pursuant thereto.
The amount of any Disqualified Stock that does not have a fixed redemption,
repayment or repurchase price will be calculated in accordance with the terms of
such Disqualified Stock as if such Disqualified Stock were redeemed, repaid or
repurchased on any date on which the amount of such Disqualified Stock is to be
determined pursuant to this Indenture; provided, however, that if such
Disqualified Stock could not be required to be redeemed, repaid or repurchased
at the time of such determination, the redemption, repayment or repurchase price
will be the book value of such Disqualified Stock as reflected in the most
recent financial statements of such Person.
"EBITDA" for any period means the sum of Consolidated Net Income, plus
the following to the extent deducted in calculating such Consolidated Net
Income:
(1) all income tax expense of the Company and its consolidated
Restricted Subsidiaries;
(2) Consolidated Interest Expense;
(3) depreciation and amortization expense of the Company and
its consolidated Restricted Subsidiaries (excluding amortization
expense attributable to a prepaid operating activity item that was paid
in cash in a prior period); and
(4) all other non-cash charges of the Company and its
consolidated Restricted Subsidiaries (including, without limitation,
deferred rental expense, but excluding any such non-cash charge to the
extent that it represents an accrual of or reserve for cash
expenditures in any future period);
15
in each case for such period. Notwithstanding the foregoing, the provision for
taxes based on the income or profits of, and the depreciation and amortization
and non- cash charges of, a Restricted Subsidiary shall be added to Consolidated
Net Income to compute EBITDA only to the extent (and in the same proportion)
that the net income of such Restricted Subsidiary was included in calculating
Consolidated Net Income and only if a corresponding amount would be permitted at
the date of determination to be dividended to the Company by such Restricted
Subsidiary without prior approval (that has not been obtained), pursuant to the
terms of its charter and all agreements, instruments, judgments, decrees,
orders, statutes, rules and governmental regulations applicable to such
Restricted Subsidiary or its stockholders.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Securities" means the debt securities of the Company issued
pursuant to this Indenture in exchange for, and in an aggregate principal amount
at maturity equal to, the Initial Securities, in compliance with the terms of
the Registration Rights Agreement.
"Existing Credit Agreement" means the Credit Agreement dated as of
September 29, 2000, as amended, among Parent, the Company, Lehman Commercial
Paper Inc., as administrative agent, Fleet National Bank, as syndication agent,
First Union National Bank, as documentation agent, and the financial
institutions and other lenders from time to time party thereto.
"Existing Mezzanine Indebtedness" means the Company's 14% Senior
Subordinated Notes due September 29, 2008 and Parent's 16% Senior Notes due
September 29, 2008.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Issue Date, including those set forth
in:
(1) the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants;
(2) statements and pronouncements of the Financial Accounting Standards
Board; and
16
(3) such other statements by such other entity as approved by a
significant segment of the accounting profession.
All ratios and computations based on GAAP contained in this Indenture shall be
computed in conformity with GAAP.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any Person and
any obligation, direct or indirect, contingent or otherwise, of such Person:
(1) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness of such Person (whether
arising by virtue of partnership arrangements, or by agreements to
keep-well, to purchase assets, goods, securities or services, to
take-or-pay or to maintain financial statement conditions or
otherwise); or
(2) entered into for the purpose of assuring in any other
manner the obligee of such Indebtedness of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or in
part);
provided, however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning. The term "Guarantor" shall mean any
Person Guaranteeing any obligation.
"Guarantor" means Parent and each Subsidiary Guarantor, as applicable.
"Guaranty" means the Parent Guaranty and each Subsidiary Guaranty, as
applicable.
"Guaranty Agreement" means a supplemental indenture, in a form
reasonably satisfactory to the Trustee, pursuant to which Parent or a Subsidiary
Guarantor guarantees the Company's obligations with respect to the Securities on
the terms provided for in this Indenture.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement.
17
"Holder" or "Securityholder" means the Person in whose name a Security
is registered on the Registrar's books.
"Incur" means issue, assume, Guarantee, incur or otherwise become
liable for; provided, however, that any Indebtedness or Capital Stock of a
Person existing at the time such Person becomes a Restricted Subsidiary (whether
by merger, consolidation, acquisition or otherwise) shall be deemed to be
Incurred by such Person at the time it becomes a Restricted Subsidiary. The term
"Incurrence" when used as a noun shall have a correlative meaning. Solely for
purposes of determining compliance with Section 4.03, (1) amortization of debt
discount or the accretion of principal with respect to a non-interest bearing or
other discount security and (2) the payment of regularly scheduled interest in
the form of additional Indebtedness of the same instrument or the payment of
regularly scheduled dividends on Capital Stock in the form of additional Capital
Stock of the same clause and with the same terms will not be deemed to be the
Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication):
(1) the principal in respect of (A) indebtedness of such
Person for money borrowed and (B) indebtedness evidenced by notes,
debentures, bonds or other similar instruments for the payment of which
such Person is responsible or liable, including, in each case, any
premium on such indebtedness to the extent such premium has become due
and payable;
(2) all Capital Lease Obligations of such Person and all
Attributable Debt in respect of Sale/Leaseback Transactions entered
into by such Person;
(3) all obligations of such Person issued or assumed as the
deferred purchase price of property, all conditional sale obligations
of such Person and all obligations of such Person under any title
retention agreement (but excluding trade accounts payable arising in
the ordinary course of business);
(4) all obligations of such Person for the reimbursement of
any obligor on any letter of credit,
18
banker's acceptance or similar credit transaction (other than
obligations with respect to letters of credit securing obligations
(other than obligations described in clauses (1) through (3) above)
entered into in the ordinary course of business of such Person to the
extent such letters of credit are not drawn upon or, if and to the
extent drawn upon, such drawing is reimbursed no later than the tenth
Business Day following payment on the letter of credit);
(5) the amount of all obligations of such Person with respect
to the redemption, repayment or other repurchase of any Disqualified
Stock of such Person or, with respect to any Preferred Stock of any
Subsidiary of such Person, the principal amount of such Preferred Stock
to be determined in accordance with this Indenture (but excluding, in
each case, any accrued dividends);
(6) all obligations of the type referred to in clauses (1)
through (5) of other Persons and all dividends of other Persons for the
payment of which, in either case, such Person is responsible or liable,
directly or indirectly, as obligor, guarantor or otherwise, including
by means of any Guarantee;
(7) all obligations of the type referred to in clauses (1)
through (6) of other Persons secured by any Lien on any property or
asset of such Person (whether or not such obligation is assumed by such
Person), the amount of such obligation being deemed to be the lesser of
the value of such property or assets and the amount of the obligation
so secured; and
(8) to the extent not otherwise included in this definition,
Hedging Obligations of such Person.
Notwithstanding the foregoing, in connection with the purchase by the Company or
any Restricted Subsidiary of any business, the term "Indebtedness" will exclude
post-closing payment adjustments to which the seller may become entitled to the
extent such payment is determined by a final closing balance sheet or such
payment depends on the performance of such business after the closing; provided,
however, that, at the time of closing, the amount of any such payment is not
determinable and, to the extent such payment thereafter
19
becomes fixed and determined, the amount is paid within 30 days thereafter.
The amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above and the
maximum liability, upon the occurrence of the contingency giving rise to the
obligation, of any contingent obligations at such date; provided, however, that
in the case of Indebtedness sold at a discount, the amount of such Indebtedness
at any time will be the accreted value thereof at such time. Notwithstanding the
foregoing, Indebtedness shall not include any liability for Federal, state,
local or other taxes owed or owing to any governmental entity.
"Indenture" means this Indenture as amended or supplemented from time
to time.
"Independent Qualified Party" means an investment banking firm,
accounting firm or appraisal firm of national standing; provided, however, that
such firm is not an Affiliate of the Company.
"Initial Public Equity Offering" means the first underwritten initial
public offering of common stock by one of Parent or the Company pursuant to an
effective registration statement under the Securities Act, which offering (i)
has a primary component and (ii) results in at least $50.0 million of aggregate
gross proceeds (whether primary or secondary).
"Interest Rate Agreement" means in respect of a Person any interest
rate swap agreement, interest rate cap agreement or other financial agreement or
arrangement designed to protect such Person against fluctuations in interest
rates.
"Investment" in any Person means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business that are
recorded as accounts receivable on the balance sheet of the lender) or other
extensions of credit (including by way of Guarantee or similar arrangement) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such
20
Person. Except as otherwise provided for herein, the amount of an Investment
shall be its fair value at the time the Investment is made and without giving
effect to subsequent changes in value. For purposes of the definition of
"Unrestricted Subsidiary", the definition of "Restricted Payment" and Section
4.04,
(1) "Investment" shall include the portion (proportionate to
the Company's equity interest in such Subsidiary) of the fair market
value of the net assets of any Subsidiary of the Company at the time
that such Subsidiary is designated an Unrestricted Subsidiary;
provided, however, that upon a redesignation of such Subsidiary as a
Restricted Subsidiary, the Company shall be deemed to continue to have
a permanent "Investment" in an Unrestricted Subsidiary equal to an
amount (if positive) equal to (x) the Company's "Investment" in such
Subsidiary at the time of such redesignation less (y) the portion
(proportionate to the Company's equity interest in such Subsidiary) of
the fair market value of the net assets of such Subsidiary at the time
of such redesignation; and
(2) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its fair market value at the time of such
transfer, in each case as determined in good faith by the Board of
Directors of the Company.
"Issue Date" means June 28, 2002.
"Lenders" has the meaning specified in the Credit Agreement.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien
or charge of any kind (including any conditional sale or other title retention
agreement or lease in the nature thereof).
"Net Available Cash" from an Asset Disposition means cash payments
received therefrom (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or otherwise
and proceeds from the sale or other disposition of any securities received as
consideration, but only as and when received, but excluding any other
consideration received in the form of assumption by the acquiring Person of
21
Indebtedness or other obligations relating to such properties or assets or
received in any other noncash form), in each case net of:
(1) all legal, title and recording tax expenses, underwriting
discounts, commissions and other fees and expenses incurred (including,
without limitation, fees and expenses of counsel, accountants and
investment bankers), and all Federal, state, provincial, foreign and
local taxes required to be accrued as a liability under GAAP, as a
consequence of such Asset Disposition;
(2) all payments made on any Indebtedness which is secured by
any assets subject to such Asset Disposition, in accordance with the
terms of any Lien upon or other security agreement of any kind with
respect to such assets, or which must by its terms, or in order to
obtain a necessary consent to such Asset Disposition, or by applicable
law, be repaid out of the proceeds from such Asset Disposition;
(3) all distributions and other payments required to be made
to minority interest holders in Restricted Subsidiaries as a result of
such Asset Disposition; and
(4) the deduction of appropriate amounts provided by the
seller as a reserve, in accordance with GAAP, against any liabilities
associated with the property or other assets disposed in such Asset
Disposition and retained by the Company or any Restricted Subsidiary
after such Asset Disposition.
"Net Cash Proceeds", with respect to any issuance or sale of Capital
Stock, means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"Obligations" means with respect to any Indebtedness all obligations
for principal, premium, interest, penalties, fees, indemnifications,
reimbursements, and other amounts payable pursuant to the documentation
governing such Indebtedness.
22
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Parent" means Buffets Holdings, Inc., a Delaware corporation.
"Parent Board" means the Board of Directors of the Parent or any
committee thereof duly authorized to act on behalf of such Board.
"Parent Guaranty" means the Guarantee of the Securities by Parent
pursuant to a Guaranty Agreement.
"Parent Note" means (i) the $7.9 million aggregate principal amount of
3% Series A Subordinated Notes issued by Parent with an initial term maturity of
six months from the Issue Date, which will be extended to June 15, 2011 with an
interest rate of 4.75% if such notes are not paid in full on the initial
maturity date, and (ii) the $20.0 million aggregate principal amount of 3%
Series B Subordinated Notes issued by Parent with an initial term maturity of
six months from the Issue Date, which will be extended to June 15, 2011 with an
interest rate of 4.75% if such notes are not paid in full on the initial
maturity date.
"Permitted Closing Date Payments" means, without duplication, the
following payments and distributions: (i) redemption of the Existing Mezzanine
Indebtedness and the payment of accrued interest thereon, (ii) repayment of all
amounts outstanding under the Existing Credit Agreement, including, but not
limited to, fees and accrued interest thereon, (iii) cash payments (including,
but not limited to, redemption fees of $18.0 million) made or agreed to be made
in connection with the redemption of the Existing Mezzanine Indebtedness, (iv)
the distribution of up to $150.0 million in cash to Parent and (v) the payment
of transaction fees and expenses relating to the Refinancing Transactions of up
to $17.1 million.
23
"Permitted Equipment Lease Financings" means one or more Sale/Leaseback
Transactions relating to equipment and/or leasehold improvements.
"Permitted Holders" means (i) Caxton-Iseman Investments L.P., Caxton
Associates, LLC, Sentinel Capital Partners, II, L.P., Frederick J. Iseman,
Robert M. Rosenberg, Steven M. Lefkowitz, Robert A. Ferris, Roe H. Hatlen and
David S. Lobel and any other Person who is a controlled Affiliate of any of the
foregoing and any member of senior management of the Company and (ii) any
Related Party of any of the foregoing.
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in:
(1) the Company, a Restricted Subsidiary or a Person that
will, upon the making of such Investment, become a Restricted
Subsidiary; provided, however, that the primary business of such
Restricted Subsidiary is a Related Business;
(2) another Person if as a result of such Investment such
other Person is merged or consolidated with or into, or transfers or
conveys all or substantially all its assets to, the Company or a
Restricted Subsidiary; provided, however, that such Person's primary
business is a Related Business;
(3) cash and Temporary Cash Investments;
(4) receivables owing to the Company or any Restricted
Subsidiary if created or acquired in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms;
provided, however, that such trade terms may include such concessionary
trade terms as the Company or any such Restricted Subsidiary deems
reasonable under the circumstances;
(5) payroll, travel and similar advances to cover matters that
are expected at the time of such advances ultimately to be treated as
expenses for accounting purposes and that are made in the ordinary
course of business;
24
(6) loans or advances to employees made in the ordinary course
of business of the Company or such Restricted Subsidiary;
(7) stock, obligations or securities received in settlement of
debts created in the ordinary course of business and owing to the
Company or any Restricted Subsidiary or in satisfaction of judgments;
(8) any Person to the extent such Investment represents the
non-cash portion of the consideration received for an Asset Disposition
as permitted pursuant to Section 4.06;
(9) any Person where such Investment was acquired by the
Company or any of its Restricted Subsidiaries (a) in exchange for any
other Investment or accounts receivable held by the Company or any such
Restricted Subsidiary in connection with or as a result of a
bankruptcy, workout, reorganization or recapitalization of the issuer
of such other Investment or accounts receivable or (b) as a result of a
foreclosure by the Company or any of its Restricted Subsidiaries with
respect to any secured Investment or other transfer of title with
respect to any secured Investment in default; and
(10) additional Investments made after the Issue Date in an
aggregate amount which, together with all other Investments made
pursuant to this clause (10) that are then outstanding, do not exceed
the greater of (a) $25.0 million and (b) 5% of Total Assets.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any Person, means
Capital Stock of any class or classes (however designated) which is preferred as
to the payment of dividends or distributions, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
Person, over shares of Capital Stock of any other class of such Person.
25
"principal" of a Security means the principal of the Security plus the
premium, if any, payable on the Security which is due or overdue or is to
become due at the relevant time.
"Pro Forma Cost Savings" means, with respect to any period, the
reduction in costs or other adjustments (including, solely in the case of clause
(3)(i) below, an annualization of EBITDA), as applicable, that are:
(1) directly attributable to an asset acquisition and
calculated on a basis that is consistent with Regulation S-X under the
Securities Act in effect and as applied as of the Issue Date;
(2) implemented by the Company or the business that was the
subject of any such asset acquisition, in each case, within one year
prior to the date of the asset acquisition and that are supportable and
quantifiable by the underlying accounting records of the Company or
such business; or
(3) in connection with any acquisition of restaurants or a
Person engaged in a Related Business, (i) the EBITDA reasonably
estimated by the Company's chief financial officer associated with any
such acquired restaurants that were operated for at least three months
but no longer than twelve months by the business that was the subject
of any such acquisition and (ii) cost savings reasonably estimated by
the Company's chief financial officer and reasonably expected by such
chief financial officer to be implemented within six months of the
consummation of such acquisition directly attributable to closing such
acquired restaurants or to headquarters consolidation, including
consolidation of functions;
as if, in the case of each of clauses (1), (2) and (3), all such reductions in
costs or other adjustments had been effected as of the beginning of such period.
"Rating Agency" means Standard & Poor's, a division of the McGraw-Hill
Companies, and Moody's Investors Service, Inc. or if Standard & Poor's or
Moody's Investors Service, Inc. or both shall not make a rating on the
Securities publicly available, a nationally recognized statistical rating agency
or agencies, as the case may be,
26
selected by the Company (as certified by a resolution of the Board of Directors
of the Company) which shall be substituted for Standard & Poor's or Moody's
Investors Service, Inc. or both, as the case may be.
"Refinance" means, in respect of any Indebtedness, to refinance,
extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue
other Indebtedness in exchange or replacement for, in whole or in part, such
indebtedness. "Refinanced" and "Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that Refinances any
Indebtedness of the Company or any Restricted Subsidiary existing on the Issue
Date or Incurred in compliance with this Indenture, including Indebtedness that
Refinances Refinancing Indebtedness; provided, however, that:
(1) such Refinancing Indebtedness has a Stated Maturity no
earlier than the Stated Maturity of the Indebtedness being Refinanced;
(2) such Refinancing Indebtedness has an Average Life at the
time such Refinancing Indebtedness is Incurred that is equal to or
greater than the Average Life of the Indebtedness being Refinanced; and
(3) such Refinancing Indebtedness has an aggregate principal
amount (or if Incurred with original issue discount, an aggregate issue
price) that is equal to or less than the aggregate principal amount (or
if Incurred with original issue discount, the aggregate accreted value)
then outstanding or committed (plus (i) accrued interest on the
Indebtedness being Refinanced not to exceed the amount of such accrued
interest for one fiscal quarter and (ii) fees and expenses, including
any premium and defeasance costs) under the Indebtedness being
Refinanced;
provided further, however, that Refinancing Indebtedness shall not include (A)
Indebtedness of a Subsidiary that Refinances Indebtedness of the Company or (B)
Indebtedness of the Company or a Restricted Subsidiary that Refinances
Indebtedness of an Unrestricted Subsidiary.
27
"Registration Rights Agreement" means the Registration Rights Agreement
dated the Issue Date, among the Company, the Subsidiary Guarantors and Credit
Suisse First Boston Corporation, Morgan Stanley & Co. Incorporated, Salomon
Smith Barney Inc., UBS Warburg LLC and Fleet Securities, Inc. and any similar
registration rights agreement entered into in connection with the issuance of
Additional Securities.
"Related Business" means any business in which the Company was engaged
on the Issue Date and any business that in the good faith judgement of the Board
of Directors is related, ancillary or complementary thereto, arises therefrom or
is necessary or desirable to facilitate such business.
"Related Party" means (1) any controlling stockholder, controlling
member, general partner, majority owned Subsidiary, or spouse or immediate
family member (in the case of an individual) of any Permitted Holder, (2) any
estate, trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners, owners or Persons holding a controlling interest of
which consist solely of one or more Permitted Holders and/or such other Persons
referred to in the immediately preceding clause (1) or (3) any executor,
administrator, trustee, manager, director or other similar fiduciary of any
Person referred to in the immediately preceding clause (2) acting solely in such
capacity.
"Representative" means , with respect to a Person, any trustee, agent
or representative (if any) for an issue of Senior Indebtedness of such Person.
"Restricted Payment" with respect to any Person means:
(1) the declaration or payment of any dividends or any other
distributions of any sort in respect of its Capital Stock (including
any payment in connection with any merger or consolidation involving
such Person) or similar payment to the direct or indirect holders of
its Capital Stock (other than dividends or distributions payable solely
in its Capital Stock (other than Disqualified Stock) and dividends or
distributions payable solely to the Company or a Restricted Subsidiary,
and other than pro rata
28
dividends or other distributions made by a Subsidiary that is not a
Wholly Owned Subsidiary to minority stockholders (or owners of an
equivalent interest in the case of a Subsidiary that is an entity other
than a corporation));
(2) the purchase, redemption or other acquisition or
retirement for value of any Capital Stock of the Company held by any
Person or of any Capital Stock of a Restricted Subsidiary held by any
Affiliate of the Company (other than a Restricted Subsidiary),
including the exercise of any option to exchange any Capital Stock
(other than into Capital Stock of the Company that is not Disqualified
Stock);
(3) the purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value, prior to scheduled maturity,
scheduled repayment or scheduled sinking fund payment of any
Subordinated Obligations of such Person (other than the purchase,
repurchase or other acquisition of Subordinated Obligations purchased
in anticipation of satisfying a sinking fund obligation, principal
installment or final maturity, in each case due within one year of the
date of such purchase, repurchase or other acquisition); or
(4) the making of any Investment (other than a
Permitted Investment) in any Person.
"Restricted Subsidiary" means any Subsidiary of the Company that is not
an Unrestricted Subsidiary.
"Revolving Credit Facility" means the revolving credit facility and
letter of credit facility contained in the Credit Agreement and any other
facilities or financing arrangements (including commercial paper facilities,
revolving credit loans, term loans, receivables financing letters of credit, or
any debt securities or other form of debt, convertible debt or exchangeable debt
financing) that Refinance or replace, in whole or in part, any such revolving
credit facility, letter or credit facility or financing arrangement.
"Sale/Leaseback Transaction" means an arrangement relating to property
owned by the Company or a Restricted Subsidiary on the Issue Date or thereafter
acquired by the Company or a Restricted Subsidiary whereby the Company or a
Restricted Subsidiary transfers such property to a Person
29
and the Company or a Restricted Subsidiary leases it from such Person.
"SEC" means the U.S. Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness of the Company secured by
a Lien.
"Securities" means the Securities issued under this Indenture.
"Senior Indebtedness" means, with respect to any Person:
(1) Indebtedness of such Person, whether outstanding on the
Issue Date or thereafter Incurred; and
(2) accrued and unpaid interest (including interest accruing
on or after the filing of any petition in bankruptcy or for
reorganization relating to such Person whether or not post-filing
interest is allowed in such proceeding) in respect of (A) indebtedness
of such Person for money borrowed and (B) indebtedness evidenced by
notes, debentures, bonds or other similar instruments for the payment
of which such Person is responsible or liable
unless, in the case of clauses (1) and (2), in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is provided
that such obligations are subordinate or pari passu in right of payment to the
Securities or the Subsidiary Guaranty of such Person, as the case may be;
provided, however, that Senior Indebtedness of such Person shall not include:
(1) any obligation of such Person to any Subsidiary;
(2) any liability for Federal, state, local or other taxes
owed or owing by such Person;
(3) any accounts payable or other liability to trade creditors
arising in the ordinary course of business (including guarantees
thereof or instruments evidencing such liabilities);
30
(4) any Indebtedness of such Person (and any accrued and
unpaid interest in respect thereof) which is subordinate or junior in
right of payment to any other Indebtedness or other obligation of such
Person; or
(5) that portion of any Indebtedness which at the time of
Incurrence is Incurred in violation of this Indenture.
"Senior Subordinated Indebtedness" means, with respect to a Person, the
Securities (in the case of the Company), the Subsidiary Guaranty (in the case of
a Subsidiary Guarantor) and any other Indebtedness of such Person that
specifically provides that such Indebtedness is to rank pari passu with the
Securities or such Subsidiary Guaranty, as the case may be, in right of payment
and is not subordinated by its terms in right of payment to any Indebtedness or
other obligation of such Person which in each case is not Senior Indebtedness of
such Person.
"Significant Subsidiary" means any Restricted Subsidiary that would be
a "Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
"Specified Sale/Leaseback Transaction" means a Sale/Leaseback
Transaction relating to leasehold interests with respect to up to 38 restaurants
owned by the Company or a Restricted Subsidiary having an aggregate net book
value of approximately $37.4 million and identified on the Issue Date on
Schedule A hereto.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency unless such contingency has occurred).
"Subordinated Obligation" means, with respect to a Person, any
Indebtedness of such Person (whether outstanding on the Issue Date or thereafter
Incurred) which is subordinate or junior in right of payment to the Securities
31
or a Subsidiary Guaranty of such Person, as the case may be, pursuant to a
written agreement to that effect.
"Subsidiary" means, with respect to any Person, any
corporation, association, partnership or other business entity of which more
than 50% of the total voting power of shares of Voting Stock is at the time
owned or controlled, directly or indirectly, by (1) such Person, (2) such Person
and one or more Subsidiaries of such Person or (3) one or more Subsidiaries of
such Person.
"Subsidiary Guarantor" means Distinctive Dining, Inc.,
HomeTown Buffet, Inc., OCB Restaurant Co., OCB Purchasing Co. and Restaurant
Innovations, Inc. and each other Subsidiary of the Company that executes the
Indenture as a guarantor and each other Subsidiary of the Company that
thereafter guarantees the Securities pursuant to the terms of this Indenture.
"Subsidiary Guaranty" means a Guarantee by a Subsidiary
Guarantor of the Company's obligations with respect to the Securities.
"Temporary Cash Investments" means any of the following:
(1) any investment in direct obligations of the United States
of America or any agency thereof or obligations guaranteed by the
United States of America or any agency thereof;
(2) investments in time deposit accounts, certificates of
deposit and money market deposits maturing within one year of the date
of acquisition thereof issued by a bank or trust company which is
organized under the laws of the United States of America, any state
thereof or any foreign country recognized by the United States of
America, and which bank or trust company has capital, surplus and
undivided profits aggregating in excess of $50.0 million (or the
foreign currency equivalent thereof) and has outstanding debt that is
rated "A" (or such similar equivalent rating) or higher by at least one
nationally recognized statistical rating organization (as defined in
Rule 436 under the Securities Act) or any money-market fund sponsored
by a registered broker dealer or mutual fund distributor;
32
(3) repurchase obligations with a term of not more than 30
days for underlying securities of the types described in clause (1)
above entered into with a bank meeting the qualifications described in
clause (2) above;
(4) investments in commercial paper, maturing not more than 90
days after the date of acquisition, issued by a person (other than an
Affiliate of the Company) organized and in existence under the laws of
the United States of America or any foreign country recognized by the
United States of America with a rating at the time as of which any
investment therein is made of "P-1" (or higher) according to Moody's
Investors Service, Inc. or "A-1" (or higher) according to Standard and
Poor's, a division of the McGraw-Hill Companies; and
(5) investments in securities with maturities of six months or
less from the date of acquisition issued or fully guaranteed by any
state, commonwealth or territory of the United States of America, or by
any political subdivision or taxing authority thereof, and rated at
least "A" by Standard & Poor's, a division of the McGraw-Hill
Companies, or "A" by Moody's Investors Service, Inc.
"Term Loan Facility" means the term loan facility initially
contained in the Credit Agreement and any other facility or financing
arrangement (including commercial paper facilities, revolving credit loans, term
loans, receivables financing, letters of credit, or any debt securities or other
form of debt, convertible debt or exchangeable debt financing) that Refinances
or replaces, in whole or in part, any such facility or financing arrangement.
"Total Assets" means the total consolidated assets of the
Company and its Restricted Subsidiaries, as set forth on the Company's
consolidated balance sheet for the most recently ended fiscal quarter for which
internal financial statements are available.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb) as in effect on the date of this Indenture.
33
"Trustee" means the party named as such in this Indenture
until a successor replaces it and, thereafter, means the successor.
"Trust Officer" means the Chairman of the Board, the President
or any other officer or assistant officer of the Trustee assigned by the Trustee
to administer its corporate trust matters.
"Uniform Commercial Code" means the New York Uniform
Commercial Code as in effect from time to time.
"Unrestricted Subsidiary" means:
(1) any Subsidiary of the Company that at the time of
determination shall be designated an Unrestricted Subsidiary by the
Board of Directors of the Company in the manner provided below; and
(2) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors of the Company may designate any Subsidiary of the
Company (including any newly acquired or newly formed Subsidiary) to be an
Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns
any Capital Stock or Indebtedness of, or holds any Lien on any property of, the
Company or any other Subsidiary of the Company that is not a Subsidiary of the
Subsidiary to be so designated; provided, however, that either (A) the
Subsidiary to be so designated has total assets of $1,000 or less or (B) if such
Subsidiary has assets greater than $1,000, such designation would be permitted
under Section 4.04. The Board of Directors of the Company may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that
immediately after giving effect to such designation (A) (i) the Company could
Incur $1.00 of additional Indebtedness under Section 4.03(a) or (ii) the
Consolidated Coverage Ratio for the Company and its Restricted Subsidiaries
would be greater than the Consolidated Coverage Ratio for the Company and its
Restricted Subsidiaries immediately before giving effect to such designation and
(B) no Default shall have occurred and be continuing. Any such designation by
the Board of Directors of the Company shall be evidenced to the Trustee by
promptly filing with the Trustee a copy of the resolution of the Board of
Directors of the Company giving effect to
34
such designation and an Officers' Certificate certifying that such designation
complied with the foregoing provisions.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
"Voting Stock" of a Person means all classes of Capital Stock
or other interests (including partnership interests) of such Person then
outstanding and normally entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof.
"Wholly Owned Subsidiary" means a Restricted Subsidiary all
the Capital Stock of which (other than directors' qualifying shares) is owned by
the Company or one or more Wholly Owned Subsidiaries.
SECTION 1.02. Other Definitions.
Defined in
Term Section
---- ---------
"Affiliate Transaction" ................ 4.07
"Appendix".............................. 2.01
"Bankruptcy Law" ....................... 6.01
"Blockage Notice" ...................... 10.03
"Change of Control Offer"............... 4.09(b)
"covenant defeasance option" ........... 8.01(b)
"Custodian" ............................ 6.01
"Event of Default" ..................... 6.01
"Guaranty Blockage Notice".............. 12.03
"Guaranty Payment Blockage Period"...... 12.03
"IPO Offer" ............................ 4.10(a)
"IPO Offer Amount" ..................... 4.10(c)(2)
"IPO Offer Period" .................... 4.10(c)(2)
"IPO Purchase Date" .................... 4.10(c)(1)
"legal defeasance option" .............. 8.01(b)
"Legal Holiday" ........................ 11.08
"Offer" ............................... 4.06(b)
"Offer Amount" ........................ 4.06(c)(2)
35
"Offer Period" ........................ 4.06(c)(2)
"pay the Securities" ................... 10.03
"Paying Agent" ......................... 2.03
"Payment Blockage Period" .............. 10.03
"Purchase Date" ....................... 4.06(c)(1)
"Registrar"............................. 2.03
"Successor Company" .................... 5.01
SECTION 1.03. Incorporation by Reference of Trust Indenture
Act. This Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC;
"indenture securities" means the Securities;
"indenture security holder" means a Securityholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee; and
"obligor" on the indenture securities means the Company and
any other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them by such definitions.
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) "including" means including without limitation;
36
(5) words in the singular include the plural and words in the
plural include the singular;
(6) unsecured Indebtedness shall not be deemed to be
subordinate or junior to Secured Indebtedness merely by virtue of its
nature as unsecured Indebtedness;
(7) Indebtedness secured by junior liens shall not be deemed
to be subordinated or junior to other Indebtedness merely because it is
secured by junior liens;
(8) the principal amount of any noninterest bearing or other
discount security at any date shall be the principal amount thereof
that would be shown on a balance sheet of the issuer dated such date
prepared in accordance with GAAP;
(9) interest payable on the Securities shall include
additional interest, if any, required to be paid on the Securities
under the Registration Rights Agreement;
(10) the principal amount of any Preferred Stock shall be (i)
the maximum liquidation value of such Preferred Stock or (ii) the
maximum mandatory redemption or mandatory repurchase price with
respect to such Preferred Stock, whichever is greater; and
(11) all references to the date the Securities were originally
issued shall refer to the Issue Date.
37
ARTICLE 2
The Securities
SECTION 2.01. Form and Dating. Provisions relating to the
Initial Securities, the Private Exchange Securities and the Exchange Securities
are set forth in the Rule 144A/Regulation S Appendix attached hereto (the
"Appendix") which is hereby incorporated in and expressly made part of this
Indenture. The Initial Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit 1 to the Appendix
which is hereby incorporated in and expressly made a part of this Indenture. The
Exchange Securities, the Private Exchange Securities and the Trustee's
certificate of authentication shall be substantially in the form of Exhibit A,
which is hereby incorporated in and expressly made a part of this Indenture. The
Securities may have notations, legends or endorsements required by law, stock
exchange rule, agreements to which the Company is subject, if any, or usage
(provided that any such notation, legend or endorsement is in a form acceptable
to the Company). Each Security shall be dated the date of its authentication.
The terms of the Securities set forth in the Appendix and Exhibit A are part of
the terms of this Indenture.
SECTION 2.02. Execution and Authentication. Two Officers shall
sign the Securities for the Company by manual or facsimile signature.
If an Officer whose signature is on a Security no longer holds
that office at the time the Trustee authenticates the Security, the Security
shall be valid nevertheless.
A Security shall not be valid until an authorized signatory of
the Trustee manually signs the certificate of authentication on the Security.
The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.
On the Issue Date, the Trustee shall authenticate and deliver
$230,000,000 of 11 1/4% Senior Subordinated Notes due 2010 and, at any time and
from time to time thereafter, the Trustee shall authenticate and deliver
Securities for original issue in an aggregate principal
38
amount specified in such order, in each case upon a written order of the Company
signed by two Officers or by an Officer and either an Assistant Treasurer or an
Assistant Secretary of the Company. Such order shall specify the amount of the
Securities to be authenticated and the date on which the original issue of
Securities is to be authenticated and, in the case of an issuance of Additional
Securities pursuant to Section 2.13 after the Issue Date, shall certify that
such issuance is in compliance with Section 4.03.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate the Securities. Unless limited by the
terms of such appointment, an authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as any Registrar, Paying Agent or agent
for service of notices and demands.
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 (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Registrar
shall keep a register of the Securities and of their transfer and exchange. The
Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement
with any Registrar, Paying Agent or co-registrar not a party to this Indenture,
which shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall
notify the Trustee of the name and address of any such agent. If the Company
fails to maintain a Registrar or Paying Agent, the Trustee shall act as such
and shall be entitled to appropriate compensation therefor pursuant to Section
7.07. The Company or any Wholly Owned Subsidiary incorporated or organized
within The United States of America may act as Paying Agent, Registrar, co-
registrar or transfer agent.
39
The Company initially appoints the Trustee as Registrar and
Paying Agent in connection with the Securities.
SECTION 2.04. Paying Agent To Hold Money in Trust. On or prior
to each due date of the principal and interest on any Security, the Company
shall deposit with the Paying Agent a sum sufficient to pay such principal and
interest when so becoming due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold in
trust for the benefit of Securityholders or the Trustee all money held by the
Paying Agent for the payment of principal of or interest on the Securities and
shall notify the Trustee of any default by the Company in making any such
payment. If the Company or a Subsidiary acts as Paying Agent, it shall segregate
the money held by it as Paying Agent and hold it as a separate trust fund. The
Company at any time may require a Paying Agent to pay all money held by it to
the Trustee and to account for any funds disbursed by the Paying Agent. Upon
complying with this Section, the Paying Agent shall have no further liability
for the money delivered to the Trustee.
SECTION 2.05. Securityholder Lists. The Trustee shall preserve
in as current a form as is reasonably practicable the most recent list
available to it of the names and addresses of Securityholders. If the Trustee is
not the Registrar, the Company shall furnish to the Trustee, in writing at least
five Business Days before each interest payment date and at such other times as
the Trustee may request in writing, a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of
Securityholders.
SECTION 2.06. Transfer and Exchange. The Securities shall be
issued in registered form and shall be transferable only upon the surrender of a
Security for registration of transfer. When a Security is presented to the
Registrar or a co-registrar with a request to register a transfer, the Registrar
shall register the transfer as requested if the requirements of this Indenture
and Section 8-401(a) of the Uniform Commercial Code are met. When Securities are
presented to the Registrar or a co-registrar with a request to exchange them for
an equal principal amount of Securities of other denominations, the
40
Registrar shall make the exchange as requested if the same requirements are met.
SECTION 2.07. Replacement Securities. If a mutilated Security
is surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements of
Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies
any other reasonable requirements of the Trustee. If required by the Trustee or
the Company, such Holder shall furnish an indemnity bond sufficient in the
judgment of the Company and the Trustee to protect the Company, the Trustee, the
Paying Agent, the Registrar and any co-registrar from any loss which any of them
may suffer if a Security is replaced. The Company and the Trustee may charge the
Holder for their expenses in replacing a Security.
Every replacement Security is an additional obligation of the
Company.
SECTION 2.08. Outstanding Securities. Securities outstanding
at any time are all Securities authenticated by the Trustee except for those
canceled by it, those delivered to it for cancellation and those described in
this Section as not outstanding. A Security does not cease to be outstanding
because the Company or an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases
to be outstanding unless the Trustee and the Company receive proof satisfactory
to them that the replaced Security is held by a protected purchaser (as defined
in Section 8-303 of the Uniform Commercial Code).
If the Paying Agent segregates and holds in trust, in
accordance with this Indenture, on a redemption date or maturity date money
sufficient to pay all principal and interest payable on that date with respect
to the Securities (or portions thereof) to be redeemed or maturing, as the case
may be, and the Paying Agent is not prohibited from paying such money to the
Securityholders on that date pursuant to the terms of this Indenture, then on
and after that date such Securities (or portions thereof) cease to be
outstanding and interest on them ceases to accrue.
41
SECTION 2.09. Temporary Securities. Until definitive
Securities are ready for delivery, the Company may prepare and the Trustee shall
authenticate temporary Securities. 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 Trustee shall authenticate definitive Securities
and deliver them in exchange for temporary Securities.
SECTION 2.10. Cancellation. The Company at any time may
deliver Securities to the Trustee for cancellation. The Registrar and the Paying
Agent shall forward to the Trustee any Securities surrendered to them for
registration of transfer, exchange or payment. The Trustee and no one else shall
cancel and destroy (subject to the record retention requirements of the
Exchange Act) all Securities surrendered for registration of transfer, exchange,
payment or cancellation and deliver a certificate of such destruction to the
Company unless the Company directs the Trustee to deliver canceled Securities to
the Company. The Company may not issue new Securities to replace Securities it
has redeemed, paid or delivered to the Trustee for cancellation.
SECTION 2.11. Defaulted Interest. If the Company defaults in a
payment of interest on the Securities, the Company shall pay defaulted interest
(plus interest on such defaulted interest to the extent lawful) in any lawful
manner. The Company may pay the defaulted interest to the persons who are
Securityholders on a subsequent special record date. The Company shall fix or
cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail to each
Securityholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.
SECTION 2.12. CUSIP Numbers. The Company in issuing the
Securities may use "CUSIP" numbers assigned by the Committee on Uniform
Securities Identification Procedures ("CUSIP") and corresponding International
Securities Identification Numbers ("ISIN") (if then generally in use) and, if
so, the Trustee shall use CUSIP numbers in notices of redemption as a
convenience to Holders; provided, however, that any such notice may state
42
that no representation is made as to the correctness of such numbers either as
printed on the Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company shall promptly notify the Trustee of any
change in the CUSIP or ISIN numbers.
SECTION 2.13. Issuance of Additional Securities. The Company shall be
entitled, subject to its compliance with Section 4.03, to issue Additional
Securities under this Indenture which shall have identical terms as the Initial
Securities issued on the Issue Date, other than with respect to the date of
issuance, issue price and first interest payment date. The Initial Securities
issued on the Issue Date, any Additional Securities and all Exchange Securities
or Private Exchange Securities issued in exchange therefor shall be treated as a
single class for all purposes under this Indenture.
With respect to any Additional Securities, the Company shall
set forth in a resolution of the Board of Directors and an Officers'
Certificate, a copy of each which shall be delivered to the Trustee, the
following information:
(1) the aggregate principal amount of such Additional
Securities to be authenticated and delivered pursuant to this
Indenture;
(2) the issue price, the issue date, the first interest
payment date, the CUSIP number and corresponding ISIN of such
Additional Securities; provided, however, that no Additional Securities
may be issued unless such Additional Securities are fungible in all
respects for U.S. Federal income tax purposes with the Securities then
outstanding; and
(3) whether such Additional Securities shall be Transfer
Restricted Securities and issued in the form of Initial Securities as
set forth in the Appendix to this Indenture or shall be issued in the
form of Exchange Securities as set forth in Exhibit A.
43
ARTICLE 3
Redemption
SECTION 3.01. Notices to Trustee. If the Company elects to
redeem Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee in writing of the redemption date, the principal amount of Securities to
be redeemed and the paragraph of the Securities pursuant to which the redemption
will occur.
The Company shall give each notice to the Trustee provided for
in this Section at least 30 days before the redemption date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein.
SECTION 3.02. Selection of Securities To Be Redeemed. If fewer
than all the Securities are to be redeemed, the Trustee shall select the
Securities to be redeemed pro rata or by lot or by a method that complies with
applicable legal and securities exchange requirements, if any, and that the
Trustee in its sole discretion shall deem to be fair and appropriate and in
accordance with methods generally used at the time of selection by fiduciaries
in similar circumstances. The Trustee shall make the selection from outstanding
Securities not previously called for redemption. The Trustee may select for
redemption portions of the principal of Securities that have denominations
larger than $1,000. Securities and portions of them the Trustee selects shall be
in principal amounts of $1,000 or a whole multiple of $1,000. Provisions of this
Indenture that apply to Securities called for redemption also apply to portions
of Securities called for redemption. The Trustee shall notify the Company
promptly of the Securities or portions of Securities to be redeemed.
SECTION 3.03. Notice of Redemption. At least 30 days but not
more than 60 days before a date for redemption of Securities, the Company shall
mail a notice of redemption by first-class mail to each Holder of Securities to
be redeemed at such Holder's registered address.
44
The notice shall identify the Securities to be redeemed and
shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be
redeemed, the identification and principal amounts of the particular
Securities to be redeemed;
(6) that, unless the Company defaults in making such
redemption payment or the Paying Agent is prohibited from making such
payment pursuant to the terms of this Indenture, interest on Securities
(or portion thereof) called for redemption ceases to accrue on and
after the redemption date; and
(7) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed
on the Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section.
SECTION 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed, Securities called for redemption become due and payable on
the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the related interest payment date). Failure to give
notice or any defect in the notice to any Holder shall not affect the validity
of the notice to any other Holder.
45
SECTION 3.05. Deposit of Redemption Price. On or prior to the
redemption date, the Company shall deposit with the Paying Agent (or, if the
Company or a Subsidiary is the Paying Agent, shall segregate and hold in trust)
money sufficient to pay the redemption price of and accrued interest on all
Securities to be redeemed on that date other than Securities or portions of
Securities called for redemption which have been delivered by the Company to the
Trustee for cancellation.
SECTION 3.06. Securities Redeemed in Part. Upon surrender of a
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate for the Holder (at the Company's expense) a new Security
equal in principal amount to the unredeemed portion of the Security
surrendered.
ARTICLE 4
Covenants
SECTION 4.01. Payment of Securities. The Company shall
promptly pay the principal of and interest on the Securities on the dates and in
the manner provided in the Securities and in this Indenture. Principal and
interest shall be considered paid on the date due if on such date the Trustee or
the Paying Agent holds in accordance with this Indenture money sufficient to pay
all principal and interest then due and the Trustee or the Paying Agent, as the
case may be, is not prohibited from paying such money to the Securityholders on
that date pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the
rate specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION 4.02. SEC Reports. Notwithstanding that the Company
may not be subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, the Company shall, after effectiveness of the Exchange Offer
Registration Statement (as defined in the Registration Rights Agreement) or the
Shelf Registration Statement (as defined in the Registration Rights Agreement),
as the case
46
may be, file with the SEC and, in any event, provide the Trustee and
Securityholders with such annual reports and such information, documents and
other reports as are specified in Sections 13 and 15(d) of the Exchange Act and
applicable to a U.S. corporation subject to such Sections, such information,
documents and other reports to be so filed and provided at the times specified
for the filing of such information, documents and reports under such Sections.
In addition, the Company shall furnish to the Holders of the
Securities and to prospective investors, upon the requests of such Holders, any
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act so long as the Securities are not freely transferable under the
Securities Act. The Company also shall comply with the other provisions of TIA
Section 314(a).
If Parent has Guaranteed the Securities and has complied with
the reporting requirements of Section 13 or 15(d) of the Exchange Act, if
applicable, and has provided the Trustee, the Holders of the Securities and
prospective investors with the reports described herein with respect to Parent
(including any financial information required by Regulation S-X 3-10 and a
separate "Management's Discussion and Analysis of Financial Condition and
Results of Operations" with respect to the Company and its Restricted
Subsidiaries on a consolidated basis), the Company shall be deemed to be in
compliance with the provisions of this Section 4.02.
SECTION 4.03. Limitation on Indebtedness.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, Incur, directly or indirectly, any Indebtedness; provided,
however, that the Company and each Restricted Subsidiary shall be entitled to
Incur Indebtedness if, on the date of such Incurrence after giving effect
thereto on a pro forma basis, no Default has occurred and is continuing and the
Consolidated Coverage Ratio exceeds (1) 2.0 to 1, if such Indebtedness is
Incurred on or prior to July 15, 2004, (2) 2.25 to 1 if such Indebtedness is
Incurred after July 15, 2004 and on or prior to July 15, 2006, and (3) 2.5 to 1,
if such Indebtedness is Incurred after July 15, 2006.
(b) Notwithstanding the foregoing paragraph (a), the Company
and the Restricted Subsidiaries shall be
47
entitled to Incur any or all of the following Indebtedness:
(1) Indebtedness Incurred by the Company and its Restricted
Subsidiaries pursuant to any Revolving Credit Facility; provided,
however, that, immediately after giving effect to any such Incurrence,
the aggregate principal amount of all Indebtedness Incurred under this
clause (1) and then outstanding does not exceed the greater of (A)
$50,000,000 and (B) 5% of the consolidated revenue of the Company and
its Restricted Subsidiaries for the most recent four consecutive fiscal
quarters for which internal financial statements are available prior to
the date such Indebtedness was Incurred;
(2) Indebtedness Incurred by the Company and its Restricted
Subsidiaries pursuant to any Term Loan Facility; provided, however,
that, after giving effect to any such Incurrence, the aggregate
principal amount of all Indebtedness Incurred under this clause (2) and
then outstanding does not exceed $245,000,000 less the sum of all
principal payments with respect to such Indebtedness pursuant to
Section 4.06(a)(3)(A);
(3) Indebtedness owed to and held by the Company or a
Restricted Subsidiary; provided, however, that (A) any subsequent
issuance or transfer of any Capital Stock which results in any such
Restricted Subsidiary ceasing to be a Restricted Subsidiary or any
subsequent transfer of such Indebtedness (other than to the Company or
a Restricted Subsidiary) shall be deemed, in each case, to constitute
the Incurrence of such Indebtedness by the obligor thereon and (B) if
the Company is the obligor on such Indebtedness owed to a Restricted
Subsidiary, such Indebtedness is expressly subordinated to the prior
payment in full in cash of all obligations with respect to the
Securities;
(4) the Securities and the Exchange Securities (other than any
Additional Securities);
(5) Indebtedness outstanding on the Issue Date (other than
Indebtedness described in clause (1), (2), (3) or (4) of this Section
4.03(b));
(6) Refinancing Indebtedness in respect of Indebtedness
Incurred pursuant to Section 4.03(a) or pursuant to clause (4) or (5)
of this Section 4.03(b) or this clause (6);
48
(7) Hedging Obligations of the Company or any Restricted
Subsidiary entered into not for the purpose of speculation;
(8) obligations in respect of one or more standby letters of
credit, performance, bid and surety bonds and completion guarantees
provided by the Company or any Restricted Subsidiary in the ordinary
course of business;
(9) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument drawn
against insufficient funds in the ordinary course of business;
provided, however, that such Indebtedness is extinguished within three
Business Days of its Incurrence;
(10) Indebtedness (including Capital Lease Obligations)
Incurred by the Company or any of its Restricted Subsidiaries to
finance the purchase, lease, construction or improvement of property
(real or personal) or equipment (whether through the direct purchase of
assets or the Capital Stock of any Person owning such assets) within
180 days after such purchase, lease or improvement in an aggregate
principal amount which, when added together with the amount of
Indebtedness previously Incurred pursuant to this clause (10) and then
outstanding (including any Refinancing Indebtedness with respect
thereto) does not exceed $25,000,000;
(11) Indebtedness attributable to the Specified Sale/Leaseback
Transaction in an aggregate principal amount which, when added together
with the amount of Indebtedness previously Incurred pursuant to this
clause (11) and then outstanding (including any Refinancing
Indebtedness with respect thereto) does not exceed $35,000,000;
provided, however, that the Net Available Cash from the Specified
Sale/Leaseback Transaction (other than Designated Excess Asset Sale
Proceeds) is applied to reduce Indebtedness as required by Section
4.06;
(12) Indebtedness attributable to Permitted Equipment Lease
Financings in an aggregate principal amount which, when added together
with the amount of Indebtedness Incurred pursuant to this clause (12)
and then outstanding (including any Refinancing Indebtedness with
respect thereto) does not exceed $25,000,000; provided, however, that
the Net Available
49
Cash from such Permitted Equipment Lease Financings is applied to
reduce Indebtedness as required by Section 4.06;
(13) the Guarantee or co-issuance of any Indebtedness
otherwise permitted to be Incurred pursuant to this Indenture;
(14) Indebtedness of the Company or any Restricted Subsidiary
consisting of indemnification, adjustment of purchase price, earn-out
or similar obligations, in each case incurred in connection with the
acquisition or disposition of any assets, including shares of Capital
Stock or divisions or lines of business, of the Company or any
Restricted Subsidiary; and
(15) Indebtedness of the Company in an aggregate principal
amount which, when taken together with all other Indebtedness of the
Company outstanding on the date of such Incurrence (other than
Indebtedness permitted by clauses (1) through (14) of this Section
4.03(b) or Section 4.03(a)), does not exceed $25,000,000.
(c) Notwithstanding the foregoing, neither the Company nor any
Subsidiary Guarantor shall Incur any Indebtedness pursuant to Section 4.03(b) if
the proceeds thereof are used, directly or indirectly, to Refinance any
Subordinated Obligations of the Company or a Subsidiary Guarantor unless such
Indebtedness shall be subordinated to the Securities or to the Subsidiary
Guaranty of such Subsidiary Guarantor to at least the same extent as such
Subordinated Obligations.
(d) For purposes of determining compliance with this Section
4.03, (1) in the event that an item of Indebtedness meets the criteria of more
than one of the types of Indebtedness described herein, the Company, in its sole
discretion, shall classify such item of Indebtedness at the time of Incurrence
and only be required to include the amount and type of such Indebtedness in one
of the above clauses and (2) the Company shall be entitled at the time of such
Incurrence to divide and classify an item of Indebtedness in more than one of
the types of Indebtedness described herein. In addition, from time to time the
Company may reclassify any Indebtedness Incurred pursuant to any clause in
Section 4.03(b) such that it will be deemed as having been Incurred under
another clause in Section 4.03(b), so long as such Indebtedness could have been
50
Incurred under such new clause had such clause been available to the Company at
the time of the original Incurrence of such Indebtedness. Indebtedness under the
Revolving Credit Facility under the Credit Agreement outstanding on the Issue
Date shall be deemed to have been Incurred on the Issue Date in reliance on
Section 4.03(b)(1). Indebtedness under the Term Loan Facility under the Credit
Agreement outstanding on the Issue Date shall be deemed to have been Incurred on
the Issue Date in reliance on Section 4.03(b)(2).
(e) Notwithstanding Sections 4.03(a) and 4.03(b), neither the
Company nor any Subsidiary Guarantor shall Incur (1) any Indebtedness if such
Indebtedness is subordinate or junior in right of payment in any respect to any
Senior Indebtedness of the Company or such Subsidiary Guarantor, as applicable,
unless such Indebtedness is Senior Subordinated Indebtedness or is expressly
subordinated in right of payment to Senior Subordinated Indebtedness of the
Company or such Subsidiary Guarantor, as applicable, or (2) any Secured
Indebtedness that is not Senior Indebtedness of such Person unless
contemporaneously therewith such Person makes effective provision to secure the
Securities or the relevant Subsidiary Guaranty, as applicable, senior to or
equally and ratably with such Secured Indebtedness for so long as such Secured
Indebtedness is secured by a Lien.
SECTION 4.04. Limitation on Restricted Payments.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary, directly or indirectly, to make a Restricted Payment if at the time
the Company or such Restricted Subsidiary makes such Restricted Payment:
(1) a Default shall have occurred and be continuing (or would
result therefrom);
(2) the Company is not entitled to Incur an additional $1.00
of Indebtedness under Section 4.03(a); or
51
(3) the aggregate amount of such Restricted Payment and all
other Restricted Payments since the Issue Date would exceed the sum of
(without duplication):
(A) 50% of the Consolidated Net Income accrued during
the period (treated as one accounting period) from the
beginning of the fiscal quarter immediately following the
fiscal quarter during which the Issue Date occurs to the end
of the most recent fiscal quarter for which internal financial
statements are then available prior to the date of such
Restricted Payment (or, in case such Consolidated Net Income
shall be a deficit, minus 100% of such deficit); plus
(B) 100% of the aggregate Net Cash Proceeds received
by the Company from the issuance or sale of its Capital Stock
(other than Disqualified Stock) subsequent to the Issue Date
(other than an issuance or sale to a Subsidiary of the Company
and other than an issuance or sale to an employee stock
ownership plan or to a trust established by the Company or any
of its Subsidiaries for the benefit of their employees), 100%
of any cash capital contribution received by the Company from
its shareholders subsequent to the Issue Date and 100% of the
fair market value (as determined in good faith by resolution
of the Board of Directors of the Company) of property (other
than cash that would constitute Temporary Cash Investments) of
a Related Business received by the Company or a Restricted
Subsidiary subsequent to the Issue Date as a contribution to
its common equity capital (other than from a Subsidiary or
that was financed with loans from the Company or any of its
Restricted Subsidiaries); plus
(C) the amount by which Indebtedness of the Company
or a Restricted Subsidiary is reduced on the Company's
consolidated balance sheet upon the conversion or exchange
(other than by a Subsidiary of the Company) subsequent to the
Issue Date of any Indebtedness of the Company or a Restricted
Subsidiary convertible or exchangeable for Capital Stock
(other than Disqualified Stock) of the Company (less the
amount of any cash, or the fair value of any other property,
distributed by the Company upon such conversion or exchange);
plus
(D) an amount equal to the sum of (x) the net
reduction in the Investments (other than Permitted
52
Investments) made by the Company or any Restricted Subsidiary
in any Person resulting from repurchases, repayments or
redemptions of such Investments by such Person, proceeds
realized on the sale of such Investment and proceeds
representing the return of capital (excluding dividends and
distributions), in each case received by the Company or any
Restricted Subsidiary, and (y) to the extent such Person is an
Unrestricted Subsidiary, the portion (proportionate to the
Company's equity interest in such Subsidiary) of the fair
market value of the net assets of such Unrestricted Subsidiary
at the time such Unrestricted Subsidiary is designated a
Restricted Subsidiary; provided, however, that the foregoing
sum shall not exceed, in the case of any such Person or
Unrestricted Subsidiary, the amount of Investments (excluding
Permitted Investments) previously made (and treated as a
Restricted Payment) by the Company or any Restricted
Subsidiary in such Person or Unrestricted Subsidiary.
(b) The provisions of Section 4.04(a) shall not prohibit:
(1) any Restricted Payment made out of the Net Cash Proceeds
of the substantially concurrent sale of, or made by exchange for,
Capital Stock of the Company (other than Disqualified Stock and other
than Capital Stock issued or sold to a Subsidiary of the Company or an
employee stock ownership plan or to a trust established by the Company
or any of its Subsidiaries for the benefit of their employees) or a
substantially concurrent capital contribution received by the Company
from its shareholders; provided, however, that (A) such Restricted
Payment shall be excluded in the calculation of the amount of
Restricted Payments and (B) the Net Cash Proceeds from such sale or
such capital contribution (to the extent so used for such Restricted
Payment) shall be excluded from the calculation of amounts under
Section 4.04(a)(3)(B);
(2) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated Obligations of the
Company or any Subsidiary Guarantor made by exchange for, or out of the
proceeds of the substantially concurrent sale of, Indebtedness which is
permitted to be Incurred pursuant to Section 4.03; provided, however,
that such purchase,
53
repurchase, redemption, defeasance or other acquisition or retirement
for value shall be excluded in the calculation of the amount of
Restricted Payments;
(3) dividends paid within 60 days after the date of
declaration thereof if at such date of declaration such dividend would
have complied with this Section 4.04; provided, however, that such
dividend shall be included in the calculation of the amount of
Restricted Payments;
(4) so long as no Default has occurred and is continuing, the
repurchase or other acquisition of shares of Capital Stock of the
Company or any of its Subsidiaries from employees, former employees,
directors or former directors of the Company or any of its Subsidiaries
(or permitted transferees of such employees, former employees,
directors or former directors), pursuant to the terms of the agreements
(including employment, severance, compensation or shareholder
agreements) or plans (or amendments thereto) approved by the Board of
Directors of the Company under which such individuals purchase or sell
or are granted the option to purchase or sell, shares of such Capital
Stock; provided, however, that the aggregate amount of such repurchases
and other acquisitions shall not exceed in any calendar year the sum of
(A) $5.0 million plus (B) the aggregate Net Cash Proceeds received by
the Company from the issuance of such Capital Stock to, or the exercise
of options to purchase such Capital Stock by, employees or directors of
the Company or any of its Subsidiaries that occurs after the Issue Date
(to the extent the Net Cash Proceeds from the sale of such Capital
Stock have not otherwise been applied to the payment of Restricted
Payments by virtue of Section 4.04(a)(3)(B) or applied pursuant to
Section 4.04(b)(1)) plus (C) the Net Cash Proceeds actually received by
the Company after the Issue Date from insurance proceeds paid in
respect of the death or disability of any employee or director;
provided further, however, that such repurchases and other acquisitions
shall be excluded in the calculation of the amount of Restricted
Payments;
(5) dividends, distributions or advances to Parent to be used
by Parent to pay Federal, state and local taxes payable by Parent and
directly attributable to (or arising as a result of) the operations of
the Company and its Restricted Subsidiaries; provided, however, that
(A) the amount of such dividends shall
54
not exceed the amount that the Company and its Restricted Subsidiaries
would be required to pay in respect of such Federal, state and local
taxes were the Company to pay such taxes as a stand-alone taxpayer and
(B) such dividends pursuant to this clause (5) are used by Parent for
such purposes within 20 days of the receipt of such dividends; provided
further, however, that such dividends shall be excluded in the
calculation of the amount of Restricted Payments;
(6) dividends, distributions or advances to Parent to the
extent necessary to pay (A) for general corporate and overhead expenses
incurred by Parent and (B) regularly scheduled interest on the Parent
Note; provided, however, that such dividends, distributions or advances
shall not exceed in any fiscal year of the Company the lesser of (i)
$1,500,000 and (ii) $250,000 plus the amount required to pay regularly
scheduled interest on the Parent Note; provided further, however, that
such dividends, distributions or advances shall be included in the
calculation of the amount of Restricted Payments;
(7) Permitted Closing Date Payments; provided, however, that
such payments shall be excluded in the calculation of the amount of
Restricted Payments;
(8) Payments of intercompany subordinated debt, the incurrence
of which was permitted under Section 4.03(b)(3); provided, however,
that no Default or Event of Default has occurred and is continuing or
would otherwise result therefrom; provided further, however, that such
payments shall be excluded in the calculation of the amount of
Restricted Payments; or
(9) Restricted Payments not exceeding $10,000,000 in the
aggregate; provided, however, that (A) at the time of such Restricted
Payments, no Default shall have occurred and be continuing (or result
therefrom) and (B) such Restricted Payments shall be included in the
calculation of the amount of Restricted Payments.
For purposes of determining compliance with this Section 4.04,
in the event that a proposed Restricted Payment meets the criteria of more than
one of the categories of Restricted Payments described in clauses (1) through
(9) of this Section 4.04(b), or is entitled to be incurred pursuant to Section
4.04(a), the Company shall be entitled to classify such item of Restricted
Payment on the date of its payment in any manner that complies with this
covenant.
55
SECTION 4.05. Limitation on Restrictions on Distributions from
Restricted Subsidiaries. The Company shall not, and shall not permit any
Restricted Subsidiary to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to (a) pay dividends or make any other distributions on
its Capital Stock to the Company or a Restricted Subsidiary or pay any
Indebtedness owed to the Company or a Subsidiary Guarantor, (b) make any loans
or advances to the Company or (c) transfer any of its property or assets to the
Company, except:
(1) with respect to clauses (a),(b) and (c) above;
(i) any encumbrance or restriction pursuant to an agreement in
effect at or entered into on the Issue Date;
(ii) any encumbrance or restriction with respect to a
Restricted Subsidiary pursuant to an agreement relating to any
Indebtedness Incurred by such Restricted Subsidiary on or prior to the
date on which such Restricted Subsidiary was acquired by the Company
(other than Indebtedness Incurred as consideration in, or to provide
all or any portion of the funds or credit support utilized to
consummate, the transaction or series of related transactions pursuant
to which such Restricted Subsidiary became a Restricted Subsidiary or
was acquired by the Company) and outstanding on such date;
(iii) any encumbrance or restriction pursuant to an agreement
effecting a Refinancing of Indebtedness Incurred pursuant to an
agreement referred to in Section 4.05(1)(i) or 4.05(1)(ii) or this
clause (iii) or contained in any amendment to an agreement referred to
in Section 4.05(1)(i) or 4.05(1)(ii) or this clause (iii); provided,
however, that the encumbrances and restrictions with respect to such
Restricted Subsidiary contained in any such refinancing agreement or
amendment are no less favorable to the Securityholders than
encumbrances and restrictions with respect to such Restricted
Subsidiary contained in such predecessor agreements;
(iv) any encumbrance or restriction consisting of any
restriction on the sale or other disposition of assets or property
securing Indebtedness as a result of a Lien permitted to be Incurred
under the Indenture on such asset or property;
(v) any encumbrance or restriction with respect to a
Restricted Subsidiary imposed pursuant to an
56
agreement entered into for the sale or disposition of all or a portion
of the Capital Stock or assets of such Restricted Subsidiary pending
the closing of such sale or disposition;
(vi) any restriction arising under applicable law, regulation
or order;
(vii) any restriction on cash or other deposits or net worth
imposed by suppliers or landlords under contracts entered into in the
ordinary course of business; and
(viii) any restriction in any agreement that is not more
restrictive than the restrictions under the terms of the Credit
Agreement as in effect on the Issue Date.
(2) with respect to clause (c) above only,
(i) any such encumbrance or restriction consisting of
customary nonassignment provisions in leases governing leasehold
interests to the extent such provisions restrict the transfer of the
lease or the property leased thereunder;
(ii) restrictions contained in security agreements or
mortgages securing Indebtedness of a Restricted Subsidiary to the
extent such restrictions restrict the transfer of the property subject
to such security agreements or mortgages; and
(iii) provisions with respect to the disposition or
distribution of assets or property in joint venture agreements, asset
sale agreements, stock sale agreements and other similar agreements
entered into in the ordinary course of business.
SECTION 4.06. Limitation on Sales of Assets and Subsidiary
Stock. (a) The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, consummate any Asset Disposition unless (1) the
Company or such Restricted Subsidiary receives consideration at the time of such
Asset Disposition at least equal to the fair market value (including as to the
value of all non-cash consideration), as determined in good faith by the Board
of Directors of the Company, of the shares and assets subject to such Asset
Disposition; (2) at least 75% of the consideration thereof received by the
Company or such Restricted Subsidiary is in the form of cash or cash equivalents
(provided that such 75% requirement shall not apply to any Asset Disposition in
which the cash or cash equivalents portion of the consideration received
therefor is no less than an amount equal to the product of (x) 4.5 and (y) the
amount of EBITDA for the previously completed
57
four fiscal quarters directly attributable to the assets or Capital Stock
included in such Asset Disposition); and (3) an amount equal to 100% of the Net
Available Cash from such Asset Disposition is applied by the Company (or such
Restricted Subsidiary, as the case may be) (A) first, to the extent the Company
elects (or is required by the terms of any Indebtedness), to prepay, repay,
redeem or purchase Senior Indebtedness of the Company or Indebtedness (other
than any Disqualified Stock) of a Wholly Owned Subsidiary (in each case other
than Indebtedness owed to the Company or an Affiliate of the Company) within one
year from the later of the date of such Asset Disposition or the receipt of such
Net Available Cash; (B) second, to the extent of the balance of such Net
Available Cash after application in accordance with clause (A), to the extent
the Company elects, to acquire Additional Assets within one year from the later
of the date of such Asset Disposition or the receipt of such Net Available Cash;
(C) third, to the extent of the balance of such Net Available Cash after
application in accordance with clauses (A) and (B), to make an Offer to the
holders of the Securities (and to holders of other Senior Subordinated
Indebtedness of the Company designated by the Company) to purchase Securities
(and such other Senior Subordinated Indebtedness of the Company) pursuant to and
subject to the conditions of this Indenture; and (D) fourth, to the extent of
the balance of such Net Available Cash after application in accordance with
clauses (A), (B) and (C), for any purpose not prohibited by the terms of this
Indenture; provided, however, that in connection with any prepayment, repayment
or purchase of Indebtedness pursuant to clause (A) or (C) above, the Company or
such Restricted Subsidiary shall permanently retire such Indebtedness and shall
cause the related loan commitment (if any) to be permanently reduced in an
amount equal to the principal amount so prepaid, repaid or purchased.
Notwithstanding the foregoing provisions of this Section, the Company and the
Restricted Subsidiaries shall not be required to apply any Net Available Cash in
accordance with this Section 4.06 except to the extent that the aggregate Net
Available Cash from all Asset Dispositions which are not applied in accordance
with this Section 4.06 exceeds $10.0 million. In addition, (i) the Company and
the Restricted Subsidiaries shall not be required to apply any Designated Excess
Asset Sale Proceeds in accordance with this Section 4.06 to the extent such
proceeds are paid out as a Restricted Payment within 270 days following the
Issue Date in compliance with Section 4.04 and (ii) other than any Designated
Excess Asset Sale
58
Proceeds, any Net Available Cash received in respect of the Specified
Sale/Leaseback Transaction or in respect of Permitted Equipment Lease Financings
Incurred pursuant to Section 4.03(b)(12) shall not be applied pursuant to
Section 4.06(a)(3)(B). Pending application of Net Available Cash pursuant to
this Section, such Net Available Cash may be invested in Temporary Cash
Investments or applied to temporarily reduce Senior Indebtedness.
For the purposes of this Section 4.06(a), the following are
deemed to be cash or cash equivalents: (1) the assumption of Indebtedness of the
Company or any Restricted Subsidiary and the release of the Company or such
Restricted Subsidiary from all liability on such Indebtedness in connection with
such Asset Disposition and (2) securities received by the Company or any
Restricted Subsidiary from the transferee that are converted by the Company or
such Restricted Subsidiary into cash within 90 days of receipt thereof.
(b) In the event of an Asset Disposition that requires the
purchase of Securities (and other Senior Subordinated Indebtedness of the
Company) pursuant to Section 4.06(a)(3)(C), the Company shall purchase
Securities tendered pursuant to an offer by the Company for the Securities (and
such other Senior Subordinated Indebtedness) (the "Offer") at a purchase price
of 100% of their principal amount (or, in the event such other Senior
Subordinated Indebtedness was issued with significant original issue discount,
100% of the accreted value thereof), without premium, plus accrued but unpaid
interest (or, in respect of such other Senior Subordinated Indebtedness, such
lesser price, if any, as may be provided for by the terms of such Senior
Subordinated Indebtedness) in accordance with the procedures (including
prorationing in the event of over subscription) set forth in Section 4.06(c). If
the aggregate purchase price of Securities tendered pursuant to the Offer
exceeds the Net Available Cash allotted to their purchase, the Company shall
select the Securities to be purchased on a pro rata basis but in round
denominations, which in the case of the Securities shall be denominations of
$1,000 principal amount at maturity or multiples thereof. The Company shall not
be required to make an Offer to purchase Securities (and other Senior
Subordinated Indebtedness) pursuant to this Section 4.06 if the Net Available
Cash available therefor is less than $10.0 million (which lesser amount shall be
carried forward for purposes of determining whether such an Offer is required
with
59
respect to the Net Available Cash from any subsequent Asset Disposition).
(c) (1) Promptly, and in any event within 10 days after the
Company becomes obligated to make an Offer, the Company shall deliver to the
Trustee and send, by first-class mail to each Holder, a written notice stating
that the Holder may elect to have his Securities purchased by the Company either
in whole or in part (subject to prorating as described in Section 4.06(b) in the
event the Offer is oversubscribed) in integral multiples of $1,000 of principal
amount at maturity, at the applicable purchase price. The notice shall specify a
purchase date not less than 30 days nor more than 60 days after the date of such
notice (the "Purchase Date") and shall state (A) that the Company has become
obligated to make an Offer, (B) the aggregate principal amount of Securities
that is subject to such Offer, (C) the purchase price, (D) the circumstances and
relevant facts regarding such Asset Disposition, (E) the Purchase Date and (F)
the instructions, as determined by the Company, consistent with this Section,
that a Holder must follow in order to have its Securities purchased.
(2) Not later than the date upon which written notice of an
Offer is delivered to the Trustee as provided below, the Company shall deliver
to the Trustee an Officers' Certificate as to (A) the amount of the Offer (the
"Offer Amount"), including information as to any other Senior Subordinated
Indebtedness of the Company included in the Offer, (B) the allocation of the Net
Available Cash from the Asset Dispositions pursuant to which such Offer is being
made and (C) the compliance of such allocation with the provisions of Section
4.06(a) and (b). On or prior to each Purchase Date, the Company shall deposit
with a Paying Agent an amount equal to the applicable Offer Amount. Upon the
expiration of the period for which the Offer remains open (the "Offer Period"),
the Company shall deliver to the Trustee for cancellation the Securities or
portions thereof which have been properly tendered to and are to be accepted by
the Company. The Trustee shall, on the Purchase Date, mail or deliver payment
(or cause the delivery of payment) to each tendering Holder in the amount of the
purchase price. In the event that the aggregate purchase price of the Securities
delivered by the Company to the Trustee is less than the Offer Amount applicable
to the Securities, the Trustee shall deliver the excess to the Company
immediately after the expiration of the Offer Period for application in
accordance with this Section 4.06.
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(3) Holders electing to have a Security purchased shall be
required to surrender the Security, with an appropriate form duly completed, to
the Company at the address specified in the notice at least three Business Days
prior to the Purchase Date. Holders shall be entitled to withdraw their election
if the Trustee or the Company receives not later than one Business Day prior to
the Purchase Date, a facsimile transmission or letter setting forth the name of
the Holder, the principal amount of the Security which was delivered for
purchase by the Holder and a statement that such Holder is withdrawing his
election to have such Security purchased. Holders whose Securities are purchased
only in part shall be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered.
(4) At the time the Company delivers Securities to the Trustee
which are to be accepted for purchase, the Company shall also deliver an
Officers' Certificate stating that such Securities are to be accepted by the
Company pursuant to and in accordance with the terms of this Section. A
Security shall be deemed to have been accepted for purchase at the time the
Trustee, directly or through an agent, mails or delivers payment therefor to the
surrendering Holder.
(d) The Company shall comply, to the extent applicable, with
the requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the repurchase of Securities pursuant to
this Section. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under this Section by virtue of its compliance
with such securities laws or regulations.
SECTION 4.07. Limitation on Affiliate Transactions. (a) The
Company shall not, and shall not permit any Restricted Subsidiary to, enter into
or permit to exist any transaction (including the purchase, sale, lease or
exchange of any property, employee compensation arrangements or the rendering of
any service) with, or for the benefit of, any Affiliate of the Company (an
"Affiliate Transaction") unless (1) the terms of the Affiliate Transaction are
no less favorable to the Company or such Restricted Subsidiary than those that
could be obtained at the time of such Affiliate Transaction in arm's-length
dealings with a Person who is not an Affiliate; (2) if such Affiliate
Transaction involves an amount in excess of $2.0
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million, the material terms of the Affiliate Transaction are set forth in
writing and a majority of the directors of the Company disinterested with
respect to such Affiliate Transaction have determined in good faith that the
criteria set forth in clause (1) of this sentence are satisfied and have
approved the relevant Affiliate Transaction as evidenced by a Board resolution;
and (3) if such Affiliate Transaction involves an amount in excess of $10.0
million, the Board of Directors of the Company shall also have received a
written opinion from an Independent Qualified Party to the effect that the
financial terms of such Affiliate Transaction are fair, from a financial
standpoint, to the Company and its Restricted Subsidiaries or not less favorable
to the Company and its Restricted Subsidiaries than could reasonably be expected
to be obtained at the time in an arm's-length transaction with a Person who is
not an Affiliate.
(b) The provisions of Section 4.07(a) shall not prohibit (1)
any Investment (other than a Permitted Investment) or other Restricted Payment,
in each case permitted to be made pursuant to, or not prohibited by, Section
4.04; (2) any issuance of securities, or other payments, awards or grants in
cash, securities or otherwise pursuant to, or the funding of, employment,
compensation or severance arrangements, stock options and stock ownership plans
approved by the Board of Directors of the Company; (3) loans or advances to
employees in the ordinary course of business in accordance with the past
practices of the Company or its Restricted Subsidiaries, but in any event not to
exceed $5.0 million in the aggregate outstanding at any one time; (4) the
payment of reasonable compensation or employee benefit arrangements to and
indemnity provided for the benefit of directors, officers or employees of the
Company or its Restricted Subsidiaries in the ordinary course of business; (5)
the payment of reasonable fees to directors of the Company and its Restricted
Subsidiaries who are not employees of the Company or its Restricted
Subsidiaries; (6) the payment of fees to Caxton-Iseman Capital, Inc. pursuant to
the terms of the Management Agreement, dated as of October 2, 2000, between the
Company and Caxton-Iseman Capital, Inc. as in effect on the Issue Date, provided
that in connection with an Initial Public Equity Offering, the Company may
terminate the Management Agreement and pay a termination fee from the proceeds
of such Initial Public Equity Offering; (7) any transaction with a Restricted
Subsidiary or joint venture or similar entity which would constitute an
Affiliate Transaction
62
solely because the Company or a Restricted Subsidiary owns an equity interest in
or otherwise controls such Restricted Subsidiary, joint venture or similar
entity; (8) the entering into of a registration rights agreement with the
stockholders of the Company or Parent; (9) the issuance or sale of any Capital
Stock (other than Disqualified Stock) of the Company; (10) any merger,
consolidation or reorganization with Parent, solely for the purposes of
reorganizing to facilitate the initial public offering of the Company or Parent.
SECTION 4.08. Limitation on the Sale or Issuance of Capital
Stock of Restricted Subsidiaries. The Company (1) shall not, and shall not
permit any Restricted Subsidiary to, sell, lease, transfer or otherwise dispose
of any Capital Stock of any Restricted Subsidiary to any Person (other than to
the Company or a Wholly Owned Subsidiary), and (2) shall not permit any
Restricted Subsidiary to issue any of its Capital Stock (other than, if
necessary, shares of its Capital Stock constituting directors' or other legally
required qualifying shares) to any Person (other than the Company or a Wholly
Owned Subsidiary) unless (A) immediately after giving effect to such issuance,
sale or other disposition, neither the Company nor any of its Subsidiaries own
any Capital Stock of such Restricted Subsidiary or (B) immediately after giving
effect to such issuance, sale or other disposition, such Restricted Subsidiary
would no longer constitute a Restricted Subsidiary and any Investment in such
Person remaining after giving effect thereto is treated as a new Investment by
the Company and such Investment would be permitted to be made under Section 4.04
if made on the date of such issuance, sale or other disposition.
Notwithstanding the foregoing, the issuance or sale of shares
of Capital Stock of any Restricted Subsidiary of the Company will not violate
the provisions of the immediately preceding sentence if such shares are issued
or sold in connection with (x) the formation or capitalization of a Restricted
Subsidiary or (y) a single transaction or a series of substantially
contemporaneous transactions whereby such Restricted Subsidiary becomes a
Restricted Subsidiary of the Company by reason of the acquisition of securities
or assets from another Person.
SECTION 4.09. Change of Control. (a) Upon the occurrence of a
Change of Control, each Holder shall have the right to require that the Company
purchase such Holder's Securities at a purchase price in cash equal to 101% of
the principal amount thereof on the date of purchase plus
63
accrued and unpaid interest, if any, to the date of purchase (subject to the
right of holders of record on the relevant record date to receive interest due
on the relevant interest payment date), in accordance with the terms
contemplated in Section 4.09(b). In the event that at the time of such Change of
Control the terms of the Senior Indebtedness of the Company restrict or prohibit
the repurchase of Securities pursuant to this Section, then prior to the mailing
of the notice to Holders provided for in Section 4.09(b) below but in any event
within 30 days following any Change of Control, the Company shall (1) repay in
full all such Senior Indebtedness or (ii) obtain the requisite consent under the
agreements governing such Senior Indebtedness to permit the repurchase of the
Securities as provided for in Section 4.09(b).
(b) Within 30 days following any Change of Control, the
Company shall mail or otherwise deliver a notice to each Holder with a copy to
the Trustee (the "Change of Control Offer") stating:
(1) that a Change of Control has occurred and that such Holder
has the right to require the Company to purchase such Holder's
Securities at a purchase price in cash equal to 101% of the principal
amount thereof on the date of purchase plus accrued and unpaid
interest, if any, to the date of purchase (subject to the right of
Holders of record on the relevant record date to receive interest on
the relevant interest payment date);
(2) the circumstances and relevant facts regarding such Change
of Control
(3) the purchase date (which shall be no earlier than 30 days
nor later than 60 days from the date such notice is mailed); and
(4) the instructions, as determined by the Company, consistent
with this Section, that a Holder must follow in order to have its
Securities purchased.
(c) Holders electing to have a Security purchased will be
required to surrender the Security, with an appropriate form duly completed, to
the Company at the address specified in the notice at least three Business Days
prior to the purchase date. Holders will be entitled to withdraw their election
if the Trustee or the Company receives not later than one Business Day prior to
the purchase date, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Security which was
delivered for purchase by the Holder and
64
a statement that such Holder is withdrawing his election to have such Security
purchased.
(d) On the purchase date, all Securities purchased by the
Company under this Section shall be delivered by the Company to the Trustee for
cancellation, and the Company shall pay the purchase price plus accrued and
unpaid interest, if any, to the Holders entitled thereto.
(e) Notwithstanding the foregoing provisions of this Section,
the Company shall not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in this Section applicable to a Change of Control Offer made by the Company and
purchases all Securities validly tendered and not withdrawn under such Change of
Control Offer.
(f) The Company shall comply, to the extent applicable, with
the requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the repurchase of Securities pursuant to
this Section. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under this Section by virtue of its compliance
with such securities laws or regulations.
SECTION 4.10. Offer to Purchase Upon Initial
Public Offering. (a) Within 30 days after the consummation
of an Initial Public Equity Offering prior to July 15, 2005, the Company shall
be required to offer to purchase (the "IPO Offer") from Holders such aggregate
principal amount of Securities as may be purchased with funds equal in amount to
50% of the Net Cash Proceeds received by the Company or Parent from such Initial
Public Equity Offering at a purchase price of 111.25% of the aggregate principal
amount of the Securities, plus accrued and unpaid interest, if any, to the date
of purchase (subject to the right of holders of record on the relevant record
date to receive interest due on the relevant interest payment date) in
accordance with the procedures (including prorationing in the event of over
subscription) set forth in Sections 4.10(b) and 4.10(c); provided, however, that
in no event will the Company be required to make an offer to purchase more than
$80,500,000 aggregate principal amount of the Securities. If the Initial Public
Equity Offering is an offering by Parent, the Company shall be required to make
an offer to repurchase Securities pursuant to the immediately preceding sentence
65
regardless of whether any of the Net Cash Proceeds, if any, received by Parent
are contributed by Parent to the equity capital of the Company.
Notwithstanding the foregoing, to the extent the Company
redeems any Securities prior to July 15, 2005 pursuant to paragraph 5 of the
Securities, any Securities so redeemed shall reduce the aggregate principal
amount of Securities that the Company shall be required to offer to purchase
pursuant to this Section 4.10 by the aggregate principal amount of Securities so
redeemed pursuant to paragraph 5 of the Securities.
(b) If the aggregate purchase price of Securities tendered
pursuant to the IPO Offer exceeds the Net Cash Proceeds allotted to their
purchase, the Company shall select the Securities to be purchased on a pro rata
basis but in round denominations, which will be denominations of $1,000
principal amount or multiples thereof.
(c) (1) Promptly, and in any event within 30 days after the
Company becomes obligated to make an IPO Offer, the Company shall deliver to the
Trustee and send, by first- class mail to each Holder, a written notice stating
that the Holder may elect to have his Securities purchased by the Company either
in whole or in part (subject to prorating as described in Section 4.10(b) in the
event the IPO Offer is oversubscribed) in integral multiples of $1,000 of
principal amount at maturity, at the purchase price specified in Section
4.10(a). The notice shall specify a purchase date not less than 30 days nor more
than 60 days after the date of such notice (the "IPO Purchase Date") and shall
state (A) that the Company has become obligated to make an IPO Offer, (B) the
aggregate principal amount of Securities that is subject to such IPO Offer, (C)
the purchase price, (D) the circumstances and relevant facts regarding such
Initial Public Equity Offering, (E) the IPO Purchase Date and (F) the
instructions, as determined by the Company, consistent with this Section, that a
Holder must follow in order to have its Securities purchased.
(2) Not later than the date upon which written notice of an
IPO Offer is delivered to the Trustee as provided in clause (1) above, the
Company shall deliver to the Trustee an Officers' Certificate as to (A) the
amount of the IPO Offer (the "IPO Offer Amount"), (B) the allocation of the Net
Cash Proceeds from the Initial Public Equity Offering pursuant to which such IPO
Offer is being made and (C) the compliance of such allocation with the
provisions of Section 4.10(a). On or prior to the IPO Purchase Date, the Company
shall deposit with a Paying Agent an amount equal to
66
the IPO Offer Amount. Upon the expiration of the period for which the IPO Offer
remains open (the "IPO Offer Period"), the Company shall deliver to the Trustee
for cancellation the Securities or portions thereof which have been properly
tendered to and are to be accepted by the Company. The Trustee shall, on the IPO
Purchase Date, mail or deliver payment (or cause the delivery of payment) to
each tendering Holder in the amount of the purchase price. In the event that the
aggregate purchase price of the Securities delivered by the Company to the
Trustee is less than the IPO Offer Amount applicable to the Securities, the
Trustee shall deliver the excess to the Company immediately after the expiration
of the IPO Offer Period.
(3) Holders electing to have a Security purchased shall be
required to surrender the Security, with an appropriate form duly completed, to
the Company at the address specified in the notice at least three Business Days
prior to the IPO Purchase Date. Holders shall be entitled to withdraw their
election if the Trustee or the Company receives not later than one Business Day
prior to the IPO Purchase Date, a facsimile transmission or letter setting forth
the name of the Holder, the principal amount of the Security which was delivered
for purchase by the Holder and a statement that such Holder is withdrawing his
election to have such Security purchased. Holders whose Securities are purchased
only in part shall be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered.
(4) At the time the Company delivers Securities to the Trustee
which are to be accepted for purchase, the Company shall also deliver an
Officers' Certificate stating that such Securities are to be accepted by the
Company pursuant to and in accordance with the terms of this Section. A
Security shall be deemed to have been accepted for purchase at the time the
Trustee, directly or through an agent, mails or delivers payment therefor to the
surrendering Holder.
(d) The Company shall comply, to the extent applicable, with
the requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the repurchase of Securities pursuant to
this Section. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under this Section by virtue of its compliance
with such securities laws or regulations.
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SECTION 4.11. Future Guarantors. The Company shall cause each
domestic Restricted Subsidiary of the Company (other than Tahoe Joe's Inc.) and
any other domestic Restricted Subsidiary formed or acquired after the Issue
Date, in each case, that (i) Guarantees any other Indebtedness of the Company or
a Subsidiary Guarantor or (ii) Incurs or has outstanding any Indebtedness for
borrowed money, to, at the same time, execute and deliver to the Trustee a
Guaranty Agreement pursuant to which such Restricted Subsidiary will Guarantee
payment of the Securities on the same terms and conditions as those set forth in
this Indenture.
If at any time, Tahoe Joe's Inc. Guarantees any other
Indebtedness of the Company or a Subsidiary Guarantor, the Company shall cause
Tahoe Joe's Inc. to execute a Guaranty Agreement pursuant to which Tahoe Joe's
Inc. will become a Subsidiary Guarantor and fully and unconditionally Guarantee
the Company's obligations with respect to the Securities on a senior
subordinated basis.
If at any time, Parent Guarantees any other Indebtedness of
the Company or a Subsidiary Guarantor (other than Indebtedness Incurred pursuant
to clauses (1) or (2) of Section 4.03(b)), the Company shall cause Parent to
execute a Guaranty Agreement pursuant to which Parent will fully and
unconditionally Guarantee the Company's obligations with respect to the
Securities on a senior subordinated basis.
SECTION 4.12. Compliance Certificate. The Company shall
deliver to the Trustee, within 120 days after the end of each fiscal year of the
Company, an Officers' Certificate stating that in the course of the performance
by the signers of their duties as Officers of the Company they would normally
have knowledge of any Default and whether or not the signers know of any Default
that occurred during such fiscal year. If they do, the certificate shall
describe the Default, its status and what action the Company is taking or
proposes to take with respect thereto. The Company also shall comply with TIA
Section 314(a)(4).
SECTION 4.13. Further Instruments and Acts. Upon request of
the Trustee, the Company will execute and deliver such further instruments and
do such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
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ARTICLE 5
Successor Company
SECTION 5.01. When Company May Merge or Transfer Assets. (a)
The Company shall not consolidate with or merge with or into, or convey,
transfer or lease, in one transaction or a series of transactions, directly or
indirectly, all or substantially all its assets to, any Person, unless:
(1) the resulting, surviving or transferee Person (the
"Successor Company") shall be a Person organized and existing under the
laws of the United States of America, any State thereof or the District
of Columbia and the Successor Company (if not the Company) shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form reasonably satisfactory to the
Trustee, all the obligations of the Company under the Securities and
this Indenture;
(2) immediately after giving pro forma effect to such
transaction (and treating any Indebtedness which becomes an obligation
of the Successor Company or any Subsidiary as a result of such
transaction as having been Incurred by such Successor Company or such
Subsidiary at the time of such transaction), no Default shall have
occurred and be continuing;
(3) immediately after giving pro forma effect to such
transaction, (A) the Successor Company would be able to Incur an
additional $1.00 of Indebtedness pursuant to Section 4.03(a) or (B) the
Consolidated Coverage Ratio for the Successor Company and its
Restricted Subsidiaries would be equal to or greater than such ratio
for the Company and its Restricted Subsidiaries immediately prior to
such transaction; and
(4) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if
any) comply with this Indenture;
provided, however, that clause (3) will not be applicable to (A) a Restricted
Subsidiary consolidating with, merging into or transferring all or part of its
properties and assets to the Company or any Restricted Subsidiary or (B) the
Company merging with an Affiliate of the Company solely for the purpose and with
the sole effect of reincorporating the Company in another jurisdiction.
The Successor Company shall be the successor to the Company
and shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture, and the predecessor Company, except
in the
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case of a lease, shall be released from the obligation to pay the principal of
and interest on the Securities.
(b) The Company shall not permit any Subsidiary Guarantor to
consolidate with or merge with or into, or convey, transfer or lease, in one
transaction or series of transactions, all or substantially all of its assets to
any Person unless: (1) except in the case of a Subsidiary Guarantor that has
been disposed of in its entirety to another Person (other than to the Company or
an Affiliate of the Company), whether through a merger, consolidation or sale of
Capital Stock or assets, if in connection therewith the Company provides an
Officers' Certificate to the Trustee to the effect that the Company will comply
with its obligations under Section 4.06 in respect of such disposition, the
resulting, surviving or transferee Person (if not such Subsidiary) shall be a
Person organized and existing under the laws of the jurisdiction under which
such Subsidiary was organized or under the laws of the United States of America,
or any State thereof or the District of Columbia, and such Person shall
expressly assume, by a Guaranty Agreement, in a form reasonably acceptable to
the Trustee, all the obligations of such Subsidiary, if any, under its
Subsidiary Guaranty; (2) immediately after giving effect to such transaction or
transactions on a pro forma basis (and treating any Indebtedness which becomes
an obligation of the resulting, surviving or transferee Person as a result of
such transaction as having been issued by such Person at the time of such
transaction), no Default shall have occurred and be continuing; and (3) the
Company delivers to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that such consolidation, merger or transfer and such
Guaranty Agreement, if any, complies with this Indenture. Notwithstanding the
foregoing, any Subsidiary Guarantor may consolidate with or merge with or into
or convey, transfer or lease, in one transaction or a series of transactions,
all or substantially all of its assets to the Company.
(c) If at any time Parent Guarantees the Securities, Parent
will covenant in its Guaranty Agreement not to merge with or into, or convey,
transfer or lease, in one transaction or a series of transactions, all or
substantially all of its assets to any Person unless: (1) the resulting,
surviving or transferee Person (if not Parent) shall be a Person organized and
existing under the laws of the jurisdiction under which Parent was organized or
under the laws of the United States of America, or any State thereof or the
District of Columbia, and such Person shall
70
expressly assume all the obligations of Parent, if any, under the Parent
Guaranty; (2) immediately after giving effect to such transaction or
transactions on a pro forma basis (and treating any Indebtedness which becomes
an obligation of the resulting, surviving or transferee Person as a result of
such transaction as having been issued by such Person at the time of such
transaction), no Default shall have occurred and be continuing; and (3) the
Company delivers to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that such consolidation, merger or transfer and such
Guaranty Agreement, if any, complies with this Indenture.
ARTICLE 6
Defaults and Remedies
SECTION 6.01. Events of Default. An "Event of Default" occurs
if:
(1) the Company defaults in any payment of interest on any
Security when the same becomes due and payable, whether or not such
payment shall be prohibited by Article 10, and such default continues
for a period of 30 days;
(2) the Company defaults in the payment of the principal of
any Security when the same becomes due and payable at its Stated
Maturity, upon optional redemption, upon required purchase, upon
declaration of acceleration or otherwise;
(3) the Company or Parent fails to comply with Section 5.01;
(4) the Company fails to comply with Section 4.02, 4.03, 4.04,
4.05, 4.06, 4.07, 4.08, 4.09, 4.10 or 4.11 (other than a failure to
purchase Securities when required under Section 4.06, 4.09 or 4.10) and
such failure continues for 30 days after the notice specified below;
(5) the Company or a Subsidiary Guarantor fails to comply with
any of its agreements in the Securities or this Indenture (other than
those referred to in clause (1), (2), (3) or (4) above) and such
failure continues for 60 days after the notice specified below;
(6) Indebtedness of the Company, any Guarantor or any
Significant Subsidiary is not paid within any applicable grace period
after final maturity or is accelerated by the holders thereof because
of a default and the total amount of such Indebtedness unpaid or
accelerated exceeds $10.0 million;
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(7) the Company, any Guarantor or any Significant Subsidiary
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;
(C) consents to the appointment of a Custodian of it
or for any substantial part of its property; or
(D) makes a general assignment for the benefit of
its creditors; or takes any comparable action under any
foreign laws relating to insolvency;
(8) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company, any Guarantor
or any Significant Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company, any
Guarantor or any Significant Subsidiary or for any substantial
part of its property; or
(C) orders the winding up or liquidation of the
Company, any Guarantor or any Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order
or decree remains unstayed and in effect for 60 days; or
(9) any judgment or decree for the payment of money in excess
of $10,000,000 or its foreign currency equivalent at the time is
entered against the Company, any Guarantor or any Significant
Subsidiary, remains outstanding for a period of 60 consecutive days
following the entry of such judgment or decree and is not discharged,
waived or the execution thereof stayed within 10 days after the notice
specified below; or
(10) the Parent Guaranty, if applicable, or any Subsidiary
Guaranty ceases to be in full force and effect (other than in
accordance with the terms of such Guaranty) and such default continues
for 10 days or any Guarantor denies or disaffirms its obligations under
its Guaranty.
The foregoing will constitute Events of Default whatever the
reason for any such Event of Default and whether it is voluntary or involuntary
or is effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body.
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The term "Bankruptcy Law" means Title 11, United States Code,
or any similar Federal or State law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
A Default under clauses (4), (5) or (9) is not an Event of
Default until the Trustee or the holders of at least 25% in principal amount of
the outstanding Securities notify the Company of the Default and the Company
does not cure such Default within the time specified after receipt of such
notice. Such notice must specify the Default, demand that it be remedied and
state that such notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after
the occurrence thereof, written notice in the form of an Officers' Certificate
of any Event of Default under clause (6) or (10) and any event which with the
giving of notice or the lapse of time would become an Event of Default under
clause (4), (5) or (9), its status and what action the Company is taking or
proposes to take with respect thereto.
SECTION 6.02. Acceleration. If an Event of Default (other than
an Event of Default specified in Section 6.01(7) or (8) with respect to the
Company) occurs and is continuing, the Trustee by notice to the Company, or the
Holders of at least 25% in principal amount of the outstanding Securities by
notice to the Company and the Trustee, may declare the principal of and accrued
but unpaid interest on all the Securities to be due and payable. Upon such a
declaration, such principal and interest shall be due and payable immediately.
If an Event of Default specified in Section 6.01(7) or (8) with respect to the
Company occurs and is continuing, the principal of and interest on all the
Securities shall ipso facto become and be immediately due and payable without
any declaration or other act on the part of the Trustee or any Securityholders.
The Holders of a majority in principal amount of the outstanding Securities by
notice to the 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 have been cured or waived except nonpayment of principal or
interest that has become due solely because of acceleration. No such rescission
shall affect any subsequent Default or impair any right consequent thereto.
SECTION 6.03. Other Remedies. If an Event of Default occurs
and is continuing, the Trustee may pursue any available remedy to collect the
payment of principal of or
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interest on the Securities or to enforce the performance of any provision of the
Securities or this Indenture.
The 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 Trustee or any Securityholder 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. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04. Waiver of Past Defaults. The Holders of a
majority in principal amount of the outstanding Securities by notice to the
Trustee may waive an existing Default and its consequences except (i) a Default
in the payment of the principal of or interest on a Security, (ii) a Default
arising from the failure to redeem or purchase any Security when required
pursuant to this Indenture or (iii) a Default in respect of a provision that
under Section 9.02 cannot be amended without the consent of each Securityholder
affected. When a Default is waived, it is deemed cured, but no such waiver shall
extend to any subsequent or other Default or impair any consequent right.
SECTION 6.05. Control by Majority. The Holders of a majority
in principal amount of the outstanding Securities may direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee
or of exercising any trust or power conferred on the Trustee. However, the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture or, subject to Section 7.01, that the Trustee determines is unduly
prejudicial to the rights of other Securityholders or would involve the Trustee
in personal liability; provided, however, that the Trustee may take any other
action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall be entitled
to indemnification satisfactory to it in its sole discretion against all losses
and expenses caused by taking or not taking such action.
SECTION 6.06. Limitation on Suits. Except to enforce the right
to receive payment of principal, premium (if any) or interest when due, no
Securityholder may pursue any remedy with respect to this Indenture or the
Securities unless:
(1) the Holder gives to the Trustee written notice stating
that an Event of Default is continuing;
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(2) the Holders of at least 25% in principal amount of the
outstanding Securities make a written request to the Trustee to pursue
the remedy;
(3) such Holder or Holders offer to the Trustee reasonable
security or indemnity against any loss, liability or expense;
(4) the Trustee does not comply with such request within 60
days after receipt of the request and the offer of security or
indemnity; and
(5) the Holders of a majority in principal amount of the
outstanding Securities do not give the Trustee a direction inconsistent
with the request during such 60- day period.
A Securityholder may not use this Indenture to prejudice the
rights of another Securityholder or to obtain a preference or priority over
another Securityholder.
SECTION 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder
to receive payment of principal of and interest on the Securities held by such
Holder, on or after the respective due dates expressed in the Securities, or to
bring suit for the enforcement of any payment with respect to the Securities,
shall not be impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of
Default specified in Section 6.01(1) or (2) occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company for the whole amount then due and owing (together with
interest on any unpaid interest to the extent lawful) and the amounts provided
for in Section 7.07.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee
may file such proofs of claim and other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property and, unless prohibited by law or applicable regulations, may vote
on behalf of the Holders in any election of a trustee in bankruptcy or other
Person performing similar functions, and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and its
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counsel, and any other amounts due the Trustee under Section 7.07.
SECTION 6.10. Priorities. If the Trustee collects any money
or property pursuant to this Article 6, it shall pay out the money or property
in the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to holders of Senior Indebtedness of the Company and,
if such money or property has been collected from a Subsidiary
Guarantor, to holders of Senior Indebtedness of such Subsidiary
Guarantor, in each case to the extent required by Article 10 and 12;
THIRD: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
FOURTH: to the Company.
The Trustee may fix a special record date and payment date for
any payment to Securityholders pursuant to this Section. At least 15 days before
such record date, the Trustee shall mail to each Securityholder a notice that
states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any
party litigant in the suit, having due regard to the merits and good faith of
the claims or defenses made by the party litigant. This Section does not apply
to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit
by Holders of more than 10% in principal amount of the Securities.
SECTION 6.12. Waiver of Stay or Extension Laws. The Company
(to the extent it may lawfully do so) shall not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, which may affect the covenants or the performance of this Indenture; and
the Company (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and shall not hinder, delay or impede
the execution of any power herein granted to the
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Trustee, but shall suffer and permit the execution of every such power as though
no such law had been enacted.
ARTICLE 7
Trustee
SECTION 7.01. Duties of Trustee. (a) If an Event of Default
has occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, the Trustee shall examine the certificates
and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own wilful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b)
of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
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(f) Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
SECTION 7.02. Rights of Trustee. (a) The Trustee may rely on
any document believed by it to be genuine and to have been signed or presented
by the proper per son. The Trustee need not investigate any fact or matter
stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The Trustee shall
not be liable for any action it takes or omits to take in good faith in reliance
on the Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Trustee's conduct does not
constitute wilful misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it here under
in good faith and in accordance with the advice or opinion of such counsel.
(f) Except with respect to Sections 4.02 and 4.13, the Trustee
shall have no duty to inquire as to the performance of the Company with respect
to the covenants contained in Article 4. In addition, the Trustee shall not be
deemed to have knowledge of an Event of Default except (i) any Default or Event
of Default occurring pursuant to Sections 6.01(1) and 6.01(2) or (ii) any
Default or Event of
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Default of which the Trustee shall have received written notification or
obtained actual knowledge.
(g) Delivery of reports, information and documents to the
Trustee under Section 4.02 is for informational purposes only, and the Trustee's
receipt of the foregoing shall not constitute constructive notice of any
information contained therein, or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely conclusively on Officers'
Certificates).
SECTION 7.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledges of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar
or co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company in the Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication.
SECTION 7.05. Notice of Defaults. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
Securityholder notice of the Default within 90 days after it occurs. Except in
the case of a Default in payment of principal of or interest on any Security
(including payments pursuant to the mandatory redemption provisions of such
Security, if any), the Trustee may withhold the notice if and so long as a
committee of its Trust Officers in good faith determines that withholding the
notice is not opposed to the interests of Securityholders.
SECTION 7.06. Reports by Trustee to Holders. As promptly as
practicable after each May 15 beginning with the May 15 following the date of
this Indenture, and in any event prior to July 15 in each year, the Trustee
shall mail to each Securityholder a brief report dated as of May 15 that
complies with TIA Section 313(a). The Trustee also shall comply with TIA Section
313(b).
A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each
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stock exchange (if any) on which the Securities are listed. The Company agrees
to notify promptly the Trustee whenever the Securities become listed on any
stock exchange and of any delisting thereof.
SECTION 7.07. Compensation and Indemnity. The Company shall
pay to the Trustee from time to time reasonable compensation for its services.
The Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services.
Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Company shall indemnify the Trustee against any and all loss,
liability or expense (including attorneys' fees) incurred by it in connection
with the administration of this trust and the performance of its duties
hereunder. The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder. The Company shall defend the
claim and the Trustee may have separate counsel and the Company shall pay the
reasonable fees and expenses of such counsel. The Company need not reimburse any
expense or indemnify against any loss, liability or expense incurred by the
Trustee through the Trustee's own wilful misconduct, negligence or bad faith.
To secure the Company's payment obligations in this Section,
the Trustee shall have a lien prior to the Securities on all money or property
held or collected by the Trustee other than money or property held in trust to
pay principal of and interest on particular Securities.
The Company's payment obligations pursuant to this Section
shall survive the discharge of this Indenture. When the Trustee incurs expenses
after the occurrence of a Default specified in Section 6.01(7) or (8) with
respect to the Company, the expenses are intended to constitute expenses of
administration under the Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. The Trustee may resign
at any time by so notifying the Company. The Holders of a majority in principal
amount of the outstanding Securities may remove the Trustee by so notifying the
Trustee and may appoint a successor Trustee. The Company shall remove the
Trustee if:
(1) the Trustee fails to comply with Section 7.10;
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(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the
Holders of a majority in principal amount of the outstanding Securities and such
Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy
exists in the office of Trustee for any reason (the Trustee in such event being
referred to herein as the retiring Trustee), the Company shall promptly appoint
a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee or the
Holders of 10% in principal amount of the outstanding Securities may petition
any court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to
this Section, the Company's obligations under Section 7.07 shall continue for
the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate
81
of authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall
at all times satisfy the requirements of TIA Section 310(a). The Trustee shall
have a combined capital and surplus of at least $50,000,000 as set forth in its
most recent published annual report of condition. The Trustee shall comply with
TIA Section 310(b); provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which other
securities or certificates of interest or participation in other securities of
the Company are out standing if the requirements for such exclusion set forth in
TIA Section 310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against
Company. The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated.
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ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Securities;
Defeasance. (a) When (1) the Company delivers to the Trustee all outstanding
Securities (other than Securities replaced pursuant to Section 2.07) for
cancellation or (2) all outstanding Securities have become due and payable,
whether at maturity or on a redemption date as a result of the mailing of a
notice of redemption pursuant to Article 3 hereof or (3) all outstanding
Securities will become due and payable within one year or are to be called for
redemption within one year under arrangements reasonably satisfactory to the
Trustee and, in the case of clause (2) and (3), the Company irrevocably deposits
with the Trustee funds sufficient to pay at maturity or upon redemption all
outstanding Securities, including interest thereon to maturity or such
redemption date (other than Securities replaced pursuant to Section 2.07), and
if in any case the Company pays all other sums payable hereunder by the Company,
then this Indenture shall, subject to Section 8.01(c), cease to be of further
effect. The Trustee shall acknowledge satisfaction and discharge of this
Indenture on demand of the Company accompanied by an Officers' Certificate and
an Opinion of Counsel and at the cost and expense of the Company.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any
time may terminate (1) all its obligations under the Securities and this
Indenture ("legal defeasance option") or (2) its obligations under Sections
4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10 and 4.11 and the operation
of Sections 6.01(4), 6.01(6), 6.01(7), 6.01(8), 6.01(9) and 6.01(10) (but, in
the case of Sections 6.01(7) and (8), with respect only to Significant
Subsidiaries) and the limitations contained in Section 5.01(a)(3) ("covenant
defeasance option"). The Company may exercise its legal defeasance option
notwithstanding its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment
of the Securities may not be accelerated because of an Event of Default with
respect thereto. If the Company exercises its covenant defeasance option,
payment of the Securities may not be accelerated because of an Event of Default
specified in Sections 6.01(4), 6.01(6), 6.01(7), 6.01(8) and 6.01(9) (but, in
the case of Sections 6.01(7) and (8), with respect only to Significant
Subsidiaries) or because of the failure of the Company to comply with Section
5.01(a)(3). If the Company exercises its legal
83
defeasance option or its covenant defeasance option, each Guarantor, if any,
shall be released from all its obligations with respect to its Guaranty.
Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07 and 7.08 and in
this Article 8 shall survive until the Securities have been paid in full.
Thereafter, the Company's obligations in Sections 7.07, 8.04 and 8.05 shall
survive.
SECTION 8.02. Conditions to Defeasance. The Company may
exercise its legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee
money or U.S. Government Obligations for the payment of principal of
and interest on the Securities to maturity or redemption, as the case
may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants or other
nationally recognized firm of financial experts expressing their
opinion that the payments of principal and interest when due and
without reinvestment on the deposited U.S. Government Obligations plus
any deposited money without investment will provide cash at such times
and in such amounts as will be sufficient to pay principal and interest
when due on all the Securities to maturity or redemption, as the case
may be;
(3) 123 days pass after the deposit is made and during the
123-day period no Default specified in Sections 6.01(7) or (8) with
respect to the Company occurs which is continuing at the end of the
123-day period;
(4) the deposit does not constitute a default under any other
material agreement binding on the Company and is not prohibited by
Article 10;
(5) the Company delivers to the Trustee an Opinion of Counsel
to the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under
the Investment Company Act of 1940;
(6) in the case of the legal defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that
(A) the Company has
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received from, or there has been published by, the Internal Revenue
Service a ruling, or (B) since the date of this Indenture there has
been a change in the applicable Federal income tax law, in either case
to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Securityholders will not recognize income, gain or
loss for Federal income tax purposes as a result of such defeasance and
will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
defeasance had not occurred;
(7) in the case of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Security holders will not recognize income, gain or loss for
Federal income tax purposes as a result of such covenant defeasance
and will be subject to Federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such
covenant defeasance had not occurred; and
(8) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance of the Securities as contemplated by this
Article 8 have been complied with.
Before or after a deposit, the Company may make arrangements
reasonably satisfactory to the Trustee for the redemption of Securities at a
future date in accordance with Article 3.
SECTION 8.03. Application of Trust Money. The Trustee shall
hold in trust money or U.S. Government Obligations deposited with it pursuant
to this Article 8. 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. Money
and securities so held in trust are not subject to Article 10.
SECTION 8.04. Repayment to Company. The Trustee and the Paying
Agent shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee
and the Paying Agent shall pay to the Company upon request any money held by
them for the payment of principal or interest that remains unclaimed for two
years, and, thereafter, Securityholders entitled to the money must look to the
Company for payment as general creditors.
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SECTION 8.05. Indemnity for Government Obligations. The
Company shall pay and shall indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against deposited U.S. Government Obligations or
the principal and interest received on such U.S. Government Obligations.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with this
Article 8 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 and the Subsidiary Guarantor's obligations under
their respective Guarantees shall be revived and reinstated as though no deposit
had occurred pursuant to this Article 8 until such time as the Trustee or Paying
Agent is permitted to apply all such money or U.S. Government Obligations in
accordance with this Article 8; provided, however, 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 Trustee or Paying
Agent.
ARTICLE 9
Amendments
SECTION 9.01. Without Consent of Holders. The Company, the
Subsidiary Guarantors and the Trustee may amend this Indenture or the Securities
without notice to or consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Securities in addition to or
in place of certificated Securities; provided, however, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(4) to make any change in Article 10 that would limit or
terminate the benefits available to any holder of Senior Indebtedness
of the Company or of a
86
Subsidiary Guarantor (or Representatives therefor) under Article 10 or
12;
(5) to add guarantees with respect to the Securities,
including any Subsidiary Guaranties, or to secure the Securities;
(6) to add to the covenants of the Company or a Subsidiary
Guarantor for the benefit of the Holders or to surrender any right or
power herein conferred upon the Company or a Subsidiary Guarantor;
(7) to comply with any requirements of the SEC in connection
with qualifying, or maintaining the qualification of, this Indenture
under the TIA; or
(8) to make any change that does not adversely affect the
rights of any Securityholder.
An amendment under this Section may not make any change that
adversely affects the rights under Article 10 or 12 of any holder of Senior
Indebtedness of the Company or of a Guarantor then outstanding unless the
holders of such Senior Indebtedness (or any group or representative thereof
authorized to give a consent) consent to such change.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any defect
therein, shall not impair or affect the validity of an amendment under this
Section.
SECTION 9.02. With Consent of Holders. The Company, the
Guarantors and the Trustee may amend this Indenture or the Securities without
notice to any Securityholder but with the written consent of the Holders of at
least a majority in principal amount of the Securities then outstanding
(including consents obtained in connection with a tender offer or exchange for
the Securities). However, without the consent of each Securityholder affected
thereby, an amendment may not:
(1) reduce the amount of Securities whose Holders must consent
to an amendment;
(2) reduce the rate of or extend the time for payment of
interest on any Security;
(3) reduce the principal amount of or extend the Stated
Maturity of any Security;
(4) reduce the amount payable upon the redemption of any
Security or change the time at which any Security may be redeemed in
accordance with Article 3;
(5) make any Security payable in money other than that stated
in the Security;
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(6) make any changes in the ranking or priority of any
Security that would adversely affect the Securityholders;
(7) make any change in Section 6.04 or 6.07 or the second
sentence of this Section; or
(8) make any change in any Guaranty that would adversely
affect the Securityholders in any material respect.
It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
An amendment under this Section may not make any change that
adversely affects the rights under Article 10 or 12 of any holder of Senior
Indebtedness of the Company or of a Subsidiary Guarantor then outstanding unless
the holders of such Senior Indebtedness (or any group or representative thereof
authorized to give a consent) consent to such change.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any defect
therein, shall not impair or affect the validity of an amendment under this
Section.
SECTION 9.03. Compliance with Trust Indenture Act. Every
amendment to this Indenture or the Securities shall comply with the TIA as then
in effect.
SECTION 9.04. Revocation and Effect of Consents and Waivers. A
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any such
Holder or subsequent Holder may revoke the consent or waiver as to such
Holder's Security or portion of the Security if the Trustee receives the notice
of revocation before the date the amendment or waiver becomes effective. After
an amendment or waiver becomes effective, it shall bind every Security holder.
An amendment or waiver becomes effective upon the execution of such amendment or
waiver by the Trustee.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Securityholders entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is
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fixed, then notwithstanding the immediately preceding paragraph, those Persons
who were Securityholders at such record date (or their duly designated proxies),
and only those Persons, shall be entitled to give such consent or to revoke any
consent previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall be valid or
effective for more than 120 days after such record date.
SECTION 9.05. Notation on or Exchange of Securities. If an
amendment changes the terms of a Security, the Trustee may require the Holder of
the Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 9.06. Trustee To Sign Amendments. The Trustee shall
sign any amendment authorized pursuant to this Article 9 if the amendment does
not adversely affect the rights, duties, liabilities or immunities of the
Trustee. If it does, the Trustee may but need not sign it. In signing such
amendment, the Trustee shall be entitled to receive indemnity reasonably
satisfactory to it and to receive, and (subject to Section 7.01) shall be fully
protected in relying upon, an Officers' Certificate and an Opinion of Counsel
stating that such amendment is authorized or permitted by this Indenture.
SECTION 9.07. Payment for Consent. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Securities unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
ARTICLE 10
Subordination
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SECTION 10.01. Agreement To Subordinate. The Company agrees,
and each Securityholder by accepting a Security agrees, that the Indebtedness
evidenced by the Securities is subordinated in right of payment, to the extent
and in the manner provided in this Article 10, to the prior payment of all
Senior Indebtedness of the Company and that the subordination is for the benefit
of and enforceable by the holders of such Senior Indebtedness. The Securities
shall in all respects rank pari passu with all other Senior Subordinated
Indebtedness of the Company and only Indebtedness of the Company which is Senior
Indebtedness of the Company shall rank senior to the Securities in accordance
with the provisions set forth herein. All provisions of this Article 10 shall be
subject to Section 10.12.
SECTION 10.02. Liquidation, Dissolution, Bankruptcy. Upon any
payment or distribution of the assets of the Company to creditors upon a total
or partial liquidation or a total or partial dissolution of the Company or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or its property:
(1) holders of Senior Indebtedness of the Company shall be
entitled to receive payment in full in cash of such Senior Indebtedness
before Securityholders shall be entitled to receive any payment of
principal of or interest on the Securities; and
(2) until such Senior Indebtedness is paid in full in cash,
any payment or distribution to which Securityholders would be entitled
but for this Article 10 shall be made to holders of such Senior
Indebtedness as their interests may appear, except that Securityholders
may receive shares of Capital Stock and any debt securities that are
subordinated to such Senior Indebtedness to at least the same extent as
the Securities.
SECTION 10.03. Default on Senior Indebtedness of the Company.
The Company shall not pay the principal of or interest on the Securities or make
any deposit pursuant to Section 8.01 and may not purchase, redeem or otherwise
retire any Securities (collectively, "pay the Securities") if either of the
following (a "Payment Default") occurs (1) any Designated Senior Indebtedness of
the Company is not paid in full in cash when due; or (2) any other default on
Designated Senior Indebtedness of the Company occurs and the maturity of such
Designated Senior Indebtedness is accelerated in accordance with its terms;
unless, in either case, the Payment Default has been cured or waived and any
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such acceleration has been rescinded or such Designated Senior Indebtedness has
been paid in full in cash; provided, however, that the Company shall be entitled
to pay the Securities without regard to the foregoing if the Company and the
Trustee receive written notice approving such payment from the Representatives
of all Designated Senior Indebtedness with respect to which the Payment Default
has occurred and is continuing.
During the continuance of any default (other than a Payment
Default) with respect to any Designated Senior Indebtedness of the Company
pursuant to which the maturity thereof may be accelerated immediately without
further notice (except such notice as may be required to effect such
acceleration) or the expiration of any applicable grace periods, the Company
shall not pay the Securities for a period (a "Payment Blockage Period")
commencing upon the receipt by the Trustee of (with a copy to the Company)
written notice (a "Blockage Notice") of such default from the Representative of
such Designated Senior Indebtedness specifying an election to effect a Payment
Blockage Period and ending 179 days thereafter. The Payment Blockage Period
shall end earlier if such Payment Blockage Period is terminated (1) by written
notice to the Trustee and the Company from the Person or Persons who gave such
Blockage Notice; (2) because the default giving rise to such Blockage Notice is
cured, waived or otherwise no longer continuing; or (3) because such Designated
Senior Indebtedness has been discharged or repaid in full in cash.
Notwithstanding the provisions described in the immediately
preceding two sentences (but subject to the provisions contained in the first
sentence of this Section), unless the holders of such Designated Senior
Indebtedness or the Representative of such Designated Senior Indebtedness shall
have accelerated the maturity of such Designated Senior Indebtedness, the
Company shall be entitled to resume payments on the Securities after termination
of such Payment Blockage Period. The Securities shall not be subject to more
than one Payment Blockage Period in any consecutive 360-day period, irrespective
of the number of defaults with respect to Designated Senior Indebtedness of the
Company during such period; provided, however, that if any Blockage Notice
within such 360-day period is delivered to the Trustee by or on behalf of any
holders of Designated Senior Indebtedness of the Company (other than the Bank
Indebtedness), a Representative of holders of the Bank Indebtedness shall be
entitled to give another Blockage Notice within such period; provided further,
however, that
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in no event shall the total number of days during which any Payment Blockage
Period or Periods is in effect exceed 179 days in the aggregate during any
360-consecutive-day period, and there must be 181 days during any 360-day
consecutive period during which no Payment Blockage Period is in effect. For
purposes of this Section, no default or event of default which existed or was
continuing on the date of the commencement of any Payment Blockage Period with
respect to the Designated Senior Indebtedness of the Company initiating such
Payment Blockage Period shall be, or be made, the basis of the commencement of a
subsequent Payment Blockage Period by the Representative of such Designated
Senior Indebtedness, whether or not within a period of 360 consecutive days,
unless such default or event of default shall have been cured or waived for a
period of not less than 90 consecutive days.
SECTION 10.04. Acceleration of Payment of Securities. If
payment of the Securities is accelerated because of an Event of Default, the
Company or the Trustee shall promptly notify the holders of the Designated
Senior Indebtedness of the Company (or their Representatives) of the
acceleration. If any Designated Senior Indebtedness of the Company is
outstanding, the Company shall not pay the Securities until five Business Days
after the Representatives of all the issues of such Designated Senior
Indebtedness receive notice of such acceleration and, thereafter, the Company
may pay the Securities only if this Indenture otherwise permits payment at that
time.
SECTION 10.05. When Distribution Must Be Paid Over. If a
distribution is made to Securityholders that because of this Article 10 should
not have been made to them, the Securityholders who receive the distribution
shall hold it in trust for holders of Senior Indebtedness of the Company and pay
it over to them as their interests may appear.
SECTION 10.06. Subrogation. After all Senior Indebtedness of
the Company is paid in full and until the Securities are paid in full,
Securityholders shall be subrogated to the rights of holders of such Senior
Indebtedness to receive distributions applicable to such Senior Indebtedness. A
distribution made under this Article 10 to holders of such Senior Indebtedness
which otherwise would have been made to Securityholders is not, as between the
Company and Securityholders, a payment by the Company on such Senior
Indebtedness.
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SECTION 10.07. Relative Rights. This Article 10 defines the relative
rights of Securityholders and holders of Senior Indebtedness of the Company.
Nothing in this Indenture shall:
(1) impair, as between the Company and Securityholders, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Securities in accordance with their
terms; or
(2) prevent the Trustee or any Securityholder from exercising its
available remedies upon a Default, subject to the rights of holders of
Senior Indebtedness of the Company to receive distributions otherwise
payable to Securityholders.
SECTION 10.08. Subordination May Not Be Impaired by Company. No
right of any holder of Senior Indebtedness of the Company 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 10.09. Rights of Trustee and Paying Agent. Notwithstanding
Section 10.03, the Trustee or Paying Agent shall continue to make payments on
the Securities and shall not be charged with knowledge of the existence of facts
that under this Article 10 would prohibit the making of any such payments
unless, not less than two Business Days prior to the date of such payment, a
Trust Officer of the Trustee receives notice satisfactory to it that such
payments are prohibited by this Article 10. The Company, the Registrar or
co-registrar, the Paying Agent, a Representative or a holder of Senior
Indebtedness of the Company shall be entitled to give the notice; provided,
however, that, if an issue of Senior Indebtedness of the Company has a
Representative, only the Representative shall be entitled to give the notice.
The Trustee in its individual or any other capacity shall be
entitled to hold Senior Indebtedness of the Company with the same rights it
would have if it were not Trustee. The Registrar and co-registrar and the Paying
Agent shall be entitled to do the same with like rights. The Trustee shall be
entitled to all the rights set forth in this Article 10 with respect to any
Senior Indebtedness of the Company which may at any time be held by it, to the
same extent as any other holder of such Senior Indebtedness; and nothing in
Article 7 shall deprive the Trustee of any of its rights as such holder. Nothing
in this Article 10 shall
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apply to claims of, or payments to, the Trustee under or pursuant to Section
7.07.
SECTION 10.10. Distribution or Notice to Representative. Whenever
any Person is to make a distribution or give a notice to holders of Senior
Indebtedness of the Company, such Person shall be entitled to make such
distribution or give such notice to their Representative (if any).
SECTION 10.11. Article 10 Not To Prevent Events of Default or Limit
Right To Accelerate. The failure to make a payment pursuant to the Securities by
reason of any provision in this Article 10 shall not be construed as preventing
the occurrence of a Default. Nothing in this Article 10 shall have any effect on
the right of the Securityholders or the Trustee to accelerate the maturity of
the Securities.
SECTION 10.12. Trust Moneys Not Subordinated. Notwithstanding
anything contained herein to the contrary, payments from money or the proceeds
of U.S. Government Obligations held in trust under Article 8 by the Trustee for
the payment of principal of and interest on the Securities shall not be
subordinated to the prior payment of any Senior Indebtedness of the Company or
subject to the restrictions set forth in this Article 10, and none of the
Securityholders shall be obligated to pay over any such amount to the Company or
any holder of Senior Indebtedness of the Company or any other creditor of the
Company.
SECTION 10.13. Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article 10, the Trustee and the Securityholders
shall be entitled to rely (1) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 10.02
are pending, (2) upon a certificate of the liquidating trustee or agent or other
Person making such payment or distribution to the Trustee or to the
Securityholders or (3) upon the Representatives of Senior Indebtedness of the
Company for the purpose of ascertaining the Persons entitled to participate in
such payment or distribution, the holders of such Senior Indebtedness and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article 10. In the event that the Trustee determines, in good faith,
that evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness of the Company to participate in any payment or distribution
pursuant to this Article 10, the Trustee shall be entitled
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to request such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of such Senior Indebtedness held by such Person, the
extent to which such Person is entitled to participate in such payment or
distribution and other facts pertinent to the rights of such Person under this
Article 10, and, if such evidence is not furnished, the Trustee shall be
entitled to defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment. The provisions of Sections
7.01 and 7.02 shall be applicable to all actions or omissions of actions by the
Trustee pursuant to this Article 10.
SECTION 10.14. Trustee To Effectuate Subordination. Each
Securityholder by accepting a Security authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Securityholders and the holders of
Senior Indebtedness of the Company as provided in this Article 10 and appoints
the Trustee as attorney-in-fact for any and all such purposes.
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior
Indebtedness of the Company. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness of the Company and shall
not be liable to any such holders if it shall mistakenly pay over or distribute
to Securityholders or the Company or any other Person, money or assets to which
any holders of Senior Indebtedness of the Company shall be entitled by virtue of
this Article 10 or otherwise.
SECTION 10.16. Reliance by Holders of Senior Indebtedness of the
Company on Subordination Provisions. Each Securityholder by accepting a Security
acknowledges and agrees that the foregoing subordination provisions are, and are
intended to be, an inducement and a consideration to each holder of any Senior
Indebtedness of the Company, whether such Senior Indebtedness was created or
acquired before or after the issuance of the Securities, to acquire and continue
to hold, or to continue to hold, such Senior Indebtedness and such holder of
such Senior Indebtedness shall be deemed conclusively to have relied on such
subordination provisions in acquiring and continuing to hold, or in continuing
to hold, such Senior Indebtedness.
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ARTICLE 11
Subsidiary Guaranties
SECTION 11.01. Guaranties. Each Subsidiary Guarantor hereby
unconditionally and irrevocably guarantees, jointly and severally, to each
Holder and to the Trustee and its successors and assigns (a) the full and
punctual payment of principal of and interest on the Securities when due,
whether at maturity, by acceleration, by redemption or otherwise, and all other
monetary obligations of the Company under this Indenture and the Securities and
(b) the full and punctual performance within applicable grace periods of all
other obligations of the Company under this Indenture and the Securities (all
the foregoing being hereinafter collectively called the "Guaranteed
Obligations"). Each Subsidiary Guarantor further agrees that the Guaranteed
Obligations may be extended or renewed, in whole or in part, without notice or
further assent from such Subsidiary Guarantor and that such Subsidiary Guarantor
will remain bound under this Article 11 notwithstanding any extension or renewal
of any Guaranteed Obligation.
Each Subsidiary Guarantor waives presentation to, demand of, payment
from and protest to the Company of any of the Guaranteed Obligations and also
waives notice of protest for nonpayment. Each Subsidiary Guarantor waives notice
of any default under the Securities or the Guaranteed Obligations. The
obligations of each Subsidiary Guarantor hereunder shall not be affected by (a)
the failure of any Holder or the Trustee to assert any claim or demand or to
enforce any right or remedy against the Company or any other Person under this
Indenture, the Securities or any other agreement or otherwise; (b) any extension
or renewal of any thereof; (c) any rescission, waiver, amendment or modification
of any of the terms or provisions of this Indenture, the Securities or any other
agreement; (d) the release of any security held by any Holder or the Trustee for
the Guaranteed Obligations or any of them; (e) the failure of any Holder or the
Trustee to exercise any right or remedy against any other guarantor of the
Guaranteed Obligations; or (f) except as set forth in Section 11.06, any change
in the ownership of such Subsidiary Guarantor.
Each Subsidiary Guarantor further agrees that its Subsidiary
Guaranty herein constitutes a guarantee of payment, performance and compliance
when due (and not a guarantee of collection) and waives any right to require
that any resort be had by any Holder or the Trustee to any security held for
payment of the Guaranteed Obligations.
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Each Subsidiary Guaranty is, to the extent and in the manner set
forth in Article 12, subordinated and subject in right of payment to the prior
payment in full of the principal of and premium, if any, and interest on all
Senior Indebtedness of the Subsidiary Guarantor giving such Subsidiary Guaranty
and each Subsidiary Guaranty is made subject to such provisions of this
Indenture.
Except as expressly set forth in Sections 8.01(b), 11.02 and 11.06,
the obligations of each Subsidiary Guarantor hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason, including
any claim of waiver, release, surrender, alteration or compromise, and shall not
be subject to any defense of setoff, counterclaim, recoupment or termination
whatsoever or by reason of the invalidity, illegality or unenforceability of the
Guaranteed Obligations or otherwise. Without limiting the generality of the
foregoing, the obligations of each Subsidiary Guarantor herein shall not be
discharged or impaired or otherwise affected by the failure of any Holder or the
Trustee to assert any claim or demand or to enforce any remedy under this
Indenture, the Securities or any other agreement, by any waiver or modification
of any thereof, by any default, failure or delay, willful or otherwise, in the
performance of the obligations, or by any other act or thing or omission or
delay to do any other act or thing which may or might in any manner or to any
extent vary the risk of such Subsidiary Guarantor or would otherwise operate as
a discharge of such Subsidiary Guarantor as a matter of law or equity.
Each Subsidiary Guarantor further agrees that its Guarantee herein
shall continue to be effective or be reinstated, as the case may be, if at any
time payment, or any part thereof, of principal of or interest on any Obligation
is rescinded or must otherwise be restored by any Holder or the Trustee upon the
bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which any Holder or the Trustee has at law or in equity against any
Subsidiary Guarantor by virtue hereof, upon the failure of the Company to pay
the principal of or interest on any Guaranteed Obligation when and as the same
shall become due, whether at maturity, by acceleration, by redemption or
otherwise, or to perform or comply with any other Guaranteed Obligation, each
Subsidiary Guarantor hereby promises to and shall, upon receipt of written
demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the
Holders or the Trustee an
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amount equal to the sum of (1) the unpaid amount of such Guaranteed Obligations,
(2) accrued and unpaid interest on such Guaranteed Obligations (but only to the
extent not prohibited by law) and (3) all other monetary Guaranteed Obligations
of the Company to the Holders and the Trustee.
Each Subsidiary Guarantor agrees that it shall not be entitled to
any right of subrogation in respect of any Guaranteed Obligations until payment
in full of all Guaranteed Obligations and all obligations to which the
Guaranteed Obligations are subordinated as provided in Article 12. Each
Subsidiary Guarantor further agrees that, as between it, on the one hand, and
the Holders and the Trustee, on the other hand, (x) the maturity of the
Guaranteed Obligations may be accelerated as provided in Article 6 for the
purposes of such Subsidiary Guarantor's Subsidiary Guaranty herein,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Guaranteed Obligations guaranteed hereby, and (y)
in the event of any declaration of acceleration of such Guaranteed Obligations
as provided in Article 6, such Guaranteed Obligations (whether or not due and
payable) shall forthwith become due and payable by such Subsidiary Guarantor for
the purposes of this Section.
Each Subsidiary Guarantor also agrees to pay any and all reasonable
costs and expenses (including reasonable attorneys' fees) incurred by the
Trustee or any Holder in enforcing any rights under this Section.
SECTION 11.02. Limitation on Liability. Any term or provision of
this Indenture to the contrary notwithstanding, the maximum aggregate amount of
the Guaranteed Obligations guaranteed hereunder by any Subsidiary Guarantor
shall not exceed the maximum amount that can be hereby guaranteed without
rendering this Indenture, as it relates to such Subsidiary Guarantor, voidable
under applicable law relating to fraudulent conveyance or fraudulent transfer or
similar laws affecting the rights of creditors generally.
SECTION 11.03. Successors and Assigns. This Article 11 shall be
binding upon each Subsidiary Guarantor and its successors and assigns and shall
enure to the benefit of the successors and assigns of the Trustee and the
Holders and, in the event of any transfer or assignment of rights by any Holder
or the Trustee, the rights and privileges conferred upon that party in this
Indenture and in the Securities shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions of this
Indenture.
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SECTION 11.04. No Waiver. Neither a failure nor a delay on the part
of either the Trustee or the Holders in exercising any right, power or privilege
under this Article 11 shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise of any right,
power or privilege. The rights, remedies and benefits of the Trustee and the
Holders herein expressly specified are cumulative and not exclusive of any other
rights, remedies or benefits which either may have under this Article 11 at law,
in equity, by statute or otherwise.
SECTION 11.05. Modification. No modification, amendment or waiver of
any provision of this Article 11, nor the consent to any departure by any
Subsidiary Guarantor therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Trustee, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice to or demand on any Subsidiary Guarantor in any case shall
entitle such Subsidiary Guarantor to any other or further notice or demand in
the same, similar or other circumstances.
SECTION 11.06. Release of Subsidiary Guarantor. Upon (i) the sale or
other disposition (including by way of consolidation or merger) of a Subsidiary
Guarantor, (ii) upon the sale or other disposition of all or substantially all
the assets of a Subsidiary Guarantor (in the case of clauses (i) and (ii), other
than a sale or disposition to the Company or an Affiliate of the Company), (iii)
the designation of a Subsidiary Guarantor as an Unrestricted Subsidiary pursuant
to the terms of this Indenture; or at such time as a Subsidiary Guarantor (A) no
longer Guarantees any other Indebtedness of the Company or another Subsidiary
Guarantor and (B) has no outstanding Indebtedness for borrowed money, such
Subsidiary Guarantor shall be deemed released from all obligations under this
Article 11 without any further action required on the part of the Trustee or any
Holder. At the request of the Company, the Trustee shall execute and deliver an
appropriate instrument evidencing such release.
SECTION 11.07. Contribution from Other Subsidiary Guarantors. Each
Subsidiary Guarantor that makes a payment under its Subsidiary Guaranty shall be
entitled to a contribution from each other Subsidiary Guarantor in an amount
equal to such other Subsidiary Guarantor's pro rata portion of such payment
based on the respective net assets
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of all the Subsidiary Guarantors at the time of such payment determined in
accordance with GAAP.
ARTICLE 12
Subordination of Subsidiary Guaranties
SECTION 12.01. Agreement To Subordinate. Each Subsidiary Guarantor
agrees, and each Securityholder by accepting a Security agrees, that the
Indebtedness evidenced by such Subsidiary Guarantor's Subsidiary Guaranty is
subordinated in right of payment, to the extent and in the manner provided in
this Article 12, to the prior payment of all Senior Indebtedness of such
Subsidiary Guarantor and that the subordination is for the benefit of and
enforceable by the holders of such Senior Indebtedness. The Guaranteed
Obligations of a Subsidiary Guarantor shall in all respects rank pari passu with
all other Senior Subordinated Indebtedness of such Subsidiary Guarantor and only
Senior Indebtedness of such Subsidiary Guarantor (including such Subsidiary
Guarantor's Guaranty of Senior Indebtedness of the Company) shall rank senior to
the Guaranteed Obligations of such Subsidiary Guarantor in accordance with the
provisions set forth herein.
SECTION 12.02. Liquidation, Dissolution, Bankruptcy. Upon any
payment or distribution of the assets of any Subsidiary Guarantor to creditors
upon a total or partial liquidation or a total or partial dissolution of such
Subsidiary Guarantor or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to such Subsidiary Guarantor or its
property:
(1) holders of Senior Indebtedness of such Subsidiary Guarantor
shall be entitled to receive payment in full in cash of such Senior
Indebtedness before Securityholders shall be entitled to receive any
payment pursuant to the Subsidiary Guaranty of such Subsidiary Guarantor;
and
(2) until the Senior Indebtedness of any Subsidiary Guarantor is
paid in full in cash, any payment or distribution to which Securityholders
would be entitled but for this Article 12 shall be made to holders of such
Senior Indebtedness as their interests may appear, except that
Securityholders may receive shares of Capital Stock and any debt
securities of such Subsidiary Guarantor that are subordinated to such
Senior Indebtedness to at least the same extent as Subsidiary Guaranty.
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SECTION 12.03. Default on Senior Indebtedness of Subsidiary
Guarantor. No Subsidiary Guarantor shall make any payments on its Subsidiary
Guaranty or purchase, redeem or otherwise retire or defease any Securities or
other Guaranteed Obligations (collectively, "pay its Subsidiary Guaranty") if
either of the following (a "Payment Default") occurs (1) any Designated Senior
Indebtedness of such Subsidiary Guarantor is not paid in full in cash when due;
or (2) any other default on Designated Senior Indebtedness of such Subsidiary
Guarantor occurs and the maturity of such Designated Senior Indebtedness is
accelerated in accordance with its terms; unless, in either case, the Payment
Default has been cured or waived and any such acceleration has been rescinded or
such Designated Senior Indebtedness has been paid in full in cash; provided,
however, that any Subsidiary Guarantor shall be entitled to pay its Subsidiary
Guaranty without regard to the foregoing if such Subsidiary Guarantor and the
Trustee receive written notice approving such payment from the Representatives
of all Designated Senior Indebtedness of such Subsidiary Guarantor with respect
to which the Payment Default has occurred and is continuing.
During the continuance of any default (other than a Payment Default)
with respect to any Designated Senior Indebtedness of a Subsidiary Guarantor
pursuant to which the maturity thereof may be accelerated immediately without
further notice (except such notice as may be required to effect such
acceleration) or the expiration of any applicable grace periods, such Subsidiary
Guarantor shall not pay its Subsidiary Guaranty for a period (a "Guaranty
Payment Blockage Period") commencing upon the receipt by the Trustee of (with a
copy to such Subsidiary Guarantor) written notice (a "Guaranty Blockage Notice")
of such default from the Representative of such Designated Senior Indebtedness
specifying an election to effect a Guaranty Payment Blockage Period and ending
179 days thereafter. The Guaranty Payment Blockage Period shall end earlier if
such Guaranty Payment Blockage Period is terminated (1) by written notice to the
Trustee and such Subsidiary Guarantor from the Person or Persons who gave such
Guaranty Blockage Notice; (2) because the default giving rise to such Guaranty
Blockage Notice is cured, waived or otherwise no longer continuing; or (3)
because such Designated Senior Indebtedness has been discharged or repaid in
full in cash.
Notwithstanding the provisions described in the immediately
preceding two sentences (but subject to the provisions contained in the first
sentence of this Section), unless the holders of such Designated Senior
Indebtedness
101
giving such Guaranty Blockage Notice or the Representative of such Designated
Senior Indebtedness shall have accelerated the maturity of such Designated
Senior Indebtedness, any Subsidiary Guarantor shall be entitled to resume
payments pursuant to its Subsidiary Guaranty after termination of such Guaranty
Payment Blockage Period. No Subsidiary Guarantor shall be subject to more than
one Guaranty Blockage Period in any consecutive 360-day period, irrespective of
the number of defaults with respect to Designated Senior Indebtedness of such
Subsidiary Guarantor during such period; provided, however, that if any Guaranty
Blockage Notice within such 360-day period is delivered to the Trustee by or on
behalf of any holders of Designated Senior Indebtedness of such Subsidiary
Guarantor (other than the Bank Indebtedness), the Representative of holders of
the Bank Indebtedness shall be entitled to give another Guaranty Blockage Notice
within such period; provided further, however, that in no event shall the total
number of days during which any Guaranty Payment Blockage Period or Periods is
in effect exceed 179 days in the aggregate during any 360-consecutive-day period
and there must be 181 days during any 360-day consecutive period during which no
Guaranty Payment Blockage Period is in effect. For purposes of this Section, no
default or event of default which existed or was continuing on the date of the
commencement of any Guaranty Payment Blockage Period with respect to the
Designated Senior Indebtedness of such Subsidiary Guarantor initiating such
Guaranty Payment Blockage Period shall be, or be made, the basis of the
commencement of a subsequent Guaranty Payment Blockage Period by the
Representative of such Designated Senior Indebtedness, whether or not within a
period of 360 days, unless such default or event of default shall have been
cured or waived for a period of not less than 90 consecutive days.
SECTION 12.04. Demand for Payment. If a demand for payment is made
on a Subsidiary Guarantor pursuant to Article 11, the Trustee shall promptly
notify the holders of the Designated Senior Indebtedness of such Subsidiary
Guarantor (or their Representatives) of such demand. If any Designated Senior
Indebtedness of such Subsidiary Guarantor is outstanding, such Subsidiary
Guarantor shall not make payments on the Subsidiary Guaranty until five Business
Days after the Representatives of all the issues of such Designated Senior
Indebtedness receive notice of such demand and, thereafter, such Subsidiary
Guarantor may make payments on the Subsidiary Guaranty only if this Indenture
otherwise permits such payment at that time.
102
SECTION 12.05. When Distribution Must Be Paid Over. If a
distribution is made to Securityholders that because of this Article 12 should
not have been made to them, the Securityholders who receive the distribution
shall hold it in trust for holders of Senior Indebtedness of the applicable
Subsidiary Guarantor and pay it over to them or their Representatives as their
interests may appear.
SECTION 12.06. Subrogation. After all Senior Indebtedness of a
Subsidiary Guarantor is paid in full and until the Securities are paid in full,
Securityholders shall be subrogated to the rights of holders of such Senior
Indebtedness to receive distributions applicable to Senior Indebtedness of such
Subsidiary Guarantor. A distribution made under this Article 12 to holders of
such Senior Indebtedness which otherwise would have been made to Securityholders
is not, as between the relevant Subsidiary Guarantor and Securityholders, a
payment by such Subsidiary Guarantor on such Senior Indebtedness.
SECTION 12.07. Relative Rights. This Article 12 defines the relative
rights of Securityholders and holders of Senior Indebtedness of a Subsidiary
Guarantor. Nothing in this Indenture shall:
(1) impair, as between a Subsidiary Guarantor and Securityholders,
the obligation of such Subsidiary Guarantor, which is absolute and
unconditional, to pay its Subsidiary Guaranty to the extent set forth in
Article 11; or
(2) prevent the Trustee or any Securityholder from exercising its
available remedies upon a default by such Subsidiary Guarantor under its
Subsidiary Guaranty, subject to the rights of holders of Senior
Indebtedness of such Subsidiary Guarantor to receive distributions
otherwise payable to Securityholders.
SECTION 12.08. Subordination May Not Be Impaired by a Subsidiary
Guarantor. No right of any holder of Senior Indebtedness of any Subsidiary
Guarantor to enforce the subordination of the Subsidiary Guaranty of such
Subsidiary Guarantor shall be impaired by any act or failure to act by such
Subsidiary Guarantor or by its failure to comply with this Indenture.
SECTION 12.09. Rights of Trustee and Paying Agent. Notwithstanding
Section 12.03, the Trustee or Paying Agent shall continue to make payments on
any Subsidiary Guaranty and shall not be charged with knowledge of the existence
of facts that would prohibit the making of any such payments unless, not less
than two Business Days prior to the date of such payment, a Trust Officer of the
Trustee
103
receives written notice satisfactory to it that such payments are prohibited by
this Article 12. The Company, the relevant Subsidiary Guarantor, the Registrar
or co-registrar, the Paying Agent, a Representative or a holder of Senior
Indebtedness of such Subsidiary Guarantor shall be entitled to give the notice;
provided, however, that, if an issue of Senior Indebtedness of any Subsidiary
Guarantor has a Representative, only the Representative shall be entitled to
give the notice.
The Trustee in its individual or any other capacity shall be
entitled to hold Senior Indebtedness of any Subsidiary Guarantor with the same
rights it would have if it were not the Trustee. The Registrar and co-registrar
and the Paying Agent may do the same with like rights. The Trustee shall be
entitled to all the rights set forth in this Article 12 with respect to any
Senior Indebtedness of any Subsidiary Guarantor which may at any time be held by
it, to the same extent as any other holder of such Senior Indebtedness; and
nothing in Article 7 shall deprive the Trustee of any of its rights as such
holder. Nothing in this Article 12 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 7.07.
SECTION 12.10. Distribution or Notice to Representative. Whenever
any Person is to make a distribution or give a notice to holders of Senior
Indebtedness of any Subsidiary Guarantor, such Person shall be entitled to make
such distribution or give such notice to their Representative (if any).
SECTION 12.11. Article 12 Not To Prevent Events of Default or Limit
Right To Demand Payment. The failure to make a payment pursuant to a Subsidiary
Guaranty by reason of any provision in this Article 12 shall not be construed as
preventing the occurrence of a Default. Nothing in this Article 12 shall have
any effect on the right of the Securityholders or the Trustee to make a demand
for payment on any Subsidiary Guarantor pursuant to its Subsidiary Guaranty.
SECTION 12.12. Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article 12, the Trustee and the Securityholders
shall be entitled to rely (1) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 12.02
are pending, (2) upon a certificate of the liquidating trustee or agent or other
Person making such payment or distribution to the Trustee or to the
Securityholders or (3) upon the Representatives for the holders of Senior
Indebtedness of any Subsidiary Guarantor for the
104
purpose of ascertaining the Persons entitled to participate in such payment or
distribution, the holders of such Senior Indebtedness and other Indebtedness of
such Subsidiary Guarantor, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto or to
this Article 12. In the event that the Trustee determines, in good faith, that
evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness of any Subsidiary Guarantor to participate in any payment or
distribution pursuant to this Article 12, the Trustee shall be entitled to
request such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of Senior Indebtedness of such Subsidiary Guarantor
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and other facts pertinent to the rights of such
Person under this Article 12, and, if such evidence is not furnished, the
Trustee shall be entitled to defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment. The
provisions of Sections 7.01 and 7.02 shall be applicable to all actions or
omissions of actions by the Trustee pursuant to this Article 12.
SECTION 12.13. Trustee To Effectuate Subordination. Each
Securityholder by accepting a Security authorizes and directs the Trustee on
his behalf to take such action as may be necessary or appropriate to acknowledge
or effectuate the subordination between the Securityholders and the holders of
Senior Indebtedness of any Subsidiary Guarantor as provided in this Article 12
and appoints the Trustee as attorney-in-fact for any and all such purposes.
SECTION 12.14. Trustee Not Fiduciary for Holders of Senior
Indebtedness of Subsidiary Guarantor. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness of any Subsidiary Guarantor
and shall not be liable to any such holders if it shall mistakenly pay over or
distribute to Securityholders or the Company or any other Person, money or
assets to which any holders of such Senior Indebtedness shall be entitled by
virtue of this Article 12 or otherwise.
SECTION 12.15. Reliance by Holders of Senior Indebtedness of
Subsidiary Guarantors on Subordination Provisions. Each Securityholder by
accepting a Security acknowledges and agrees that the foregoing subordination
provisions are, and are intended to be, an inducement and a consideration to
each holder of any Senior Indebtedness of any Subsidiary Guarantor, whether such
Senior Indebtedness
105
was created or acquired before or after the issuance of the Securities, to
acquire and continue to hold, or to continue to hold, such Senior Indebtedness
and such holder of Senior Indebtedness shall be deemed conclusively to have
relied on such subordination provisions in acquiring and continuing to hold, or
in continuing to hold, such Senior Indebtedness.
ARTICLE 13
Miscellaneous
SECTION 13.01. Trust Indenture Act Controls. If any provision of
this Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 13.02. Notices. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:
if to the Company or any Subsidiary Guarantor:
Buffets, Inc.
1460 Buffet Way
Eagan, Minnesota 55121
Attention: General Counsel
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019
Attention: John C. Kennedy
if to the Trustee:
U.S. Bank National Association
180 East Fifth Street
Suite 200
St. Paul, Minnesota 55101
Attention: Corporate Trust Services
The Company, any Subsidiary Guarantor or the Trustee by notice to
the other may designate additional or different addresses for subsequent notices
or communications.
Any notice or communication delivered in person or mailed to a
Securityholder shall be delivered in person or mailed to the Securityholder at
the Securityholder's address as it appears on the registration books of the
Registrar and shall be sufficiently given if so mailed within the time
prescribed.
Failure to deliver or mail a notice or communication to a
Securityholder or any defect in it shall not affect its sufficiency with respect
to other Securityholders. If a notice or communication is delivered or mailed in
the manner provided above, it is duly given, whether or not the addressee
receives it.
SECTION 13.03. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, any Subsidiary Guarantor the Trustee, the Registrar and
anyone else shall have the protection of TIA Section 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take or refrain
from taking
106
any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
SECTION 13.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 13.06. When Securities Disregarded. 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 disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which the Trustee knows are so owned shall be so disregarded. Also,
subject to the fore going, only Securities outstanding at the time shall be
considered in any such determination.
SECTION 13.07. Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by or a meeting of Securityholders.
The Registrar and the Paying Agent may make reasonable rules for their
functions.
107
SECTION 13.08. Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or a day on which banking institutions are not required to be open in
the State of New York. If a payment date is a Legal Holiday, payment shall be
made on the next succeeding day that is not a Legal Holiday, and no interest
shall accrue for the intervening period. If a regular record date is a Legal
Holiday, the record date shall not be affected.
SECTION 13.09. Governing Law. This Indenture and the Securities
shall be governed by, and construed in accordance with, the laws of the State of
New York but without giving effect to applicable principles of conflicts of law
to the extent that the application of the laws of another jurisdiction would be
required thereby.
SECTION 13.10. No Recourse Against Others. A director, officer,
employee, incorporator or stockholder, as such, of the Company or any Subsidiary
Guarantor shall not have any liability for any obligations of the Company under
the Securities or this Indenture or of such Subsidiary Guarantor under its
Subsidiary Guaranty or this Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Securityholder waives and releases all such liability. The waiver and
release shall be part of the consideration for the issue of the Securities.
SECTION 13.11. Successors. All agreements of the Company in this
Indenture and the Securities shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successors.
SECTION 13.12. Multiple 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. One signed copy is enough to prove
this Indenture.
SECTION 13.13. Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
108
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed
as of the date first written above.
BUFFETS, INC.,
by /s/ R. Michael Andrews, Jr.
------------------------------
Name: R. Michael Andrews, Jr.
Title: Chief Financial Officer
DISTINCTIVE DINING, INC.,
by /s/ R. Michael Andrews, Jr.
------------------------------
Name: R. Michael Andrews, Jr.
Title: Chief Financial Officer
HOMETOWN BUFFET, INC.,
by /s/ R. Michael Andrews, Jr.
------------------------------
Name: R. Michael Andrews, Jr.
Title: Chief Financial Officer
OCB RESTAURANT CO.,
by /s/ R. Michael Andrews, Jr.
------------------------------
Name: R. Michael Andrews, Jr.
Title: Chief Financial Officer
OCB PURCHASING CO.,
by /s/ R. Michael Andrews, Jr.
------------------------------
Name: R. Michael Andrews, Jr.
Title: Chief Financial Officer
RESTAURANT INNOVATIONS, INC.,
by /s/ R. Michael Andrews, Jr.
------------------------------
Name: R. Michael Andrews, Jr.
Title: Chief Financial Officer
U.S. BANK NATIONAL ASSOCIATION,
by /s/ Frank Leslie
------------------------------
Name: Frank Leslie
Title: Vice President
RULE 144A/REGULATION S APPENDIX
PROVISIONS RELATING TO INITIAL SECURITIES,
PRIVATE EXCHANGE SECURITIES
AND EXCHANGE SECURITIES
1. Definitions
1.1 Definitions
For the purposes of this Appendix the following terms shall have the
meanings indicated below:
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Temporary Regulation S Global Security or beneficial
interest therein, the rules and procedures of the Depository, Euroclear and
Clearstream for such a Temporary Regulation S Global Security, in each case to
the extent applicable to such transaction and as in effect from time to time.
"Clearstream" means Clearstream Banking, societe anonyme, or any
successor securities clearing agency.
"Definitive Security" means a certificated Initial Security or
Exchange Security or Private Exchange Security bearing, if required, the
restricted securities legend set forth in Section 2.3(e).
"Depository" means The Depository Trust Company, its nominees and
their respective successors.
"Distribution Compliance Period", with respect to any Securities,
means the period of 40 consecutive days beginning on and including the later of
(i) the day on which such Securities are first offered to Persons other than
distributors (as defined in Regulation S under the
2
Securities Act) in reliance on Regulation S and (ii) the date on which such
Securities are initially issued.
"Euroclear" means Euroclear Bank S.A./N.V., as operator of the
Euroclear System, or any successor securities clearing agency.
"Exchange Securities" means (1) the 11 1/4% Senior Subordinated
Notes due 2010 issued pursuant to the Indenture in connection with a Registered
Exchange Offer pursuant to a Registration Rights Agreement and (2) Additional
Securities, if any, issued pursuant to a registration statement filed with the
SEC under the Securities Act.
3
"Initial Purchasers" means (1) with respect to the Initial
Securities issued on the Issue Date, Credit Suisse First Boston Corporation,
Morgan Stanley & Co. Incorporated, Salomon Smith Barney Inc., UBS Warburg LLC
and Fleet Securities, Inc. and (2) with respect to each issuance of Additional
Securities, the Persons purchasing such Additional Securities under the related
Purchase Agreement.
"Initial Securities" means (1) $230,000,000 aggregate principal
amount of 11 1/4% Senior Subordinated Notes due 2010 issued on the Issue Date
and (2) Additional Securities, if any, issued in a transaction exempt from the
registration requirements of the Securities Act.
"Private Exchange" means the offer by the Company, pursuant to a
Registration Rights Agreement, to the Initial Purchasers to issue and deliver to
each Initial Purchaser, in exchange for the Initial Securities held by the
Initial Purchaser as part of its initial distribution, a like aggregate
principal amount of Private Exchange Securities.
"Private Exchange Securities" means any 11 1/4% Senior Subordinated
Notes due 2010 issued in connection with a Private Exchange.
"Purchase Agreement" means (1) with respect to the Initial
Securities issued on the Issue Date, the Purchase Agreement dated June 21, 2002,
among the Company, the Subsidiary Guarantors and the Initial Purchasers, and (2)
with respect to each issuance of Additional Securities, the purchase agreement
or underwriting agreement among the Company, the Subsidiary Guarantors and the
Persons purchasing such Additional Securities.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Registered Exchange Offer" means the offer by the Company, pursuant
to a Registration Rights Agreement, to certain Holders of Initial Securities, to
issue and deliver to such Holders, in exchange for the Initial Securities, a
like aggregate principal amount of Exchange Securities registered under the
Securities Act.
"Registration Rights Agreement" means (1) with respect to the
Initial Securities issued on the Issue Date, the Registration Rights Agreement
dated June 28, 2002, among the Company, the Subsidiary Guarantors and the
Initial
4
Purchasers, and (2) with respect to each issuance of Additional Securities
issued in a transaction exempt from the registration requirements of the
Securities Act, the registration rights agreement, if any, among the Company,
the Subsidiary Guarantors and the Persons purchasing such Additional Securities
under the related Purchase Agreement.
"Securities" means the Initial Securities, the Exchange Securities
and the Private Exchange Securities, treated as a single class.
"Securities Act" means the Securities Act of 1933.
"Securities Custodian" means the custodian with respect to a Global
Security (as appointed by the Depository), or any successor Person thereto and
shall initially be the Trustee.
"Shelf Registration Statement" means the registration statement
issued by the Company in connection with the offer and sale of Initial
Securities or Private Exchange Securities pursuant to a Registration Rights
Agreement.
"Transfer Restricted Securities" means Securities that bear or are
required to bear the legend set forth in Section 2.3(e)hereto.
1.2 Other Definitions
Defined in
Term Section:
---- -------
"Agent Members"....................................... 2.1(b)
"Global Security"..................................... 2.1(a)
"Permanent Regulation S Global Security".............. 2.1(a)
"Regulation S"........................................ 2.1(a)
"Rule 144A"........................................... 2.1(a)
"Rule 144A Global Security"........................... 2.1(a)
"Temporary Regulation S Global Security".............. 2.1(a)
2. The Securities
2.1 (a) Form and Dating. The Initial Securities will be offered
and sold by the Company pursuant to a Purchase Agreement. The Initial Securities
will be resold initially only to (i) QIBs in reliance on Rule 144A under
5
the Securities Act ("Rule 144A") and (ii) Persons other than U.S. Persons (as
defined in Regulation S) in reliance on Regulation S under the Securities Act
("Regulation S"). Initial Securities may thereafter be transferred to, among
others, QIBs and purchasers in reliance on Regulation S, in each case, subject
to the restrictions on transfer set forth herein. Initial Securities initially
resold pursuant to Rule 144A shall be issued initially in the form of one or
more permanent global Securities in definitive, fully registered form
(collectively, the "Rule 144A Global Security") and Initial Securities initially
resold pursuant to Regulation S shall be issued initially in the form of one or
more temporary global securities in definitive, fully registered form
(collectively, the "Temporary Regulation S Global Security"), in each case
without interest coupons and with the global securities legend and restricted
securities Legend set forth in Exhibit 1 hereto, which shall be deposited on
behalf of the purchasers of the Initial Securities represented thereby with the
Securities Custodian, and registered in the name of the Depository or a nominee
of the Depository, duly executed by the Company and authenticated by the Trustee
as provided in the Indenture. Except as set forth in this Section 2.1(a),
beneficial ownership interests in the Temporary Regulation S Global Security
will not be exchangeable for interests in the permanent global security (the
"Permanent Regulation S Global Security"), or any other Security without a
legend containing restrictions on transfer of such Security prior to the
expiration of the Distribution Compliance Period and then beneficial interests
in the Temporary Regulation S Global Security may be exchanged for interests in
a Rule 144A Global Security or the Permanent Regulation S Global Security only
upon certification in a form reasonably satisfactory to the Trustee that
beneficial ownership interests in such Temporary Regulation S Global Security
are owned either by non-U.S. persons or U.S. persons who purchased such
interests in a transaction that did not require registration under the
Securities Act.
Beneficial interests in Temporary Regulation S Global Securities may
be exchanged for interests in Rule 144A Global Securities or Permanent
Regulation S Global Securities only if(1) such exchange occurs in connection
with a transfer of Securities in compliance with Rule 144A, and (2) the
transferor of the Regulation S Global Security first delivers to the Trustee a
written certificate (in a form satisfactory to the Trustee) to the effect that
the Regulation S Global Security is being transferred to a
6
Person (a) who the transferor reasonably believes to be a QIB, (b) purchasing
for its own account or the account of a QIB in a transaction meeting the
requirements of Rule 144A, and (c) in accordance with all applicable securities
laws of the States of the United States and other jurisdictions.
The Rule 144A Global Security, the Temporary Regulation S Global
Security and the Permanent Regulation S Global Security are collectively
referred to herein as "Global Securities." The aggregate principal amount of the
Global Securities may from time to time be increased or decreased by adjustments
made on the records of the Trustee and the Depository or its nominee as
hereinafter provided.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply only to
a Global Security deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.1(b), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depository for such
Global Security or Global Securities or the nominee of such Depository and (b)
shall be delivered by the Trustee to such Depository or pursuant to such
Depository's instructions or held by the Trustee as custodian for the
Depository.
Members of, or participants in, the Depository ("Agent Members")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depository or by the Trustee as the custodian of the
Depository or under such Global Security, and the Company, the Trustee and any
agent of the Company or the Trustee shall be entitled to treat the Depository as
the absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depository
or impair, as between the Depository and its Agent Members, the operation of
customary practices of such Depository governing the exercise of the rights of
a holder of a beneficial interest in any Global Security.
(c) Certificated Securities. Except as provided in this Section
2.1 or Section 2.3 or 2.4, owners of beneficial interests in Global Securities
shall not be
7
entitled to receive physical delivery of certificated Securities.
2.2 Authentication. The Trustee shall authenticate and deliver: (1) on
the Issue Date, an aggregate principal amount of $230,000,000 11 1/4% Senior
Subordinated Notes due 2010, (2) any Additional Securities for an original issue
in an aggregate principal amount specified in the written order of the Company
pursuant to Section 2.02 of the Indenture and (3) Exchange Securities or Private
Exchange Securities for issue only in a Registered Exchange Offer or a Private
Exchange, respectively, pursuant to a Registration Rights Agreement, for a like
principal amount of Initial Securities, in each case upon a written order of the
Company signed by two Officers or by an Officer and either an Assistant
Treasurer or an Assistant Secretary of the Company. Such order shall specify the
amount of the Securities to be authenticated and the date on which the original
issue of Securities is to be authenticated and, in the case of any issuance of
Additional Securities pursuant to Section 2.13 of the Indenture, shall certify
that such issuance is in compliance with Section 4.03 of the Indenture.
2.3 Transfer and Exchange.
(a) Transfer and Exchange of Definitive Securities. When
Definitive Securities are presented to the Registrar or a co-registrar with a
request:
(x) to register the transfer of such Definitive Securities; or
(y) to exchange such Definitive Securities for an equal principal
amount of Definitive Securities of other authorized
denominations,
the Registrar or co-registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Securities surrendered for transfer or
exchange:
(i) shall be duly endorsed or accompanied by a written instrument
of transfer in form reasonably satisfactory to the Company and
the Registrar or co-registrar, duly executed
8
by the Holder thereof or its attorney duly authorized in
writing; and
(ii) if such Definitive Securities are required to bear a
restricted securities legend, they are being transferred or
exchanged pursuant to an effective registration statement
under the Securities Act, pursuant to Section 2.3(b) or
pursuant to clause (A), (B) or (C) below, and are accompanied
by the following additional information and documents, as
applicable:
(A) if such Definitive Securities are 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; or
(B) if such Definitive Securities are being transferred to
the Company, a certification to that effect; or
(C) if such Definitive Securities are being transferred (x)
pursuant to an exemption from registration in accordance
with Rule 144A, Regulation S or Rule 144 under the
Securities Act; or (y) in reliance upon another
exemption from the requirements of the Securities Act:
(i) a certification to that effect (in the form set
forth on the reverse of the Security) and (ii) if the
Company so requests, an opinion of counsel or other
evidence reasonably satisfactory to it as to the
compliance with the restrictions set forth in the legend
set forth in Section 2.3(e)(i).
(b) Restrictions on Transfer of a Definitive Security for a
Beneficial Interest in a Global Security. A Definitive Security may not be
exchanged for a beneficial interest in a Rule 144A Global Security or a
Permanent Regulation S Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a Definitive
Security, duly endorsed or accompanied by appropriate instruments of transfer,
in form satisfactory to the Trustee, together with:
9
(i) certification, in the form set forth on the reverse of the
Security, that such Definitive Security is either (A) being
transferred to a QIB in accordance with Rule 144A or (B) is
being transferred after expiration of the Distribution
Compliance Period by a Person who initially purchased such
Security in reliance on Regulation S to a buyer who elects to
hold its interest in such Security in the form of a beneficial
interest in the Permanent Regulation S Global Security; and
(ii) written instructions directing the Trustee to make, or to
direct the Securities Custodian to make, an adjustment on its
books and records with respect to such Rule 144A Global
Security (in the case of a transfer pursuant to clause
(b)(i)(A)) or Permanent Regulation S Security (in the case of
a transfer pursuant to clause (b)(i)(B)) to reflect an
increase in the aggregate principal amount of the Securities
represented by the Rule 144A Global Security or Permanent
Regulation S Global Security, as applicable, such instructions
to contain information regarding the Depository account to be
credited with such increase,
then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Securities Custodian, the
aggregate principal amount of Securities represented by the Rule 144A Global
Security or Permanent Regulation S Global Security, as applicable, to be
increased by the aggregate principal amount of the Definitive Security to be
exchanged and shall credit or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the Rule 144A Global
Security or Permanent Regulation S Global Security, as applicable, equal to the
principal amount of the Definitive Security so canceled. If no Rule 144A Global
Securities or Permanent Regulation S Global Securities, as applicable, are then
outstanding, the Company shall issue and the Trustee shall authenticate, upon
written order of the Company in the form of an Officers' Certificate, a new Rule
144A Global Security or Permanent Regulation S Global Security, as applicable,
in the appropriate principal amount.
10
(c) Transfer and Exchange of Global Securities.
(i) The transfer and exchange of Global Securities or beneficial
interests therein shall be effected through the Depository, in
accordance with this Indenture (including applicable
restrictions on transfer set forth herein, if any) and the
procedures of the Depository therefor. A transferor of a
beneficial interest in a Global Security shall deliver to the
Registrar a written order given in accordance with the
Depository's procedures containing information regarding the
participant account of the Depository to be credited with a
beneficial interest in the Global Security. The Registrar
shall, in accordance with such instructions, instruct the
Depository to credit to the account of the Person specified in
such instructions a beneficial interest in the Global Security
and to debit the account of the Person making the transfer the
beneficial interest in the Global Security being transferred.
(ii) If the proposed transfer is a transfer of a beneficial
interest in one Global Security to a beneficial interest in
another Global Security, the Registrar shall reflect on its
books and records the date and an increase in the principal
amount of the Global Security to which such interest is being
transferred in an amount equal to the principal amount of the
interest to be so transferred, and the Registrar shall reflect
on its books and records the date and a corresponding decrease
in the principal amount of the Global Security from which such
interest is being transferred.
(iii) Notwithstanding any other provisions of this Appendix (other
than the provisions set forth in Section 2.4), a Global
Security may not be transferred as a whole except by the
Depository to a nominee of the Depository or by a nominee of
the Depository to the Depository or another nominee of the
11
Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor
Depository.
(iv) In the event that a Global Security is exchanged for
Definitive Securities pursuant to Section 2.4 of this
Appendix, prior to the consummation of a Registered Exchange
Offer or the effectiveness of a Shelf Registration Statement
with respect to such Securities, such Securities may be
exchanged only in accordance with such procedures as are
substantially consistent with the provisions of this Section
2.3 (including the certification requirements set forth on the
reverse of the Initial Securities intended to ensure that such
transfers comply with Rule 144A or Regulation S, as the case
may be) and such other procedures as may from time to time be
adopted by the Company.
(d) Restrictions on Transfer of Temporary Regulation S Global
Securities. During the Distribution Compliance Period, beneficial ownership
interests in Temporary Regulation S Global Securities may only be sold, pledged
or transferred through Euroclear or Clearstream in accordance with the
Applicable Procedures and only (i) to the Company, (ii) so long as such Security
is eligible for resale pursuant to Rule 144A, to a Person whom the selling
holder reasonably believes is a QIB that purchases for its own account or for
the account of a QIB to whom notice is given that the resale, pledge or transfer
is being made in reliance on Rule 144A, (iii) in an offshore transaction in
accordance with Regulation S, (iv) pursuant to an exemption from registration
under the Securities Act provided by Rule 144 (if applicable) under the
Securities Act or (v) 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.
(e) Legend.
(i) Except as permitted by the following paragraphs (ii), (iii)
and (iv), each Security certificate evidencing the Restricted Global
Securities (and all Securities issued in exchange therefor or in
substitution thereof) shall bear a legend in substantially the following
form:
12
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933 (THE "SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY
IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING
ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES
ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY
THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) THE COMPANY, (II) IN THE UNITED STATES TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (III)
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE
WITH RULE 904 UNDER THE SECURITIES ACT, (IV) PURSUANT TO EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (V) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES
(I) THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF
ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE
FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global
Security) pursuant to Rule 144 under the Securities Act, the Registrar
shall permit the transferee thereof to exchange such Transfer Restricted
Security for a certificated Security that does not bear the legend set
forth above and rescind any restriction on the transfer of such Transfer
Restricted Security, if the transferor thereof certifies in writing to the
Registrar that such sale or transfer was made in reliance on Rule 144
(such certification to be in the form set forth on the reverse of the
Security).
13
(iii) After a transfer of any Initial Securities or Private Exchange
Securities pursuant to and during the period of the effectiveness of a
Shelf Registration Statement with respect to such Initial Securities or
Private Exchange Securities, as the case may be, all requirements
pertaining to legends on such Initial Security or such Private Exchange
Security will cease to apply, the requirements requiring any such Initial
Security or such Private Exchange Security issued to certain Holders be
issued in global form will cease to apply, and a certificated Initial
Security or Private Exchange Security or an Initial Security or Private
Exchange Security in global form, in each case without restrictive
transfer legends, will be available to the transferee of the Holder of
such Initial Securities or Private Exchange Securities upon exchange of
such transferring Holder's certificated Initial Security or Private
Exchange Security or directions to transfer such Holder's interest in the
Global Security, as applicable.
(iv) Upon the consummation of a Registered Exchange Offer with
respect to the Initial Securities, all requirements pertaining to such
Initial Securities that Initial Securities issued to certain Holders be
issued in global form will still apply with respect to Holders of such
Initial Securities that do not exchange their Initial Securities, and
Exchange Securities in certificated or global form will be available to
Holders that exchange such Initial Securities in such Registered Exchange
Offer.
(v) Upon the consummation of a Private Exchange with respect to
the Initial Securities, all requirements pertaining to such Initial
Securities that Initial Securities issued to certain Holders be issued in
global form will still apply with respect to Holders of such Initial
Securities that do not exchange their Initial Securities, and Private
Exchange Securities in global form with the global securities legend and
the Restricted Securities Legend set forth in Exhibit 1 hereto will be
available to Holders that exchange such Initial Securities in such Private
Exchange.
(f) Cancellation or Adjustment of Global Security. At such time as
all beneficial interests in a Global Security have either been exchanged for
certificated Securities, redeemed, purchased or canceled, such Global
14
Security shall be returned to the Depository for cancellation or retained and
canceled by the Trustee. At any time prior to such cancellation, if any
beneficial interest in a Global Security is exchanged for certificated
Securities, redeemed, purchased or canceled, the principal amount of Securities
represented by such Global Security shall be reduced and an adjustment shall be
made on the books and records of the Trustee (if it is then the Securities
Custodian for such Global Security) with respect to such Global Security, by the
Trustee or the Securities Custodian, to reflect such reduction.
(g) Obligations with Respect to Transfers and Exchanges of
Securities.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate certificated
Securities and Global Securities at the Registrar's or co-registrar's
request.
(ii) No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax, assessments, or similar governmental
charge payable in connection therewith (other than any such transfer
taxes, assessments or similar governmental charge payable upon exchange or
transfer pursuant to Sections 3.06, 4.09 and 9.05 of the Indenture).
(iii) The Registrar or co-registrar shall not be required to
register the transfer of or exchange (a) any Definitive Security selected
for redemption in whole or in part pursuant to Article 3 of this
Indenture, except the unredeemed portion of any Definitive Security being
redeemed in part, or (b) any Security for a period beginning 15 Business
Days before the mailing of a notice of an offer to repurchase or redeem
Securities or 15 Business Days before an interest payment date.
(iv) Prior to the due presentation for registration of transfer of
any Security, the Company, the Trustee, the Paying Agent, the Registrar or
any co-registrar may deem and treat the person in whose name a Security
is registered as the absolute owner of such Security for the purpose of
receiving payment of
15
principal of and interest on such Security and for all other purposes
whatsoever, whether or not such Security is overdue, and none of the
Company, the Trustee, the Paying Agent, the Registrar or any co-registrar
shall be affected by notice to the contrary.
(v) All Securities issued upon any transfer or exchange pursuant
to the terms of this Indenture shall evidence the same debt and shall be
entitled to the same benefits under this Indenture as the Securities
surrendered upon such transfer or exchange.
(h) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to any
beneficial owner of a Global Security, a member of, or a participant in
the Depository or other Person with respect to the accuracy of the records
of the Depository or its nominee or of any participant or member thereof,
with respect to any ownership interest in the Securities or with respect
to the delivery to any participant, member, beneficial owner or other
Person (other than the Depository) of any notice (including any notice of
redemption) or the payment of any amount, under or with respect to such
Securities. All notices and communications to be given to the Holders and
all payments to be made to Holders under the Securities shall be given or
made only to or upon the order of the registered Holders (which shall be
the Depository or its nominee in the case of a Global Security). The
rights of beneficial owners in any Global Security shall be exercised only
through the Depository subject to the applicable rules and procedures of
the Depository. The Trustee may rely and shall be fully protected in
relying upon information furnished by the Depository with respect to its
members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to any
transfer of any interest in any Security (including any transfers between
or among Depository participants, members or beneficial owners in any
Global Security) other than to require delivery of such certificates and
other documentation or evidence as are expressly required by, and to do so
if and when expressly
16
required by, the terms of this Indenture, and to examine the same to
determine substantial compliance as to form with the express requirements
hereof.
2.4 Certificated Securities.
(a) A Global Security deposited with the Depository or with the
Trustee as Securities Custodian for the Depository pursuant to Section 2.1 shall
be transferred to the beneficial owners thereof in the form of certificated
Securities in an aggregate principal amount equal to the principal amount of
such Global Security, in exchange for such Global Security, only if such
transfer complies with Section 2.3 and (i) the Depository notifies the Company
that it is unwilling or unable to continue as Depository for such Global
Security or if at any time such Depository ceases to be a "clearing agency"
registered under the Exchange Act, and, in either case, a successor Depositary
is not appointed by the Company within 90 days of such notice, or (ii) an Event
of Default has occurred and is continuing or (iii) the Company, in its sole
discretion, notifies the Trustee in writing that it elects to cause the issuance
of Definitive Securities under this Indenture.
(b) Any Global Security that is transferable to the beneficial
owners thereof pursuant to this Section shall be surrendered by the Depository
to the Trustee located at its principal corporate trust office in the Borough of
Manhattan, The City of New York, to be so transferred, in whole or from time to
time in part, without charge, and the Trustee shall authenticate and deliver,
upon such transfer of each portion of such Global Security, an equal aggregate
principal amount of Definitive Securities of authorized denominations. Any
portion of a Global Security transferred pursuant to this Section shall be
executed, authenticated and delivered only in denominations of $1,000 principal
amount and any integral multiple thereof and registered in such names as the
Depository shall direct. Any Definitive Security delivered in exchange for an
interest in the Transfer Restricted Security shall, except as otherwise provided
by Section 2.3(e) hereof, bear the restricted securities legend set forth in
Exhibit 1 hereto.
(c) Subject to the provisions of Section 2.4(b), the registered
Holder of a Global Security shall be entitled to grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests
17
through Agent Members, to take any action which a Holder is entitled to take
under this Indenture or the Securities.
(d) In the event of the occurrence of either of the events
specified in Section 2.4(a), the Company shall promptly make available to the
Trustee a reasonable supply of Definitive Securities in definitive, fully
registered form without interest coupons.
EXHIBIT 1
to
RULE 144A/REGULATION S APPENDIX
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITARY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS 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.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[FOR REGULATION S GLOBAL NOTE ONLY] UNTIL 40 DAYS AFTER THE
COMMENCEMENT OF THE OFFERING, AN OFFER OR SALE OF NOTES WITHIN THE UNITED STATES
BY A DEALER (AS DEFINED IN THE SECURITIES ACT) MAY VIOLATE THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT IF SUCH OFFER OR SALE IS MADE OTHERWISE THAN
IN ACCORDANCE WITH THE RULE 144A THEREUNDER.]
[Restricted Securities Legend]
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF
THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5
OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
2
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY
THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY (I) TO THE COMPANY, (II) IN THE UNITED STATES TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (III) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE
WITH RULE 904 UNDER THE SECURITIES ACT, (IV) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE) OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH OF CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
[Temporary Regulation S Global Security Legend]
EXCEPT AS SET FORTH BELOW, BENEFICIAL OWNERSHIP INTERESTS IN THIS
TEMPORARY REGULATION S GLOBAL SECURITY WILL NOT BE EXCHANGEABLE FOR INTERESTS IN
THE PERMANENT REGULATION S GLOBAL SECURITY OR ANY OTHER SECURITY REPRESENTING AN
INTEREST IN THE SECURITIES REPRESENTED HEREBY WHICH DO NOT CONTAIN A LEGEND
CONTAINING RESTRICTIONS ON TRANSFER, UNTIL THE EXPIRATION OF THE "40-DAY
DISTRIBUTION COMPLIANCE PERIOD" (WITHIN THE MEANING OF RULE 903(c)(3) OF
REGULATION S UNDER THE SECURITIES ACT) AND THEN ONLY UPON CERTIFICATION IN FORM
REASONABLY SATISFACTORY TO THE TRUSTEE THAT SUCH BENEFICIAL INTERESTS ARE OWNED
EITHER BY NON-U.S. PERSONS OR U.S. PERSONS WHO PURCHASED SUCH INTERESTS IN A
TRANSACTION THAT DID NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT. DURING
SUCH 40-DAY DISTRIBUTION COMPLIANCE PERIOD, BENEFICIAL OWNERSHIP INTERESTS IN
THIS TEMPORARY REGULATION S GLOBAL SECURITY MAY ONLY BE SOLD, PLEDGED OR
TRANSFERRED THROUGH EUROCLEAR BANK S.A./N.A., AS OPERATOR OF THE EUROCLEAR
SYSTEM OR CLEARSTREAM BANKING, SOCIETE ANONYME AND ONLY (I) TO THE COMPANY, (II)
IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (III) OUTSIDE THE UNITED
STATES IN A TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, OR
(IV) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT,
IN EACH OF CASES (I) THROUGH (IV) IN
3
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES. HOLDERS OF INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY WILL
NOTIFY ANY PURCHASER OF THIS SECURITY OF THE RESALE RESTRICTIONS REFERRED TO
ABOVE, IF THEN APPLICABLE.
BENEFICIAL INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY
MAY BE EXCHANGED FOR INTERESTS IN A RULE 144A GLOBAL SECURITY ONLY IF (1) SUCH
EXCHANGE OCCURS IN CONNECTION WITH A TRANSFER OF THE SECURITIES IN COMPLIANCE
WITH RULE 144A, AND (2) THE TRANSFEROR OF THE REGULATION S GLOBAL SECURITY FIRST
DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS
CERTIFICATE) TO THE EFFECT THAT THE REGULATION S GLOBAL SECURITY BEING
TRANSFERRED TO A PERSON (A) WHO THE TRANSFEROR REASONABLY BELIEVES TO BE A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (B) PURCHASING FOR
ITS OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, AND (C) IN ACCORDANCE WITH
ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER
JURISDICTIONS.
BENEFICIAL INTEREST IN A RULE 144A GLOBAL SECURITY MAY BE
TRANSFERRED TO A PERSON WHO TAKES DELIVERY IN THE FORM OF AN INTEREST IN THE
REGULATION S GLOBAL SECURITY, WHETHER BEFORE OR AFTER THE EXPIRATION OF THE
40-DAY DISTRIBUTION COMPLIANCE PERIOD, ONLY IF THE TRANSFEROR FIRST DELIVERS TO
THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO
THE EFFECT THAT IF SUCH TRANSFER IS BEING MADE IN ACCORDANCE WITH RULE 903 OR
904 OF REGULATION S OR RULE 144 (IF AVAILABLE) AND THAT, IF SUCH TRANSFER OCCURS
PRIOR TO THE EXPIRATION OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD, THE
INTEREST TRANSFERRED WILL BE HELD IMMEDIATELY THEREAFTER THROUGH EUROCLEAR BANK
S.A./N.A. OR CLEARSTREAM BANKING SOCIETE ANONYME.
[OID Legend]
FOR PURPOSES OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED (THE "CODE"), THIS SECURITY HAS ORIGINAL ISSUE DISCOUNT. FOR PURPOSES
OF SECTION 1273 OF THE CODE, THE ISSUE PRICE IS $961.81 AND THE AMOUNT OF
ORIGINAL ISSUE DISCOUNT IS $38.19, IN EACH CASE PER $1,000 PRINCIPAL AMOUNT OF
THIS SECURITY. FOR PURPOSES OF SECTION 1275 OF THE CODE, THE ISSUE DATE OF THIS
SECURITY IS JUNE 28, 2002. FOR PURPOSES OF SECTION 1272 OF THE CODE, THE YIELD
TO MATURITY (COMPOUNDED SEMI-ANNUALLY) IS 12%.
4
No. CUSIP No.
-------------- ----------
$
----------
11 1/4% Senior Subordinated Note due 2010
Buffets, Inc., a Minnesota corporation, promises to pay to Cede &
Co., or registered assigns, the principal sum of _________ Dollars on July 15,
2010.
Interest Payment Dates: January 15 and July 15, commencing January
15, 2003.
Record Dates: January 1 and July 1.
Additional provisions of this Security are set forth on the other
side of this Security.
Dated:
BUFFETS, INC.
by
-----------------------
Name:
Title:
by
-----------------------
Name:
Title:
5
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
U.S. BANK NATIONAL ASSOCIATION
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by
---------------------------------
Authorized Signatory
6
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
11 1/4% Senior Subordinated Note due 2010
1. Interest
Buffets, Inc., a Minnesota corporation (such corporation, and its
successors and assigns under the Indenture hereinafter referred to, being herein
called the "Company"), promises to pay interest on the principal amount of this
Security at the rate per annum shown above; provided, however, that if a
Registration Default (as defined in the Registration Rights Agreement applicable
to this Security) occurs, additional interest will accrue on this Security at a
rate of 0.25% per annum (increasing by an additional 0.25% per annum after each
consecutive 90-day period that occurs after the date on which such Registration
Default occurs up to a maximum additional interest rate of 1.5%) from and
including the date on which any such Registration Default shall occur to but
excluding the date on which all Registration Defaults have been cured. The
Company will pay interest semiannually on January 15 and July 15 of each year,
commencing January 15, 2003. Interest on the Securities will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from June 28, 2002. Interest will be computed on the basis of a 360-day
year of twelve 30-day months. The Company will pay interest on overdue principal
at the above rate and will pay interest on overdue installments of interest at
such rate to the extent lawful.
2. Method of Payment
The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the January 1 or July 1 next preceding the interest payment date
even if Securities are canceled after the record date and on or before the
interest payment date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company will pay principal and interest in money
of the United States that at the time of payment is legal tender for payment of
public and private debts. Payments in respect of the Securities represented by a
Global Security
7
(including principal, premium, if any, and interest) will be made by wire
transfer of immediately available funds to the accounts specified by [Name of
Depository]. The Company will make all payments in respect of a certificated
Security (including principal, premium, if any, and interest) by mailing a check
to the registered address of each Holder thereof; provided, however, that
payments on a certificated Security will be made by wire transfer to a U.S.
dollar account maintained by the payee with a bank in the United States if such
Holder elects payment by wire transfer by giving written notice to the Trustee
or the Paying Agent to such effect designating such account no later than 30
days immediately preceding the relevant due date for payment (or such other date
as the Trustee may accept in its discretion).
3. Paying Agent and Registrar
Initially, U.S. Bank National Association (the "Trustee") will act
as Paying Agent and Registrar. The Company may appoint and change any Paying
Agent, Registrar or co-registrar without notice. The Company or any of its
domestically incorporated or organized Wholly Owned Subsidiaries may act as
Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as of
June 28, 2002 ("Indenture"), among the Company, the Subsidiary Guarantors and
the 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 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the Indenture
(the "Act"). Terms defined in the Indenture and not defined herein have the
meanings ascribed thereto in the Indenture. The Securities are subject to all
such terms, and Securityholders are referred to the Indenture and the Act for a
statement of those terms.
The Securities are general unsecured obligations of the Company. The
Company shall be entitled, subject to its compliance with Section 4.03 of the
Indenture, to issue Additional Securities pursuant to Section 2.13 of the
Indenture. The Initial Securities issued on the Issue Date,
8
any Additional Securities and all Exchange Securities or Private Exchange
Securities issued in exchange therefor will be treated as a single class for all
purposes under the Indenture. The Indenture contains covenants that limit the
ability of the Company and its subsidiaries to incur additional indebtedness;
pay dividends or distributions on, or redeem or repurchase capital stock; make
investments; issue or sell capital stock of subsidiaries; engage in transactions
with affiliates; transfer or sell assets; guarantee indebtedness; restrict
dividends or other payments of subsidiaries; and consolidate, merge or transfer
all or substantially all of its assets and the assets of its subsidiaries. These
covenants are subject to important exceptions and qualifications.
5. Optional Redemption
Except as set forth below, the Company shall not be entitled to
redeem the Securities at its option prior to July 15, 2006.
On and after July 15, 2006, the Company shall be entitled at its
option to redeem all or a portion of the Securities upon not less than 30 nor
more than 60 days' notice, at the redemption prices (expressed in percentages of
principal amount), plus accrued interest to the redemption date (subject to the
right of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date), if redeemed during the 12-month period
commencing on July 15 of the years set forth below:
Redemption
Period Price
------ -----
2006 105.625%
2007 103.750%
2008 101.875%
2009 and thereafter 100.000%
In addition, prior to July 15, 2005, the Company shall be entitled
at its option to redeem Securities (which includes Additional Securities, if
any) in an aggregate principal amount not to exceed 35% of the aggregate
principal amount of the Securities (which includes Additional Securities, if
any) originally issued at a redemption price (expressed as a percentage of
principal
9
amount) of 111.25%, plus accrued and unpaid interest to the redemption date,
with the net cash proceeds, to the extent actually received by the Company, from
an Initial Public Equity Offering (provided, however, that if the Initial Public
Equity Offering is an offering by Parent, a portion of the Net Cash Proceeds
thereof equal to the amount required to redeem any such Notes is contributed to
the equity capital of the Company or used to acquire from the Company Capital
Stock (other than Disqualified Stock) of the Company); provided, however, that
(1) at least 65% of such aggregate principal amount of Securities (which
includes Additional Securities, if any) remains outstanding immediately after
the occurrence of the redemption (other than Securities held, directly or
indirectly, by the Company or its Affiliates); and (2) the redemption occurs
within 60 days after the date of the Initial Public Equity Offering.
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each Holder of Securities to be
redeemed at its registered address. Securities in denominations larger than
$1,000 principal amount may be redeemed in part but only in whole multiples of
$1,000. If money sufficient to pay the redemption price of and accrued interest
on all Securities (or portions thereof) to be redeemed on the redemption date is
deposited with the Paying Agent on or before the redemption date and certain
other conditions are satisfied, on and after such date interest ceases to accrue
on such Securities (or such portions thereof) called for redemption.
7. Put Provisions
Upon a Change of Control, any Holder of Securities will have the
right to cause the Company to repurchase the Securities of such Holder at a
repurchase price equal to 101% of the principal amount of the Securities to be
repurchased plus accrued interest to the date of repurchase (subject to the
right of holders of record on the relevant record date to receive interest due
on the related interest payment date) as provided in, and subject to the terms
of, the Indenture.
Under certain circumstances as set forth in the Indenture, the
Company will be required to offer to purchase
10
Securities with the Net Available Cash from Asset Dispositions.
As provided in, and subject to the terms of, the Indenture, within
30 days after the consummation of an Initial Public Equity Offering prior to
July 15, 2005, the Company will be required to offer to purchase such aggregate
principal amount of Securities as may be purchased with funds equal in amount to
50% of the Net Cash Proceeds received by the Company or Parent from such Initial
Public Equity Offering at a purchase price of 111.25% of the aggregate principal
amount of the Securities, plus accrued and unpaid interest, if any, to the date
of purchase (subject to the right of holders of record on the relevant record
date to receive interest due on the related interest payment date); provided,
however, that in no event will the Company be required to make an offer to
purchase more than $80.5 million aggregate principal amount of the Securities.
8. Subordination
The Securities are subordinated to Senior Indebtedness of the
Company, as defined in the Indenture. To the extent provided in the Indenture,
Senior Indebtedness of the Company must be paid before the Securities may be
paid. The Company agrees, and each Securityholder by accepting a Security
agrees, to the subordination provisions contained in the Indenture and
authorizes the Trustee to give it effect and appoints the Trustee as
attorney-in-fact for such purpose.
9. Guaranty
The payment by the Company of the principal of, and premium and
interest on, the Securities is fully and unconditionally guaranteed on a joint
and several senior subordinated basis by each of the Subsidiary Guarantors.
11
10. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of $1,000 principal amount and whole multiples of $1,000. A Holder
may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not register the transfer of
or exchange any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or any Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.
11. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner
of it for all purposes.
12. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
13. Discharge and Defeasance
Subject to certain conditions set forth in the Indenture, the
Company at any time shall be entitled to terminate some or all of its
obligations under the Securities and the Indenture if the Company deposits with
the Trustee money or U.S. Government Obligations for the payment of principal
and interest on the Securities to redemption or maturity, as the case may be.
12
14. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture and the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the Securities
and (ii) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount outstanding of
the Securities. Subject to certain exceptions set forth in the Indenture,
without the consent of any Securityholder, the Company, the Subsidiary
Guarantors and the Trustee shall be entitled to amend the Indenture or the
Securities to cure any ambiguity, omission, defect or inconsistency, or to
comply with Article 5 of the Indenture, or to provide for uncertificated
Securities in addition to or in place of certificated Securities, or to add
guarantees with respect to the Securities, including Subsidiary Guaranties, or
to secure the Securities, or to add additional covenants or surrender rights and
powers conferred on the Company or the Subsidiary Guarantors, or to comply with
any request of the SEC in connection with qualifying the Indenture under the
Act, or to make any change that does not adversely affect the rights of any
Securityholder.
13
15. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for 30
days in payment of interest on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon redemption pursuant to paragraph 5
of the Securities, upon acceleration or otherwise, or failure by the Company to
redeem or purchase Securities when required; (iii) failure by the Company or any
Subsidiary Guarantors to comply with other agreements in the Indenture or the
Securities, in certain cases subject to notice and lapse of time; (iv) certain
accelerations (including failure to pay within any grace period after final
maturity) of other Indebtedness of the Company or any Significant Subsidiary if
the amount accelerated (or so unpaid) exceeds $10 million; (v) certain events of
bankruptcy or insolvency with respect to the Company, a Subsidiary Guarantor
and the Significant Subsidiaries; (vi) certain judgments or decrees for the
payment of money, the portion of which not covered by insurance exceeding $10
million and (vii) certain defaults with respect to Subsidiary Guaranties. If an
Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the Securities may declare all the Securities
to be due and payable immediately. Certain events of bankruptcy or insolvency
are Events of Default which will result in the Securities being due and payable
immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Securities unless it receives indemnity or security
satisfactory to it. Subject to certain limitations, Holders of a majority in
principal amount of the Securities may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Securityholders notice of any
continuing Default (except a Default in payment of principal or interest) if it
determines that withholding notice is not opposed to the interest of the
Holders.
14
16. Trustee Dealings with the Company
Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may other wise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
17. No Recourse Against Others
A director, officer, employee, incorporator or stockholder, as such,
of the Company or any Subsidiary Guarantor or the Trustee shall not have any
liability for any obligations of the Company or any Subsidiary Guarantor under
the Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Securities.
18. Authentication
This Security shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
19. Abbreviations
Customary abbreviations may be used in the name of a Securityholder
or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
15
20. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
21. Holders' Compliance with Registration Rights Agreement
Each Holder of a Security, by acceptance hereof, acknowledges and
agrees to the provisions of the Registration Rights Agreement applicable to this
Security, including the obligations of the Holders with respect to a
registration and the indemnification of the Company to the extent provided
therein.
22. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
The Company will furnish to any Securityholder upon written request
and without charge to the Securityholder a copy of the Indenture which has in it
the text of this Security. Requests may be made to:
Buffets, Inc.
1460 Buffets Way
Eagan, MN 55121
Attention: General Counsel
16
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to
transfer this Security on the books of the Company. The agent may substitute
another to act for him.
- --------------------------------------------------------------------------------
Date: Your Signature:
---------------- ----------------------------
- --------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act after the later of the date of original issuance
of such Securities and the last date, if any, on which such Securities were
owned by the Company or any Affiliate of the Company, the undersigned confirms
that such Securities are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) [ ] to the Company; or
(2) [ ] in the United States to Person whom the seller reasonably
believes is a "qualified institutional buyer" (as defined in
Rule 144A under the Securities Act) in a transaction meeting
the requirements of Rule 144A; or
17
(3) [ ] outside the United States in an offshore transaction in
accordance with Rule 904 under the Securities Act; or
(4) [ ] pursuant to the exemption from registration under the
Securities Act provided by Rule 144 thereunder (if available);
or
(5) [ ] pursuant to an effective registration statement under the
Securities Act of 1933.
If such transfer is being made pursuant to an offshore transaction in
accordance with Rule 904 under the Securities Act, the undersigned further
certifies that:
(i) the offer of the Securities was not made to a person in the United
States;
(ii) either (a) at the time the buy offer was originated, the transferee
was outside the United States or we and any person acting on our behalf
reasonably believed that the transferee was outside the United States, or
(b) the transaction was executed in, on or through the facilities of a
designated off-shore securities market and neither we nor any person
acting on our behalf knows that the transaction has been pre-arranged with
a buyer in the United States;
(iii) no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903 or Rule 904 of Regulation S,
as applicable;
(iv) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act;
(v) we have advised the transferee of the transfer restrictions applicable
to the Securities; and
(vi) if the circumstances set forth in Rule 904(b) under the Securities
Act are applicable, we have complied with the additional conditions
therein, including (if applicable) sending a confirmation or other notice
stating that the Securities may be offered and sold during the
distribution compliance period specified in Rule 903 of Regulation S;
pursuant to
18
registration of the Securities under the Securities Act; or pursuant to an
available exemption from the registration requirements under the
Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to register
any of the Securities evidenced by this certificate in the name of any
person other than the registered holder thereof; provided, however, that
if box (3) or (4) is checked, the Trustee shall be entitled to require,
prior to registering any such transfer of the Securities, such legal
opinions, certifications and other information as the Company has
reasonably requested 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 of 1933, such as the exemption provided
by Rule 144 under such Act.
--------------------------------
Signature
Signature Guarantee:
- ---------------------------------- --------------------------------
Signature must be guaranteed Signature
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
- --------------------------------------------------------------------------------
TO BE COMPLETED BY PURCHASER IF (1) ABOVE IS CHECKED.
19
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
Dated:
--------------------- ----------------------------------
NOTICE: To be executed by an
executive officer
20
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have
been made:
Date of Amount of Amount of Principal Signature of
Exchange decrease in increase in amount of authorized
Principal Principal this Global officer of
amount of amount of Security Trustee or
this this following Securities
Global Global such Custodian
Security Security decrease or
increase
- -------- ----------- ----------- ----------- ------------
21
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.06, 4.09 or 4.10 of the Indenture, check the box:
[ ]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.06, 4.09 or 4.10 of the Indenture, state the
amount in principal amount: $
Date: Your Signature:
------------------ ----------------------------
(Sign exactly as your name
appears on the other side
of this Security.)
Signature Guarantee:
---------------------------------------------------------
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
EXHIBIT A
FORM OF FACE OF EXCHANGE SECURITY
OR PRIVATE EXCHANGE SECURITY* **
[OID Legend]
FOR PURPOSES OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED (THE "CODE"), THIS SECURITY HAS ORIGINAL ISSUE DISCOUNT. FOR PURPOSES
OF SECTION 1273 OF THE CODE, THE ISSUE PRICE IS $961.81 AND THE AMOUNT OF
ORIGINAL ISSUE DISCOUNT IS $38.19, IN EACH CASE PER $1,000 PRINCIPAL AMOUNT OF
THIS SECURITY. FOR PURPOSES OF SECTION 1275 OF THE CODE, THE ISSUE DATE OF THIS
SECURITY IS JUNE 28, 2002. FOR PURPOSES OF SECTION 1272 OF THE CODE, THE YIELD
TO MATURITY (COMPOUNDED SEMI-ANNUALLY) IS 12%.
- --------
*. If the Security is to be issued in global form add the Global Securities
Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1
captioned "TO BE ATTACHED TO GLOBAL SECURITIES - SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY".
**. If the Security is a Private Exchange Security issued in a Private Exchange
to an Initial Purchaser holding an unsold portion of its initial allotment, add
the Restricted Securities Legend from Exhibit 1 to Appendix A and replace the
Assignment Form included in this Exhibit A with the Assignment Form included in
such Exhibit 1.
2
No. CUSIP No.
-------------- -----------
$
----------
11 1/4% Senior Subordinated Note due 2010
Buffets, Inc, a Minnesota corporation, promises to pay to
__________, or registered assigns, the principal sum of ____________________
Dollars on July 15, 2010.
Interest Payment Dates: January 15 and July 15, commencing January
15, 2003.
Record Dates: January 1 and July 1.
Additional provisions of this Security are set forth on the other
side of this Security.
Dated:
BUFFETS, INC.
by
-----------------------
Name:
Title:
by
-----------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
U.S. BANK NATIONAL ASSOCIATION
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by
--------------------------------------
Authorized Signatory
3
FORM OF REVERSE SIDE OF EXCHANGE SECURITY
OR PRIVATE EXCHANGE SECURITY
11 1/4% Senior Subordinated Note due 2010
1. Interest
Buffets, Inc., a Minnesota corporation (such corporation, and its
successors and assigns under the Indenture hereinafter referred to, being herein
called the "Company"), promises to pay interest on the principal amount of this
Security at the rate per annum shown above; [provided, however, that if a
Registration Default (as defined in the Registration Rights Agreement applicable
to this Security) occurs, additional interest will accrue on this Security at a
rate of 0.25% per annum (increasing by an additional 0.25% per annum after each
consecutive 90-day period that occurs after the date on which such Registration
default occurs up to a maximum additional interest rate of 1.5%) from and
including the date on which any such Registration Default shall occur to but
excluding the date on which all Registration Defaults have been cured***.] The
Company will pay interest semiannually on January 15 and July 15 of each year,
commencing January 15, 2003. Interest on the Securities will accrue from [insert
last interest payment date on which interest was paid on the Initial Securities
or, if no interest has been paid on the Initial Securities, insert the date of
the original issue of the Initial Securities]. Interest will be computed on the
basis of a 360-day year of twelve 30-day months. The Company will
- ----------
***. Insert if at the date of issuance of the Exchange Security or Private
Exchange Security (as the case may be) any Registration Default has occurred
with respect to the related Initial Securities during the interest period in
which such date of issuance occurs.
4
pay interest on overdue principal at the above rate and will pay interest on
overdue installments of interest at such rate to the extent lawful.
2. Method of Payment
The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the January 1 or July 1 next preceding the interest payment date
even if Securities are canceled after the record date and on or before the
interest payment date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company will pay principal and interest in money
of the United States that at the time of payment is legal tender for payment of
public and private debts. Payments in respect of the Securities represented by a
Global Security (including principal, premium, if any, and interest) will be
made by wire transfer of immediately available funds to the accounts specified
by [Name of Depository]. The Company will make all payments in respect of a
certificated Security (including principal, premium, if any, and interest) by
mailing a check to the registered address of each Holder thereof; provided,
however, that payments on a certificated Security will be made by wire transfer
to a U.S. dollar account maintained by the payee with a bank in the United
States if such Holder elects payment by wire transfer by giving written notice
to the Trustee or the Paying Agent to such effect designating such account no
later than 30 days immediately preceding the relevant due date for payment (or
such other date as the Trustee may accept in its discretion).
3. Paying Agent and Registrar
Initially, U.S. Bank National Association (the "Trustee") will act
as Paying Agent and Registrar. The Company may appoint and change any Paying
Agent, Registrar or co-registrar without notice. The Company or any of its
domestically incorporated or organized Wholly Owned Subsidiaries may act as
Paying Agent, Registrar or co-registrar.
5
4. Indenture
The Company issued the Securities under an Indenture dated as of
June 28, 2002 ("Indenture"), among the Company, the Subsidiary Guarantors and
the 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 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the Indenture
(the "Act"). Terms defined in the Indenture and not defined herein have the
meanings ascribed thereto in the Indenture. The Securities are subject to all
such terms, and Securityholders are referred to the Indenture and the Act for a
statement of those terms.
The Securities are general unsecured obligations of the Company. The
Company shall be entitled, subject to its compliance with Section 4.03 of the
Indenture, to issue Additional Securities pursuant to Section 2.13 of the
Indenture. The Initial Securities issued on the Issue Date, any Additional
Securities and all Exchange Securities or Private Exchange Securities issued in
exchange therefor will be treated as a single class for all purposes under the
Indenture. The Indenture contains covenants that limit the ability of the
Company and its subsidiaries to incur additional indebtedness; pay dividends or
distributions on, or redeem or repurchase capital stock; make investments; issue
or sell capital stock of subsidiaries; engage in transactions with affiliates;
transfer or sell assets; guarantee indebtedness; restrict dividends or other
payments of subsidiaries; and consolidate, merge or transfer all or
substantially all of its assets and the assets of its subsidiaries. These
covenants are subject to important exceptions and qualifications.
5. Optional Redemption
Except as set forth below, the Company shall not be entitled to
redeem the Securities at its option prior to July 15, 2006.
On and after July 15, 2006, the Company shall be entitled at its
option to redeem all or a portion of the Securities upon not less than 30 nor
more than 60 days' notice, at the redemption prices (expressed in percentages of
principal amount), plus accrued interest to the redemption date (subject to the
right of Holders of record
6
on the relevant record date to receive interest due on the relevant interest
payment date), if redeemed during the 12-month period commencing on July 15 of
the years set forth below:
Redemption
Period Price
------ -----
2006 105.625%
2007 103.750%
2008 101.875%
2009 and thereafter 100.000%
In addition, prior to July 15, 2005, the Company shall be entitled
at its option to redeem Securities (which includes Additional Securities, if
any) in an aggregate principal amount not to exceed 35% of the aggregate
principal amount of the Securities (which includes Additional Securities, if
any) originally issued at a redemption price (expressed as a percentage of
principal amount) of 111.25%, plus accrued and unpaid interest to the redemption
date, with the net cash proceeds, to the extent actually received by the
Company, from an Initial Public Equity Offering (provided, however, that if the
Initial Public Equity Offering is an offering by Parent, a portion of the Net
Cash Proceeds thereof equal to the amount required to redeem any such Notes is
contributed to the equity capital of the Company or used to acquire from the
Company Capital Stock (other than Disqualified Stock) of the Company); provided,
however, that (1) at least 65% of such aggregate principal amount of Securities
(which includes Additional Securities, if any) remains outstanding immediately
after the occurrence of the redemption (other than Securities held, directly or
indirectly, by the Company or its Affiliates); and (2) the redemption occurs
within 60 days after the date of the Initial Public Equity Offering.
7
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each Holder of Securities to be
redeemed at its registered address. Securities in denominations larger than
$1,000 principal amount may be redeemed in part but only in whole multiples of
$1,000. If money sufficient to pay the redemption price of and accrued interest
on all Securities (or portions thereof) to be redeemed on the redemption date is
deposited with the Paying Agent on or before the redemption date and certain
other conditions are satisfied, on and after such date interest ceases to accrue
on such Securities (or such portions thereof) called for redemption.
7. Put Provisions
Upon a Change of Control, any Holder of Securities will have the
right to cause the Company to repurchase the Securities of such Holder at a
repurchase price equal to 101% of the principal amount of the Securities to be
repurchased plus accrued interest to the date of repurchase (subject to the
right of holders of record on the relevant record date to receive interest due
on the related interest payment date) as provided in, and subject to the terms
of, the Indenture.
Under certain circumstances as set forth in the Indenture, the
Company will be required to offer to purchase Securities with the Net Available
Cash from Asset Dispositions.
As provided in, and subject to the terms of, the Indenture, within
30 days after the consummation of an Initial Public Equity Offering prior to
July 15, 2005, the Company will be required to offer to purchase such aggregate
principal amount of Securities as may be purchased with funds equal in amount to
50% of the Net Cash Proceeds received by the Company or Parent from such Initial
Public Equity Offering at a purchase price of 111.25% of the aggregate principal
amount of the Securities, plus accrued and unpaid interest, if any, to the date
of purchase (subject to the right of holders of record on the relevant record
date to receive interest due on the related interest payment date); provided,
however, that in no event will the Company be required to make an offer to
purchase more than $80.5 million aggregate principal amount of the Securities.
8
8. Subordination
The Securities are subordinated to Senior Indebtedness of the
Company, as defined in the Indenture. To the extent provided in the Indenture,
Senior Indebtedness of the Company must be paid before the Securities may be
paid. The Company agrees, and each Securityholder by accepting a Security
agrees, to the subordination provisions contained in the Indenture and
authorizes the Trustee to give it effect and appoints the Trustee as
attorney-in-fact for such purpose.
9. Guaranty
The payment by the Company of the principal of, and premium and
interest on, the Securities is fully and unconditionally guaranteed on a joint
and several senior subordinated basis by each of the Subsidiary Guarantors.
10. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of $1,000 principal amount and whole multiples of $1,000. A Holder
may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not register the transfer of
or exchange any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or any Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.
11. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner
of it for all purposes.
9
12. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
13. Discharge and Defeasance
Subject to certain conditions set forth in the Indenture, the
Company at any time shall be entitled to terminate some or all of its
obligations under the Securities and the Indenture if the Company deposits with
the Trustee money or U.S. Government Obligations for the payment of principal
and interest on the Securities to redemption or maturity, as the case may be.
14. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture and the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the Securities
and (ii) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount outstanding of
the Securities. Subject to certain exceptions set forth in the Indenture,
without the consent of any Securityholder, the Company, the Subsidiary
Guarantors and the Trustee shall be entitled to amend the Indenture or the
Securities to cure any ambiguity, omission, defect or inconsistency, or to
comply with Article 5 of the Indenture, or to provide for uncertificated
Securities in addition to or in place of certificated Securities, or to add
guarantees with respect to the Securities, including Subsidiary Guaranties, or
to secure the Securities, or to add additional covenants or surrender rights and
powers conferred on the Company or the Subsidiary Guarantors, or to comply with
any request of the SEC in connection with qualifying the Indenture under the
Act, or to make any change that does not adversely affect the rights of any
Securityholder.
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15. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for 30
days in payment of interest on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon redemption pursuant to paragraph 5
of the Securities, upon acceleration or otherwise, or failure by the Company to
redeem or purchase Securities when required; (iii) failure by the Company or any
Subsidiary Guarantors to comply with other agreements in the Indenture or the
Securities, in certain cases subject to notice and lapse of time; (iv) certain
accelerations (including failure to pay within any grace period after final
maturity) of other Indebtedness of the Company or any Significant Subsidiary if
the amount accelerated (or so unpaid) exceeds $10 million; (v) certain events of
bankruptcy or insolvency with respect to the Company, a Subsidiary Guarantor
and the Significant Subsidiaries; (vi) certain judgments or decrees for the
payment of money, the portion of which not covered by insurance exceeding $10
million and (vii) certain defaults with respect to Subsidiary Guaranties. If an
Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the Securities may declare all the Securities
to be due and payable immediately. Certain events of bankruptcy or insolvency
are Events of Default which will result in the Securities being due and payable
immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Securities unless it receives indemnity or security
satisfactory to it. Subject to certain limitations, Holders of a majority in
principal amount of the Securities may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Securityholders notice of any
continuing Default (except a Default in payment of principal or interest) if it
determines that withholding notice is not opposed to the interest of the
Holders.
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16. Trustee Dealings with the Company
Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may other wise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
17. No Recourse Against Others
A director, officer, employee, incorporator or stockholder, as such,
of the Company or any Subsidiary Guarantor or the Trustee shall not have any
liability for any obligations of the Company or any Subsidiary Guarantor under
the Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Securities.
18. Authentication
This Security shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
19. Abbreviations
Customary abbreviations may be used in the name of a Securityholder
or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
20. CUSIP Numbers
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Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
[21. Holders' Compliance with Registration Rights Agreement.
Each Holder of a Security, by acceptance hereof, acknowledges and
agrees to the provisions of the Registration Rights Agreement applicable to this
Security, including the obligations of the Holders with respect to a
registration and the indemnification of the Company to the extent provided
therein.]*
22. Governing Law.
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
The Company will furnish to any Securityholder upon written request
and without charge to the Securityholder a copy of the Indenture which has in it
the text of this Security. Requests may be made to:
Buffets, Inc.
1460 Buffets Way
Eagan, MN 55121
Attention: General Counsel
- ----------
*. Delete if this Security is not being issued in exchange for an Initial
Security.
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ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to
transfer this Security on the books of the Company. The agent may substitute
another to act for him.
- --------------------------------------------------------------------------------
Date: Your Signature:
------------------- -----------------------------
- --------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.06, 4.09 or 4.10 of the Indenture, check the box:
[ ]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.06, 4.09 or 4.10 of the Indenture, state the
amount in principal amount: $
Date: Your Signature:
------------- ----------------------------
(Sign exactly as your name
appears on the other side
of this Security.)
Signature Guarantee:
-----------------------------------------------------------
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.