1
Exhibit 4.1
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AMSCAN HOLDINGS, INC.
as Issuer
and
THE GUARANTORS NAMED HEREIN
as Guarantors
TO
IBJ SCHRODER BANK & TRUST COMPANY
as Trustee
------------
Indenture
Dated as of December 19, 1997
------------
$200,000,000
9.875% SENIOR SUBORDINATED NOTES DUE 2007
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CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310(a)(1)......................................... 7.10
(a)(2)............................................ 7.10
(a)(3)............................................ N.A.
(a)(4)............................................ N.A.
(a)(5)............................................ 7.10
(b)............................................... 7.10
(c)............................................... N.A.
311(a)............................................ 7.11
(b)............................................... 7.11
(c)............................................... N.A.
312(a)............................................ 2.05
(b)............................................... 12.03
(c)............................................... 12.03
313(a)............................................ 7.06
(b)(1)............................................ 9.03
(b)(2)............................................ 7.06; 7.07
(c)............................................... 7.06; 12.02
(d)............................................... 7.06
314(a)............................................ 4.03; 12.02
(b)............................................... 9.02
(c)(1)............................................ 12.04
(c)(2)............................................ 12.04
(c)(3)............................................ N.A.
(d)............................................... 9.03-9.05
(e)............................................... 12.05
(f)............................................... N.A.
315(a)............................................ 7.01
(b)............................................... 7.05; 12.02
(c) ............................................. 7.01
(d)............................................... 7.01
(e)............................................... 6.11
316(a)(last sentence)............................. 2.09
(a)(1)(A)......................................... 6.05
(a)(1)(B)......................................... 6.04
(a)(2)............................................ N.A.
(b)............................................... 6.07
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(c)............................................... 2.12
317(a)(1)......................................... 6.08
(a)(2)............................................ 6.09
(b) .............................................. 2.04
318(a)............................................ 12.01
(b)............................................... N.A.
(c)............................................... 12.01
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N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
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TABLE OF CONTENTS
Page
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ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions.................................... 1
Section 1.02 Other Definitions.............................. 20
Section 1.03 Incorporation by Reference of Trust
Indenture Act................................ 21
Section 1.04 Rules of Construction.......................... 22
ARTICLE 2
THE SENIOR SUBORDINATED NOTES
Section 2.01 Form and Dating................................ 22
Section 2.02 Execution and Authentication................... 24
Section 2.03 Registrar and Paying Agent..................... 26
Section 2.04 Paying Agent to Hold Money in Trust............ 26
Section 2.05 Holder Lists................................... 27
Section 2.06 Transfer and Exchange.......................... 27
Section 2.07 Replacement Senior Subordinated Notes.......... 35
Section 2.08 Outstanding Senior Subordinated Notes.......... 36
Section 2.09 Treasury Senior Subordinated Notes............. 36
Section 2.10 Temporary Senior Subordinated Notes............ 37
Section 2.11 Cancellation................................... 37
Section 2.12 Defaulted Interest; Notice of Liquidated Damages 37
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee............................. 38
Section 3.02 Selection of Senior Subordinated Notes
to Be Redeemed............................... 38
Section 3.03 Notice of Redemption........................... 39
Section 3.04 Effect of Notice of Redemption................. 40
Section 3.05 Deposit of Redemption Price.................... 40
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Section 3.06 Senior Subordinated Notes Redeemed in Part..... 40
Section 3.07 Optional Redemption............................ 41
Section 3.08 Mandatory Redemption........................... 42
Section 3.09 Offer to Purchase by Application
of Excess Proceeds........................... 42
ARTICLE 4
COVENANTS
Section 4.01 Payment of Senior Subordinated Notes........... 44
Section 4.02 Maintenance of Office or Agency................ 45
Section 4.03 Reports........................................ 45
Section 4.04 Compliance Certificate......................... 46
Section 4.05 Taxes.......................................... 47
Section 4.06 Stay, Extension and Usury Laws................. 47
Section 4.07 Restricted Payments............................ 47
Section 4.08 Dividend and Other Payment Restrictions
Affecting Subsidiaries....................... 50
Section 4.09 Incurrence of Indebtedness and Issuance
of Disqualified Stock........................ 51
Section 4.10 Asset Sales.................................... 53
Section 4.11 Transactions with Affiliates................... 55
Section 4.12 Liens.......................................... 57
Section 4.13 Offer to Repurchase Upon Change
of Control................................... 57
Section 4.14 Issuances of Guarantees of Indebtedness........ 59
Section 4.15 Corporate Existence............................ 59
Section 4.16 No Senior Subordinated Debt.................... 60
ARTICLE 5
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of
All or Substantially All Assets.............. 60
Section 5.02 Successor Corporation Substituted.............. 61
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ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.............................. 61
Section 6.02 Acceleration................................... 64
Section 6.03 Other Remedies................................. 64
Section 6.04 Waiver of Past Defaults........................ 65
Section 6.05 Control by Majority............................ 65
Section 6.06 Limitation on Suits............................ 65
Section 6.07 Rights of Holders of Senior Subordinated
Notes to Receive Payment..................... 66
Section 6.08 Collection Suit by Trustee..................... 66
Section 6.09 Trustee May File Proofs of Claim............... 66
Section 6.10 Priorities..................................... 67
Section 6.11 Undertaking for Costs.......................... 68
ARTICLE 7
TRUSTEE
Section 7.01 Duties of Trustee.............................. 68
Section 7.02 Rights of Trustee.............................. 69
Section 7.03 Individual Rights of Trustee................... 70
Section 7.04 Trustee's Disclaimer........................... 70
Section 7.05 Notice of Defaults............................. 70
Section 7.06 Reports by Trustee to Holders of the
Senior Subordinated Notes.................... 71
Section 7.07 Compensation and Indemnity..................... 71
Section 7.08 Replacement of Trustee......................... 72
Section 7.09 Successor Trustee by Merger, etc............... 73
Section 7.10 Eligibility; Disqualification.................. 74
Section 7.11 Preferential Collection of Claims Against Company 74
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or
Covenant Defeasance.......................... 74
Section 8.02 Legal Defeasance and Discharge................. 74
Section 8.03 Covenant Defeasance............................ 75
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Section 8.04 Conditions to Legal or Covenant Defeasance..... 76
Section 8.05 Deposited Money and Government
Securities to be Held in Trust;
Other Miscellaneous Provisions............... 77
Section 8.06 Repayment to Company........................... 78
Section 8.07 Reinstatement.................................. 78
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Senior
Subordinated Notes........................... 79
Section 9.02 With Consent of Holders of Senior
Subordinated Notes........................... 80
Section 9.03 Compliance with Trust Indenture Act............ 82
Section 9.04 Revocation and Effect of Consents.............. 82
Section 9.05 Notation on or Exchange of Senior
Subordinated Notes........................... 82
Section 9.06 Trustee to Sign Amendments, etc................ 82
ARTICLE 10
SUBORDINATION
Section 10.01 Agreement to Subordinate....................... 83
Section 10.02 Certain Definitions............................ 83
Section 10.03 Liquidation; Dissolution; Bankruptcy........... 84
Section 10.04 Default on Designated Senior Debt.............. 85
Section 10.05 Acceleration of Senior Subordinated Notes...... 86
Section 10.06 When Distribution Must Be Paid Over............ 86
Section 10.07 Notice by Company.............................. 87
Section 10.08 Subrogation.................................... 87
Section 10.09 Relative Rights................................ 88
Section 10.10 Subordination May Not Be Impaired by
Company..................................... 88
Section 10.11 Distribution or Notice to Representative....... 89
Section 10.12 Rights of Trustee and Paying Agent............. 89
Section 10.13 Authorization to Effect Subordination.......... 90
Section 10.14 Amendments..................................... 90
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ARTICLE 11
SENIOR SUBORDINATED GUARANTEES
Section 11.01 Senior Subordinated Guarantees................. 90
Section 11.02 Subordination of Senior Subordinated
Guarantee.................................... 92
Section 11.03 Limitation on Guarantor Liability.............. 92
Section 11.04 Execution and Delivery of Senior
Subordinated Guarantees...................... 92
Section 11.05 Guarantors May Consolidate, etc.,
on Certain Terms............................. 93
Section 11.06 Releases of Senior Subordinated Guarantees..... 94
Section 11.07 "Trustee" to Include Paying Agent.............. 95
ARTICLE 12
MISCELLANEOUS
Section 12.01 Trust Indenture Act Controls................... 95
Section 12.02 Notices........................................ 95
Section 12.03 Communication by Holders of Senior Subordinated
Notes with Other Holders of Senior
Subordinated Notes........................... 96
Section 12.04 Certificate and Opinion as to Conditions
Precedent.................................... 97
Section 12.05 Statements Required in Certificate
or Opinion................................... 97
Section 12.06 Rules by Trustee and Agents.................... 98
Section 12.07 No Personal Liability of Directors,
Officers, Employees and Stockholders......... 98
Section 12.08 Governing Law.................................. 98
Section 12.09 No Adverse Interpretation of Other
Agreements................................... 98
Section 12.10 Successors..................................... 98
Section 12.11 Severability................................... 98
Section 12.12 Counterpart Originals.......................... 98
Section 12.13 Table of Contents, Headings, etc............... 98
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EXHIBITS
Exhibit A-1 FORM OF SENIOR SUBORDINATED NOTE
Exhibit B-1 FORM OF CERTIFICATE OF EXCHANGE OR REGISTRATION OF
TRANSFER FROM RULE 144A GLOBAL NOTE TO REGULATION S
GLOBAL NOTE
Exhibit B-2 FORM OF CERTIFICATE OF EXCHANGE OR REGISTRATION OF
TRANSFER FROM REGULATION S GLOBAL NOTE TO RULE 144A
GLOBAL NOTE
Exhibit B-3 FORM OF CERTIFICATE OF EXCHANGE OR REGISTRATION OF
TRANSFER OF CERTIFICATED NOTES
Exhibit B-4 FORM OF UNRESTRICTED NOTE CERTIFICATE
Exhibit C GUARANTORS
Exhibit D FORM OF SENIOR SUBORDINATED GUARANTEE
Exhibit E FORM OF SUPPLEMENTAL INDENTURE
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INDENTURE dated as of December 19, 1997 among Amscan Holdings, Inc., a
Delaware corporation (the "Company"), each of the Persons listed on Exhibit C
hereto (each, a "Guarantor" and, collectively, the "Guarantors") and IBJ
Schroder Bank & Trust Company, as trustee (the "Trustee").
RECITALS OF THE COMPANY AND THE GUARANTORS
The Company has duly authorized the creation of an issue of its 9.875%
Senior Subordinated Notes Due 2007 (herein called the "Senior Subordinated
Notes") of substantially the tenor and amount hereinafter set forth, and to
provide therefor the Company has duly authorized the execution and delivery of
this Indenture. Senior Subordinated Notes may consist of any or all of the
Senior Subordinated Notes sold pursuant to Rule 144A or Regulation S or Exchange
Notes, each as defined herein. The Senior Subordinated Notes sold pursuant to
Rule 144A Securities and Regulation S and Exchange Notes shall rank pari passu
with each other.
The Company and the Guarantors are members of the same consolidated
group of companies and are engaged in related businesses and the Guarantors will
derive direct and indirect economic benefit from the issuance of the Senior
Subordinated Notes; accordingly, the Guarantors have each duly authorized the
execution and delivery of this Indenture to provide for the Senior Subordinated
Guarantee (as hereinafter defined) by each of them with respect to the Senior
Subordinated Notes as set forth in this Indenture.
All things necessary to make the Senior Subordinated Notes with Senior
Subordinated Guarantees endorsed thereon, when executed by the Company and the
Guarantors, respectively, and authenticated and delivered hereunder and duly
issued by the Company and the Guarantors, the valid obligations of the Company
and the Guarantors, and to make this Indenture a valid agreement of the Company
and the Guarantors, in accordance with their and its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Senior
Subordinated Notes with the Senior Subordinated Guarantees of the Guarantors
endorsed thereon by the Holders thereof, it is mutually agreed, for the equal
and proportionate benefit of all Holders of the Senior Subordinated Notes, as
follows:
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ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions. "Accrued Bankruptcy Interest" has the meaning
set forth in Section 10.02 hereof.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Restricted Subsidiary of such specified Person,
including, without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Restricted Subsidiary of such specified Person, and (ii) Indebtedness secured by
a Lien encumbering any asset acquired by such specified Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling", "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Agent Members" means any member of, or participant in, the Depositary.
"Agreement and Plan of Merger" means the Agreement and Plan of Merger,
dated August 10, 1997, between the Company and Confetti Acquisition, Inc.
"Applicable Premium" means, with respect to a Senior Subordinated Note,
the greater of (i) 1.0% of the then outstanding principal amount of such Senior
Subordinated Note and (ii)(a) the present value of all remaining required
interest and principal payments due on such Senior Subordinated Note and all
premium payments relating thereto assuming a redemption date of December 15,
2002, computed using a discount rate equal to the Treasury Rate plus 50 basis
points minus (b) the then outstanding principal amount of such Senior
Subordinated Note minus (c) accrued interest thereon paid on the redemption
date.
"Applicable Procedures" means, with respect to any transfer or exchange
of beneficial interests in a Global Note, the rules and procedures of the
Depositary, Euroclear and Cedel Bank that are applicable to such transfer or
exchange.
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"Asset Sale" means: (i) the sale, conveyance, transfer or other
disposition (whether in a single transaction or a series of related
transactions) of property or assets (including by way of a sale and leaseback)
of the Company or any Restricted Subsidiary (each referred to in this definition
as a "disposition") or (ii) the issuance or sale of Equity Interests of any
Restricted Subsidiary (whether in a single transaction or a series of related
transactions), in each case, other than: (a) a disposition of Cash Equivalents
or goods held for sale in the ordinary course of business or obsolete equipment
or other obsolete assets in the ordinary course of business consistent with past
practices of the Company; (b) the disposition of all or substantially all of the
assets of the Company in a manner permitted pursuant to the provisions of
Section 5.01 hereof or any disposition that constitutes a Change of Control
pursuant to this Indenture; (c) any disposition that is a Restricted Payment or
Permitted Investment that is permitted pursuant to Section 4.07 hereof; (d) any
individual disposition or series of related dispositions, of assets with an
aggregate fair market value of less than $2.5 million; (e) any sale of an Equity
Interest in, or Indebtedness or other securities of, an Unrestricted Subsidiary;
and (f) foreclosures on assets.
"Bank Credit Agreement" means one or more credit agreements to be
entered into by and among the Company and the financial institutions party
thereto providing a portion of the financing for the Transaction, as well as
financing for the Company's ongoing requirements, including any related notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended, modified, renewed, refunded,
refinanced or replaced (in whole or in part) from time to time.
"Bankruptcy Law" has the meaning set forth in Section 10.02 hereof.
"Board of Directors" means the Board of Directors of the Company or any
duly authorized committee of that Board of Directors.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination thereof
is to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership, partnership interests
(whether general or limited) and (iv) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person (but excluding customary
employee incentive
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or bonus arrangements, and customary earn-out provisions granted in connection
with acquisition transactions and providing for aggregate payouts not in excess
of $5 million per year).
"Cash Equivalents" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof, (iii) certificates of
deposit and eurodollar time deposits with maturities of one year or less from
the date of acquisition, bankers' acceptances with maturities not exceeding one
year and overnight bank deposits, in each case with any domestic bank having
capital and surplus in excess of $500 million and a Keefe Bank Watch Rating of
"B" (or the equivalent rating under a substantially similar ratings system if
Keefe Bank Watch Ratings are no longer published) or better, (iv) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clauses (ii) and (iii) above entered into with any
financial institution meeting the qualifications specified in clause (iii) above
and (v) commercial paper having the highest rating obtainable from Moody's
Investors Service, Inc. or Standard & Poor's Corporation (or in their absence,
an equivalent rating from another nationally recognized securities rating
agency) and in each case maturing within one year after the date of acquisition.
"Cedel Bank" means Cedel Bank, societe anonyme.
"Certificated Notes" means Senior Subordinated Notes that are in the
form of the Senior Subordinated Notes attached hereto as Exhibit A-1, that do
not include the information called for by footnotes 1 and 4 thereof.
"Change of Control" means the occurrence of any of the following:
(a) the sale, lease, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of
transactions, of all or substantially all of the assets of the Company
and its Restricted Subsidiaries, taken as a whole, to any "person" (as
such term is used in Section 13(d)(3) of the Exchange Act) other than
the Permitted Holders and their Related Parties;
(b) the Company becomes aware (by way of a report or any other
filing pursuant to Section 13(d) of the Exchange Act, proxy, vote,
written notice or otherwise) of the acquisition by any Person or group
(within the meaning of Section 13(d)(3) or Section 14(d)(2) of the
Exchange Act, or any successor provision), including any group acting
for the purpose of acquiring, holding or disposing of securities (within
the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than the
Permitted Holders or any of their Related Parties, in a single
transaction or in a related series of transactions, by way of merger,
consolidation or other business combination or purchase of beneficial
ownership (within the meaning of Rule 13d-3
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under the Exchange Act, or any successor provision) of 50% or more of
the aggregate voting power of the Voting Stock of the Company, and such
Person or group beneficially owns Voting Stock having greater aggregate
voting power than the Permitted Holders and their Related Parties; or
(c) a majority of the members of the Board of Directors of the
Company cease to be Continuing Directors.
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period plus (i) an
amount equal to any extraordinary loss plus any net loss realized in connection
with an Asset Sale (to the extent such losses were deducted in computing such
Consolidated Net Income), plus (ii) provision for taxes based on income or
profits of such Person and its Restricted Subsidiaries for such period, to the
extent that such provision for taxes was deducted in computing such Consolidated
Net Income, plus (iii) consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued and whether or
not capitalized (including, without limitation, amortization of original issue
discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capital Lease Obligations, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance financings, and
net payments (if any) pursuant to Hedging Obligations), to the extent that any
such expense was deducted in computing such Consolidated Net Income, plus (iv)
depreciation, amortization (including amortization of goodwill and other
intangibles but excluding amortization of prepaid cash operating expenses that
were paid in a prior period) and other non-cash charges of such Person and its
Restricted Subsidiaries for such period to the extent that such depreciation,
amortization and other non-cash charges were deducted in computing such
Consolidated Net Income, minus (v) cash outlays that were made by such Person or
any of its Restricted Subsidiaries during such period in respect of any item
that was reflected as a non-cash charge in a prior period, provided that such
non-cash charge was added to Consolidated Net Income in determining Consolidated
Cash Flow for such prior period.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that (i) the Net Income (but not loss) for such period of
any Person that is not a Restricted Subsidiary or that is accounted for by the
equity method of accounting shall be included only to the extent of the amount
of dividends or distributions paid in cash to the referent Person or a
Wholly-Owned Restricted Subsidiary thereof, (ii) the Net Income of any
Restricted Subsidiary shall be excluded to the extent that the declaration or
payment of dividends or similar distributions by that Restricted Subsidiary of
that Net Income is not at the date of determination permitted
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without any prior governmental approval (that has not been obtained) or,
directly or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Restricted Subsidiary or its stockholders, (iii)
the Net Income of any Person acquired in a pooling of interests transaction for
any period prior to the date of such acquisition shall be excluded, (iv) the
cumulative effect of a change in accounting principles shall be excluded and (v)
the Net Income of any Unrestricted Subsidiary shall be excluded, whether or not
distributed to the Company or one of its Restricted Subsidiaries.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors who (i) was a member of such Board of Directors
on the date of this Indenture or (ii) was nominated for election or elected to
such Board of Directors with, or whose election to such Board of Directors was
approved by, the affirmative vote of a majority of the Continuing Directors who
were members of such Board of Directors at the time of such nomination or
election or (iii) is any designee of the Permitted Holders or their Affiliates
or was nominated by the Permitted Holders or their Affiliates or any designees
of the Permitted Holders or their Affiliates on the Board of Directors.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 12.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"Depositary" means, with respect to the Senior Subordinated Notes
issuable or issued in whole or in part in global form, the Person specified in
Section 2.03 hereof as the Depositary with respect to the Senior Subordinated
Notes, until a successor shall have been appointed and become such pursuant to
the applicable provision of this Indenture, and, thereafter, "Depositary" shall
mean or include such successor.
"Designated Senior Debt" has the meaning set forth in Section 10.02
hereof.
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to the date
on which the Senior Subordinated Notes mature.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
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"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
Office, as operator of the Euroclear System.
"Event of Default" has the meaning set forth in Section 6.01 hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Note" means any Senior Subordinated Note (i) issued in
exchange for a Transfer Restricted Security or Transfer Restricted Securities
pursuant to an Exchange Offer, or (ii) otherwise issued in a transaction
registered under the Securities Act, whether pursuant to a Resale Registration
Statement or otherwise pursuant to the Registration Rights Agreement and any
Senior Subordinated Note with respect to which the predecessor Senior
Subordinated Note was an Exchange Note.
"Exchange Offer" means the offer that may be made by the Company
pursuant to an effective registration statement under the Securities Act to
exchange Exchange Notes for Transfer Restricted Securities.
"Exchange Registration Statement" means a registration statement of the
Company under the Securities Act registering Exchange Notes for distribution
pursuant to the Exchange Offer.
"Excludable Current Liabilities" means, with respect to the
consideration received by the Company in connection with any Asset Sale, (i)
each trade payable incurred in the ordinary course of business of the Company or
any Restricted Subsidiary, (ii) each current liability that is in an amount less
than $50,000 on an individual basis, and (iii) each liability due within 90 days
of the date of consummation of such Asset Sale, in the case of each of clauses
(i) through (iii), that is assumed by the transferee of the assets that are
subject to such Asset Sale pursuant to customary assumption provisions.
"Existing Indebtedness" means Indebtedness of the Company and its
Restricted Subsidiaries (other than Indebtedness under the Bank Credit
Agreement) in existence on the date of this Indenture, until such amounts are
repaid.
"Fixed Charge Coverage Ratio" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person and its
Restricted Subsidiaries for such period to the Fixed Charges of such Person and
its Restricted Subsidiaries for such period. In the event that the Company or
any of its Restricted Subsidiaries incurs, assumes, Guarantees or redeems any
Indebtedness (other than revolving credit borrowings) or issues Preferred Stock
subsequent to the commencement of the period for which the Fixed Charge
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Coverage Ratio is being calculated but on or prior to the date on which the
event for which the calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated
giving pro forma effect to such incurrence, assumption, Guarantee or redemption
of Indebtedness, or such issuance or redemption of Preferred Stock, as if the
same had occurred at the beginning of the applicable four-quarter reference
period.
In calculating the Fixed Charge Coverage Ratio, acquisitions will be
given pro forma effect as follows:
(i) (A) acquisitions that have been made or are being made by the
Company or any of its Restricted Subsidiaries during the four-quarter
reference period or subsequent to such reference period and on or prior to the
Calculation Date (including through mergers or consolidations and including
any related financing transactions) shall be deemed to have occurred on the
first day of the four-quarter reference period, and
(B) for purposes of determining the pro forma effects of any such
acquisition, Consolidated Cash Flow shall be increased to reflect the
annualized amount of any cost savings expected by the Company to be realized
in connection with such acquisition (from steps to be taken not later than the
first anniversary of such acquisition, and without reduction for any
non-recurring charges expected in connection with such acquisition), as set
forth in an Officers' Certificate signed by the Company's chief executive and
chief financial officers (which shall be determinative of such matters) which
states (x) the amount of such increase, (y) that such increase is based on the
reasonable beliefs of the officers executing such Officers' Certificate at the
time of such execution (and that estimates of cost savings from prior
acquisitions have been reevaluated and updated) and (z) that any related
incurrence of Indebtedness is permitted pursuant to Section 4.09.
(ii) Consolidated Cash Flow shall be further increased to reflect the
annualized amount of any cost savings expected by the Company but not yet
realized in respect of any acquisition made by the Company during the four
fiscal quarters immediately preceding the four-quarter reference period prior
to the Calculation Date, to the extent such cost savings are (x) expected to
result from steps taken not later than the first anniversary of the relevant
acquisition and (y) determined and certified as set forth in clause (i) above.
In addition, in calculating the Fixed Charge Coverage Ratio,
discontinued operations will be given pro forma effect as follows:
-8-
18
(1) the Consolidated Cash Flow attributable to discontinued operations,
as determined in accordance with GAAP, and operations or businesses disposed
of on or prior to the Calculation Date, shall be excluded, and
(2) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses disposed of
on or prior to the Calculation Date, shall be excluded, but only to the extent
that the obligations giving rise to such Fixed Charges will not be obligations
of the Company or any of its Restricted Subsidiaries following the Calculation
Date.
"Fixed Charges" means, with respect to any Person for any period, the
sum of (i) the consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued (including, without
limitation, amortization of original issue discount, non-cash interest payments,
the interest component of any deferred payment obligations, the interest
component of all payments associated with Capital Lease Obligations,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financings, and net payments (if any) pursuant
to Hedging Obligations), and (ii) the consolidated interest expense of such
Person and its Restricted Subsidiaries that was capitalized during such period,
and (iii) any interest expense on Indebtedness of another Person that is
Guaranteed by such Person or one of its Restricted Subsidiaries or secured by a
Lien on assets of such Person or one of its Restricted Subsidiaries (whether or
not such Guarantee or Lien is called upon) and (iv) the product of (a) all cash
dividend payments (and non-cash dividend payments in the case of a Person that
is a Restricted Subsidiary) paid to any Person other than the Company or a
Restricted Subsidiary on any series of Preferred Stock of such Person, times (b)
a fraction, the numerator of which is one and the denominator of which is one
minus the then current combined federal, state and local statutory tax rate of
such Person paying the dividend, expressed as a decimal, in each case, on a
consolidated basis and in accordance with GAAP.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the date of this Indenture.
"Global Notes" means, individually and collectively, the Regulation S
Temporary Global Note, the Regulation S Permanent Global Note and the Rule 144A
Global Note.
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"Government Securities" means securities that are (a) direct obligations
of the United States of America for the timely payment of which its full faith
and credit is pledged or (b) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States of America the
timely payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act), as custodian with respect to any such Government Security
or a specific payment of principal of or interest on any such Government
Security held by such custodian for the account of the holder of such depository
receipt; provided, that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of the
Government Security or the specific payment of principal of or interest on the
Government Security evidenced by such depository receipt.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Guarantors" means each Subsidiary of the Company that executes a Senior
Subordinated Guarantee in accordance with the provisions of this Indenture, and,
in each case, their respective successors and assigns, while such Senior
Subordinated Guarantee is outstanding.
"Hedging Obligations" means, with respect to any Person, the obligations
of such Person under (i) currency exchange or interest rate swap agreements,
currency exchange or interest rate cap agreements and currency exchange or
interest rate collar agreements and (ii) other agreements or arrangements
designed to protect such Person against fluctuations in currency exchange or
interest rates.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indebtedness" means, with respect to any Person, any indebtedness of
such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or bankers' acceptances
or representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or representing any Hedging Obligations,
except any such balance that constitutes an accrued expense or trade payable, if
and to the extent any of the foregoing indebtedness (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance sheet
of such Person
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prepared in accordance with GAAP, as well as all indebtedness of others secured
by a Lien on any asset of such Person (whether or not such indebtedness is
assumed by such Person) and, to the extent not otherwise included, the Guarantee
by such Person of any Indebtedness of any other Person.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.
"Independent Financial Advisor" means an accounting, appraisal,
investment banking firm or consultant of nationally recognized standing that is
not an Affiliate of the Company and that is, in the judgment of the Company's
Board of Directors, qualified to perform the task for which it has been engaged.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances (other than cash advances made to suppliers with respect to current or
anticipated purchases of inventory in the ordinary course of business) or
capital contributions (excluding commission, travel and similar advances to
officers and employees made in the ordinary course of business), purchases or
other acquisitions of Indebtedness, Equity Interests or other securities
(directly from the issuer thereof or from third parties) together with all items
that are or would be classified as investments on a balance sheet prepared in
accordance with GAAP; provided that an acquisition of Equity Interests or other
securities by the Company for consideration consisting of common equity
securities of the Company shall not be deemed to be an Investment. If the
Company or any Subsidiary of the Company sells or otherwise disposes of any
Equity Interests of any direct or indirect Subsidiary of the Company such that,
after giving effect to any such sale or disposition, the Company no longer owns,
directly or indirectly, greater than 50% of the outstanding Equity Interests of
such Subsidiary, the Company shall be deemed to have made an Investment on the
date of any such sale or disposition equal to the fair market value of the
Equity Interests of such Subsidiary not sold or disposed of.
"Joint Ventures" means all corporations, partnerships, associations or
other business entities (i) that are engaged in a Principal Business and (ii) of
which 50% of the total voting power of shares of Capital Stock entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the
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21
time owned or controlled, directly or indirectly, by the Company or one or more
Restricted Subsidiaries of the Company (or a combination thereof).
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in The City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period.
"Letter of Credit Obligations" means all Obligations in respect of
Indebtedness of the Company or any of its Restricted Subsidiaries with respect
to letters of credit issued pursuant to the Bank Credit Agreement, which
Indebtedness shall be deemed to consist of (a) the aggregate maximum amount then
available to be drawn under all such letters of credit (the determination of
such maximum amount to assume compliance with all conditions for drawing) and
(b) the aggregate amount that has then been paid by, and not reimbursed to, the
issuers under such letters of credit.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
"Liquidated Damages" means all liquidated damages then owing pursuant to
Section 5 of the Registration Rights Agreement.
"Mortgage Financing" means the incurrence by the Company or a Restricted
Subsidiary of the Company of any Indebtedness secured by a mortgage or other
Lien on real property acquired or improved by the Company or any Restricted
Subsidiary of the Company after the date of this Indenture.
"Mortgage Refinancing" means the incurrence by the Company or a
Restricted Subsidiary of the Company of any Indebtedness secured by a mortgage
or other Lien on real property subject to a mortgage or other Lien existing on
the date of this Indenture or created or incurred subsequent to the date of this
Indenture as permitted by the terms of this Indenture and owned by the Company
or any Restricted Subsidiary of the Company.
"Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of Preferred Stock dividends, excluding, however, (i) any gain (but not
loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (a) any
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Asset Sale (including, without limitation, dispositions pursuant to sale and
leaseback transactions) or (b) the disposition of any securities by such Person
or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness
of such Person or any of its Restricted Subsidiaries and (ii) any extraordinary
or nonrecurring gain (but not loss), together with any related provision for
taxes on such extraordinary or nonrecurring gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by the Company
or any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale (including, without limitation, legal, accounting
and investment banking fees, and brokerage and sales commissions) and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), amounts required to be applied to
the repayment of Indebtedness (other than Bank Debt) secured by a Lien on the
asset or assets that were the subject of such Asset Sale and any reserve for
adjustment in respect of the sale price of such asset or assets established in
accordance with GAAP.
"Non-Recourse Debt" means Indebtedness of an Unrestricted Subsidiary (i)
as to which neither the Company nor any of its Restricted Subsidiaries (a)
provides credit support of any kind (including any undertaking, agreement or
instrument that would constitute Indebtedness), (b) is directly or indirectly
liable (as a guarantor or otherwise), or (c) constitutes the lender; and (ii) no
default with respect to which (including any rights that the holders thereof may
have to take enforcement action against an Unrestricted Subsidiary) would permit
(upon notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any of its Restricted Subsidiaries to declare a default on such other
Indebtedness of the Company or any of its Restricted Subsidiaries or cause the
payment thereof to be accelerated or payable prior to its stated maturity; and
(iii) as to which the lenders have been notified in writing that they will not
have any recourse to the stock or assets of the Company or any of its Restricted
Subsidiaries.
"Note Custodian" means the Trustee, as custodian with respect to the
Senior Subordinated Notes in global form, or any successor entity thereto.
"Obligations" means, with respect to any Indebtedness, any principal,
interest, penalties, fees, indemnifications, reimbursements, damages and other
liabilities payable under the documentation governing any such Indebtedness.
"Offering" means the offering of the Senior Subordinated Notes by the
Company.
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23
"Offering Circular" means the circular or memorandum, dated December 15,
1997, prepared in connection with and relating to the Offering.
"Officer" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the
Company, by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 12.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
12.05 hereof. The counsel may be an employee of or counsel to the Company, any
Guarantor or the Trustee.
"Permitted Holders" means Goldman, Sachs & Co. and any of its
Affiliates.
"Permitted Investments" means (a) any Investment in the Company or in a
Restricted Subsidiary of the Company (including the acquisition of any Equity
Interest in a Restricted Subsidiary); (b) any investment in cash and Cash
Equivalents; (c) any Investment by the Company or any Restricted Subsidiary of
the Company in a Person, if as a result of such Investment (A) such Person
becomes a Restricted Subsidiary of the Company or (B) such Person, in one
transaction or a series of related transactions, is merged, consolidated or
amalgamated with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, the Company or a Restricted Subsidiary of the
Company; (d) any Investment made as a result of the receipt of consideration not
constituting cash or Cash Equivalents from an Asset Sale that was made pursuant
to and in compliance with Section 4.10; (e) any Investment existing on the date
of this Indenture; (f) any Investment by Restricted Subsidiaries in other
Restricted Subsidiaries and Investments by Subsidiaries that are not Restricted
Subsidiaries in other Subsidiaries that are not Restricted Subsidiaries; (g)
advances to employees not in excess of $2.5 million outstanding at any one time;
(h) any Investment 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; (i) Hedging Obligations; (j) loans and advances to officers, directors
and employees for business-related travel expenses, moving expenses and other
similar expenses, in each case incurred in the ordinary course of business; (k)
Investments the payment for which
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consists exclusively of Equity Interests (exclusive of Disqualified Stock) of
the Company; and (1) additional Investments having an aggregate fair market
value, taken together with all other Investments made pursuant to this clause
(1) that are at that time outstanding, not to exceed $15 million plus 5% of the
increase in Total Assets since the date of this Indenture at the time of such
Investment (with the fair market value of each Investment being measured at the
time made and without giving effect to subsequent changes in value).
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
in whole or in part; provided that: (i) the principal amount (or accreted value,
if applicable) of such Permitted Refinancing Indebtedness does not exceed the
principal amount (or accreted value, if applicable) of the Indebtedness so
extended, refinanced, renewed, replaced, defeased or refunded (plus the amount
of reasonable expenses incurred in connection therewith); (ii) such Permitted
Refinancing Indebtedness has a final maturity date on or later than the final
maturity date of, and has a Weighted Average Life to Maturity equal to or
greater than the Weighted Average Life to Maturity of, the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; (iii) if the
Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded
is subordinated in right of payment to the Securities, such Permitted
Refinancing Indebtedness has a final maturity date later than the final maturity
date of the Securities, and is subordinated in right of payment to the
Securities, on terms at least as favorable to the Holders of Securities as those
contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; and (iv) such Indebtedness
is incurred either by the Company or by the Restricted Subsidiary who is the
obligor on the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded.
"Person" means any individual, corporation, partnership, 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" means any Equity Interest with preferential right of
payment of dividends or upon liquidation, dissolution, or winding up.
"Principal Business" means (i) the design, manufacture and distribution
of party goods and related products, including, but not limited to, tableware
(such as plates, cups, cutlery, napkins and table covers), decorations, banners,
balloons, novelties, horns, party hats, party favors, stationery, invitations,
greeting cards, gift wrap, ribbons, gift boxes, gift bags, giftware, costumes,
masks and makeup, and (ii) any activity or business incidental,
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25
directly related or similar to those set forth in clause (i) of this definition,
or any business or activity that is a reasonable extension, development or
expansion thereof or ancillary thereto.
"Purchase Agreement" means that certain Purchase Agreement, dated
December 15, 1997, between the Company and Goldman, Sachs & Co. pursuant to
which the Senior Subordinated Notes are sold by the Company and delivered to,
and purchased and accepted by, Goldman, Sachs & Co.
"Registration Rights Agreement" means that certain Exchange and
Registration Rights Agreement, dated as of December 19, 1997, by and among the
Company and the other parties named on the signature pages thereof, as such
agreement may be amended, modified or supplemented from time to time.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means a permanent global security that is
deposited with and registered in the name of the Depositary or its nominee,
representing Senior Subordinated Notes sold in reliance on Regulation S.
"Related Parties" means any Person controlled by the Permitted Holders,
including any partnership of which any of the Permitted Holders or their
Affiliates is a general partner.
"Representative" has the meaning set forth in Section 10.02 hereof.
"Repurchase Offer" means an offer made by the Company to purchase all or
any portion of a Holder's Senior Subordinated Notes pursuant to Section 4.10 or
4.13 hereof.
"Resale Registration Statement" means a shelf registration statement
under the Securities Act filed by the Company, if required by, and meeting the
requirements of, the Exchange and Registration Rights Agreement, registering the
Transfer Restricted Securities for resale.
"Responsible Officer," when used with respect to the Trustee, means any
Officer within the Corporate Finance Department of the Trustee (or any successor
group of the Trustee) or any other Officer of the Trustee customarily performing
functions similar to those performed by any of the above designated Officers and
also means, with respect to a particular corporate trust matter, any other
Officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
"Restricted Investment" means an Investment other than a Permitted
Investment.
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"Restricted Subsidiary" means, with respect to any Person, any
Subsidiary of such Person that is not (i) an Unrestricted Subsidiary or (ii) a
direct or indirect Subsidiary of an Unrestricted Subsidiary; provided, however,
that upon the occurrence of any Unrestricted Subsidiary ceasing to be an
Unrestricted Subsidiary, such Subsidiary shall be included in the definition of
Restricted Subsidiary.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 144A Global Note" means a permanent global note that contains the
paragraph referred to in footnote 1 and the additional schedule referred to in
footnote 4 to the form of the Senior Subordinated Note attached hereto as
Exhibit A-1, and that is deposited with and registered in the name of the
Depositary or its nominee, representing a series of Senior Subordinated Notes
sold to U.S. Persons in reliance on Rule 144A or another exemption from the
registration requirements of the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Debt" has the meaning set forth in Section 10.02 hereof.
"Senior Guarantees" means the Guarantees by the Guarantors of
Obligations under the Bank Credit Agreement.
"Senior Subordinated Guarantees" means the Guarantees by the Guarantors
of the Obligations under this Indenture and the Senior Subordinated Notes.
"Senior Subordinated Indebtedness" means the Securities and any other
indebtedness which ranks pari passu in right of payment to the Securities.
"Significant Restricted Subsidiary" means any Restricted Subsidiary that
would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of
Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation
is in effect on the date of this Indenture.
"Specified Real Estate" means the real properties owned by the Company
or its Subsidiaries as of the date hereof, comprising the distribution
facilities in Chester, New York, Montreal, Quebec, Canada, and Melbourne,
Australia.
"Stated Maturity" means, with respect to any installment of interest or
principal on, or any other payments with respect to, any series of Indebtedness,
the date on which such
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payment of interest or principal or other payment (including any sinking fund
payment) was scheduled or required to be paid, but shall not include any
acceleration of such payment or any contingent obligations to repay, redeem or
repurchase any such interest or principal prior to the date originally scheduled
for the payment thereof.
"Subordinated Indebtedness" means any Indebtedness of the Company or any
of its Restricted Subsidiaries which is expressly by its terms subordinated in
right of payment to any other Senior Subordinated Indebtedness.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or one or more Subsidiaries
of such Person (or any combination thereof).
"Total Assets" means, with respect to any Person, the total consolidated
assets of such Person and its Restricted Subsidiaries, as shown on the most
recent balance sheet of such Person.
"Transaction" means the merger of the Company and Confetti Acquisition,
Inc. pursuant to the Agreement and Plan of Merger.
"Transfer Restricted Securities" means securities that bear or are
required to bear the legend set forth in Section 2.06 hereof.
"Treasury Rate" means the yield to maturity at the time of computation
of United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15(519) which
has become publicly available at least two Business Days prior to the date fixed
for redemption (or, if such Statistical Release is no longer published, any
publicly available source of similar market data)) most nearly equal to the then
remaining term to December 15, 2002; provided, however, that if the then
remaining term to December 15, 2002 is not equal to the constant maturity of a
United States Treasury security for which a weekly average yield is given, the
Treasury Rate shall be obtained by linear interpolation (calculated to the
nearest one-twelfth of a year) from the weekly average yields of United States
Treasury securities for which such yields are given, except that if the then
remaining term to December 15, 2002 is less than one year, the weekly average
yield on actually traded United States Treasury securities adjusted to a
constant maturity of one year shall be used.
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28
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this instrument until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Unrestricted Subsidiary" means any Subsidiary (other than the
Guarantors or any successor to any of them) that is designated by the Board of
Directors of the Company as an Unrestricted Subsidiary pursuant to a board
resolution, but only to the extent that such Subsidiary: (a) has no Indebtedness
other than Non-Recourse Debt; (b) is not party to any agreement, contract,
arrangement or understanding with the Company or any Restricted Subsidiary of
the Company unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Company or such Restricted Subsidiary
than those that might be obtained at the time from Persons who are not
Affiliates of the Company; (c) is a Person with respect to which neither the
Company nor any of its Restricted Subsidiaries has any direct or indirect
obligation (x) to subscribe for additional Equity Interests or (y) to maintain
or preserve such Person's financial condition or to cause such Person to achieve
any specified levels of operating results; (d) has not guaranteed and does not
otherwise directly or indirectly provide credit support for any Indebtedness of
the Company or any of its Restricted Subsidiaries; and (e) has at least one
director on its board of directors that is not a director or executive officer
of the Company or any of its Restricted Subsidiaries and has at least one
executive officer that is not a director or executive officer of the Company or
any of its Restricted Subsidiaries. Any such designation by the Board of
Directors of the Company shall be evidenced to the Trustee by filing with the
Trustee a certified copy of the board resolution giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the foregoing conditions and was permitted by Section 4.07 hereof.
If, at any time, any Unrestricted Subsidiary would fail to meet the foregoing
requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an
Unrestricted Subsidiary for purposes hereof and, so long as such Unrestricted
Subsidiary remains a Subsidiary, any Indebtedness of such Subsidiary shall be
deemed to be incurred by a Restricted Subsidiary of the Company as of such date
(and, if such Indebtedness is not permitted to be incurred as of such date under
Section 4.09 hereof, the Company shall be in default of such covenant). The
Board of Directors of the Company may at any time designated any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided that such designation shall
be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the
Company of any outstanding Indebtedness of such Unrestricted Subsidiary and such
designation shall only be permitted if (i) such Indebtedness is permitted under
Section 4.09
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hereof, and (ii) no Default or Event of Default would be in existence following
such designation.
"U.S. Person" has the meaning specified in Regulation S.
"Voting Stock" means, with respect to any Person, any class or series of
capital stock of such Person that is ordinarily entitled to vote in the election
of directors thereof at a meeting of stockholders called for such purpose,
without the occurrence of any additional event or contingency.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly-Owned Restricted Subsidiary" is any Wholly-Owned Subsidiary that
is a Restricted Subsidiary.
"Wholly-Owned Subsidiary" of any Person means a Subsidiary of such
Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person or by
such Person and one or more Wholly Owned Subsidiaries of such Person.
Section 1.02 Other Definitions.
Defined in
Term Section
"Affiliate Transaction" 4.11
"Asset Sale Offer" 4.10
"Authentication Order" 2.02
"Change of Control Offer" 4.13
"Change of Control Payment" 4.13
"Change of Control Payment Date" 4.13
"Covenant Defeasance" 8.03
"Custodian" 6.01
"DTC" 2.03
"Event of Default" 6.01
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"Excess Proceeds" 4.10
"incur" 4.09
"incurrence" 4.09
"Legal Defeasance" 8.02
"Offer Amount" 3.09
"Offer Period" 3.09
"Paying Agent" 2.03
"Payment Blockage Notice" 10.04
"Purchase Date" 3.09
"QIBs" 2.01
"Refunding Capital Stock" 4.07
"Registrar" 2.03
"Restricted Payments" 4.07
"Retired Capital Stock" 4.07
"Subordinated Asset Sale Offer" 4.10
Section 1.03 Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the Trust Indenture Act, the provision
is incorporated by reference in and made a part of this Indenture.
The following Trust Indenture Act terms used in this Indenture have the
following meanings:
"indenture securities" means the Senior Subordinated Notes;
"indenture security Holder" means a Holder of a Senior Subordinated
Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Senior Subordinated Notes and the Senior Subordinated
Guarantees means the Company and the Guarantors, respectively, and any successor
obligor upon the Senior Subordinated Notes and the Senior Subordinated
Guarantees, respectively.
All other terms used in this Indenture that are defined by the Trust
Indenture Act, defined by Trust Indenture Act reference to another statute or
defined by SEC rule under the Trust Indenture Act have the meanings so assigned
to them.
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Section 1.04 Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to
it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural include
the singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act shall be
deemed to include substitute, replacement of successor sections or rules
adopted by the SEC from time to time.
ARTICLE 2
THE SENIOR SUBORDINATED NOTES
Section 2.01 Form and Dating. The Senior Subordinated Notes and the
Trustee's certificate of authentication shall be substantially in the form of
Exhibit A-1 attached hereto. The Senior Subordinated Guarantees shall be
substantially in the form of Exhibit D attached hereto, the terms of which are
incorporated in and made part of this Indenture. The Senior Subordinated Notes
may have notations, legends or endorsements required by law, stock exchange rule
or usage. Each Senior Subordinated Note shall be dated the date of its
authentication. The Senior Subordinated Notes shall be issued in minimum
denominations of $1,000 and integral multiples of $1,000 in excess thereof. The
terms and provisions contained in the Senior Subordinated Notes shall
constitute, and are hereby expressly made, a part of this Indenture and the
Company, the Guarantors and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.
(a) Global Notes. Senior Subordinated Notes offered and sold to
qualified institutional buyers as defined in Rule 144A ("QIBs") in reliance on
Rule 144A shall be issued initially in the form of Rule 144A Global Notes, which
shall be deposited on behalf of the purchasers of the Senior Subordinated Notes
represented thereby with the Depositary at its New York office, and registered
in the name of the Depositary or a nominee of the Depositary, duly executed by
the Company and authenticated by the Trustee as hereinafter provided. The
aggregate principal amount of the Rule 144A
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Global Notes may from time to time be increased or decreased by adjustments made
on the records of the Trustee and the Depositary or its nominee as hereinafter
provided.
Senior Subordinated Notes offered and sold in reliance on Regulation S
shall be issued in the form of the Regulation S Global Note, which shall be
deposited on behalf of the purchasers of the Senior Subordinated Notes
represented thereby with the Trustee, at its New York office, as custodian for
the Depositary, and registered in the name of the Depositary or the nominee of
the Depositary for the accounts of designated agents holding on behalf of
Euroclear or Cedel Bank, duly executed by the Company and authenticated by the
Trustee as hereinafter provided. Until the expiration of the 40-day restricted
period (as defined in Regulation S), beneficial interests in the Regulation S
Global Note shall be held only in or through accounts maintained at the
Depositary by Euroclear or Cedel Bank (or by Agent Members acting for the
account thereof), and no Person shall be entitled to effect any transfer or
exchange that would result in any such interest being held otherwise than in or
through such an account; provided that this clause shall not prohibit any
transfer or exchange of such an interest in accordance with Section 2.06(a)(ii).
The "40-day restricted period" shall terminate upon the 41st day after the later
of (A) the day that Goldman, Sachs & Co. advises the Company and the Trustee is
the day on which Senior Subordinated Notes are first offered to Persons other
than distributors (as defined in Regulation S) and (B) the day on which the
initial delivery of the Senior Subordinated Notes occurs pursuant to the
Purchase Agreement. The aggregate principal amount of the Regulation S Global
Notes may from time to time be increased or decreased by adjustments made on the
records of the Trustee and the Depositary or its nominee, as the case may be, in
connection with transfers of interest as hereinafter provided.
Each Global Note shall represent such of the outstanding Senior
Subordinated Notes as shall be specified therein and each shall provide that it
shall represent the aggregate amount of outstanding Senior Subordinated Notes
from time to time endorsed thereon and that the aggregate amount of outstanding
Senior Subordinated Notes represented thereby may from time to time be reduced
or increased, as appropriate, to reflect exchanges, redemptions and transfers of
interest. Any endorsement of a Global Note to reflect the amount of any increase
or decrease in the amount of outstanding Senior Subordinated Notes represented
thereby shall be made by the Trustee or the Note Custodian, at the direction of
the Trustee, in accordance with instructions given by the Holder thereof as
required by Section 2.06 hereof.
The provisions of the "Operating Procedures of the Euroclear System" and
"Terms and Conditions Governing Use of Euroclear" and the "General Terms and
Conditions of Cedel Bank" and "Customer Handbook" of Cedel Bank shall be
applicable
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to interests in the Regulation S Global Notes that are held by the Agent Members
through Euroclear or Cedel Bank.
Except as set forth in Section 2.06 hereof, the Global Notes may be
transferred, in whole and not in part, only to another nominee of the Depositary
or to a successor of the Depositary or its nominee.
(b) Book-Entry Provisions. This Section 2.01(b) shall apply only to Rule
144A Global Notes and the Regulation S Global Notes deposited with or on behalf
of the Depositary.
The Company shall execute and the Trustee shall, in accordance with this
Section 2.01(b), authenticate and deliver the Global Notes that (i) shall be
registered in the name of the Depositary or the nominee of the Depositary and
(ii) shall be delivered by the Trustee to the Depositary or pursuant to the
Depositary's instructions or held by the Trustee as custodian for the
Depositary.
Agent Members shall have no rights either under this Indenture with
respect to any Global Note held on their behalf by the Depositary or by the
Trustee as custodian for the Depositary or under such Global Note, and the
Depositary may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner of such Global Note for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or impair, as between the Depositary and its Agent Members, the
operation of customary practices of such Depositary governing the exercise of
the rights of an owner of a beneficial interest in any Global Note.
(c) Certificated Notes. Senior Subordinated Notes issued in certificated
form shall be substantially in the form of Exhibit A-1 attached hereto (but
without including the text referred to in footnotes 1 and 4 thereto).
Section 2.02 Execution and Authentication. Two Officers of the Company
shall sign the Senior Subordinated Notes for the Company by manual or facsimile
signature. The Company's seal shall be reproduced on the Senior Subordinated
Notes and may be in facsimile form.
If an Officer of the Company whose signature is on a Senior Subordinated
Note no longer holds that office at the time a Senior Subordinated Note is
authenticated, the Senior Subordinated Note shall nevertheless be valid.
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A Senior Subordinated Note shall not be valid until authenticated by the
manual signature of the Trustee. The signature shall be conclusive evidence that
the Senior Subordinated Note has been authenticated under this Indenture.
The Trustee shall, upon receipt of a written order of the Company signed
by two Officers of the Company (the "Authentication Order"), authenticate Senior
Subordinated Notes for original issue. The Trustee shall authenticate Senior
Subordinated Notes for original issue on the date of this Indenture in an
aggregate amount not to exceed $110,000,000 upon receipt of an Authentication
Order. In addition, the Trustee shall, from time to time, authenticate Senior
Subordinated Notes issued in one or more series (such Senior Subordinated Notes
to be substantially in the form of Exhibit A-1) in an aggregate principal amount
not to exceed $90,000,000 upon receipt of an Authentication Order; provided,
however, that the Company agrees that such Senior Subordinated Notes shall not
be issued at a price that would cause such Senior Subordinated Notes to have
"original issue discount" within the meaning of Section 1273 of the Internal
Revenue Code of 1986, as amended. The aggregate principal amount of Senior
Subordinated Notes outstanding at any one time shall not exceed $200,000,000
except as provided in Section 2.07 hereof and in the immediately succeeding
paragraph.
At any time and from time to time after the execution and delivery of
this Indenture and after the effectiveness of a registration statement under the
Securities Act with respect thereto, the Company may deliver Exchange Notes
executed by the Company, and having endorsed thereon the Senior Subordinated
Guarantees executed under Section 11.04 by the Guarantors, to the Trustee for
authentication, together with an Authentication Order for the authentication and
delivery of such Exchange Notes and a like principal amount of Transfer
Restricted Securities for cancellation in accordance with Section 2.11 of this
Indenture, and the Trustee in accordance with the Authentication Order shall
authenticate and deliver such Exchange Notes, with the Senior Subordinated
Guarantees endorsed thereon. Prior to authenticating such Exchange Notes, and
accepting any additional responsibilities under this Indenture in relation to
such Securities, the Trustee shall be entitled to receive, if requested, and
(subject to Section 7.01) shall be fully protected in relying upon, an Opinion
of Counsel stating in substance
(a) that all conditions hereunder precedent to the authentication and
delivery of such Exchange Notes with the Senior Subordinated Guarantees of the
Guarantors endorsed thereon have been complied with and that such Exchange
Notes and the Senior Subordinated Guarantees of the Guarantors endorsed
thereon, when such Senior Subordinated Notes have been duly authenticated and
delivered by the Trustee (and subject to any other conditions specified in
such Opinion of Counsel), have been duly issued and delivered and will
constitute valid and legally binding obligations of the
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Company and the Guarantors, respectively, enforceable in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles; and
(b) that the issuance of the Exchange Notes in exchange for Transfer
Restricted Securities has been effected in compliance with the Securities Act.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Senior Subordinated Notes. An authenticating agent may
authenticate Senior Subordinated Notes whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as an
Agent to deal with the Company or an Affiliate of the Company.
Section 2.03 Registrar and Paying Agent. The Company shall maintain an
office or agency where Senior Subordinated Notes may be presented for
registration of transfer or for exchange ("Registrar") and an office or agency
where Senior Subordinated Notes may be presented for payment ("Paying Agent").
The Registrar shall keep a register of the Senior Subordinated Notes and of
their transfer and exchange. The Company may appoint one or more co-registrars
and one or more additional paying agents. The term "Registrar" includes any
co-registrar and the term "Paying Agent" includes any additional paying agent.
The Company may change any Paying Agent or Registrar without notice to any
Holder. The Company shall notify the Trustee in writing of the name and address
of any Agent not a party to this Indenture. If the Company fails to appoint or
maintain another entity as Registrar or Paying Agent, the Trustee shall act as
such. The Company or any of its Subsidiaries may act as Paying Agent or
Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to
act as the Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Note Custodian with respect to the Global Notes. The
Company initially appoints the Trustee to act as the Registrar and Paying Agent
with respect to the Certificated Notes.
Section 2.04 Paying Agent to Hold Money in Trust. The Company shall
require each Paying Agent other than the Trustee to agree in writing that the
Paying Agent will hold in trust for the benefit of Holders or the Trustee all
money held by the Paying Agent for the payment of principal, premium, if any, or
interest, including Liquidated Damages, if any, on the Senior Subordinated
Notes, and will notify the Trustee of any default by the Company or any
Guarantor in making any such payment. While any such default
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continues, the Trustee may require a Paying Agent to pay all money held by it to
the Trustee. The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent
(if other than the Company or a Subsidiary) shall have no further liability for
the money. If the Company or a Subsidiary acts as Paying Agent, it shall
segregate and hold in a separate trust fund for the benefit of the Holders all
money held by it as Paying Agent. Upon any bankruptcy or reorganization
proceedings relating to the Company or a Guarantor, the Trustee shall serve as
Paying Agent for the Senior Subordinated Notes.
Section 2.05 Holder Lists. The Trustee shall preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of all Holders and shall otherwise comply with Section
312(a) of the Trust Indenture Act. If the Trustee is not the Registrar, the
Company and/or the Guarantors shall furnish to the Trustee at least 10 Business
Days before each interest payment date and at such other times as the Trustee
may request in writing, a list in such form and as of such date as the Trustee
may reasonably require of the names and addresses of the Holders of Senior
Subordinated Notes and the Company and the Guarantors shall otherwise comply
with Section 312(a) of the Trust Indenture Act.
Section 2.06 Transfer and Exchange. (a) Transfer and Exchange of Global
Notes. The transfer and exchange of Global Notes or beneficial interests therein
shall be effected through the Depositary, in accordance with this Indenture and
the procedures of the Depositary therefor, which shall include restrictions on
transfer comparable to those set forth herein to the extent required by the
Securities Act. The Trustee shall have no obligation to ascertain the
Depositary's compliance with such restrictions on transfer. Beneficial interests
in a Global Note may be transferred to Persons who take delivery thereof in the
form of a beneficial interest in the same Global Note in accordance with the
transfer restrictions set forth in the legend in subsection (g) of this Section
2.06. Transfers of beneficial interests in the Global Notes to Persons required
to take delivery thereof in the form of an interest in another Global Note shall
be permitted as follows:
(i) Rule 144A Global Note to Regulation S Global Note. If, at any
time, an owner of a beneficial interest in a Rule 144A Global Note deposited
with the Depositary (or the Trustee as custodian for the Depositary) wishes to
transfer its beneficial interest in such Rule 144A Global Note to a Person who
is required or permitted to take delivery thereof in the form of an interest
in a Regulation S Global Note, such owner shall, subject to the Applicable
Procedures, exchange or cause the exchange of such interest for an equivalent
beneficial interest in a Regulation S Global Note as provided in this Section
2.06(a)(i). Upon receipt by the Trustee of (1) instructions given in
accordance with the Applicable Procedures from an Agent Member
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directing the Trustee to credit or cause to be credited a beneficial interest
in the Regulation S Global Note in an amount equal to the beneficial interest
in the Rule 144A Global Note to be exchanged, (2) a written order given in
accordance with the Applicable Procedures containing information regarding the
participant account of the Depositary and the Euroclear or Cedel Bank account
to be credited with such increase and (3) a certificate in the form of Exhibit
B-1 hereto given by the owner of such beneficial interest stating that the
transfer of such interest has been made in compliance with the transfer
restrictions applicable to the Global Notes and pursuant to and in accordance
with Rule 903 or Rule 904 of Regulation S, then the Registrar shall instruct
the Depositary to reduce or cause to be reduced the aggregate principal amount
at maturity of the applicable Rule 144A Global Note and to increase or cause
to be increased the aggregate principal amount at maturity of the applicable
Regulation S Global Note by the principal amount at maturity of the beneficial
interest in the Rule 144A Global Note to be exchanged or transferred, to
credit or cause to be credited to the account of the Person specified in such
instructions a beneficial interest in the Regulation S Global Note equal to
the reduction in the aggregate principal amount at maturity of the Rule 144A
Global Note, and to debit, or cause to be debited, from the account of the
Person making such exchange or transfer the beneficial interest in the Rule
144A Global Note that is being exchanged or transferred.
(ii) Regulation S Global Note to Rule 144A Global Note. If, at any
time, an owner of a beneficial interest in a Regulation S Global Note
deposited with the Depositary (or with the Trustee as custodian for the
Depositary) wishes to transfer its beneficial interest in such Regulation S
Global Note to a Person who is required or permitted to take delivery thereof
in the form of an interest in a Rule 144A Global Note, such owner shall,
subject to the Applicable Procedures, exchange or cause the exchange of such
interest for an equivalent beneficial interest in a Rule 144A Global Note as
provided in this Section 2.06(a)(ii). Upon receipt by the Trustee of (1)
instructions from Euroclear or Cedel Bank, if applicable, and the Depositary,
directing the Registrar to credit or cause to be credited a beneficial
interest in the Rule 144A Global Note equal to the beneficial interest in the
Regulation S Global Note to be exchanged, such instructions to contain
information regarding the participant account with the Depositary to be
credited with such increase, (2) a written order given in accordance with the
Applicable Procedures containing information regarding the participant account
of the Depositary and (3) if such transfer is to occur during the 40-day
restricted period, a certificate in the form of Exhibit B-2 attached hereto
given by the owner of such beneficial interest stating (A) if the transfer is
pursuant to Rule 144A, that the Person transferring such interest in a
Regulation S Global Note reasonably believes that the Person acquiring such
interest in a Rule 144A Global Note is a QIB and is obtaining such beneficial
interest in a transaction meeting the requirements of Rule 144A and any
applicable blue sky or securities laws of any state of the United States, (B)
that the transfer complies with the requirements of Rule 144 under the
Securities Act and any
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applicable blue sky or securities laws of any state of the United States or
(C) if the transfer is pursuant to any other exemption from the registration
requirements of the Securities Act, that the transfer of such interest has
been made in compliance with the transfer restrictions applicable to the
Global Notes and pursuant to and in accordance with the requirements of the
exemption claimed, such statement to be supported by an Opinion of Counsel
from the transferee or the transferor in form reasonably acceptable to the
Company and to the Registrar, then the Registrar shall instruct the Depositary
to reduce or cause to be reduced the aggregate principal amount at maturity of
such Regulation S Global Note and to increase or cause to be increased the
aggregate principal amount at maturity of the applicable Rule 144A Global Note
by the principal amount at maturity of the beneficial interest in the
Regulation S Global Note to be exchanged or transferred, and the Registrar
shall instruct the Depositary, concurrently with such reduction, to credit or
cause to be credited to the account of the Person specified in such
instructions a beneficial interest in the applicable Rule 144A Global Note
equal to the reduction in the aggregate principal amount at maturity of such
Regulation S Global Note and to debit or cause to be debited from the account
of the Person making such transfer the beneficial interest in the Regulation S
Global Note that is being exchanged or transferred.
(b) Transfer and Exchange of Certificated Notes. When Certificated Notes
are presented by a Holder to the Registrar with a request:
(x) to register the transfer of the Certificated Notes; or
(y) to exchange such Certificated Notes for an equal principal
amount of Certificated Notes of other authorized
denominations,
the Registrar shall register the transfer or make the exchange as requested;
provided, however, that the Certificated Notes presented or surrendered for
registration of transfer or exchange:
(i) shall be duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by his attorney, duly authorized in writing; and
(ii) in the case of a Certificated Note that is a Transfer Restricted
Security, such request shall be accompanied by the following additional
information and documents, as applicable:
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(A) if such Transfer Restricted Security is being delivered to
the Registrar by a Holder for registration in the name of
such Holder, without transfer, or such Transfer Restricted
Security is being transferred to the Company, a
certification to that effect from such Holder (in
substantially the form of Exhibit B-3 hereto);
(B) if such Transfer Restricted Security is being transferred
to a QIB in accordance with Rule 144A under the Securities
Act or pursuant to an exemption from registration in
accordance with Rule 144 under the Securities Act or
pursuant to an effective registration statement under the
Securities Act, a certification to that effect from such
Holder (in substantially the form of Exhibit B-3 hereto);
or
(C) if such Transfer Restricted Security is being transferred
in reliance on any other exemption from the registration
requirements of the Securities Act, a certification to
that effect from such Holder (in substantially the form of
Exhibit B-3 hereto) and an Opinion of Counsel from such
Holder or the transferee reasonably acceptable to the
Company and to the Registrar to the effect that such
transfer is in compliance with the Securities Act.
(c) Transfer of a Beneficial Interest in a Rule 144A Global Note or
Regulation S Global Note for a Certificated Note. Except as set forth in Section
2.06(f), a beneficial interest in a Global Note may not be exchanged for a
Certificated Note.
(d) Restrictions on Transfer and Exchange of Global Notes.
Notwithstanding any other provision of this Indenture (other than the provisions
set forth in subsection (f) of this Section 2.06), a Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary or
a nominee of such successor Depositary.
(e) Transfer and Exchange of a Certificated Note for a Beneficial
Interest in a Global Note. A Certificated Note may not be transferred or
exchanged for a beneficial interest in a Global Note.
(f) Authentication of Certificated Notes in Absence of Depositary. If at
any time:
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(i) the Depositary for the Senior Subordinated Notes notifies
the Company that the Depositary is unwilling or unable to
continue as Depositary for the Global Notes and a successor
Depositary for the Global Notes is not appointed by the
Company within 90 days after delivery of such notice; or
(ii) the Company delivers to the Trustee an Officers' Certificate
or an order signed by two Officers of the Company notifying
the Trustee that it elects to cause the issuance of
Certificated Notes under this Indenture,
then the Company shall execute, and the Trustee shall, upon receipt of an
Authentication Order in accordance with Section 2.02 hereof, authenticate and
deliver, Certificated Notes in an aggregate principal amount equal to the
principal amount of the Global Notes in exchange for such Global Notes.
(g) Legends.
(i) Except as permitted by the following paragraphs (ii), (iii)
and (iv), each Senior Subordinated Note certificate
evidencing Global Notes and Certificated Notes (and all
Senior Subordinated Notes issued in exchange therefor or
substitution thereof) shall bear a legend in substantially
the following form:
"THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES
ACT") AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A) (1) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT
PURCHASING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION
COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER
THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE),
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(4) TO AN INSTITUTION THAT IS AN ACCREDITED INVESTOR WITHIN
THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) OF REGULATION
D IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT (IF AVAILABLE) OR (5) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS. THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER FROM IT OF THE NOTES EVIDENCED HEREBY
OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE. NO
REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE
EXEMPTION PROVIDED BY RULE 144 FOR RESALES OF THE NOTES."
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a
Global Note) pursuant to Rule 144 under the Securities Act
or pursuant to an effective registration statement under the
Securities Act:
(A) in the case of any Transfer Restricted Security that
is a Certificated Note, the Registrar shall permit the
Holder thereof to exchange such Transfer Restricted
Security for a Certificated Note that does not bear
the legend set forth in (i) above and rescind any
restriction on the transfer of such Transfer
Restricted Security upon receipt of a certification
from the transferring Holder substantially in the form
of Exhibit B-4 hereto; and
(B) in the case of any Transfer Restricted Security
represented by a Global Note, such Transfer Restricted
Security shall not be required to bear the legend set
forth in (i) above, but shall continue to be subject
to the provisions of Section 2.06(a) and (b) hereof;
provided, however, that with respect to any request
for an exchange of a Transfer Restricted Security that
is represented by a Global Note for a Certificated
Note (if such exchange is permitted by the terms of
this Section 2.06) that does not bear the legend set
forth in (i) above, which request is made in
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reliance upon Rule 144, the Holder thereof shall
certify in writing to the Registrar that such request
is being made pursuant to Rule 144 (such certification
to be substantially in the form of Exhibit B-4
hereto).
(iii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a
Global Note) in reliance on any exemption from the
registration requirements of the Securities Act (other than
exemptions pursuant to Rule 144A or Rule 144 under the
Securities Act) in which the Holder or the transferee
provides an Opinion of Counsel to the Company and the
Registrar in form and substance reasonably acceptable to the
Company and the Registrar (which Opinion of Counsel shall
also state that the transfer restrictions contained in the
legend are no longer applicable):
(A) in the case of any Transfer Restricted Security that
is a Certificated Note, the Registrar shall permit
the Holder thereof to exchange such Transfer
Restricted Security for a Certificated Note that does
not bear the legend set forth in (i) above and
rescind any restriction on the transfer of such
Transfer Restricted Security; and
(B) in the case of any Transfer Restricted Security
represented by a Global Note, such Transfer
Restricted Security shall not be required to bear the
legend set forth in (i) above, but shall continue to
be subject to the provisions of Section 2.06(a) and
(b) hereof.
(iv) Notwithstanding the foregoing, upon consummation of the
Exchange Offer in accordance with the Registration Rights
Agreement, the Company shall issue and, upon receipt of an
authentication order in accordance with Section 2.02 hereof,
the Trustee shall authenticate Exchange Notes in exchange
for Transfer Restricted Securities accepted for exchange in
the Exchange Offer, which Exchange Notes shall not bear the
legend set forth in (i) above, and the Registrar shall
rescind any restriction on the transfer of such Exchange
Notes, in each case unless the Holder of such Transfer
Restricted Securities is
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either (A) a broker-dealer, (B) a Person participating
in the distribution of the Transfer Restricted
Securities or (C) a Person who is an affiliate (as
defined in Rule 144A) of the Company.
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in Global Notes have been exchanged for Certificated Notes,
redeemed, repurchased or canceled, all Global Notes shall be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for an interest in another Global Note or for Certificated Notes,
redeemed, repurchased or canceled, the principal amount of Senior Subordinated
Notes represented by such Global Note shall be reduced accordingly and an
endorsement shall be made on such Global Note, by the Trustee or the Note
Custodian, at the direction of the Trustee, to reflect such reduction.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate
Certificated Notes and Global Notes at the Registrar's
request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any transfer
tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or similar
governmental charge payable upon exchange or transfer
pursuant to Sections 3.07, 3.09, 4.10, 4.13 and 9.05
hereof).
(iii) The Registrar shall not be required to register the
transfer of or exchange any Senior Subordinated Note
selected for redemption in whole or in part, except the
unredeemed portion of any Senior Subordinated Note being
redeemed in part.
(iv) All Certificated Notes and Global Notes issued upon any
registration of transfer or exchange of Certificated Notes
or Global Notes shall be the valid obligations of the
Company, evidencing the same debt, and entitled to the
same benefits under this Indenture, as the Certificated
Notes or Global Notes surrendered upon such registration
of transfer or exchange.
(v) The Company shall not be required:
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(A) to issue, to register the transfer of or to exchange
Senior Subordinated Notes during a period beginning
at the opening of business 15 days before the day of
any selection of Senior Subordinated Notes for
redemption under Section 3.02 hereof and ending at
the close of business on the day of selection; or
(B) to register the transfer of or to exchange any Senior
Subordinated Note so selected for redemption in whole
or in part, except the unredeemed portion of any
Senior Subordinated Note being redeemed in part; or
(C) to register the transfer of or to exchange a Senior
Subordinated Note between a record date and the next
succeeding interest payment date.
(vi) Prior to due presentment for the registration of a
transfer of any Senior Subordinated Note, the Trustee, any
Agent and the Company may deem and treat the Person in
whose name any Senior Subordinated Note is registered as
the absolute owner of such Senior Subordinated Note for
the purpose of receiving payment of principal of and
interest on such Senior Subordinated Notes, and neither
the Trustee, any Agent nor the Company shall be affected
by notice to the contrary.
(vii) The Trustee shall authenticate Certificated Notes and
Global Notes in accordance with the provisions of Section
2.02 hereof.
Section 2.07. Replacement Senior Subordinated Notes. If any mutilated
Senior Subordinated Note is surrendered to the Trustee, or the Company and the
Trustee receive evidence to their satisfaction of the destruction, loss or theft
of any Senior Subordinated Note, the Company shall issue and the Trustee shall
authenticate a replacement Senior Subordinated Note, with a Senior Subordinate
Guarantee endorsed thereon, if the conditions for replacement set forth herein
have been met. If required by the Trustee or the Company, an indemnity bond must
be supplied by the Holder that is sufficient in the judgment of the Trustee and
the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Senior
Subordinated Note is replaced. The Company and the Trustee may charge for their
expenses in replacing a Senior Subordinated Note.
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Every replacement Senior Subordinated Note is an additional obligation
of the Company and shall be entitled to all of the benefits of this Indenture
equally and proportionately with all other Senior Subordinated Notes duly issued
hereunder.
Section 2.08. Outstanding Senior Subordinated Notes. The Senior
Subordinated Notes outstanding at any time are all the Senior Subordinated Notes
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, those reductions in the interest in a Global Note effected
by the Trustee in accordance with the provisions hereof, those described in this
Section as not outstanding and, for purposes of the aggregate principal amount
of Senior Subordinated Notes that are required to remain outstanding immediately
following a redemption thereof in accordance with Section 3.07(b) hereof, those
held by the Company or any Affiliate (except Goldman, Sachs & Co.). Except as
set forth in Section 2.09 hereof or as otherwise provided in this Section 2.08
with respect to Section 3.07(b), a Senior Subordinated Note does not cease to be
outstanding because the Company or an Affiliate of the Company holds the Senior
Subordinated Note.
If a Senior Subordinated Note is replaced pursuant to Section 2.07
hereof, it ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Senior Subordinated Note is held by a bona
fide purchaser.
If the principal amount of any Senior Subordinated Note is considered
paid under Section 4.01 hereof, it ceases to be outstanding and interest on it
ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Senior Subordinated Notes payable on that date, then on and
after that date such Senior Subordinated Notes shall be deemed to be no longer
outstanding and shall cease to accrue interest.
Section 2.09. Treasury Senior Subordinated Notes. In determining whether
the Holders of the required principal amount of Senior Subordinated Notes have
concurred in any direction, waiver or consent, Senior Subordinated Notes owned
by the Company, any Guarantor, or by any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company or any Guarantor (other than Senior Subordinated Notes held by Goldman,
Sachs & Co.), shall be considered as though not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Senior Subordinated Notes shown on the
Trustee's register as being so owned shall be so disregarded.
Section 2.10. Temporary Senior Subordinated Notes. Until Certificated
Notes are ready for delivery, the Company may prepare and the Trustee shall
authenticate
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temporary Senior Subordinated Notes upon a written order of the Company signed
by two Officers of the Company. Temporary Senior Subordinated Notes shall be
substantially in the form of Certificated Notes but may have variations that the
Company considers appropriate for temporary Senior Subordinated Notes and as
shall be reasonably acceptable to the Trustee. Without unreasonable delay, the
Company shall prepare and the Trustee shall authenticate Certificated Notes in
exchange for temporary Senior Subordinated Notes.
Holders of temporary Senior Subordinated Notes shall be entitled to all
of the benefits of this Indenture.
Section 2.11. Cancellation. The Company at any time may deliver Senior
Subordinated Notes to the Trustee for cancellation. The Registrar and Paying
Agent shall forward to the Trustee any Senior Subordinated Notes surrendered to
them for registration of transfer, exchange or payment. The Trustee and no one
else shall cancel all Senior Subordinated Notes, and the Senior Subordinated
Guarantees endorsed thereon, surrendered for registration of transfer, exchange,
payment, replacement or cancellation and shall retain or destroy, in accordance
with its normal practice, canceled Senior Subordinated Notes, and the Senior
Subordinated Guarantees endorsed thereon, (subject to the record retention
requirement of the Exchange Act). If such Senior Subordinated Notes are
destroyed, certification of the destruction of all canceled Senior Subordinated
Notes shall be delivered to the Company. The Company may not issue new Senior
Subordinated Notes to replace Senior Subordinated Notes that it has paid or that
have been delivered to the Trustee for cancellation other than as provided in
Section 2.02 in connection with the issuance of Exchange Notes or as otherwise
provided for under the terms of this Indenture.
Section 2.12. Defaulted Interest; Notice of Liquidated Damages. If the
Company defaults in a payment of interest on the Senior Subordinated Notes, it
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Senior Subordinated Notes and in Section 4.01 hereof. The Company shall
notify the Trustee in writing of the amount of defaulted interest proposed to be
paid on each Senior Subordinated Note and the date of the proposed payment. The
Company shall fix or cause to be fixed each such special record date and payment
date, provided that no such special record date shall be less than 10 days prior
to the related payment date for such defaulted interest. At least 15 days before
the special record date, the Company (or, upon the written request of the
Company, the Trustee in the name and at the expense of the Company) shall mail
or cause to be mailed
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to Holders a notice that states the special record date, the related payment
date and the amount of such interest to be paid.
The Company shall notify the Trustee in writing if the Company becomes
obligated to pay Liquidated Damages.
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee. If the Company elects to redeem Senior
Subordinated Notes pursuant to the optional redemption provisions of Section
3.07 hereof, it shall furnish to the Trustee, at least 30 days (or at least 45
days if the Company requests the Trustee to give notice to the Holders pursuant
to Section 3.03 hereof) but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the clause of this Indenture pursuant to
which the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Senior Subordinated Notes to be redeemed and (iv) the redemption
price.
Section 3.02. Selection of Senior Subordinated Notes to Be Redeemed. If
less than all of the Senior Subordinated Notes are to be redeemed at any time,
selection of the Senior Subordinated Notes for redemption shall be made by the
Trustee in compliance with the requirements of the principal national securities
exchange, if any, on which the Senior Subordinated Notes are listed or, if the
Senior Subordinated Notes are not so listed, on a pro rata basis, by lot or by
such method as the Trustee shall deem fair and appropriate; provided, that no
Senior Subordinated Notes of $1,000 or less shall be redeemed in part. In the
event of partial redemption by lot, the particular Senior Subordinated Notes to
be redeemed shall be selected, unless otherwise provided herein, not less than
30 nor more than 60 days prior to the redemption date by the Trustee from the
outstanding Senior Subordinated Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the Senior
Subordinated Notes selected for redemption and, in the case of any Senior
Subordinated Note selected for partial redemption, the principal amount thereof
to be redeemed. Senior Subordinated Notes and portions of Senior Subordinated
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Senior Subordinated Notes of a Holder are to be
redeemed, the entire outstanding amount of Senior Subordinated Notes held by
such Holder, even if not a multiple of $1,000, shall be redeemed. If any Senior
Subordinated Note is to be redeemed in part only, a new Senior Subordinated
Note, with a Senior Subordinated Guarantee endorsed thereon, in principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Senior Subordinated Note. On and after
the
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redemption date, unless the Company defaults in payment of the redemption price,
interest ceases to accrue on Senior Subordinated Notes or portions of them
called for redemption. Except as provided in this Section 3.02, provisions of
this Indenture that apply to Senior Subordinated Notes called for redemption
also apply to portions of Senior Subordinated Notes called for redemption.
Section 3.03. Notice of Redemption. Subject to the provisions of Section
3.09 hereof, at least 30 days but not more than 60 days before a redemption
date, the Company shall mail or cause to be mailed, by first class mail, a
notice of redemption to the Trustee and to each Holder of Senior Subordinated
Notes to be redeemed at such Holder's registered address.
The notice shall identify the Senior Subordinated Notes to be redeemed
and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Senior Subordinated Note is being redeemed in part, the
portion of the principal amount of such Senior Subordinated Note to be
redeemed and that, after the redemption date upon surrender of such Senior
Subordinated Note, a new Senior Subordinated Note or Senior Subordinated Notes
in principal amount equal to the unredeemed portion shall be issued upon
cancellation of the original Senior Subordinated Note;
(d) the name and address of the Paying Agent or the place or places
where such Senior Subordinated Notes are to be surrendered for payment;
(e) that Senior Subordinated Notes called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption payment,
interest on Senior Subordinated Notes called for redemption ceases to accrue
on and after the redemption date;
(g) the paragraph of the Senior Subordinated Notes and/or Section of
this Indenture pursuant to which the Senior Subordinated Notes called for
redemption are being redeemed; and
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(h) that no representation is made as to the correctness or accuracy of
the CUSIP number, if any, listed in such notice or printed on the Senior
Subordinated Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
Section 3.04. Effect of Notice of Redemption. Once notice of redemption
is mailed in accordance with Section 3.03 hereof, Senior Subordinated Notes
called for redemption become irrevocably due and payable on the redemption date
at the redemption price. A notice of redemption may not be conditional.
Section 3.05. Deposit of Redemption Price. At least one Business Day
prior to the redemption date, the Company shall deposit with the Trustee or with
the Paying Agent money sufficient to pay the redemption price of and accrued
interest, including Liquidated Damages, if any, on all Senior Subordinated Notes
to be redeemed on that date. The Trustee or the Paying Agent shall promptly
return to the Company any money deposited with the Trustee or the Paying Agent
by the Company in excess of the amounts necessary to pay the redemption price
of, and accrued interest on, all Senior Subordinated Notes to be redeemed.
If the Company complies with the provisions of the preceding paragraph,
on and after the redemption date, interest shall cease to accrue on the Senior
Subordinated Notes or the portions of Senior Subordinated Notes called for
redemption. If a Senior Subordinated Note is redeemed on or after an interest
record date but on or prior to the related interest payment date, then any
accrued and unpaid interest shall be paid to the Person in whose name such
Senior Subordinated Note was registered at the close of business on such record
date. If any Senior Subordinated Note called for redemption shall not be so paid
upon surrender for redemption because of the failure of the Company to comply
with the preceding paragraph, interest shall be paid on the unpaid principal,
from the redemption date until such principal is paid, and to the extent lawful
on any interest, including Liquidated Damages, if any, not paid on such unpaid
principal, in each case at the rate provided in the Senior Subordinated Notes
and in Section 4.01 hereof.
Section 3.06. Senior Subordinated Notes Redeemed in Part. Upon surrender
of a Senior Subordinated Note that is redeemed in part, the Company shall issue
and the Trustee shall authenticate for the Holder at the expense of the Company
a new Senior Subordinated Note, with the Senior Subordinated Guarantees endorsed
thereon, equal in principal amount to the unredeemed portion of the Senior
Subordinated Note surrendered.
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Section 3.07. Optional Redemption. (a) Except as set forth in clause (b)
or (c) of this Section 3.07, the Company shall not have the option to redeem the
Senior Subordinated Notes pursuant to this Section 3.07 prior to December 15,
2002. From and after December 15, 2002, the Company shall have the option to
redeem the Senior Subordinated Notes, in whole or in part, upon not less than 30
nor more than 60 days' written notice at the Senior Subordinated Note redemption
prices (expressed as percentages of principal amount) set forth below, plus
accrued and unpaid interest, including Liquidated Damages, if any, thereon to
the applicable redemption date, if redeemed during the twelve-month period
beginning on December 15 of each of the years indicated below:
Percentage of
Year Principal Amount
---- ----------------
2002................................ 104.937%
2003................................ 103.292%
2004................................ 101.646%
2005 and thereafter....................... 100%
(b) Notwithstanding the provisions of clause (a) of this Section 3.07,
at any time prior to December 15, 2000, the Company may, at its option, on any
one or more occasions, redeem up to 35% of the aggregate principal amount of
Senior Subordinated Notes issued hereunder at a redemption price equal to
109.875% of the principal amount thereof, plus accrued and unpaid interest,
including Liquidated Damages, if any, thereon to the redemption date, with the
net proceeds of public or private sales of common stock of, or contributions to
the common equity capital of, the Company; provided that at least 59% of the
aggregate principal amount of Senior Subordinated Notes issued hereunder remains
outstanding immediately after the occurrence of each such redemption; and
provided, further, that such redemption shall occur within 120 days of the date
of the closing of the related sale of common stock of, or capital contribution
to, the Company.
(c) Notwithstanding the provisions of clause (a) of this Section 3.07,
at any time on or prior to December 15, 2002, upon the occurrence of a Change of
Control, the Company may redeem the Senior Subordinated Notes, in whole but not
in part, at a redemption price equal to the principal amount thereof plus the
Applicable Premium plus accrued and unpaid interest and Liquidated Damages, if
any, to the redemption date.
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Notice of redemption of the Senior Subordinated Notes pursuant to this paragraph
shall be mailed to the Holders of the Senior Subordinated Notes not more than 30
days following the occurrence of a Change of Control.
(d) Any redemption pursuant to this Section 3.07 shall be made pursuant
to the provisions of Sections 3.01 through 3.06 hereof.
Section 3.08. Mandatory Redemption. Except as set forth under Sections
4.10 and 4.13 hereof, the Company shall not be required to make mandatory
redemption or sinking fund payments with respect to the Senior Subordinated
Notes.
Section 3.09 Offer to Purchase by Application of Excess Proceeds. In the
event that, pursuant to Section 4.10 hereof, the Company shall be required to
commence an offer to all Holders of Senior Subordinated Notes to purchase Senior
Subordinated Notes, it shall follow the procedures specified below.
The Asset Sale Offer (as defined in Section 4.10 hereof) shall remain
open for a period of 20 Business Days following its commencement and no longer,
except to the extent that a longer period is required by applicable law (the
"Offer Period"). No later than five Business Days after the termination of the
Offer Period (the "Purchase Date"), the Company shall purchase the principal
amount of Senior Subordinated Notes required to be purchased pursuant to Section
4.10 hereof (the "Offer Amount") or, if less than the Offer Amount has been
tendered, all Senior Subordinated Notes tendered in response to the Asset Sale
Offer. Payment for any Senior Subordinated Notes so purchased shall be made in
the same manner (as to payment of funds) as interest payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest,
including Liquidated Damages, if any, shall be paid to the Person in whose name
a Senior Subordinated Note is registered at the close of business on such record
date, and no additional interest shall be payable to Holders who tender Senior
Subordinated Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company shall send, by
first class mail, a notice to the Trustee and each of the Holders, with a copy
to the Depositary. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Senior Subordinated Notes pursuant to
the Asset Sale Offer. The Asset Sale Offer shall be made to all Holders. The
notice, which shall govern the terms of the Asset Sale Offer, shall state:
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(a) that the Asset Sale Offer is being made pursuant to this
Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer
shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Senior Subordinated Note not tendered or accepted for
payment shall continue to accrue interest;
(d) that, unless the Company defaults in making such payment, any
Senior Subordinated Note accepted for payment pursuant to the Asset Sale Offer
shall cease to accrue interest on and after the Purchase Date;
(e) that Holders electing to have a Senior Subordinated Note
purchased pursuant to an Asset Sale Offer may only elect to have all of such
Senior Subordinated Note purchased and may not elect to have only a portion of
such Senior Subordinated Note purchased;
(f) that Holders electing to have a Senior Subordinated Note
purchased pursuant to any Asset Sale Offer shall be required to surrender the
Senior Subordinated Note, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Senior Subordinated Note completed, or
transfer such Senior Subordinated Note by book-entry transfer, to the Company,
a depository, if appointed by the Company, or a Paying Agent at the address
specified in the notice at least three days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election if
the Company, the Depositary or the Paying Agent, as the case may be, receives,
not later than the expiration of the Offer Period, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Senior Subordinated Note the Holder delivered for
purchase and a statement that such Holder is withdrawing his election to have
such Senior Subordinated Note purchased;
(h) that, if the aggregate principal amount of Senior Subordinated
Notes surrendered by Holders exceeds the Offer Amount, the Company shall
select the Notes to be purchased on a pro rata basis (with such adjustments as
may be deemed appropriate by the Company so that only Senior Subordinated
Notes in denominations of $1,000, or integral multiples thereof, shall be
purchased); and
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(i) that Holders whose Senior Subordinated Notes were purchased
only in part shall be issued new Senior Subordinated Notes equal in principal
amount to the unpurchased portion of the Senior Subordinated Notes surrendered
(or transferred by book-entry transfer).
On or before the Purchase Date, the Company shall, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Senior Subordinated Notes or portions thereof tendered pursuant to the
Asset Sale Offer, or if less than the Offer Amount has been tendered, all Senior
Subordinated Notes tendered, and shall deliver to the Trustee an Officers'
Certificate stating that such Senior Subordinated Notes or portions thereof were
accepted for payment by the Company in accordance with the terms of this Section
3.09. The Company, the Depositary or the Paying Agent, as the case may be, shall
promptly (but in any case not later than five days after the Purchase Date) mail
or deliver to each tendering Holder an amount equal to the purchase price of the
Senior Subordinated Notes tendered by such Holder and accepted by the Company
for purchase, and the Company shall promptly issue a new Senior Subordinated
Note, with the Senior Subordinated Guarantee endorsed thereon, and the Trustee,
upon receipt of an Authentication Order, shall authenticate and mail or deliver
such new Senior Subordinated Note to such Holder, in a principal amount equal to
any unpurchased portion of the Senior Subordinated Note surrendered. Any Senior
Subordinated Note not so accepted shall be promptly mailed or delivered by the
Company to the Holder thereof. The Company shall publicly announce the results
of the Asset Sale Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09 any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
ARTICLE 4
COVENANTS
Section 4.01 Payment of Senior Subordinated Notes. The Company shall pay
or cause to be paid the principal of, premium, if any, and interest, together
with Liquidated Damages, if any, on the Senior Subordinated Notes on the dates
and in the manner provided in the Senior Subordinated Notes. Principal, premium,
if any, and interest shall be considered paid on the date due if the Paying
Agent, if other than the Company or a Subsidiary thereof, holds as of 10:00 a.m.
Eastern Time on the due date (or, if required by the Depositary, such earlier
time to allow the Trustee to make timely payment to the Depositary) money
deposited by the Company in immediately available funds and designated for and
sufficient to pay all principal, premium, if any, and interest then due. The
Company shall pay all Liquidated Damages, if any, in immediately
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available funds in the same manner on the dates and in the amounts set forth in
the Registration Rights Agreement.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Senior
Subordinated Notes to the extent lawful; it shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest and Liquidated Damages (without regard to any
applicable grace period) at the same rate to the extent lawful.
Section 4.02 Maintenance of Office or Agency. The Company shall maintain
in the Borough of Manhattan, The City of New York, an office or agency (which
may be an office of the Trustee or an Affiliate of the Trustee, Registrar or
co-registrar) where Senior Subordinated Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Senior Subordinated Notes and this Indenture
may be served. The Company shall give prompt written notice to the Trustee of
the location, and any change in the location, of such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Senior Subordinated Notes may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in the Borough of Manhattan, The City of New York for such purposes. The Company
shall give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee
as one such office or agency of the Company in accordance with Section 2.03.
Section 4.03 Reports. (a) Whether or not required by the rules and
regulations of the SEC, so long as any Senior Subordinated Notes are
outstanding, the Company shall, commencing after consummation of the
Transaction, furnish to the Holders of Senior Subordinated Notes as of the same
dates and for the same periods as would be required pursuant to the Exchange Act
if the Company were subject to the Exchange Act (i) all quarterly and annual
financial information that would be required to be contained in
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a filing with the SEC on Forms 10-Q and 10-K if the Company were required to
file such Forms, including a "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and, with respect to the annual information
only, a report thereon by the Company's certified independent accountants and
(ii) all current reports that would be required to be filed with the SEC on Form
8-K if the Company were required to file such reports. In addition, whether or
not required by the rules and regulations of the SEC, following the consummation
of the Transaction, the Company shall file a copy of all such information and
reports with the SEC for public availability (unless the SEC will not accept
such a filing) and make such information available to securities analysts and
prospective investors upon request. The Company shall at all times comply with
Section 314(a) of the Trust Indenture Act.
(b) For so long as any Senior Subordinated Notes remain outstanding, the
Company and the Guarantors shall furnish to the Holders of the Senior
Subordinated Notes and to securities analysts and prospective investors, upon
their request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act.
Section 4.04 Compliance Certificate. (a) The Company shall deliver to
the Trustee, within 90 days after the end of each fiscal year, an Officers'
Certificate stating that a review of the activities of the Company and its
Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under this
Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Company has kept,
observed, performed and fulfilled each and every covenant contained in this
Indenture and is not in default in the performance or observance of any of the
terms, provisions and conditions of this Indenture (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of Default
of which he or she may have knowledge and what action the Company is taking or
proposes to take with respect thereto) and that to the best of his or her
knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of, Liquidated Damages or interest, if any,
on the Senior Subordinated Notes is prohibited or if such event has occurred, a
description of the event and what action the Company is taking or proposes to
take with respect thereto.
(a) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any
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such violation has occurred, specifying the nature and period of existence
thereof, it being understood that such accountants shall not be liable directly
or indirectly to any Person for any failure to obtain knowledge of any such
violation.
(b) The Company shall, so long as any of the Senior Subordinated Notes
are outstanding, deliver to the Trustee, forthwith upon any Officer becoming
aware of any Default or Event of Default, an Officers' Certificate specifying
such Default or Event of Default and what action the Company is taking or
proposes to take with respect thereto.
Section 4.05 Taxes. The Company shall pay, and shall cause each of its
Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and
governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders of the Senior Subordinated Notes.
Section 4.06 Stay, Extension and Usury Laws. Each of the Company and the
Guarantors covenants (to the extent that it may lawfully do so) that it shall
not at any time insist upon, plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay, extension or usury law wherever enacted,
now or at any time hereafter in force, that may affect the covenants or the
performance of this Indenture; and each of the Company and the Guarantors (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it shall not, by resort to any
such law, hinder, delay or impede the execution of any power herein granted to
the Trustee, but shall suffer and permit the execution of every such power as
though no such law has been enacted.
Section 4.07 Restricted Payments. The Company shall not, and shall not
permit any of its Restricted Subsidiaries to, directly or indirectly: (i)
declare or pay any dividend or make any other payment or distribution on account
of the Company's or any of its Restricted Subsidiaries' Equity Interests (other
than dividends or distributions payable in Equity Interests (other than
Disqualified Stock) of the Company or dividends or distributions payable to the
Company or any Restricted Subsidiary of the Company); (ii) purchase, redeem,
defease or otherwise acquire or retire for value any Equity Interests of the
Company; (iii) make any principal or interest payment on or with respect to, or
purchase, redeem, defease or otherwise acquire or retire for value any
Subordinated Indebtedness, except for a payment of principal or interest at
Stated Maturity; or (iv) make any Restricted Investment (all such payments and
other actions set forth in clauses (i) through (iv) above being collectively
referred to as "Restricted Payments"), unless, at the time of and after giving
effect to such Restricted Payment:
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(a) no Default or Event of Default shall have occurred and be continuing
or would occur as a consequence thereof;
(b) the Company would, at the time of such Restricted Payment and
immediately after giving pro forma effect thereto as if such Restricted
Payment had been made at the beginning of the applicable four-quarter period,
have been permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in the first
paragraph of Section 4.09 hereof; and
(c) such Restricted Payment, together with the aggregate of all other
Restricted Payments made by the Company and its Restricted Subsidiaries after
the date of this Indenture (including Restricted Payments permitted by clause
(i) of the next succeeding paragraph, but excluding all other Restricted
Payments permitted by the next succeeding paragraph), is less than the sum of
(i) 50% of the Consolidated Net Income of the Company for the period (taken as
one accounting period) from the beginning of the first fiscal quarter
commencing after the date of this Indenture to the end of the Company's most
recently ended fiscal quarter for which internal financial statements are
available at the time of such Restricted Payment (or, if such Consolidated Net
Income for such period is a deficit, less 100% of such deficit), plus (ii)
100% of the aggregate net cash proceeds and the fair market value, as
determined in good faith by the Board of Directors, of marketable securities
received by the Company from the issue or sale since the date of this
Indenture of Equity Interests (including Retired Capital Stock (as defined
below)) of the Company (except in connection with the Transaction) or of debt
securities of the Company that have been converted into such Equity Interests
(other than Refunding Capital Stock (as defined below) or Equity Interests or
convertible debt securities of the Company sold to a Restricted Subsidiary of
the Company and other than Disqualified Stock or debt securities that have
been converted into Disqualified Stock), plus (iii) 100% of the aggregate
amounts contributed to the common equity capital of the Company since the date
of this Indenture, (except amounts contributed to finance the Transaction),
plus (iv) 100% of the aggregate amounts received in cash and the fair market
value of marketable securities (other than Restricted Investments) received
from (x) the sale or other disposition of Restricted Investments made by the
Company and its Restricted Subsidiaries since the date of this Indenture or
(y) the sale of the stock of an Unrestricted Subsidiary or the sale of all or
substantially all of the assets of an Unrestricted Subsidiary to the extent
that a liquidating dividend is paid to the Company or any Subsidiary from the
proceeds of such sale, plus (v) 100% of any dividends received by the Company
or a Wholly-Owned Restricted Subsidiary of the Company after the date of this
Indenture from an Unrestricted Subsidiary of the Company, plus (vi) $10.0
million.
The foregoing provisions shall not prohibit:
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(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at the date of declaration such payment would have
complied with the provisions of this Indenture;
(ii) the redemption, repurchase, retirement or other acquisition of any
Equity Interests of the Company or any Restricted Subsidiary (the "Retired
Capital Stock") or any Subordinated Indebtedness, in each case, in exchange
for, or out of the proceeds of, the substantially concurrent sale (other than
to a Restricted Subsidiary of the Company) of Equity Interests of the Company
(other than any Disqualified Stock) (the "Refunding Capital Stock"); provided
that the amount of any such net cash proceeds that are utilized for any such
redemption, repurchase, retirement or other acquisition shall be excluded from
clause (c)(ii) of the immediately preceding paragraph;
(iii) the defeasance, redemption or repurchase of Subordinated
Indebtedness with the net cash proceeds from an incurrence of Permitted
Refinancing Indebtedness;
(iv) the redemption, repurchase or other acquisition or retirement for
value of any Equity Interests of the Company or any Restricted Subsidiary of
the Company held by any member of the Company's (or any of its Subsidiaries')
management pursuant to any management equity subscription agreement or stock
option or similar agreement; provided that the aggregate price paid for all
such repurchased, redeemed, acquired or retired Equity Interests shall not
exceed the sum of $5.0 million in any twelve-month period plus the aggregate
cash proceeds received by the Company during such twelve-month period from any
issuance of Equity Interests by the Company to members of management of the
Company and its Subsidiaries; provided that the amount of any such net cash
proceeds that are utilized for any such redemption, repurchase, retirement or
other acquisition shall be excluded from clause (c)(ii) of the immediately
preceding paragraph;
(v) Investments in Unrestricted Subsidiaries or Joint Ventures having an
aggregate fair market value, taken together with all other Investments made
pursuant to this clause (v) that are at that time outstanding, not to exceed
$15 million plus 5% of the increase in Total Assets since the date of this
Indenture at the time of such Investment (with the fair market value of each
Investment being measured at the time made and without giving effect to
subsequent changes in value);
(vi) repurchases of Equity Interests deemed to occur upon exercise or
conversion of stock options, warrants, convertible securities or other similar
Equity Interests if such Equity Interests represent a portion of the exercise
or conversion price of such options, warrants, convertible securities or other
similar Equity Interests;
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(vii) the making and consummation of a Subordinated Asset Sale Offer in
accordance with the provisions of Section 4.10 hereof; and
(viii) any dividend or distribution payable on or in respect of any
class of Equity Interests issued by a Restricted Subsidiary of the Company;
provided that such dividend or distribution is paid on a pro rata basis to all
of the holders of such Equity Interests in accordance with their respective
holdings of such Equity Interests;
provided, further, that at the time of, and after giving effect to, any
Restricted Payment permitted under clauses (iv), (v) or (vii) above, no Default
or Event of Default shall have occurred and be continuing or would occur as a
consequence thereof.
As of the date of this Indenture, all of the Company's Subsidiaries
shall be Restricted Subsidiaries. The Company shall not permit any Unrestricted
Subsidiary to become a Restricted Subsidiary except pursuant to the last
sentence of the definition of Unrestricted Subsidiary in Section 1.01 hereof.
For purposes of designating any Restricted Subsidiary as an Unrestricted
Subsidiary, all outstanding Investments by the Company and its Restricted
Subsidiaries (except to the extent repaid) in the Subsidiary so designated shall
be deemed to be Restricted Payments in an amount equal to the book value of such
Investment at the time of such designation. Such designation shall only be
permitted if a Restricted Payment in such amount would be permitted at such time
and if such Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary. Unrestricted Subsidiaries shall not be subject to any of the
restrictive covenants set forth in this Article 4.
The amount of all Restricted Payments (other than cash) shall be the
fair market value (evidenced by a resolution of the Board of Directors set forth
in an Officers' Certificate delivered to the Trustee) on the date of the
Restricted Payment of the asset(s) proposed to be transferred by the Company or
such Restricted Subsidiary, as the case may be, pursuant to the Restricted
Payment. Not later than the date of making any Restricted Payment, the Company
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this Section 4.07 were computed, which calculations may
be based upon the Company's latest available financial statements.
Section 4.08 Dividend and Other Payment Restrictions Affecting
Subsidiaries. The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (i)(a) pay dividends or make any other distributions to
the Company or any of its Restricted Subsidiaries (1) on its Capital Stock or
(2) with respect to any other interest or participation in, or measured by, its
profits, or (b) pay any indebtedness owed to the
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Company or any of its Restricted Subsidiaries, (ii) make loans or advances to
the Company or any of its Restricted Subsidiaries or (iii) sell, lease or
transfer any of its properties or assets to the Company or any of its Restricted
Subsidiaries, except for such encumbrances or restrictions existing under or by
reason of (a) Existing Indebtedness as in effect on the date of this Indenture,
(b) the Bank Credit Agreement and any amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or refinancings
thereof, provided that the Bank Credit Agreement and any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings thereof are no more restrictive taken as a whole
with respect to such dividend and other payment restrictions than those terms
described in the Bank Credit Agreement on the date of this Indenture, (c) this
Indenture and the Senior Subordinated Notes, (d) applicable law, (e) any
instrument governing Indebtedness or Capital Stock of a Person acquired by the
Company or any of its Restricted Subsidiaries as in effect at the time of such
acquisition (except to the extent such Indebtedness was incurred in connection
with or in contemplation of such acquisition), which encumbrance or restriction
is not applicable to any Person, or the properties or assets of any Person,
other than the Person, or the property or assets of the Person, so acquired,
provided that, in the case of Indebtedness, such Indebtedness was permitted by
the terms of this Indenture to be incurred, (f) customary non-assignment or net
worth provisions in leases and other agreements entered into in the ordinary
course of business and consistent with past practices, (g) purchase money
obligations for property acquired in the ordinary course of business that impose
restrictions of the nature described in clause (iii) above on the property so
acquired, (h) Permitted Refinancing Indebtedness, provided that the restrictions
contained in the agreements governing such Permitted Refinancing Indebtedness
are no more restrictive than those contained in the agreements governing the
Indebtedness being refinanced, (i) any Mortgage Financing or Mortgage
Refinancing that imposes restrictions on the real property securing such
Indebtedness, (j) any Permitted Investment, (k) contracts for the sale of
assets, including, without limitation, customary restrictions with respect to a
Restricted Subsidiary of the Company pursuant to an agreement that has been
entered into for the sale or disposition of all or substantially all of the
Capital Stock or assets of such Restricted Subsidiary or (l) customary
provisions in joint venture agreements and other similar agreements.
Section 4.09 Incurrence of Indebtedness and Issuance of Disqualified
Stock. The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guaranty or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "incur" and correlatively, an "incurrence" of) any Indebtedness
(including Acquired Debt) and the Company shall not issue any Disqualified
Stock; provided, however, that the Company may incur Indebtedness (including
Acquired Debt) or issue shares of Disqualified Stock
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if the Fixed Charge Coverage Ratio for the Company for the most recent four full
fiscal quarters for which internal financial statements are available at the
time of such incurrence would have been at least 2.00 to 1.0 determined on a pro
forma basis (including a pro forma application of the net proceeds therefrom),
as if the additional Indebtedness had been incurred or the Disqualified Stock
had been issued, as the case may be, and the application of the proceeds
therefrom had occurred at the beginning of such four-quarter period.
The foregoing provisions shall not apply to:
(a) the incurrence by the Company (and the Guarantee thereof by the
Guarantors) of Indebtedness under the Bank Credit Agreement and the issuance
of letters of credit thereunder (with letters of credit being deemed to have a
principal amount equal to the aggregate maximum amount then available to be
drawn thereunder, assuming compliance with all conditions for drawing) up to
an aggregate principal amount of $167.0 million outstanding at any one time,
less principal repayments of term loans and permanent commitment reductions
with respect to revolving loans and letters of credit under the Bank Credit
Agreement (in each case, other than in connection with an amendment,
refinancing, refunding, replacement, renewal or modification) made after the
date of this Indenture;
(b) the incurrence by the Company or any of its Restricted Subsidiaries
of any Existing Indebtedness;
(c) the incurrence by the Company or any of its Restricted Subsidiaries
of Indebtedness represented by the Senior Subordinated Notes (but, with
respect to this clause (c), only up to the aggregate principal amount thereof
issued on the date of this Indenture);
(d) Indebtedness (including Acquired Debt) incurred by the Company or
any of its Restricted Subsidiaries to finance the purchase, lease or
improvement of property (real or personal), assets or equipment (whether
through the direct purchase of assets or the Capital Stock of any Person
owning such assets), in an aggregate principal amount not to exceed $15
million plus 5% of the increase in Total Assets since the date of this
Indenture;
(e) Indebtedness incurred by the Company or any of its Restricted
Subsidiaries constituting reimbursement obligations with respect to letters of
credit issued in the ordinary course of business, including, without
limitation, letters of credit in respect of workers' compensation claims or
self-insurance, or other Indebtedness with respect to reimbursement type
obligations regarding workers' compensation claims;
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(f) intercompany Indebtedness between or among the Company and any of
its Restricted Subsidiaries and Guarantees by the Company of Indebtedness of
any Restricted Subsidiary of the Company or by a Restricted Subsidiary of the
Company of Indebtedness of any other Restricted Subsidiary of the Company or
the Company;
(g) Hedging Obligations that are incurred (1) for the purpose of fixing
or hedging interest rate or currency exchange rate risk with respect to any
Indebtedness that is permitted by the terms of this Indenture to be
outstanding or (2) for the purpose of fixing or hedging currency exchange rate
risk with respect to any purchases or sales of goods or other transactions or
expenditures made or to be made in the ordinary course of business and
consistent with past practices as to which the payment therefor or proceeds
therefrom, as the case may be, are denominated in a currency other than U.S.
dollars;
(h) obligations in respect of performance and surety bonds and
completion guarantees provided by the Company or any Restricted Subsidiary in
the ordinary course of business;
(i) the incurrence by the Company or any of its Restricted Subsidiaries
of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of
which are used to extend, refinance, renew, replace, defease or refund,
Indebtedness that was permitted by this Indenture to be incurred;
(j) the incurrence by the Company's Unrestricted Subsidiaries of
Non-Recourse Debt, provided, however, that if any such Indebtedness ceases to
be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed
to constitute an incurrence of Indebtedness by a Restricted Subsidiary of the
Company; and
(k) the incurrence by the Company of additional Indebtedness (including
pursuant to the Bank Credit Agreement) not otherwise permitted hereunder in an
amount under this clause (k) not to exceed $25.0 million in aggregate
principal amount (or accreted value, as applicable) outstanding at any one
time.
Section 4.10 Asset Sales. The Company shall not, and shall not permit
any of its Restricted Subsidiaries to, cause, make or suffer to exist an Asset
Sale unless (i) the Company (or the Restricted Subsidiary, as the case may be)
receives consideration at the time of such Asset Sale at least equal to the fair
market value (evidenced by a resolution of the Board of Directors set forth in
an Officers' Certificate delivered to the Trustee) of the assets or Equity
Interests issued or sold or otherwise disposed of and (ii) at least 80% of the
consideration therefor received by the Company or such Restricted Subsidiary is
in the form of cash or Cash Equivalents; provided that the amount of (x) any
liabilities (as
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shown on the Company's or such Restricted Subsidiary's most recent balance
sheet) of the Company or any Restricted Subsidiary (other than contingent
liabilities and liabilities that are by their terms subordinated to the Senior
Subordinated Notes or any guarantee thereof) that are assumed by the transferee
of any such assets pursuant to a customary novation agreement that releases the
Company or such Restricted Subsidiary from further liability, (y) any Excludable
Current Liabilities and (z) any notes or other obligations received by the
Company or any such Restricted Subsidiary from such transferee that are
immediately converted by the Company or such Restricted Subsidiary into cash (to
the extent of the cash received), shall be deemed to be cash for purposes of
this provision.
Within 365 days after the Company's or any Restricted Subsidiary's
receipt of the Net Proceeds of any Asset Sale (or, in the case of any Asset Sale
involving the Specified Real Estate, by the later of (i) June 30, 1999 and (ii)
the date 365 days after receipt of the Net Proceeds), the Company or such
Restricted Subsidiary may apply the Net Proceeds from such Asset Sale, at its
option, (i) to permanently repay or reduce Obligations under the Bank Credit
Agreement (and to correspondingly reduce commitments with respect thereto) or
other Senior Debt, (ii) to secure Letter of Credit Obligations to the extent
related letters of credit have not been drawn upon or returned undrawn and/or
(iii) to an investment in any one or more businesses, capital expenditures or
acquisitions of other assets, in each case, used or useful in a Principal
Business; provided that such Net Proceeds may, at the Company's option, be
deemed to have been applied pursuant to clause (iii) to the extent of any
expenditures by the Company made to invest in, acquire or construct businesses,
properties or assets used in the Principal Business within one year preceding
the date of such Asset Sale. Pending the final application of any such Net
Proceeds, the Company or such Restricted Subsidiary may temporarily reduce
Indebtedness under a revolving credit facility, if any, or otherwise invest such
Net Proceeds in Cash Equivalents. Any Net Proceeds from the Asset Sale that are
not invested as provided and within the time period set forth in the first
sentence of this paragraph shall be deemed to constitute "Excess Proceeds." When
the aggregate amount of Excess Proceeds exceeds $15.0 million, the Company shall
make offers to all Holders of Senior Subordinated Notes and to holders of any
other Senior Subordinated Indebtedness, the terms of which so require (each an
"Asset Sale Offer"), to purchase the maximum principal amount of Senior
Subordinated Notes and such other Senior Subordinated Indebtedness, that is an
integral multiple of $1,000, that may be purchased out of the Excess Proceeds at
an offer price in cash in an amount equal to 100% of the aggregate principal
amount thereof (or 100% of the accreted value thereof, in the case of Senior
Subordinated Indebtedness issued at a discount), plus accrued and unpaid
interest, including Liquidated Damages, if any, thereon to the date fixed for
the closing of such offer in accordance with the procedures set forth in Section
3.09 hereof. The Excess Proceeds shall be allocated to the respective Asset Sale
Offers for the Senior Subordinated Notes and such other Senior Subordinated
Indebtedness in proportion to their relative principal amounts (or accreted
value, as applicable). The Company shall
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commence an Asset Sale Offer with respect to Excess Proceeds within 10 Business
Days after the date that the aggregate amount of Excess Proceeds exceeds $15.0
million according to the procedure described in Section 3.09 hereof. To the
extent that the aggregate amount of Senior Subordinated Notes (and other Senior
Subordinated Indebtedness) tendered pursuant to any required Asset Sale Offer is
less than the Excess Proceeds allocated thereto, the Company may use any
remaining Excess Proceeds (x) to offer to redeem or purchase other Senior
Subordinated Indebtedness or Subordinated Indebtedness (a "Subordinated Asset
Sale Offer") in accordance with the provisions of the indenture or other
agreement governing such other Senior Subordinated Indebtedness or Subordinated
Indebtedness or (y) for any other purpose not prohibited by any provision
herein. If the aggregate principal amount of Senior Subordinated Notes tendered
pursuant to any Asset Sale Offer exceeds the amount of Excess Proceeds allocated
thereto, the Trustee shall select the Senior Subordinated Notes to be purchased
on a pro rata basis, based upon the principal amount of Senior Subordinated
Notes tendered. Upon completion of any such Asset Sale Offer, the amount of
Excess Proceeds shall be reset at zero.
Notwithstanding the foregoing, the Company may, in lieu of making an
Asset Sale Offer for other Senior Subordinated Indebtedness, satisfy its
obligation under the governing agreement with respect thereto by applying the
Excess Proceeds allocated to such other Senior Subordinated Indebtedness to the
prepayment, redemption or public or private repurchase of such Senior
Subordinated Indebtedness.
The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of the Senior Subordinated Notes as a result of an Asset Sale.
Section 4.11 Transactions with Affiliates. The Company shall not, and
shall not permit any of its Restricted Subsidiaries to, make any payment to, or
sell, lease, transfer or otherwise dispose of any of its properties or assets
to, or purchase any property or assets from, or enter into or make or amend any
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate (each of the foregoing, an "Affiliate Transaction"),
unless (i) such Affiliate Transaction is on terms that are no less favorable to
the Company or the relevant Restricted Subsidiary than those that would have
been obtained in a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person and (ii) the Company delivers to the Trustee
(a) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $5.0 million, a
resolution of the Board of Directors set forth in an Officers' Certificate
certifying that such Affiliate Transaction complies
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with clause (i) above and, if there are any disinterested members of the Board
of Directors, that such Affiliate Transaction has been approved by a majority of
the disinterested members of the Board of Directors and (b) with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $10.0 million, or with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $5.0 million as to which there are no
disinterested members of the Board of Directors, an opinion as to the fairness
to the Holders of such Affiliate Transaction from a financial point of view
issued by an accounting, appraisal or investment banking firm of national
standing.
The foregoing provisions shall not apply to the following: (i)
transactions between or among the Company and/or any of its Restricted
Subsidiaries; (ii) Restricted Payments or Permitted Investments permitted under
Section 4.07 hereof; (iii) the payment of all fees, expenses and other amounts
as disclosed in the Offering Circular relating to the Transaction; (iv) the
payment of reasonable and customary regular fees to, and indemnity provided on
behalf of, officers, directors, employees or consultants of the Company or any
Restricted Subsidiary of the Company; (v) the transfer or provision of
inventory, goods or services by the Company or any Restricted Subsidiary of the
Company in the ordinary course of business to any Affiliate of the Company on
terms that are customary in the industry or consistent with past practices,
including with respect to price and volume discounts; (vi) the execution of, or
the performance by the Company or any of its Restricted Subsidiaries of its
obligations under the terms of, any financial advisory, financing, underwriting
or placement agreement or any other agreement relating to investment banking or
financing activities with Goldman, Sachs & Co. or any of its Affiliates
including, without limitation, in connection with acquisitions or divestitures,
in each case to the extent that such agreement was approved by a majority of the
disinterested members of the Board of Directors in good faith; (vii) payments,
advances or loans to employees that are approved by a majority of the
disinterested members of the Board of Directors of the Company in good faith;
(viii) the performance of any agreement as in effect as of the date of this
Indenture or any transaction contemplated thereby (including pursuant to any
amendment thereto so long as any such amendment is not disadvantageous to the
Holders of Senior Subordinated Notes in any material respect); (ix) the
existence of, or the performance by the Company or any of its Restricted
Subsidiaries of its obligations under the terms of, any stockholders agreement
(including any registration rights agreement or purchase agreement related
thereto) to which it is a party as of the date of this Indenture and any similar
agreements which it may enter into thereafter, provided, however, that the
existence of, or the performance by the Company or any of its Restricted
Subsidiaries of obligations under, any future amendment to any such existing
agreement or under any similar agreement entered into after the date of this
Indenture shall only be permitted by this clause (ix) to the extent that the
terms of any such amendment or new agreement are not otherwise disadvantageous
to the Holders of the Senior Subordinated Notes in any material respect; (x)
transactions permitted by, and
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complying with, the provisions of Section 5.01 hereof; and (xi) transactions
with suppliers or other purchases or sales of goods or services, in each case in
the ordinary course of business (including, without limitation, pursuant to
joint venture agreements) and otherwise in compliance with the terms of this
Indenture which are fair to the Company or its Restricted Subsidiaries, in the
reasonable determination of a majority of the disinterested members of the Board
of Directors of the Company or an executive officer thereof, or are on terms at
least as favorable as might reasonably have been obtained at such time from an
unaffiliated party.
Section 4.12 Liens. The Company shall not, and shall not permit any of
its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
suffer to exist any Lien that secures obligations under any Senior Subordinated
Indebtedness or Subordinated Indebtedness on any asset or property now owned or
hereafter acquired by the Company or any of its Restricted Subsidiaries, or on
any income or profits therefrom, or assign or convey any right to receive income
therefrom to secure any Senior Subordinated Indebtedness or Subordinated
Indebtedness, unless the Senior Subordinated Notes are equally and ratably
secured with the obligations so secured or until such time as such obligations
are no longer secured by a Lien; provided, that in any case involving a Lien
securing Subordinated Indebtedness, such Lien is subordinated to the Lien
securing the Senior Subordinated Notes to the same extent that such Subordinated
Indebtedness is subordinated to the Senior Subordinated Notes.
Section 4.13 Offer to Repurchase Upon Change of Control. (a) Upon the
occurrence of a Change of Control, each Holder of Senior Subordinated Notes
shall have the right to require the Company to repurchase all or any part (equal
to $1,000 in principal amount or an integral multiple thereof) of such Holder's
Senior Subordinated Notes pursuant to the offer described below (the "Change of
Control Offer") at an offer price in cash (the "Change of Control Payment")
equal to 101% of the aggregate principal amount thereof plus accrued and unpaid
interest, including Liquidated Damages, if any, thereon to the date of
repurchase. Within 30 days following any Change of Control, the Company shall
mail a notice to each Holder, the Trustee and the Depositary stating: (1) that
the Change of Control Offer is being made pursuant to this Section 4.13 and that
all Senior Subordinated Notes tendered shall be accepted for payment; (2) the
purchase price and the Change of Control Payment Date (as defined below); (3)
that any Senior Subordinated Note not tendered shall continue to accrue
interest; (4) that, unless the Company defaults in the payment of the Change of
Control Payment, all Senior Subordinated Notes accepted for payment pursuant to
the Change of Control Offer shall cease to accrue interest after the Change of
Control Payment Date; (5) that Holders electing to have any Senior Subordinated
Notes purchased pursuant to a Change of Control Offer shall be required to
surrender the Senior Subordinated Notes, with the form
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entitled "Option of Holder to Elect Purchase" on the reverse of the Senior
Subordinated Notes completed, to the Paying Agent or the Depositary, as
applicable at the address specified in the notice prior to the close of business
on the third Business Day preceding the Change of Control Payment Date; (6) that
Holders shall be entitled to withdraw their election if the Paying Agent or the
Depositary, as applicable, receives, not later than the close of business on the
second Business Day preceding the Change of Control Payment Date (or such later
date required by applicable law), a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of Senior
Subordinated Notes delivered for purchase, and a statement that such Holder is
withdrawing his or her election to have the Senior Subordinated Notes purchased;
and (7) that Holders whose Senior Subordinated Notes are being purchased only in
part shall be issued new Senior Subordinated Notes, with the Senior Subordinated
Guarantees endorsed thereon, equal in principal amount to the unpurchased
portion of the Senior Subordinated Notes surrendered, which unpurchased portion
must be equal to $1,000 in principal amount or an integral multiple thereof.
Such notice shall describe the transaction or transactions that constitute the
Change of Control. The Company shall comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws and regulations are applicable in connection with the
repurchase of Senior Subordinated Notes as a result of a Change of Control.
(b) On a date that is no earlier than 30 days nor later than 60 days
from the date that the Company mails or causes to be mailed notice of the Change
of Control to the Holders (the "Change of Control Payment Date"), the Company
shall, to the extent lawful, (1) accept for payment all Senior Subordinated
Notes or portions thereof properly tendered pursuant to the Change of Control
Offer, (2) deposit with the Paying Agent an amount equal to the Change of
Control Payment in respect of all Senior Subordinated Notes or portions thereof
so tendered and (3) deliver or cause to be delivered to the Trustee for
cancellation the Senior Subordinated Notes so accepted together with an
Officers' Certificate stating the aggregate principal amount of Senior
Subordinated Notes or portions thereof being purchased by the Company. The
Paying Agent shall promptly mail to each Holder of Senior Subordinated Notes so
tendered the Change of Control Payment for such Senior Subordinated Notes, and
the Trustee shall promptly authenticate and mail (or cause to be transferred by
book entry) to each Holder a new Senior Subordinated Note, with the Senior
Subordinated Guarantees endorsed thereon, equal in principal amount to any
unpurchased portion of the Senior Subordinated Notes surrendered, if any;
provided that each such new Senior Subordinated Note shall be in a principal
amount of $1,000 or an integral multiple thereof. The Company shall publicly
announce the results of the Change of Control Offer on or as soon as practicable
after the Change of Control Payment Date.
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(c) 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 4.13 and Section 3.07(c) hereof and such third party
purchases all of the Senior Subordinated Notes validly tendered and not
withdrawn under such Change of Control Offer.
Section 4.14 Issuances of Guarantees of Indebtedness. The Company shall
not permit any Restricted Subsidiary, directly or indirectly, to guarantee or
pledge any assets to secure the payment of any other Indebtedness unless such
Restricted Subsidiary either (i) is a Guarantor, or (ii) simultaneously executes
and delivers a supplemental indenture to this Indenture, in the form of Exhibit
E hereto, providing for the Guarantee of the payment of all Obligations with
respect to the Senior Subordinated Notes by such Restricted Subsidiary, which
Guarantee shall be senior to such Restricted Subsidiary's Guarantee of or pledge
to secure any other Indebtedness that constitutes Subordinated Indebtedness and
subordinated to such Restricted Subsidiary's Guarantee of or pledge to secure
any other Indebtedness that constitutes Senior Debt to the same extent as the
Senior Subordinated Notes are subordinated to Senior Debt. In addition, (x) if
the Company shall, after the date of this Indenture, create or acquire any new
Restricted Subsidiary (other than a Restricted Subsidiary organized under the
laws of a country other than the United States), then such newly created or
acquired Restricted Subsidiary shall execute a Senior Subordinated Guarantee and
deliver an Opinion of Counsel in accordance with Article 11 hereof, and (y) if
the Company shall (whether before or after the date of this Indenture) create or
acquire any other new Subsidiary that becomes a guarantor under the Bank Credit
Agreement, then such newly created or acquired Subsidiary shall execute a Senior
Subordinated Guarantee and deliver an Opinion of Counsel in accordance with
Article 11 hereof. Notwithstanding the foregoing, any such Senior Subordinated
Guarantee shall provide by its terms that it shall be automatically and
unconditionally released and discharged upon certain mergers, consolidations,
sales and other dispositions (including, without limitation, by foreclosure)
pursuant to Article 11 hereof. In addition, if any Guarantor is released and
relieved of all obligations it may have as a guarantor under the Bank Credit
Agreement, then such Guarantor shall also be automatically released and relieved
of any obligations under its Senior Subordinated Guarantee.
Section 4.15 Corporate Existence. Subject to Article 5 hereof, the
Company and the Guarantors shall do or cause to be done all things necessary to
preserve and keep in full force and effect (i) its corporate existence, and the
corporate, partnership or other existence of each of its Restricted
Subsidiaries, in accordance with the respective organizational documents (as the
same may be amended from time to time) of the Company or any such Restricted
Subsidiary and (ii) the rights (charter and statutory),
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licenses and franchises of the Company, the Guarantors and their respective
Restricted Subsidiaries; provided, however, that the Company and the Guarantors
shall not be required to preserve any such right, license or franchise, or the
corporate, partnership or other existence of any of their respective Restricted
Subsidiaries, if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company or
such Guarantor, as applicable, and its Restricted Subsidiaries, taken as a
whole, and that the loss thereof is not adverse in any material respect to the
Holders of the Senior Subordinated Notes. Notwithstanding the foregoing, the
loss of licenses shall not be deemed a default under this Section 4.15 provided
that such loss is not adverse in any material respect to the Holders of the
Senior Subordinated Notes.
Section 4.16 No Senior Subordinated Debt. Notwithstanding the provisions
of Section 4.09 hereof, (i) the Company shall not directly or indirectly incur,
create, issue, assume, guarantee or otherwise become liable for any Indebtedness
that is subordinate or junior in right of payment to any Senior Debt and senior
in any respect in right of payment to the Senior Subordinated Notes and (ii) no
Guarantor shall directly or indirectly incur, create, issue, assume, guarantee
or otherwise become liable for any Indebtedness that is subordinate or junior in
right of payment to the Senior Guarantees and senior in any respect in right of
payment to the Senior Subordinated Guarantees.
ARTICLE 5
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of All or Substantially All
Assets. The Company shall not consolidate or merge with or into (whether or not
the Company is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions to, another Person unless (i) the
Company is the surviving corporation or the Person formed by or surviving any
such consolidation or merger (if other than the Company) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made is a corporation organized or existing under the laws of the United States,
any state thereof or the District of Columbia; (ii) the Person formed by or
surviving any such consolidation or merger (if other than the Company) or Person
to which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made assumes all the obligations of the Company under the Senior
Subordinated Notes and this Indenture pursuant to a supplemental indenture in
form reasonably satisfactory to the Trustee; (iii) immediately after such
transaction no Default or Event of Default exists; and (iv) except in the case
of a merger of the Company with or into a Wholly-Owned Restricted Subsidiary of
the Company, the Company or the Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such
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sale, assignment, transfer, lease, conveyance or other disposition shall have
been made will, at the time of such transaction and after giving pro forma
effect thereto as if such transaction had occurred at the beginning of the
applicable four-quarter period, be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in the first paragraph of Section 4.09 hereof. Notwithstanding the
foregoing clauses (iii) and (iv), (a) any Restricted Subsidiary may consolidate
with, merge into or transfer all or part of its properties and assets to the
Company and (b) the Company may merge with an Affiliate incorporated solely for
the purpose of reincorporating the Company in another jurisdiction.
Section 5.02 Successor Corporation Substituted. Upon any consolidation
or merger, or any sale, assignment, transfer, lease, conveyance or other
disposition of all or substantially all of the assets of the Company in
accordance with Section 5.01 hereof, the successor Person formed by such
consolidation or into or with which the Company is merged or to which such sale,
assignment, transfer, lease, conveyance or other disposition is made shall
succeed to, and be substituted for (so that from and after the date of such
consolidation, merger, sale, assignment, transfer, lease, conveyance or other
disposition, the provisions of this Indenture referring to the "Company" shall
refer instead to the successor Person and not to the Company), and may exercise
every right and power of the Company under this Indenture with the same effect
as if such successor Person had been named as the Company herein; provided,
however, that the predecessor Company shall not be relieved from the obligation
to pay the principal of and interest on the Senior Subordinated Notes except in
the case of a sale of all of the Company's assets that meets the requirements of
Section 5.01 hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01 Events of Default. An "Event of Default" occurs if:
(1) the Company defaults in the payment of interest, including
Liquidated Damages, if any, on the Senior Subordinated Notes when the same
becomes due and payable and the Default continues for a period of 30 days,
whether or not such payment is prohibited by the provisions of Article 10
hereof;
(2) the Company defaults in the payment of the principal of or premium,
if any, on the Senior Subordinated Notes when the same becomes due and payable
at maturity, upon redemption or otherwise, whether or not such payment is
prohibited by the provisions of Article 10 hereof;
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(3) the Company fails, and such failure continues for 30 days after
notice from the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Senior Subordinated Notes, to observe or perform any
covenant, condition or agreement on the part of the Company to be observed or
performed pursuant to Sections 4.07, 4.09, 4.13 and 5.01 hereof;
(4) the Company fails, and such failure continues for 60 days after
notice from the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Senior Subordinated Notes, to comply with any of its
other agreements or covenants in, or provisions of, the Senior Subordinated
Notes or this Indenture;
(5) a default occurs under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any of
its Restricted Subsidiaries), whether such Indebtedness or guarantee now
exists or shall be created after the date of this Indenture, which default
results in the acceleration of such Indebtedness prior to its express maturity
and, in each case, the principal amount of such Indebtedness, together with
the principal amount of any other such Indebtedness the maturity of which has
been so accelerated, aggregates $15.0 million or more;
(6) the Company or any of its Restricted Subsidiaries fails to pay final
judgments aggregating in excess of $15.0 million, which judgments are not
paid, discharged or stayed for a period of 60 days;
(7) the Company or any of its Restricted Subsidiaries pursuant to or
within the meaning of any Bankruptcy Law:
(a) commences a voluntary case,
(b) consents to the entry of an order for relief against it in an
involuntary case,
(c) consents to the appointment of a Custodian of it or for all or
substantially all of its property,
(d) makes a general assignment for the benefit of its creditors,
or
(e) admits in writing its inability to pay its debts as they
become due;
(8) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
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(a) is for relief against the Company or any Restricted Subsidiary
in an involuntary case,
(b) appoints a Custodian of the Company or any Restricted
Subsidiary or for all or substantially all of the property of the
Company or any Restricted Subsidiary, or
(c) orders the liquidation of the Company or any Restricted
Subsidiary,
and the order or decree remains unstayed and in effect for 60 consecutive
days;
or
(9) except as otherwise permitted under the provisions of this
Indenture, any Senior Subordinated Guarantee is held in any judicial
proceeding to be unenforceable or invalid or ceases for any reason to be in
full force and effect (except by its terms) or any Guarantor, or any Person
acting on behalf of any Guarantor, denies or disaffirms such Guarantor's
obligations under its Senior Subordinated Guarantee.
The term "Custodian" means any receiver, trustee, assignee, liquidator
or similar official under any Bankruptcy Law. Except for a Default or an Event
of Default pursuant to Sections 6.01(1) or 6.01(2) hereof, the Trustee shall not
be deemed to have knowledge of any Default or Event of Default unless the
Trustee shall have received written notification of such Default or Event of
Default.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have had
to pay if the Company then had elected to redeem the Senior Subordinated Notes
pursuant to Section 3.07 hereof, an equivalent premium shall also become and be
immediately due and payable to the extent permitted by law upon the acceleration
of the Senior Subordinated Notes. If an Event of Default occurs prior to
December 15, 2002 by reason of any willful action (or inaction) taken (or not
taken) by or on behalf of the Company with the intention of avoiding the
prohibition on redemption of the Senior Subordinated Notes prior to December 15,
2002, pursuant to Section 3.07 hereof, then the premium payable for purposes of
this paragraph for each of the years beginning on December 15 of the years set
forth below shall be as set forth in the following table expressed as a
percentage of the principal amount, plus accrued interest, if any, and
Liquidated Damages, if any, to the date of payment:
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Percentage of
Year Principal Amount
---- ----------------
1997................................ 109.875%
1998................................ 108.887%
1999................................ 107.900%
2000................................ 106.912%
2001................................ 105.925%
Section 6.02 Acceleration. If an Event of Default (other than an Event
of Default specified in clauses (7) and (8) of Section 6.01 hereof) relating to
the Company or any Restricted Subsidiary occurs and is continuing, the Trustee
by notice to the Company, or the Holders of at least 25% in principal amount of
the then outstanding Senior Subordinated Notes by written notice to the Company
and the Trustee, may declare the unpaid principal amount of, any accrued
interest on and any Liquidated Damages due in respect of all the Senior
Subordinated Notes to be due and payable immediately. Upon such declaration the
principal, premium, if any, and interest, including Liquidated Damages, if any,
shall be due and payable immediately; provided, however, that so long as any
Senior Debt or any commitment therefor is outstanding under the Bank Credit
Agreement, any such notice or declaration shall not become effective until the
earlier of (a) five Business Days after such notice is delivered to the
Representative for the Bank Debt or (b) the acceleration of any Indebtedness
under the Bank Credit Agreement. Notwithstanding the foregoing, if an Event of
Default specified in clause (7) or (8) of Section 6.01 hereof relating to the
Company, any Significant Restricted Subsidiary or any group of Restricted
Subsidiaries that, taken together, would constitute a Significant Restricted
Subsidiary occurs, all outstanding Senior Subordinated Notes shall become and be
immediately due and payable without any declaration, notice or action on the
part of the Trustee or any Holder. The Holders of a majority in aggregate
principal amount of the then outstanding Senior Subordinated Notes by written
notice to the Trustee may rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree.
Section 6.03 Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal, premium, if any, and interest, including Liquidated Damages, if
any, on the Senior
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Subordinated Notes or to enforce the performance of any provision of the Senior
Subordinated Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Senior Subordinated Notes or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Holder of a Senior Subordinated Note
in exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. All remedies are cumulative to the extent permitted by law.
Section 6.04 Waiver of Past Defaults. Holders of not less than a
majority in aggregate principal amount of the Senior Subordinated Notes then
outstanding by notice to the Trustee may on behalf of the Holders of all of the
Senior Subordinated Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of principal of, premium, if any, and interest, including Liquidated
Damages, if any, on, the Senior Subordinated Notes (including in connection with
an offer to purchase or a tender or exchange offer) (provided, however, that the
Holders of a majority in aggregate principal amount of the then outstanding
Senior Subordinated Notes may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration).
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
Section 6.05 Control by Majority. Holders of a majority in principal
amount of the then outstanding Senior Subordinated Notes may direct the time,
method and place of conducting any proceeding for exercising any remedy
available to the Trustee or exercising any trust or power conferred on it.
However, the Trustee may refuse to follow any direction that conflicts with law
or this Indenture that the Trustee determines may be unduly prejudicial to the
rights of other Holders of Senior Subordinated Notes or that may involve the
Trustee in personal liability.
Section 6.06 Limitation on Suits. A Holder of a Senior Subordinated Note
may pursue a remedy with respect to this Indenture or the Senior Subordinated
Notes only if:
(a) the Holder of a Senior Subordinated Note gives to the Trustee
written notice of a continuing Event of Default;
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(b) the Holders of at least 25% in principal amount of the then
outstanding Senior Subordinated Notes make a written request to the Trustee to
pursue the remedy;
(c) such Holder of a Senior Subordinated Note or Holders of Senior
Subordinated Notes offer and, if requested, provide to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Senior Subordinated Notes do not give the
Trustee a direction inconsistent with the request.
A Holder of a Senior Subordinated Note may not use this Indenture to prejudice
the rights of another Holder of a Senior Subordinated Note or to obtain a
preference or priority over another Holder of a Senior Subordinated Note.
Section 6.07 Rights of Holders of Senior Subordinated Notes to Receive
Payment. Notwithstanding any other provision of this Indenture, the right of any
Holder of a Senior Subordinated Note to receive payment of principal, premium,
if any, and interest, including Liquidated Damages, if any, on the Senior
Subordinated Note, on or after the respective due dates expressed in the Senior
Subordinated Note (including in connection with an offer to purchase), or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or 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 is
authorized to recover judgments in its own name and as trustee of an express
trust against the Company or any Guarantor for the whole amount of principal of,
premium, if any, and interest, including Liquidated Damages, if any, remaining
unpaid on the Senior Subordinated Notes and interest on overdue principal and,
to the extent lawful, interest and such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
Section 6.09 Trustee May File Proofs of Claim. The Trustee is authorized
to file such proofs of claim and other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and the Holders of the Senior Subordinated
Notes allowed in any judicial
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proceedings relative to the Company or any of the Guarantors (or any other
obligor upon the Senior Subordinated Notes), its creditors or its property and
shall be entitled and empowered to collect, receive and distribute any money or
other property payable or deliverable on any such claims and any custodian in
any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee, and in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.07 hereof. To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof out
of the estate in any such proceeding, shall be denied for any reason, payment of
the same shall be secured by a Lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other properties that the
Holders may be entitled to receive in such proceeding whether in liquidation or
under any plan of reorganization or arrangement or otherwise. Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Senior Subordinated Notes or the rights
of any Holder, or to authorize the Trustee to vote in respect of the claim of
any Holder in any such proceeding.
Section 6.10 Priorities. If the Trustee collects any money pursuant to
this Article, it shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders of Senior Subordinated Notes for amounts due and
unpaid on the Senior Subordinated Notes for principal, premium, if any, and
interest, including Liquidated Damages, if any, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Senior
Subordinated Notes for principal, premium, if any, and interest, including
Liquidated Damages, if any, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Senior Subordinated Notes pursuant to this Section 6.10.
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Section 6.11 Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as a Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by a Holder of a Senior Subordinated Note pursuant to Section
6.07 hereof, or a suit by Holders of more than 10% in principal amount of the
then outstanding Senior Subordinated Notes.
ARTICLE 7
TRUSTEE
Section 7.01 Duties of Trustee. (a) If an Event of Default has occurred
and is continuing, the Trustee shall exercise such of the rights and powers
vested in it by this Indenture, and use the same degree of care and skill in its
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the express
provisions of this Indenture and the Trustee need perform only those duties
that are specifically set forth in this Indenture and no others, and no
implied covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture. However, the
Trustee shall examine the certificates and opinions to determine whether or
not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
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(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction received
by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity reasonably satisfactory to it against any loss, liability
or expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
Section 7.02 Rights of Trustee. (a) The Trustee may conclusively rely
upon any document believed by it to be genuine and to have been signed or
presented by the proper Person. The Trustee need not investigate any fact or
matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
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(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company or any Guarantor shall be
sufficient if signed by an Officer of the Company or such Guarantor.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
security or indemnity reasonably satisfactory to the Trustee against the costs,
expenses and liabilities that might be incurred by it in compliance with such
request or direction.
(g) Except with respect to Sections 4.01 and 4.04 hereof, the Trustee
shall have no duty to inquire as to the performance of the Company's covenants
in Article 4 hereof. In addition, the Trustee shall not be deemed to have
knowledge of any Default or Event of Default except (i) any Event of Default
occurring pursuant to Sections 6.01(1) or 6.01(2) hereof or (ii) any Default or
Event of Default of which the Trustee shall have received written notification
or obtained actual knowledge.
Section 7.03 Individual Rights of Trustee. The Trustee in its individual
or any other capacity may become the owner or pledgee of Senior Subordinated
Notes and may otherwise deal with the Company, the Guarantors or any Affiliate
of the Company with the same rights it would have if it were not Trustee.
However, in the event that the Trustee acquires any conflicting interest, it
must eliminate such conflict within 90 days, apply to the SEC for permission to
continue as trustee or resign. Any Agent may do the same with like rights and
duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
Section 7.04 Trustee's Disclaimer. The Trustee shall not be responsible
for and makes no representation as to the validity or adequacy of this
Indenture, the Senior Subordinated Notes or the Senior Subordinated Guarantees;
it shall not be accountable for the Company's use of the proceeds from the
Senior Subordinated Notes or any money paid to the Company or upon the Company's
direction under any provision of this Indenture; it shall not be responsible for
the use or application of any money received by any Paying Agent other than the
Trustee; and it shall not be responsible for any statement or recital herein or
any statement in the Senior Subordinated Notes or any other document in
connection with the sale of the Senior Subordinated Notes or pursuant to this
Indenture other than its certificate of authentication.
Section 7.05 Notice of Defaults. If a Default or Event of Default occurs
and is continuing and if it is known to a Responsible Officer of the Trustee,
the Trustee shall mail to Holders of Senior Subordinated Notes a notice of the
Default or Event of Default within 90 days after it occurs unless such Default
or Event of Default has been cured. Except in the case of a Default or Event of
Default in payment of principal of, premium,
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if any, or interest, including Liquidated Damages, if any, on, any Senior
Subordinated Note, the Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of the Holders of the Senior Subordinated Notes.
Section 7.06 Reports by Trustee to Holders of the Senior Subordinated
Notes. Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, and for so long as Senior Subordinated Notes remain
outstanding, the Trustee shall mail to the Holders of the Senior Subordinated
Notes a brief report dated as of such reporting date that complies with Section
313(a) of the Trust Indenture Act (but if no event described in Section 313(a)
of the Trust Indenture Act has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also shall comply
with Section 313(b)(2) of the Trust Indenture Act. The Trustee shall also
transmit by mail all reports as required by Section 313(c) of the Trust
Indenture Act.
A copy of each report at the time of its mailing to the Holders of
Senior Subordinated Notes shall be mailed to the Company and filed with the SEC
and each stock exchange on which the Senior Subordinated Notes are listed in
accordance with Section 313(d) of the Trust Indenture Act. The Company shall
promptly notify the Trustee when the Senior Subordinated Notes are listed on any
stock exchange.
Section 7.07 Compensation and Indemnity. The Company and the Guarantors
shall pay to the Trustee from time to time reasonable compensation for its
acceptance of this Indenture and services hereunder. The Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Company and the Guarantors shall reimburse the Trustee promptly upon
request for all reasonable disbursements, advances and expenses incurred or made
by it in addition to the compensation for its services. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel whether incurred in disputes between the parties or in
disputes with third parties or otherwise.
The Company and the Guarantors shall indemnify the Trustee against any
and all losses, liabilities or expenses incurred by it arising out of or in
connection with the acceptance or administration of its duties under this
Indenture, including the costs and expenses of enforcing this Indenture against
the Company and the Guarantors (including this Section 7.07) and defending
itself against any claim (whether asserted by the Company, the Guarantors or any
Holder or any other person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except to the extent any
such loss, liability or expense may be attributable to its negligence or bad
faith. The Trustee shall notify the Company and the Guarantors promptly of any
claim
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for which it may seek indemnity. Failure by the Trustee to so notify the Company
and the Guarantors shall not relieve the Company and the Guarantors of their
obligations hereunder. The Company and the Guarantors shall defend the claim and
the Trustee shall cooperate in the defense. The Trustee may have separate
counsel and the Company and the Guarantors shall pay the reasonable fees and
expenses of such counsel. The Company and the Guarantors need not pay for any
settlement made without their consent, which consent shall not be unreasonably
withheld.
The obligations of the Company and the Guarantors under this Section
7.07 shall survive the satisfaction and discharge of this Indenture.
To secure the Company's and the Guarantors' payment obligations in this
Section, the Trustee shall have a Lien prior to the Senior Subordinated Notes on
all money or property held or collected by the Trustee, except that held in
trust to pay principal, premium, if any, and interest, including Liquidated
Damages, if any, on particular Senior Subordinated Notes. Such Lien shall
survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(7) or (8) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of Section 313(b)(2) of the
Trust Indenture Act to the extent applicable.
Section 7.08 Replacement of Trustee. A resignation or removal of the
Trustee and appointment of a successor Trustee shall become effective only upon
the successor Trustee's acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from the
trust hereby created by so notifying the Company. The Holders of a majority in
principal amount of the then outstanding Senior Subordinated Notes may remove
the Trustee by so notifying the Trustee and the Company in writing. The Company
may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
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(c) a Custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Senior Subordinated
Notes may appoint a successor Trustee to replace the successor Trustee appointed
by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Senior Subordinated Notes of at least 10% in principal amount of
the then outstanding Senior Subordinated Notes may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Senior
Subordinated Note who has been a Holder of a Senior Subordinated Note for at
least six months, fails to comply with Section 7.10, such Holder of a Senior
Subordinated Note may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Senior Subordinated Notes. The retiring Trustee
shall promptly transfer all property held by it as Trustee to the successor
Trustee, provided all sums owing to the Trustee hereunder have been paid and
subject to the Lien provided for in Section 7.07 hereof. Notwithstanding
replacement of the Trustee pursuant to this Section 7.08, the Company's
obligations under Section 7.07 hereof shall continue for the benefit of the
retiring Trustee.
Section 7.09 Successor Trustee by Merger, etc. If the Trustee
consolidates, merges or converts into, or transfers all or substantially all of
its corporate trust business to, another corporation, the successor corporation
without any further act shall be the successor Trustee.
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Section 7.10 Eligibility; Disqualification. There shall at all times be
a Trustee hereunder that is a corporation organized and doing business under the
laws of the United States of America or of any state thereof that is authorized
under such laws to exercise corporate trustee power, that is subject to
supervision or examination by federal or state authorities and that has a
combined capital and surplus of at least $50.0 million as set forth in its most
recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of Sections 310(a)(1), (2) and (5) of the Trust Indenture Act. The
Trustee is subject to Section 310(b) of the Trust Indenture Act.
Section 7.11 Preferential Collection of Claims Against Company. The
Trustee is subject to Section 311(a) of the Trust Indenture Act, excluding any
creditor relationship listed in Section 311(b) of the Trust Indenture Act. A
Trustee who has resigned or been removed shall be subject to Section 311(a) of
the Trust Indenture Act to the extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Senior
Subordinated Notes upon compliance with the conditions set forth below in this
Article 8.
Section 8.02 Legal Defeasance and Discharge. Upon the Company's exercise
under Section 8.01 hereof of the option applicable to this Section 8.02, the
Company and the Guarantors shall, subject to the satisfaction of the conditions
set forth in Section 8.04 hereof, be deemed to have been discharged from their
obligations with respect to all outstanding Senior Subordinated Notes on the
date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company shall be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Senior Subordinated Notes, which shall thereafter be deemed to be
"outstanding" only for the purposes of Section 8.05 hereof and the other
Sections of this Indenture referred to in (a) and (b) below, and to have
satisfied all its other obligations under such Senior Subordinated Notes and
this Indenture and the Senior Subordinated Guarantees (and the Trustee, on
demand of and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Senior Subordinated Notes to receive
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payments in respect of the principal of, premium, if any, and interest,
including Liquidated Damages, if any, on such Senior Subordinated Notes when
such payments are due from the trust fund described in Section 8.04 hereof, and
as more fully set forth in such Section, (b) the Company's obligations with
respect to such Senior Subordinated Notes under Article 2 and Section 4.02
hereof, (c) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and the Company's obligations in connection therewith and (d) this
Article 8. Subject to compliance with this Article 8, the Company may exercise
its option under this Section 8.02 notwithstanding the prior exercise of its
option under Section 8.03 hereof.
Section 8.03 Covenant Defeasance. Upon the Company's exercise under
Section 8.01 hereof of the option applicable to this Section 8.03, the Company
and the Guarantors shall, subject to the satisfaction of the conditions set
forth in Section 8.04 hereof, be released from their obligations under the
covenants contained in Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14
and 4.16 hereof and the covenants contained in the Senior Subordinated
Guarantees with respect to the outstanding Senior Subordinated Notes on and
after the date the conditions set forth below are satisfied (hereinafter,
"Covenant Defeasance"), and the Senior Subordinated Notes shall thereafter be
deemed not "outstanding" for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder (it being understood that such Senior
Subordinated Notes shall not be deemed outstanding for accounting purposes). For
this purpose, Covenant Defeasance means that, with respect to the outstanding
Senior Subordinated Notes, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section 6.01
hereof, but, except as specified above, the remainder of this Indenture, such
Senior Subordinated Notes and such Senior Subordinated Guarantees shall be
unaffected thereby. In addition, upon the Company's exercise under Section 8.01
hereof of the option applicable to this Section 8.03 hereof, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, Sections
6.01(3) through 6.01(6) and 6.01(9) hereof shall not constitute Events of
Default.
Section 8.04 Conditions to Legal or Covenant Defeasance. The following
shall be the conditions to the application of either Section 8.02 or 8.03 hereof
to the outstanding Senior Subordinated Notes:
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In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company or the Guarantors must irrevocably deposit
with the Trustee, in trust, for the benefit of the Holders of the Senior
Subordinated Notes, cash in United States dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will
be sufficient, in the opinion of a nationally recognized firm of
independent public accountants provided to the Trustee, to pay the
principal of, premium, if any, and interest, including Liquidated
Damages, if any, on the outstanding Senior Subordinated Notes on the
stated maturity or on the applicable redemption date, as the case may
be, and the Company or the Guarantors must, concurrently with such
deposit and opinion, provide written notice to the Trustee specifying
whether the Senior Subordinated Notes are being defeased to maturity or
to a particular redemption date;
(b) in the case of an election under Section 8.02 hereof,
the Company or the Guarantors shall have delivered to the Trustee an
Opinion of Counsel in the United States reasonably acceptable to the
Trustee confirming that (A) the Company or the Guarantors have 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
Holders of the outstanding Senior Subordinated Notes will not recognize
income, gain or loss for federal income tax purposes as a result of such
Legal Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the
case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof,
the Company or the Guarantors shall have delivered to the Trustee an
Opinion of Counsel in the United States reasonably acceptable to the
Trustee confirming that the Holders of the outstanding Senior
Subordinated Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such Covenant Defeasance and will be
subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and
be continuing on the date of such deposit (other than a Default or Event
of Default resulting from the borrowing of funds to be applied to such
deposit) or insofar as Section 6.01(7) or 6.01(8) hereof is concerned,
at any time in the period ending on the 91st day after the date of
deposit;
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(e) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under, any
material agreement or instrument (other than this Indenture) to which
the Company or any of its Restricted Subsidiaries is a party or by which
the Company or any of its Restricted Subsidiaries is bound;
(f) the Company or the Guarantors shall have delivered to
the Trustee an Opinion of Counsel to the effect that after the 91st day
following the deposit, the trust funds will not be subject to the effect
of any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally;
(g) the Company or the Guarantors shall have delivered to
the Trustee an Officers' Certificate stating that the deposit was not
made by the Company or the Guarantors, as applicable, with the intent of
preferring the Holders of Senior Subordinated Notes over the other
creditors of the Company or the Guarantors, as applicable, with the
intent of defeating, hindering, delaying or defrauding creditors of the
Company or the Guarantors, as applicable, or others; and
(h) the Company or the Guarantors shall have delivered to
the Trustee an Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent provided for or relating to the
Legal Defeasance or the Covenant Defeasance have been complied with.
Section 8.05 Deposited Money and Government Securities to be Held in
Trust; Other Miscellaneous Provisions. Subject to Section 8.06 hereof, all money
and non-callable Government Securities (including the proceeds thereof)
deposited with the Trustee (or other qualifying trustee, collectively for
purposes of this Section 8.05, the "Trustee") pursuant to Section 8.04 hereof in
respect of the outstanding Senior Subordinated Notes shall be held in trust and
applied by the Trustee, in accordance with the provisions of such Senior
Subordinated Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Senior Subordinated Notes of all
sums due and to become due thereon in respect of principal, premium, if any, and
interest, including Liquidated Damages, if any, but such money need not be
segregated from other funds except to the extent required by law.
The Company and the Guarantors shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed against the cash or
non-callable
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Government Securities deposited pursuant to Section 8.04 hereof or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Senior
Subordinated Notes.
Anything in this Article 8 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the request of the
Company any money or non-callable Government Securities held by it as provided
in Section 8.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.04(a) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06 Repayment to Company. Any money deposited with the Trustee
or any Paying Agent, or then held by the Company, in trust for the payment of
the principal of, premium, if any, or interest, including Liquidated Damages, if
any, on any Senior Subordinated Note and remaining unclaimed for two years after
such principal, premium, if any, or interest, including Liquidated Damages, if
any, has become due and payable shall be paid to the Company on its request or
(if then held by the Company) shall be discharged from such trust; and the
Holder of such Senior Subordinated Note shall thereafter, as a general creditor,
look only to the Company for payment thereof, and all liability of the Trustee
or such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in the New York
Times and The Wall Street Journal (national edition), notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
Section 8.07 Reinstatement. If the Trustee or Paying Agent is unable to
apply any United States dollars or non-callable Government Securities in
accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then the obligations of
the Company and the Guarantors under this Indenture, the Senior Subordinated
Notes and the Senior Subordinated Guarantees shall be revived and reinstated as
though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until
such time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.02 or 8.03 hereof, as the case may be; provided,
however, that, if the Company or any Guarantor makes any payment of principal
of, premium, if any, or interest, including Liquidated Damages, if any, on any
Senior Subordinated Note following the reinstatement of its obligations, the
Company or such Guarantor shall be
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subrogated to the rights of the Holders of such Senior Subordinated Notes to
receive such payment from the money held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Senior Subordinated Notes.
Notwithstanding Section 9.02 of this Indenture, the Company, the Guarantors and
the Trustee may amend or supplement this Indenture or the Senior Subordinated
Notes without the consent of any Holder of a Senior Subordinated Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Senior Subordinated Notes in addition
to or in place of certificated Senior Subordinated Notes;
(c) to provide for the assumption of the Company's obligations to the
Holders of the Senior Subordinated Notes in the case of a merger or
consolidation pursuant to Article 5 hereof;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Senior Subordinated Notes or that does not
adversely affect the legal rights hereunder of any Holder of the Senior
Subordinated Notes;
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the Trust Indenture Act; or
(f) to allow any Guarantor to execute a supplemental indenture and/or a
Senior Subordinated Guarantee with respect to the Senior Subordinated Notes.
Upon the request of the Company accompanied by a resolution of the Board
of Directors of the Company and each of the Guarantors, as the case may be,
authorizing the execution of any such amended or supplemental Indenture, and
upon receipt by the Trustee of the documents described in Section 7.02 hereof,
the Trustee shall join with the Company and the Guarantors in the execution of
any amended or supplemental Indenture authorized or permitted by the terms of
this Indenture and to make any further appropriate agreements and stipulations
that may be therein contained, but the Trustee shall not be obligated to enter
into such amended or supplemental Indenture that affects its own rights, duties
or immunities under this Indenture or otherwise.
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Section 9.02 With Consent of Holders of Senior Subordinated Notes.
Except as provided below in this Section 9.02, the Company, the Guarantors and
the Trustee may amend or supplement this Indenture (including Section 4.10 and
4.13 hereof) and the Senior Subordinated Notes with the consent of the Holders
of at least a majority in principal amount of the Senior Subordinated Notes then
outstanding (including, without limitation, consents obtained in connection with
a purchase of, or tender offer or exchange offer for, the Senior Subordinated
Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or
Event of Default (other than a continuing Default or Event of Default in the
payment of the principal of, premium, if any, or interest, including Liquidated
Damages, if any, on the Senior Subordinated Notes, except a payment default
resulting from an acceleration that has been rescinded) or compliance with any
provision of this Indenture or the Senior Subordinated Notes may be waived with
the consent of the Holders of a majority in principal amount of the then
outstanding Senior Subordinated Notes (including, without limitation, consents
obtained in connection with a purchase of, or tender offer or exchange offer
for, the Senior Subordinated Notes).
Upon the request of the Company accompanied by a resolution of the Board
of Directors of the Company and each of the Guarantors, as the case may be,
authorizing the execution of any such amended or supplemental Indenture, and
upon the filing with the Trustee of evidence satisfactory to the Trustee of the
consent of the Holders of Senior Subordinated Notes as aforesaid, and upon
receipt by the Trustee of the documents described in Section 7.02 hereof, the
Trustee shall join with the Company and the Guarantors in the execution of such
amended or supplemental Indenture unless such amended or supplemental Indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Senior
Subordinated Notes under this Section 9.02 to approve the particular form of any
proposed amendment or waiver, but it shall be sufficient if such consent
approves the substance thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Senior Subordinated Notes
affected thereby a notice briefly describing the amendment, supplement or
waiver. Any failure of the Company to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such amended
or supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof,
the Holders of a majority in aggregate principal amount of the Senior
Subordinated Notes then outstanding may waive compliance in a particular
instance by the Company or any Guarantor with any provision of this Indenture or
the Senior Subordinated Notes. However, without the consent of each Holder
affected, an amendment or waiver may not (with respect to any Senior
Subordinated Notes held by a non-consenting Holder):
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(a) reduce the principal amount of Senior Subordinated Notes whose
Holders must consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any
Senior Subordinated Note or alter the provisions with respect to the
redemption of the Senior Subordinated Notes (except as provided above
with respect to Sections 4.10 and 4.13 hereof);
(c) reduce the rate of or change the time for payment of interest,
including Liquidated Damages, if any, or default interest on any Senior
Subordinated Note;
(d) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest, including Liquidated
Damages, if any, on the Senior Subordinated Notes (except a rescission
of acceleration of the Senior Subordinated Notes by the Holders of at
least a majority in aggregate principal amount of the Senior
Subordinated Notes and a waiver of the payment default that resulted
from such acceleration);
(e) make any Senior Subordinated Note payable in money other than
that stated in the Senior Subordinated Notes;
(f) make any change in the provisions of this Indenture relating
to waivers of past Defaults or the rights of Holders of Senior
Subordinated Notes to receive payments of principal of or premium, if
any, or interest, including Liquidated Damages, if any, on the Senior
Subordinated Notes;
(g) waive a redemption payment with respect to any Senior
Subordinated Note (except as provided above with respect to Sections
4.10 and 4.13 hereof);
(h) make any change in the foregoing amendment and waiver
provisions.
Section 9.03 Compliance with Trust Indenture Act. Every amendment or
supplement to this Indenture or the Senior Subordinated Notes shall be set forth
in an amended or supplemental Indenture that complies with the Trust Indenture
Act as then in effect.
Section 9.04 Revocation and Effect of Consents. Until an amendment,
supplement or waiver becomes effective, a consent to it by a Holder of a Senior
Subordinated Note is a continuing consent by the Holder of a Senior Subordinated
Note
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and every subsequent Holder of a Senior Subordinated Note or portion of a Senior
Subordinated Note that evidences the same debt as the consenting Holder's Senior
Subordinated Note, even if notation of the consent is not made on any Senior
Subordinated Note. However, any such Holder of a Senior Subordinated Note or
subsequent Holder of a Senior Subordinated Note may revoke the consent as to its
Senior Subordinated Note if the Trustee receives written notice of revocation
before the date the waiver, supplement or amendment becomes effective. An
amendment, supplement or waiver becomes effective in accordance with its terms
and thereafter binds every Holder.
Section 9.05 Notation on or Exchange of Senior Subordinated Notes. The
Trustee may place an appropriate notation about an amendment, supplement or
waiver on any Senior Subordinated Note thereafter authenticated. The Company in
exchange for all Senior Subordinated Notes may issue and the Trustee shall, upon
receipt of an Authentication Order, authenticate new Senior Subordinated Notes
that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Senior
Subordinated Note shall not affect the validity and effect of such amendment,
supplement or waiver.
Section 9.06 Trustee to Sign Amendments, etc. The Trustee shall sign any
amended or supplemental Indenture authorized pursuant to this Article 9 if the
amendment or supplement does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. Neither the Company nor any Guarantor
may sign an amended or supplemental Indenture until its respective Board of
Directors approves it. In executing any amended or supplemental indenture, the
Trustee shall be entitled to receive and (subject to Section 7.01) shall be
fully protected in relying upon, an Officer's Certificate and an Opinion of
Counsel stating that the execution of such amended or supplemental indenture is
authorized or permitted by this Indenture and that there has been compliance
with all conditions precedent.
ARTICLE 10
SUBORDINATION
Section 10.01 Agreement to Subordinate. The Company agrees, and each
Holder by accepting a Senior Subordinated Note agrees, that the Indebtedness
evidenced by the Senior Subordinated Note is subordinated in right of payment,
to the extent and in the manner provided in this Article, to the prior payment
in full of all Senior Debt (whether outstanding on the date hereof or hereafter
created, incurred, assumed or guaranteed), and that the subordination is for the
benefit of the holders of Senior Debt.
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Section 10.02 Certain Definitions. "Accrued Bankruptcy Interest" means,
with respect to any Senior Debt, all interest accruing thereon after the filing
of a petition by or against the Company under any Bankruptcy Law, in accordance
with and at the rate (including any rate applicable upon any default or event of
default, to the extent lawful) specified in the documents evidencing or
governing such Senior Debt, whether or not the claim for such interest is
allowed as a claim after such filing in any proceeding under such Bankruptcy
Law.
"Bank Debt" means all Obligations in respect of the Indebtedness
outstanding under the Bank Credit Agreement, together with any amendment,
modification, renewal, refunding, refinancing or replacement (in whole or in
part) from time to time of such Indebtedness.
"Bank Hedging Obligations" means all present and future Hedging
Obligations of the Company, whether existing now or in the future, that are
secured by the Bank Credit Agreement (or other agreement evidencing Bank Debt or
other Senior Debt) or any of the collateral documents executed from time to time
in connection therewith.
"Bankruptcy Law" means title 11, U.S. Code or any similar Federal or
state law for the relief of debtors.
"Designated Senior Debt" means (i) so long as the Bank Debt is
outstanding, the Bank Debt, (ii) the Bank Hedging Obligations and (iii) any
Senior Debt permitted under this Indenture the principal amount of which is
$15.0 million or more and that has been designated by the Company as "Designated
Senior Debt" and as to which the Trustee has been given written notice of such
designation.
"Permitted Junior Securities" means, with respect to any payment or
distribution of any kind, equity securities or subordinated securities of the
Company or any successor obligor provided for by a plan of reorganization or
readjustment that, in the case of any such subordinated securities, are
subordinated in right of payment to all Senior Debt that may at the time be
outstanding to at least the same extent as the Senior Subordinated Notes are so
subordinated as provided in this Indenture.
"Representative" means the indenture trustee or other trustee, agent or
representative for any Senior Debt.
Securities Payment" means any payment or distribution of any kind,
whether in cash, property or securities (including any payment or distribution
deliverable by reason of the payment of any other Indebtedness subordinated to
the Senior Subordinated Notes)
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on account of the principal of (and premium, if any) or interest on the Senior
Subordinated Notes or on account of the purchase or redemption or other
acquisition of or satisfaction of obligations with respect to Senior
Subordinated Notes by the Company or any Subsidiary of the Company.
"Senior Debt" means (i) the Bank Debt, (ii) the Bank Hedging Obligations
and (iii) any other Indebtedness permitted to be incurred by the Company under
the terms of this Indenture, unless the instrument under which such Indebtedness
is incurred expressly provides that it is on a parity with or subordinated in
right of payment to the Senior Subordinated Notes. Notwithstanding anything to
the contrary in the foregoing, Senior Debt will not include (1) any liability
for federal, state, local or other taxes owed or owing by the Company, (2) any
Indebtedness of the Company to any of its Restricted Subsidiaries or other
Affiliates (other than Goldman, Sachs & Co. and its Affiliates, including
Goldman Sachs Credit Partners L.P.), (3) any trade payables, (4) that portion of
any Indebtedness that is incurred in violation of this Indenture, (5)
Indebtedness which, when incurred and without respect to any election under
Section 1111(b) of Title 11, United States Code, is without recourse to the
Company, (6) any Indebtedness, Guarantee or obligation of the Company which is
contractually subordinate in right of payment to any other Indebtedness,
Guarantee or obligation of the Company; provided, however, that this clause (6)
shall not apply to the subordination of liens or security interests covering
particular properties or types of assets securing Senior Debt, (7) Indebtedness
evidenced by the Senior Subordinated Notes and (8) Capital Stock.
All Designated Senior Debt now or hereafter existing and all other
Obligations relating thereto shall not be deemed to have been paid in full
unless the holders or owners thereof shall have received payment in full in cash
or Cash Equivalents with respect to such Designated Senior Debt and all other
Obligations with respect thereto.
Section 10.03 Liquidation; Dissolution; Bankruptcy. Upon any
distribution to creditors of the Company in a liquidation or dissolution of the
Company or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to the Company or its property, an assignment for the
benefit of creditors or any marshalling of the Company's assets and liabilities,
the holders of Senior Debt shall be entitled to receive payment in full of all
Obligations due in respect of such Senior Debt (including Accrued Bankruptcy
Interest), or provision shall be made for such payment in cash or Cash
Equivalents or otherwise in a manner satisfactory to the holders of such Senior
Debt, before the Holders of the Senior Subordinated Notes shall be entitled to
receive any Securities Payment (other than payments in Permitted Junior
Securities) and until all Obligations with respect to Senior Debt are paid in
full, or provision is made for payment in cash or Cash Equivalents or otherwise
in a manner satisfactory to the holders of such Senior Debt, any Securities
Payment (other than payments in Permitted Junior Securities) to which the
Holders of Senior Subordinated Notes would be entitled shall be made to the
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holders of Senior Debt (except that the Trustee or the Holders of Senior
Subordinated Notes may receive payments and other distributions made from any
defeasance trust created pursuant to Section 8.01 hereof).
Section 10.04 Default on Designated Senior Debt. The Company may not
make any Securities Payment (other than payments in Permitted Junior Securities)
to the Trustee or any Holder upon or in respect of Obligations with respect to
the Senior Subordinated Notes (other than payments and other distributions made
from any defeasance trust created pursuant to Section 8.01 hereof) until all
principal and other Obligations with respect to the Senior Debt have been paid
in full or provision has been made for the payment in full in cash or Cash
Equivalents or otherwise in a manner satisfactory to the holders of such Senior
Debt if:
(i) a default in the payment of any principal of, premium, if any, or
interest on Designated Senior Debt occurs and is continuing (including any
default in payment upon the maturity of any Designated Senior Debt by lapse of
time, acceleration or otherwise), or any judicial proceeding is pending to
determine whether any such default has occurred; or
(ii) a default, other than a payment default described in subsection (i)
above, occurs and is continuing with respect to Designated Senior Debt that
permits, or would permit with the giving of notice or passage of time, or
both, (as such default or event of default is defined in any agreement,
indenture or other document governing such Designated Senior Debt) holders of
the Designated Senior Debt to which such default relates to accelerate its
maturity and the Trustee receives a notice of such default (a "Payment
Blockage Notice") from the Company or the holders of any Designated Senior
Debt.
If the Trustee receives any such Payment Blockage Notice, no subsequent
Payment Blockage Notice shall be effective for purposes of this Section unless
and until at least 360 days shall have elapsed since the first day of
effectiveness of the immediately prior Payment Blockage Notice. No nonpayment
default that existed or was continuing on the date of delivery of any Payment
Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent
Payment Blockage Notice unless such default shall have been cured or waived for
a period of not less than 180 days.
If the Company is prohibited from making Securities Payments on the
Senior Subordinated Notes under subsection (i) or (ii) above, the Company may
and shall resume Securities Payments on the Senior Subordinated Notes upon:
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(1) in the case of a default pursuant to the Section 10.04(i), the date
upon which the default, event of default or other event giving rise to such
prohibition is cured or waived or shall have ceased to exist, unless another
default, event of default or other event that would prohibit such payment under
Section 10.04(i) has occurred and is continuing, or all Obligations in respect
of such Designated Senior Debt shall have been discharged or paid in full, or
(2) in the case of any prohibition referred to in Section 10.04(ii)
hereof, the earlier of the date on which such nonpayment default is cured or
waived or 179 days pass after the relevant Payment Blockage Notice is received
by the Trustee thereunder,
in each such case, if this Article otherwise permits a Securities Payment.
Section 10.05 Acceleration of Senior Subordinated Notes. If payment of
the Senior Subordinated Notes is accelerated because of an Event of Default, the
Company shall promptly notify holders of Senior Debt of the acceleration.
Section 10.06 When Distribution Must Be Paid Over. If, notwithstanding
the provisions of Sections 10.03 and 10.04, any direct or indirect Securities
Payment (other than payments in Permitted Junior Securities) on account of
principal of or interest on or other Obligations with respect to the Senior
Subordinated Notes shall be made by or on behalf of the Company (including any
payments or distribution by any liquidating trustee or agent or other Person in
a proceeding referred to in Section 10.03) and received by the Trustee or any
Holder of Senior Subordinated Notes at a time when such Securities Payment or
distribution was prohibited by the provisions of Section 10.03 or 10.04 or such
Securities Payment was required to be made to holders of Senior Debt or their
Representatives, then, unless and until such payment or distribution is no
longer prohibited by Section 10.03 or 10.04, such Securities Payment or
distribution shall be received, segregated from other funds or assets and held
in trust by the Trustee or such Holder of Senior Subordinated Notes, as the case
may be, for the benefit of, and shall be immediately paid or delivered over to,
the holders of Senior Debt or their Representatives, ratably in accordance with
the respective amounts of the principal of such Senior Debt, interest (including
Accrued Bankruptcy Interest) thereon and all other Obligations with respect
thereto held or represented by each, until the principal of all Senior Debt,
interest (including Accrued Bankruptcy Interest) thereon and all other
Obligations with respect thereto have been paid in full in cash or Cash
Equivalents or otherwise in a manner satisfactory to the holders of such Senior
Debt. Any distribution to the holders of Senior Debt or their Representatives of
assets other than cash or Cash Equivalents or otherwise in a manner satisfactory
to the holders of such Senior Debt may be held by such holders or such
Representatives as additional collateral without any duty to the Holder of
Senior Subordinated Notes to liquidate or otherwise realize on such assets or to
apply such assets to any Senior Debt or other Obligations relating thereto.
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With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are specifically set
forth in this Article 10, and no implied covenants or obligations with respect
to the holders of Senior Debt shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall in good faith mistakenly pay over or distribute to or on behalf of
Holders of Senior Subordinated Notes or the Company or any other Person money or
assets to which any holders of Senior Debt shall be entitled by virtue of this
Article 10, except if such payment is made as a result of the willful misconduct
or gross negligence of the Trustee. Nothing in this Section 10.06 shall affect
the obligation of any Person other than the Trustee to hold such payment or
distribution for the benefit of, and to pay or deliver such payment or
distribution over to, the holders of Senior Debt or their Representatives.
Section 10.07 Notice by Company. The Company shall promptly notify the
Trustee and the Paying Agent of any facts known to the Company that would cause
a payment of any Obligations with respect to the Senior Subordinated Notes to
violate this Article, but failure to give such notice shall not affect the
subordination of the Senior Subordinated Notes to the Senior Debt as provided in
this Article 10.
Section 10.08 Subrogation. After all Senior Debt is paid in full and
until the Senior Subordinated Notes are paid in full, Holders of Senior
Subordinated Notes shall be subrogated (equally and ratably with all other
Indebtedness pari passu with the Senior Subordinated Notes) to the rights of
holders of Senior Debt to receive distributions applicable to Senior Debt to the
extent that distributions otherwise payable to the Holders of Senior
Subordinated Notes have been applied to the payment of Senior Debt. A
distribution made under this Article 10 to holders of Senior Debt that otherwise
would have been made to Holders of Senior Subordinated Notes is not, as between
the Company and Holders, a payment by the Company on the Senior Subordinated
Notes.
Section 10.09 Relative Rights. This Article 10 defines the relative
rights of Holders of Senior Subordinated Notes and holders of Senior Debt.
Nothing in this Indenture shall:
(1) impair, as between the Company and Holders, the obligation of the
Company, which is absolute and unconditional, to pay principal of, premium, if
any, and interest, including Liquidated Damages, if any, on the Senior
Subordinated Notes in accordance with their terms;
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(2) affect the relative rights of Holders and creditors of the Company
other than their rights in relation to holders of Senior Debt; or
(3) prevent the Trustee or any Holder from exercising its available
remedies upon a Default or Event of Default, subject to the rights of holders
and owners of Senior Debt to receive distributions and payments otherwise
payable to Holders.
If the Company fails because of this Article 10 to pay principal of,
premium if any, or interest, including Liquidated Damages, if any, on a Senior
Subordinated Note on the due date, the failure is still a Default or Event of
Default.
Section 10.10 Subordination May Not Be Impaired by Company. No right of
any present or future holder of Senior Debt to enforce the subordination of the
Indebtedness evidenced by the Senior Subordinated Notes shall be impaired by any
act or failure to act by the Company or any Holder of Senior Subordinated Notes
or any holder of Senior Debt or by the failure of the Company or any Holder of
Senior Subordinated Notes or any holder of Senior Debt to comply with this
Indenture regardless of any knowledge thereof that any such Holder of Senior
Subordinated Notes or holder of Senior Debt, as the case may be, may have or be
otherwise charged with. The holders of Senior Debt may extend, renew, restate,
supplement, modify or amend the terms of the Senior Debt or any Obligations with
respect thereto or any security therefor and release, sell or exchange such
security and otherwise deal freely with the Company and its Subsidiaries and
Affiliates all without affecting the liabilities and obligations of the parties
to this Indenture or the Holders. No provision in any supplemental indenture
that adversely affects the subordination of the Senior Subordinated Notes or
other provisions of this Article 10 shall be effective against the holders of
the Designated Senior Debt that have not consented thereto.
Each Holder of the Senior Subordinated Notes by their acceptance
thereof: (a) acknowledges and agrees that the holders of any Senior Debt or
their Representative, in its or their discretion, and without affecting any
rights of any holder of Senior Debt under this Article 10, may foreclose any
mortgage or deed of trust covering interest in real property securing such
Senior Debt or any guarantee thereof by judicial or nonjudicial sale, even
though such action may release the Company or any guarantor of such Senior Debt
from further liability under such Senior Debt or any guarantee thereof or may
otherwise limit the remedies available to the holders thereof; and (b) hereby
waives any defense that such Holder may otherwise have to the enforcement by any
holder of any Senior Debt or any Representative of such holder against such
Holder of this Article 10 after or as a result of any action, including any such
defense based on any loss or impairment of rights of subrogation.
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If at any time any payment of Obligations with respect to any Senior
Debt is rescinded or must otherwise be returned upon the insolvency, bankruptcy,
reorganization or liquidation of the Company or otherwise, the provisions of
this Article 10 shall continue to be effective or reinstated, as the case may
be, to the same extent as though such payments had not been made.
Section 10.11 Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Debt, the
distribution may be made and the notice given to their Representative.
Upon any payment or distribution of assets of the Company referred to in
this Article 10, the Trustee and the Holders of Senior Subordinated Notes shall
be entitled to rely upon any order or decree made by any court of competent
jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders of Senior Subordinated Notes for the purpose of
ascertaining the Persons entitled to participate in such distribution, the
holders of the Senior Debt and other Indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article 10.
Section 10.12 Rights of Trustee and Paying Agent. Notwithstanding the
provisions of this Article 10 or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts that
would prohibit the making of any payment or distribution by the Trustee, and the
Trustee and the Paying Agent may continue to make payments on the Senior
Subordinated Notes, unless a Responsible Officer of the Trustee shall have
received at its Corporate Trust Office at least two Business Days prior to the
date of such payment written notice of facts that would cause the payment of any
Obligations with respect to the Senior Subordinated Notes to violate this
Article. Only the Company or a Representative may give the notice. Nothing in
this Article 10 shall impair the claims of, or payments to, the Trustee under or
pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior Debt
with the same rights it would have if it were not Trustee. Any Agent may do the
same with like rights.
Section 10.13 Authorization to Effect Subordination. Each Holder of a
Senior Subordinated Note by the Holder's acceptance thereof authorizes and
directs the Trustee on the Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 10, and appoints the Trustee to act as the
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Holder's attorney-in-fact for any and all such purposes. If the Trustee does not
file a proper proof of claim or proof of debt in the form required in any
proceeding referred to in Section 6.09 hereof at least 30 days before the
expiration of the time to file such claim, the agent under the Bank Credit
Agreement is hereby authorized to file an appropriate claim for and on behalf of
the Holders of the Senior Subordinated Notes.
The Company, the Trustee and each Holder by their acceptance of the
Senior Subordinated Notes acknowledge that damages would be inadequate to
compensate the holders of Senior Debt for any breach or default by the Company,
the Trustee or any such Holder of its obligations under this Article 10, and,
therefore, agree that the holders of Senior Debt and their Representatives shall
be entitled to equitable relief, including injunctive relief and specific
performance, in the enforcement thereof.
Section 10.14 Amendments. The provisions of this Article 10 shall not be
amended or modified without the written consent of the holders of all Senior
Debt unless such amendment or modification does not adversely affect the holders
of such Senior Debt.
ARTICLE 11
SENIOR SUBORDINATED GUARANTEES
Section 11.01 Senior Subordinated Guarantees. Subject to this Article
11, each of the Guarantors, jointly and severally, hereby unconditionally
guarantees to each Holder of a Senior Subordinated Note authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the Senior
Subordinated Notes or the obligations of the Company under this Indenture or the
Senior Subordinated Notes, that: (a) the principal of, premium, if any, and
interest, including Liquidated Damages, if any, on the Senior Subordinated Notes
shall be promptly paid in full when due, whether at maturity, by acceleration,
redemption or otherwise, and (to the extent permitted by law) interest on the
overdue principal of, premium and interest, including Liquidated Damages, on the
Senior Subordinated Notes, if any, and all other obligations of the Company to
the Holders or the Trustee under this Indenture or the Senior Subordinated Notes
shall be promptly paid in full or performed, all in accordance with the terms of
this Indenture and the Senior Subordinated Notes; and (b) in case of any
extension of time of payment or renewal of any Senior Subordinated Notes or any
of such other obligations, that same shall be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise. Failing payment when due of any
amount so guaranteed for whatever reason, the Guarantors shall be obligated to
pay the same immediately whether or not such failure to pay has become an Event
of Default which could cause acceleration pursuant to Section 6.02
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hereof. Each Guarantor agrees that this is a guarantee of payment and not a
guarantee of collection.
The Guarantors hereby agree that their obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Senior Subordinated Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Senior Subordinated
Notes with respect to any provisions hereof or thereof, the recovery of any
judgment against the Company, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a guarantor. Each Guarantor hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest, notice and all demands whatsoever and covenants that, subject
to this Article 11, this Senior Subordinated Guarantee shall not be discharged
except by complete performance of the obligations contained in the Senior
Subordinated Notes and this Indenture.
If any Holder of Senior Subordinated Notes or the Trustee is required by
any court or otherwise to return to the Company or Guarantors, or any Custodian,
Trustee, liquidator or other similar official acting in relation to either the
Company or Guarantors, any amount paid by either to the Trustee or such Holder,
this Senior Subordinated Guarantee, to the extent theretofore discharged, shall
be reinstated in full force and effect.
Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders of Senior Subordinated Notes in respect
of any Obligations guaranteed hereby until payment in full of all Obligations
guaranteed hereby. Each Guarantor further agrees that, as between the
Guarantors, on the one hand, and the Holders and the Trustee, on the other hand,
(x) the maturity of the Obligations guaranteed hereby may be accelerated as
provided in Article 6 hereof for the purposes of this Senior Subordinated
Guarantee, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the Obligations guaranteed hereby and (y) in the
event of any declaration of acceleration of such Obligations as provided in
Section 6.02 hereof, such Obligations (whether or not due and payable) shall
forthwith become due and payable by the Guarantors for the purpose of this
Senior Subordinated Guarantee. The Guarantors shall have the right to seek
contribution from any non-paying Guarantor so long as the exercise of such right
does not impair the rights of the Holders under the Senior Subordinated
Guarantees.
Section 11.02 Subordination of Senior Subordinated Guarantee. The
Obligations of each Guarantor under its Senior Subordinated Guarantee pursuant
to this
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Article 11 shall be junior and subordinated to the Senior Guarantee of such
Guarantor on the same basis as the Senior Subordinated Notes are junior and
subordinated to Senior Debt of the Company. For the purposes of the foregoing
sentence, the Trustee and the Holders shall have the right to receive and/or
retain payments by any of the Guarantors only at such times as they may receive
and/or retain payments in respect of the Senior Subordinated Notes pursuant to
this Indenture, including Article 10 hereof.
Section 11.03 Limitation on Guarantor Liability. Each Guarantor, and by
its acceptance of Senior Subordinated Notes, each Holder, hereby confirms that
it is the intention of all such parties that the Senior Subordinated Guarantee
of such Guarantor not constitute a fraudulent transfer or conveyance for
purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar federal or state law to the extent
applicable to any Senior Subordinated Guarantee. To effectuate the foregoing
intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree
that the obligations of such Guarantor under its Senior Subordinated Guarantee
and this Article 11 shall be limited to the maximum amount as will, after giving
effect to such maximum amount and all other contingent and fixed liabilities of
such Guarantor that are relevant under such laws, and after giving effect to any
collections from, rights to receive contribution from or payments made by or on
behalf of any other Guarantor in respect of the obligations of such other
Guarantor under this Article 11, result in the obligations of such Guarantor
under its Senior Subordinated Guarantee not constituting a fraudulent transfer
or conveyance.
Section 11.04 Execution and Delivery of Senior Subordinated Guarantees.
To evidence its Senior Subordinated Guarantee set forth in Section 11.01, each
Guarantor hereby agrees that a notation of such Senior Subordinated Guarantee
substantially in the form of Exhibit D shall be endorsed by an Officer of such
Guarantor on each Senior Subordinated Note authenticated and delivered by the
Trustee and that this Indenture shall be executed on behalf of such Guarantor by
its President or one of its Vice Presidents and attested to by an Officer of
such Guarantor.
Each Guarantor hereby agrees that its Senior Subordinated Guarantee set
forth in Section 11.01 shall remain in full force and effect notwithstanding any
failure to endorse on each Senior Subordinated Note a notation of such Senior
Subordinated Guarantee.
If an Officer whose signature is on this Indenture or on the Senior
Subordinated Guarantee no longer holds that office at the time the Trustee
authenticates the Senior Subordinated Note on which a Senior Subordinated
Guarantee is endorsed, the Senior Subordinated Guarantee shall be valid
nevertheless.
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The delivery of any Senior Subordinated Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the Senior
Subordinated Guarantee set forth in this Indenture on behalf of the Guarantors.
In the event that the Company creates or acquires any new Subsidiaries
subsequent to the date of this Indenture, if required by Section 4.14 hereof,
the Company shall cause such Subsidiaries to execute supplemental indentures to
this Indenture and Senior Subordinated Guarantees in accordance with Section
4.14 hereof and this Article 11, to the extent applicable.
Section 11.05 Guarantors May Consolidate, etc., on Certain Terms. No
Guarantor may consolidate with or merge with or into (whether or not such
Guarantor is the surviving Person) another Person whether or not affiliated with
such Guarantor unless:
(a) subject to Section 11.06 hereof, the Person formed by or surviving
any such consolidation or merger (if other than such Guarantor)
unconditionally assumes all the obligations of such Guarantor under the Senior
Subordinated Guarantee and this Indenture on the terms set forth herein
pursuant to a supplemental indenture in form and substance reasonably
satisfactory to the Trustee;
(b) immediately after giving effect to such transaction, no Default or
Event of Default exists; and
(c) the Company would be permitted by virtue of the Company's pro forma
Fixed Charge Coverage Ratio to incur, immediately after giving effect to such
transaction, at least $1.00 of additional Indebtedness pursuant to the Fixed
Charge Coverage Ratio test set forth in the first paragraph of Section 4.09
hereof.
In case of any such consolidation or merger and upon the assumption by the
successor Person, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the Senior Subordinated
Guarantee endorsed upon the Senior Subordinated Notes and of the due and
punctual performance of all of the covenants and conditions of this Indenture to
be performed by the Guarantor, such successor Person shall succeed to and be
substituted for the Guarantor with the same effect as if it had been named
herein as a Guarantor. Such successor Person thereupon may cause to be signed
any or all of the Senior Subordinated Guarantees to be endorsed upon all of the
Senior Subordinated Notes issuable hereunder which theretofore shall not have
been signed by the Company and delivered to the Trustee. All the Senior
Subordinated Guarantees so issued shall in all respects have the same legal rank
and benefit under this Indenture as
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the Guarantees theretofore and thereafter issued in accordance with the terms of
this Indenture as though all of such Senior Subordinated Guarantees had been
issued at the date of the execution hereof.
Except as set forth in Articles 4 and 5 hereof, and notwithstanding
clauses (a) through (c) above, nothing contained in this Indenture or in any of
the Senior Subordinated Notes shall prevent any consolidation or merger of a
Guarantor with or into the Company or another Guarantor, or shall prevent any
sale or conveyance of the property of a Guarantor as an entirety or
substantially as an entirety to the Company or another Guarantor.
Section 11.06 Releases of Senior Subordinated Guarantees. In the event
of a sale or other disposition of all or substantially all of the assets of any
Guarantor, by way of merger, consolidation or otherwise, or a sale or other
disposition (including, without limitation, by foreclosure) of all of the
Capital Stock of any Guarantor, then such Guarantor (in the event of a sale or
other disposition, by way of such a merger, consolidation or otherwise
(including, without limitation, by foreclosure), of all of the Capital Stock of
such Guarantor) or the Person acquiring the property (in the event of a sale or
other disposition of all or substantially all of the assets of such Guarantor)
shall be automatically released and relieved of any obligations under its Senior
Subordinated Guarantee; provided that the Net Proceeds of such sale or other
disposition are applied, as and if required; in accordance with Section 4.10
hereof. In addition, if any Guarantor is released and relieved of all
obligations it may have as a guarantor under the Bank Credit Agreement, then
such Guarantor shall also be automatically released and relieved of any
obligations under its Senior Subordinated Guarantee. Upon delivery by the
Company to the Trustee of an Officers' Certificate and an Opinion of Counsel to
the effect that such sale or other disposition was made by the Company in
accordance with the provisions of this Indenture, including without limitation
Sections 4.10 and 5.01 hereof, the Trustee shall execute any documents
reasonably required in order to evidence the release of any Guarantor from its
obligations under its Senior Subordinated Guarantee.
Any Guarantor not released from its obligations under its Senior
Subordinated Guarantee shall remain liable for the full amount of principal of
and interest on the Senior Subordinated Notes and for the other obligations of
any Guarantor under this Indenture as provided in this Article 11.
Section 11.07 "Trustee" to Include Paying Agent. In case at any time any
Paying Agent other than the Trustee shall have been appointed by the Company and
be then acting hereunder, the term "Trustee" as used in this Article 11 shall in
such case (unless the context shall otherwise require) be construed as extending
to and including such Paying Agent within its meaning as fully and for all
intents and purposes as if such Paying Agent were named in this Article 11 in
place of the Trustee.
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ARTICLE 12
MISCELLANEOUS
Section 12.01 Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with the duties imposed by Section
318(c) of the Trust Indenture Act, the imposed duties shall control.
Section 12.02 Notices. Any notice, request, instruction, order or other
communication by the Company, the Guarantors or the Trustee to the others is
duly given only if in writing and delivered in Person or mailed by first class
mail (registered or certified, return receipt requested), telex, telecopier or
overnight air courier guaranteeing next day delivery, to the others' address:
If to the Company or any Guarantors:
Amscan Holdings, Inc.
80 Grasslands Road
Elmsford, New York 10523
Telecopier No.: (914) 345-2056
Attention: Secretary
With a copy to:
GS Capital Partners II, L.P.
85 Broad Street
New York, NY 10004
Telecopier No.: (212) 357-5505
Attention: David J. Greenwald
and
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019
Telecopier No.: (212) 403-2000
Attention: Mitchell S. Presser
If to the Trustee:
-95-
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IBJ Schroder Bank & Trust Company
One State Street
New York, NY 10004
Telecopier No.: (212) 858-2156
Attention: Corporate Finance Department
The Company, any Guarantor or the Trustee, by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders) shall
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in Section 313(c) of the Trust Indenture Act, to the extent
required by the Trust Indenture Act. Failure to mail a notice or communication
to a Holder or any defect in it shall not affect its sufficiency with respect to
other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall mail
a copy to the Trustee and each Agent at the same time.
Section 12.03 Communication by Holders of Senior Subordinated Notes with
Other Holders of Senior Subordinated Notes. Holders may communicate pursuant to
Section 312(b) of the Trust Indenture Act with other Holders with respect to
their rights under this Indenture or the Senior Subordinated Notes. The Company,
the Guarantors, the Trustee, the Registrar and anyone else shall have the
protection of Section 312(c) of the Trust Indenture Act.
Section 12.04 Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Company or any Guarantor to the Trustee to
take any action under this Indenture, the Company or such Guarantor, as the case
may be, shall furnish to the Trustee:
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(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 12.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory
to the Trustee (which shall include the statements set forth in Section 12.05
hereof) stating that, in the opinion of such counsel, all such conditions
precedent and covenants have been satisfied.
Section 12.05 Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture (other than a certificate provided pursuant to
Section 314(a)(4) of the Trust Indenture Act) shall comply with the provisions
of Section 314(e) of the Trust Indenture Act and shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
Section 12.06 Rules by Trustee and Agents. The Trustee may make
reasonable rules for action by or at a meeting of Holders. The Registrar or
Paying Agent may make reasonable rules and set reasonable requirements for its
functions.
Section 12.07 No Personal Liability of Directors, Officers, Employees
and Stockholders. No past, present or future director, officer, employee,
incorporator or stockholder of the Company or any Guarantor, as such, shall have
any liability for any obligations of the Company or the Guarantors under the
Senior Subordinated Notes, the Senior Subordinated Guarantees, this Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder of Senior Subordinated
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Notes by accepting a Senior Subordinated Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Senior Subordinated Notes.
Section 12.08 Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE SENIOR SUBORDINATED
NOTES AND THE SENIOR SUBORDINATED GUARANTEES.
Section 12.09 No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret any other indenture, loan or debt
agreement of the Company or its Subsidiaries or of any other Person. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture
and the Senior Subordinated Guarantees.
Section 12.10 Successors. All agreements of the Company and each
Guarantor in this Indenture and the Senior Subordinated Notes shall bind its
respective successors. All agreements of the Trustee in this Indenture shall
bind its successors.
Section 12.11 Severability. In case any provision in this Indenture or
in the Senior Subordinated Notes shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 12.12 Counterpart Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
Section 12.13 Table of Contents, Headings, etc. The Table of Contents,
Cross-Reference Table and Headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part of this Indenture and shall in no way modify or restrict any
of the terms or provisions hereof.
[Signatures on following page]
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SIGNATURES
Dated as of December 19, 1997
Amscan Holdings, Inc.
Attest: By: /s/ GERALD C. RITTENBERG
----------------------------------
Name: Gerald C. Rittenberg
/s/ JAMES M. HARRISON Title: Chief Executive Officer
- -------------------------------
Name: James M. Harrison
Title: President, Chief Financial
Officer and Treasurer
Amscan Inc.
Attest: By: /s/ GERALD C. RITTENBERG
----------------------------------
Name: Gerald C. Rittenberg
/s/ JAMES M. HARRISON Title: President
- -------------------------------
Name: James M. Harrison
Title: Secretary and Treasurer
Am-Source, Inc.
Attest: By: /s/ GERALD C. RITTENBERG
----------------------------------
Name: Gerald C. Rittenberg
/s/ JAMES M. HARRISON Title: President
- -------------------------------
Name: James M. Harrison
Title: Secretary and Treasurer
Trisar, Inc.
Attest: By:/s/ GERALD C. RITTENBERG
----------------------------------
Name: Gerald C. Rittenberg
/s/ JAMES M. HARRISON Title: President
- -------------------------------
Name: James M. Harrison
Title: Secretary and Treasurer
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SSY Realty Corp.
Attest: By:/s/ GERALD C. RITTENBERG
----------------------------------
Name: Gerald C. Rittenberg
/s/ JAMES M. HARRISON Title: President
- -------------------------------
Name: James M. Harrison
Title: Secretary and Treasurer
JCS Realty Corp.
Attest: By:/s/ GERALD C. RITTENBERG
----------------------------------
Name: Gerald C. Rittenberg
/s/ JAMES M. HARRISON Title: President
- -------------------------------
Name: James M. Harrison
Title: Secretary and Treasurer
-100-
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Dated as of December 19, 1997 IBJ Schroder Bank & Trust Company
Trustee
Attest: By: /s/ LUIS PEREZ
----------------------------------
Name: Luis Perez
Title: Asst. Vice President
/s/ JAMES M. HARRISON
- -------------------------------
111
Exhibit A-1
(Face of Senior Subordinated Note)
================================================================================
CUSIP o
No. ___ $__________
9.875% Senior Subordinated Notes due 2007
AMSCAN HOLDINGS, INC.
promises to pay to _______________ or registered assigns, the principal sum of
Dollars ($____________) on December 15, 2007.
Interest Payment Dates: June 15 and December 15
Record Dates: June 1 and December 1
Dated: __________, ____
AMSCAN HOLDINGS, INC.
By:______________________________
Name:
Title:
By:______________________________
Name:
Title:
This is one of the Senior
Subordinated Notes referred to
in the within-mentioned Indenture: (SEAL)
IBJ Schroder Bank & Trust Company,
as Trustee
By:__________________________________
Authorized Signatory
A-1-1
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================================================================================
(Back of Senior Subordinated Note)
9.875% Senior Subordinated Notes due 2007
[UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SENIOR
SUBORDINATED NOTES IN DEFINITIVE FORM, THIS SENIOR SUBORDINATED NOTE MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR
A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET,
NEW YORK, NEW YORK) ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER
ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.](1)
"THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF
REGULATION S UNDER
- ----------
(1) This paragraph should be included only if the Senior Subordinated
Note is issued in global form.
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THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (4) TO AN
INSTITUTION THAT IS AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(a)(1),
(2), (3) OR (7) OF REGULATION D IN A TRANSACTION EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (IF AVAILABLE) OR (5) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (B) IN ACCORDANCE
WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER
JURISDICTIONS. THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER FROM IT OF THE NOTES EVIDENCED HEREBY OF THE RESALE
RESTRICTIONS SET FORTH IN (A) ABOVE. NO REPRESENTATION CAN BE MADE AS TO THE
AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALES OF THE NOTES."
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. Interest. Amscan Holdings, Inc., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Senior
Subordinated Note at the rate of 9.875% per annum, which interest shall be
payable in cash semi-annually in arrears on June 15 and December 15, or if any
such day is not a Business Day, on the next succeeding Business Day (each an
"Interest Payment Date"); provided that the first Interest Payment Date shall be
June 15, 1998. Interest on the Senior Subordinated Notes will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from the date of original issuance. Interest will be computed on the basis
of a 360-day year comprised of twelve 30-day months.
2. Method of Payment. On each Interest Payment Date the Company shall
pay interest and Liquidated Damages, if any, to the Person who is the Holder of
record of this Senior Subordinated Note as of the close of business on June 1 or
December 1 immediately preceding such Interest Payment Date, even if this Senior
Subordinated Note is canceled after such record date and on or before such
Interest Payment Date, except as provided in Section 2.12 of the Indenture with
respect to defaulted interest. Principal, premium, if any, and interest,
including Liquidated Damages, if any, on this Senior Subordinated Note will be
payable at the office or agency of the Company maintained for such purpose
within The City and State of New York or, at the option of the Company, payment
of interest, including Liquidated Damages, if any, may be made by check mailed
to the Holder of this Senior Subordinated Note at its address set forth in the
register of
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Holders of Senior Subordinated Notes; provided, however, that all payments with
respect to Global Notes and Certificated Notes the Holders of which have given
wire transfer instructions to the Company at least 10 Business Days prior to the
applicable payment date will be required to be made by wire transfer of
immediately available funds to the accounts specified by the Holders thereof.
Such payment shall be in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts.
3. Paying Agent and Registrar. Initially, IBJ Schroder Bank & Trust
Company, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company, any Guarantor or any other of its Restricted
Subsidiaries may act in any such capacity.
4. Indenture. The Company issued the Senior Subordinated Notes under an
Indenture dated as of December 19, 1997 ("Indenture") among the Company, the
Guarantors and the Trustee. The terms of the Senior Subordinated Notes include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939, as amended (15 U.S. Code ss.ss.
77aaa-77bbbb). The Senior Subordinated Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of such
terms. The Senior Subordinated Notes are general unsecured obligations of the
Company limited in an aggregate principal amount at maturity to $200.0 million
and will mature on December 15, 2007.
5. Optional Redemption. (a) Except as set forth in clause (b) or (c) of
this Paragraph 5, the Senior Subordinated Notes are not redeemable at the
Company's option prior to December 15, 2002. From and after December 15, 2002,
the Senior Subordinated Notes will be subject to redemption at the option of the
Company, in whole or in part, upon not less than 30 nor more than 60 days'
written notice, at the redemption prices (expressed as percentages of principal
amount) set forth below, plus accrued and unpaid interest, including Liquidated
Damages, if any, thereon to the applicable redemption date, if redeemed during
the twelve-month period beginning on December 15 of the years indicated below:
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Year Percentage
- ---- ----------
2002.............................................. 104.937%
2003.............................................. 103.292%
2004.............................................. 101.646%
2005 and thereafter............................... 100%
(b) Notwithstanding the provisions of clause (a) of this Paragraph 5,
prior to December 15, 2000, the Company may, at its option, on any one or more
occasions, redeem up to 35% of the aggregate principal amount of Senior
Subordinated Notes issued under the Indenture at a redemption price equal to
109.875% of the principal amount thereof, plus accrued and unpaid interest,
including Liquidated Damages, if any, thereon to the redemption date, with the
net proceeds of public or private sales of common stock of, or contributions to
the common equity capital of, the Company; provided that at least 59% of the
aggregate principal amount of Senior Subordinated Notes issued under the
Indenture remains outstanding immediately after the occurrence of each such
redemption; and provided, further, that such redemption shall occur within 120
days of the date of the closing of the related sale of common stock of, or
capital contribution to, the Company.
(c) Notwithstanding the provisions of clause (a) of this Paragraph 5, at
any time on or prior to December 15, 2002, upon the occurrence of a Change of
Control, the Company may redeem the Senior Subordinated Notes, in whole but not
in part, at a redemption price equal to the principal amount thereof plus the
Applicable Premium plus accrued and unpaid interest and Liquidated Damages, if
any, to the redemption date. Notice of redemption of the Senior Subordinated
Notes pursuant to this paragraph shall be mailed to the Holders of the Senior
Subordinated Notes not more than 30 days following the occurrence of a Change of
Control.
6. Mandatory Redemption. Except as set forth in Paragraph 7 below, the
Company shall not be required to make mandatory redemption or sinking fund
payments with respect to the Senior Subordinated Notes.
7. Repurchase at Option of Holder. (a) Upon the occurrence of a Change
of Control, each Holder of Senior Subordinated Notes shall have the right to
require the Company to repurchase all or any part (equal to $1,000 in principal
amount or an integral multiple thereof) of such Holder's Senior Subordinated
Notes pursuant to the offer
A-1-5
116
described below (the "Change of Control Offer") at an offer price in cash (the
"Change of Control Payment") equal to 101% of the aggregate principal amount
thereof plus accrued and unpaid interest, including Liquidated Damages, if any,
thereon to the date of repurchase. Within 30 days following any Change of
Control, the Company shall mail a notice to each Holder setting forth the
procedures governing the Change of Control Offer and describing the transaction
or transactions that constitute the Change of Control as required by the
Indenture.
(b) If the Company or a Restricted Subsidiary consummates any Asset
Sales permitted by the Indenture, within 10 Business Days of the date on which
the aggregate amount of Excess Proceeds exceeds $15.0 million, the Company shall
commence an offer to all Holders of Senior Subordinated Notes and to the holders
of any other Senior Subordinated Indebtedness the terms of which so require (an
"Asset Sale Offer") pursuant to Section 4.10 of the Indenture to purchase the
maximum principal amount of Senior Subordinated Notes and such other Senior
Subordinated Indebtedness, that is an integral multiple of $1,000, that may be
purchased out of the Excess Proceeds at an offer price in cash in an amount
equal to 100% of the aggregate principal amount thereof (or 100% of the accreted
value thereof, in case of Senior Subordinated Indebtedness issued at a
discount), plus accrued and unpaid interest, including Liquidated Damages, if
any, thereon to the date fixed for the closing of such offer, in accordance with
the procedures set forth in the Indenture. The Excess Proceeds shall be
allocated to the respective Asset Sale Offers for the Senior Subordinated Notes
and such other Senior Subordinated Indebtedness in proportion to their relative
amounts (or accreted value, as applicable). To the extent that the aggregate
amount of Senior Subordinated Notes (and such other Senior Subordinated
Indebtedness) tendered pursuant to any required Asset Sale Offer is less than
the Excess Proceeds allocated thereto, the Company may use any remaining Excess
Proceeds (x) to offer to redeem or purchase other Senior Subordinated
Indebtedness or Subordinated Indebtedness in accordance with the provisions of
the Indenture or other agreement governing such other Senior Subordinated
Indebtedness or Subordinated Indebtedness or (y) for any other purpose not
prohibited by any provision of the Indenture. If the aggregate principal amount
of Senior Subordinated Notes tendered pursuant to any Asset Sale Offer exceeds
the amount of Excess Proceeds allocated thereto, the Trustee shall select the
Senior Subordinate Notes to be purchased on a pro rata basis based upon the
principal amount of Senior Subordinated Notes tendered. Holders of Senior
Subordinated Notes that are the subject of an offer to purchase will receive an
Asset Sale Offer from the Company prior to any related purchase date and may
elect to have such Senior Subordinated Notes purchased by completing the form
entitled "Option of Holder to Elect Purchase" on the reverse of this Senior
Subordinated Note.
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117
8. Notice of Optional Redemption. Notice of optional redemption will be
mailed at least 30 days but not more than 60 days before the redemption date to
each Holder whose Senior Subordinated Notes are to be redeemed at its registered
address. Senior Subordinated Notes in denominations larger than $1,000 may be
redeemed in part but only in whole multiples of $1,000, unless all of the Senior
Subordinated Notes held by a Holder are to be redeemed. On and after the
redemption date, unless the Company defaults in payment of the redemption price,
interest ceases to accrue on Senior Subordinated Notes or portions of them
called for redemption.
9. Denominations, Transfer, Exchange. The Senior Subordinated Notes are
in registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Senior Subordinated Notes may be registered
and Senior Subordinated Notes may be exchanged as provided in the Indenture. The
Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and the Company may require a
Holder to pay any taxes and fees required by law or permitted by the Indenture.
The Company need not exchange or register the transfer of any Senior
Subordinated Note or portion of a Senior Subordinated Note selected for
redemption, except for the unredeemed portion of any Senior Subordinated Note
being redeemed in part. Also, it need not exchange or register the transfer of
any Senior Subordinated Notes during a period beginning at the opening of
business 15 days before the day of any selection of Senior Subordinated Notes to
be redeemed and ending at the close of business on the day of selection or
during the period between a record date and the next succeeding Interest Payment
Date.
10. Persons Deemed Owners. The registered Holder of a Senior
Subordinated Note may be treated as its owner for all purposes.
11. Amendment, Supplement and Waiver. Subject to certain exceptions, the
Indenture or the Senior Subordinated Notes may be amended or supplemented with
the consent of the Holders of at least a majority in principal amount of the
Senior Subordinated Notes then outstanding, and any existing Default or Event of
Default or compliance with any provision of the Indenture or the Senior
Subordinated Notes may be waived with the consent of the Holders of a majority
in principal amount of the then outstanding Senior Subordinated Notes. Without
the consent of any Holder of a Senior Subordinated Note, the Indenture or the
Senior Subordinated Notes may be amended or supplemented to cure any ambiguity,
defect or inconsistency, to provide for uncertificated Senior Subordinated Notes
in addition to or in place of certificated Senior Subordinated Notes, to provide
for the assumption of the Company's obligations to the Holders of the Senior
Subordinated Notes in the case of a merger or consolidation, to make any change
that would provide any additional rights or benefits to the Holders of the
Senior
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118
Subordinated Notes or that does not adversely affect the legal rights under the
Indenture of any such Holder, to comply with the requirements of the SEC in
order to effect or maintain the qualification of the Indenture under the Trust
Indenture Act, or to allow any Guarantor to execute a supplemental indenture
and/or a Senior Subordinated Guarantee with respect to the Senior Subordinated
Notes.
12. Defaults and Remedies. Events of Default include: (i) default for 30
days in the payment when due of interest, including Liquidated Damages, if any,
on the Senior Subordinated Notes (whether or not prohibited by Article 10 the
Indenture); (ii) default in payment when due of the principal of or premium, if
any, on the Senior Subordinated Notes (whether or not prohibited by Article 10
of the Indenture); (iii) failure by the Company for 30 days after notice from
the Trustee or the Holders of at least 25% in principal amount of the then
outstanding Senior Subordinated Notes to comply with Sections 4.07, 4.09, 4.13
or 5.01 of the Indenture; (iv) failure by the Company for 60 days after notice
from the Trustee or the Holders of at least 25% in principal amount of the then
outstanding Senior Subordinated Notes to comply with any of its other agreements
or covenants in, or provisions of, the Indenture or the Senior Subordinated
Notes; (v) default under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any Indebtedness for
money borrowed by the Company or any of its Restricted Subsidiaries (or the
payment of which is guaranteed by the Company or any of its Restricted
Subsidiaries), whether such Indebtedness or guarantee now exists or is created
after the date of the Indenture, which default results in the acceleration of
such Indebtedness prior to its express maturity and, in each case, the principal
amount of any such Indebtedness, together with the principal amount of any other
such Indebtedness the maturity of which has been so accelerated, aggregates
$15.0 million or more; (vi) failure by the Company or any of its Restricted
Subsidiaries to pay final judgments aggregating in excess of $15.0 million,
which judgments are not paid, discharged or stayed for a period of 60 days;
(vii) certain events of bankruptcy or insolvency with respect to the Company or
any of its Restricted Subsidiaries; and (viii) except as permitted by the
Indenture, any Senior Subordinated Guarantee is held in any judicial proceeding
to be unenforceable or invalid or ceases for any reason to be in full force and
effect (except by its terms) or any Guarantor, or any Person acting on behalf of
any Guarantor, denies or disaffirms such Guarantor's obligations under its
Senior Subordinated Guarantee. If any Event of Default occurs and is continuing,
the Trustee or the Holders of at least 25% in principal amount of the then
outstanding Senior Subordinated Notes may declare all the Senior Subordinated
Notes to be due and payable immediately. Notwithstanding the foregoing, in the
case of an Event of Default arising from certain events of bankruptcy or
insolvency, all outstanding Senior Subordinated Notes will become due and
payable without further action or notice. Holders may not enforce the Indenture
or the Senior Subordinated Notes except as
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119
provided in the Indenture. Subject to certain limitations, Holders of a majority
in principal amount of the then outstanding Senior Subordinated Notes may direct
the Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of the Senior Subordinated Notes notice of any continuing Default or
Event of Default (except a Default or Event of Default relating to the payment
of principal or interest, including Liquidated Damages, if any) if it determines
that withholding notice is in their interest. The Holders of a majority in
aggregate principal amount of the Senior Subordinated Notes then outstanding by
notice to the Trustee may on behalf of the Holders of all of the Senior
Subordinated Notes waive any existing Default or Event of Default and its
consequences under the Indenture except a continuing Default or Event of Default
in the payment of interest, including Liquidated Damages, if any, on, or the
principal and premium, if any, of, the Senior Subordinated Notes. The Company is
required to deliver to the Trustee annually a statement regarding compliance
with the Indenture, and the Company is required upon becoming aware of any
Default or Event of Default, to deliver to the Trustee a statement specifying
such Default or Event of Default.
13. Trustee Dealings with Company. The Trustee, in its individual or any
other capacity, may become the owner or pledgee of Senior Subordinated Notes,
and may otherwise deal with the Company, any Guarantor or any of their
respective Affiliates, as if it were not the Trustee. However, in the event that
the Trustee acquires any conflicting interest it must eliminate such conflict
within 90 days, apply to the SEC for permission to continue as trustee or
resign.
14. No Recourse Against Others. No past, present or future director,
officer, employee, incorporator or stockholder of the Company or any Guarantor,
as such, shall have any liability for any obligations of the Company or the
Guarantors under the Senior Subordinated Notes, the Senior Subordinated
Guarantees, the Indenture or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder of Senior Subordinated Notes
by accepting a Senior Subordinated Note waives and releases all such liability.
The waiver and release are part of the consideration for the issuance of the
Senior Subordinated Notes.
15. Authentication. This Senior Subordinated Note shall not be valid
until authenticated by the manual signature of the Trustee or an authenticating
agent.
16. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
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17. Additional Rights of Holders of Transfer Restricted Securities. In
addition to the rights provided to Holders of Senior Subordinated Notes under
the Indenture, Holders of Transferred Restricted Securities shall have all the
rights set forth in the Exchange and Registration Rights Agreement dated as of
December 19, 1997, between the Company and the parties named on the signature
pages thereto (the "Registration Rights Agreement").
18. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Senior Subordinated Notes and the Trustee may
use CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Senior Subordinated Notes or as contained in any notice of redemption and
reliance may be placed only on the other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Amscan Holdings, Inc.
80 Grasslands Road
Elmsford, New York 10523
Telecopier No.: (914) 345-2056
Attention: Secretary
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Assignment Form
To assign this Security, fill in the form below: (I) or (we) assign and
transfer this Security to
(Insert assignee's Social Security or tax I.D. No.)
(Print or type assignee's name, address and zip code)
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 face of this Security)
Signature Guarantee:(2)
- ----------
(2) Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
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Option of Holder to Elect Purchase
If you want to elect to have this Senior Subordinated Note purchased by
the Company pursuant to Section 4.10 or 4.13 of the Indenture, check the box
below:
Section 4.10 |_| |_| Section 4.13
If you want to elect to have only part of the Senior Subordinated Note
purchased by the Company pursuant to Section 4.10 or Section 4.13 of the
Indenture, state the amount you elect to have purchased: $___________
Date:
Your Signature:___________________________________________________
(Sign exactly as your name appears on the Security)
Tax Identification No.:______________________
Signature Guarantee:(3)_______________________
- --------
(3) Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
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SCHEDULE OF EXCHANGES FOR CERTIFICATED NOTES
OR ANOTHER GLOBAL NOTE4
The following exchanges of a part of this Global Note for another Global
Note have been made:
Principal Amount
Amount of Amount of of this Signature of
decrease in increase in Global Note authorized
Principal Amount Principal Amount following officer of
Date of of this of this such decrease Trustee or
Exchange Global Note Global Note (or increase) Note Custodian
- -------- ----------- ----------- ------------- --------------
- --------
(4) To be included only if the Senior Subordinated Note is issued in global
form.
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Exhibit B-1
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM RULE 144A GLOBAL NOTE TO REGULATION S GLOBAL NOTE
(Pursuant to Section 2.06(a)(i) of the Indenture)
IBJ Schroder Bank & Trust Company
One State Street
New York, NY 10004
Attention: Corporate Trust Division
Re: 9.875% Senior Subordinated Notes
due 2007 of Amscan Holdings, Inc.
Reference is hereby made to the Indenture, dated as of December 19, 1997
(the "Indenture"), among Amscan Holdings, Inc., as issuer (the "Company"), the
Parties Listed on Exhibit C thereto as guarantors and IBJ Schroder Bank & Trust
Company, as trustee. Capitalized terms used but not defined herein shall have
the meanings given to them in the Indenture.
This letter relates to $_______ principal amount of Senior Subordinated
Notes which are evidenced by one or more Rule 144A Global Notes (CUSIP
03216NAA1) and held with the Depositary in the name of
____________________________ (the "Transferor"). The Transferor has requested a
transfer of such beneficial interest in the Senior Subordinated Notes to a
Person who will take delivery thereof in the form of an equal principal amount
of Senior Subordinated Notes evidenced by one or more Regulation S Global Notes
(CUSIP U00180AA4), which amount, immediately after such transfer, is to be held
with the Depositary through Euroclear or Cedel Bank or both (Common Code o).
In connection with such request and in respect of such Senior
Subordinated Notes, the Transferor hereby certifies that such transfer has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with Rule 903 or Rule 904 under the
United States Securities Act of 1933, as amended (the "Securities Act"), and
accordingly the Transferor hereby further certifies that:
(1) The offer of the Senior Subordinated Notes was not made to a person in
the United States;
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(2) either:
(a) at the time the buy order was originated, the transferee was
outside the United States or the Transferor and any person acting
on its behalf reasonably believed and believes that the transferee
was outside the United States; or
(b) the transaction was executed in, on or through the facilities of a
designated offshore securities market and neither the Transferor
nor any person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States;
(3) no directed selling efforts have been made in contravention of the
requirements of Rule 904(b) of Regulation S;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) upon completion of the transaction, the beneficial interest being
transferred as described above is to be held with the Depositary through
Euroclear or Cedel Bank or both (Common Code o).
Upon giving effect to this request to exchange a beneficial interest in
a Rule 144A Global Note for a beneficial interest in a Regulation S Global Note,
the resulting beneficial interest shall be subject to the restrictions on
transfer applicable to Regulation S Global Notes pursuant to the Indenture and
the Securities Act.
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This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and Goldman, Sachs & Co. (85 Broad
Street, New York, New York, 10004), the initial purchaser of such Senior
Subordinated Notes being transferred. Terms used in this certificate and not
otherwise defined in the Indenture have the meanings set forth in Regulation S
under the Securities Act.
____________________________________
[Insert Name of Transferor]
By:_________________________________
Name:
Title:
Dated: _________, ___
cc: Amscan Holdings, Inc.
Goldman, Sachs & Co.
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Exhibit B-2
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM REGULATION S GLOBAL NOTE TO RULE 144A GLOBAL NOTE
(Pursuant to Section 2.06(a)(ii) of the Indenture)
IBJ Schroder Bank & Trust Company
One State Street
New York, NY 10004
Attention: Corporate Trust Division
Re: 9.875% Senior Subordinated Notes
due 2007 of Amscan Holdings, Inc.
Reference is hereby made to the Indenture, dated as of December 19, 1997
(the "Indenture"), among Amscan Holdings, Inc., as issuer (the "Company"), the
Parties Listed on Exhibit C thereto as guarantors and IBJ Schroder Bank & Trust
Company, as trustee. Capitalized terms used but not defined herein shall have
the meanings given to them in the Indenture.
This letter relates to $_______ principal amount of Senior Subordinated
Notes which are evidenced by one or more Regulation S Global Notes (CUSIP
U00180AA4) and held with the Depositary through [Euroclear] [Cedel Bank] (Common
Code o) in the name of ____________________________ (the "Transferor"). The
Transferor has requested a transfer of such beneficial interest in the Senior
Subordinated Notes to a Person who will take delivery thereof in the form of an
equal principal amount of Senior Subordinated Notes evidenced by one or more
Rule 144A Global Notes (CUSIP 03216NAA1), to be held with the Depositary.
In connection with such request and in respect of such Senior
Subordinated Notes, the Transferor hereby certifies that:
[CHECK ONE]
|_| such transfer is being effected pursuant to and in accordance with
Rule 144A under the United States Securities Act of 1933, as amended
(the "Securities Act"), and, accordingly, the Transferor hereby further
certifies that the Senior
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Subordinated Notes are being transferred to a Person that the Transferor
reasonably believes is purchasing the Senior Subordinated Notes for its
own account, or for one or more accounts with respect to which such
Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of
Rule 144A in a transaction meeting the requirements of Rule 144A;
or
|_| such transfer is being effected pursuant to and in accordance with Rule
144 under the Securities Act;
or
|_| such transfer is being effected pursuant to an effective registration
statement under the Securities Act;
or
|_| such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A or
Rule 144, and the Transferor hereby further certifies that the Senior
Subordinated Notes are being transferred in compliance with the transfer
restrictions applicable to the Global Notes and in accordance with the
requirements of the exemption claimed, which certification is supported
by an Opinion of Counsel, provided by the transferor or the transferee
(a copy of which the Transferor has attached to this certification) in
form reasonably acceptable to the Company and to the Registrar, to the
effect that such transfer is in compliance with the Securities Act;
and such Senior Subordinated Notes are being transferred in compliance with any
applicable blue sky securities laws of any state of the United States.
Upon giving effect to this request to exchange a beneficial interest in
Regulation S Global Notes for a beneficial interest in Rule 144A Global Notes,
the resulting beneficial interest shall be subject to the restrictions on
transfer applicable to Rule 144A Global Notes pursuant to the Indenture and the
Securities Act.
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This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and Goldman, Sachs & Co. (85 Broad
Street, New York, New York, 10004), the initial purchaser of such Senior
Subordinated Notes being transferred. Terms used in this certificate and not
otherwise defined in the Indenture have the meanings set forth in Regulation S
under the Securities Act.
_____________________________________
[Insert Name of Transferor]
By:_______________________
Name:
Title:
Dated: _________, __
cc: Amscan Holdings, Inc.
Goldman, Sachs & Co.
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Exhibit B-3
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
OF CERTIFICATED NOTES
(Pursuant to Section 2.06(b) of the Indenture)
IBJ Schroder Bank & Trust Company
One State Street
New York, NY 10004
Attention: Corporate Trust Division
Re: 9.875% Senior Subordinated Notes
due 2006 of Amscan Holdings, Inc.
Reference is hereby made to the Indenture, dated as of December 19, 1997
(the "Indenture"), among Amscan Holdings, Inc., as issuer (the "Company"), the
Parties Listed on Exhibit C thereto as guarantors and IBJ Schroder Bank & Trust
Company, as trustee. Capitalized terms used but not defined herein shall have
the meanings given to them in the Indenture.
This letter relates to $_______ principal amount of Senior Subordinated
Notes which are evidenced by one or more Certificated Notes (CUSIP o) in the
name of ________________ (the "Transferor"). The Transferor has requested an
exchange or transfer of such Certificated Note(s) in the form of an equal
principal amount of Senior Subordinated Notes evidenced by one or more
Certificated Notes (CUSIP o), to be delivered to the Transferor or, in the case
of a transfer of such Senior Subordinated Notes, to such Person as the
Transferor instructs the Trustee.
In connection with such request and in respect of the Senior
Subordinated Notes surrendered to the Trustee herewith for exchange or transfer
(the "Surrendered Senior Subordinated Notes"), the Transferor hereby certifies
that:
[CHECK ONE]
|_| the Surrendered Senior Subordinated Notes are being acquired for the
Transferor's own account, without transfer;
or
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131
|_| the Surrendered Senior Subordinated Notes are being transferred to the
Company;
or
|_| the Surrendered Senior Subordinated Notes are being transferred
pursuant to and in accordance with Rule 144A under the United States
Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the
Surrendered Senior Subordinated Notes are being transferred to a Person
that the Transferor reasonably believes is purchasing the Surrendered
Senior Subordinated Notes for its own account, or for one or more
accounts with respect to which such Person exercises sole investment
discretion, and such Person and each such account is a "qualified
institutional buyer" within the meaning of Rule 144A, in each case in a
transaction meeting the requirements of Rule 144A; or
|_| the Surrendered Senior Subordinated Notes are being transferred in a
transaction permitted by Rule 144 under the Securities Act;
or
|_| the Surrendered Senior Subordinated Notes are being transferred
pursuant to an effective registration statement under the Securities
Act;
or
|_| such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A or
Rule 144, and the Transferor hereby further certifies that the Senior
Subordinated Notes are being transferred in compliance with the transfer
restrictions applicable to the Global Notes and in accordance with the
requirements of the exemption claimed, which certification is supported
by an Opinion of Counsel, provided by the transferor or the transferee
(a copy of which the Transferor has attached to this certification) in
form reasonably acceptable to the Company and to the Registrar, to the
effect that such transfer is in compliance with the Securities Act;
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132
and the Surrendered Senior Subordinated Notes are being transferred in
compliance with any applicable blue sky securities laws of any state of the
United States.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and Goldman, Sachs & Co. (85 Broad
Street, New York, New York, 10004), the initial purchaser of such Senior
Subordinated Notes being transferred. Terms used in this certificate and not
otherwise defined in the Indenture have the meanings set forth in Regulation S
under the Securities Act.
____________________________________
[Insert Name of Transferor]
By:_______________________
Name:
Title:
Dated: ____________, __
cc: Amscan Holdings, Inc.
Goldman, Sachs & Co.
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Exhibit B-4
FORM OF UNRESTRICTED NOTE CERTIFICATE
(Pursuant to Section 2.06(c) of the Indenture)
IBJ Schroder Bank & Trust Company
One State Street
New York, NY 10004
Attention: Corporate Trust Division
Re: 9.875% Senior Subordinated Notes
due 2007 of Amscan Holdings, Inc.
Reference is hereby made to the Indenture, dated as of December 19, 1997
(the "Indenture"), among Amscan Holdings, Inc., as issuer (the "Company"), the
Parties Listed on Exhibit C thereto as guarantors and IBJ Schroder Bank & Trust
Company, as trustee. Capitalized terms used but not defined herein shall have
the meanings given to them in the Indenture.
This letter relates to $_______ principal amount of Senior Subordinated
Notes which are evidenced by a beneficial interest in one or more Rule 144A
Global Notes or Regulation S Global Notes or are in certificated form (CUSIP
__________) (the "Specified Security") in the name of ______________________
(the "Owner"). The Owner has requested that the Specified Security be exchanged
for one or more Senior Subordinated Notes bearing no legend pursuant to Section
2.06(g)(ii) of the Indenture.
In connection with such exchange, the Owner hereby certifies that the
exchange is occurring after December 15, 1999 and the Owner is not, and during
the preceding three months has not been an affiliate of the Company;
The Owner also acknowledges that any future transfer of the Specified Security
must be in compliance with any applicable blue sky securities laws of any state
of the United States.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and Goldman, Sachs & Co. (85 Broad
Street, New York, New York, 10004), the initial purchaser of such Senior
Subordinated Notes being exchanged.
B-4-1
134
_____________________________________
[Insert Name of Owner]
By:__________________________________
Name:
Title:
Dated: ______________, __
cc: Amscan Holdings, Inc.
Goldman, Sachs & Co.
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Exhibit C
GUARANTORS
1. Amscan Inc.
2. Am-Source, Inc.
3. Trisar, Inc.
4. SSY Realty Corp.
5. JCS Realty Corp.
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Exhibit D
FORM OF SENIOR SUBORDINATED GUARANTEE
The obligations of the Guarantors to the Holders of Senior Subordinated
Notes and to the Trustee pursuant to this Senior Subordinated Guarantee and the
Indenture dated December 19, 1997, among Amscan Holdings, Inc., each of the
Persons listed on Exhibit C thereto and IBJ Schroder Bank & Trust Company, as
trustee, (the "Indenture") are expressly set forth in Article 11 of the
Indenture, and reference is hereby made to such Indenture for the precise terms
of this Senior Subordinated Guarantee. The terms of Article 11 of the Indenture
are incorporated herein by reference.
Each of the Guarantors, jointly and severally, hereby unconditionally
guarantees to each Holder of a Senior Subordinated Note authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of the Indenture, the Senior
Subordinated Notes or the obligations of the Company under the Indenture or the
Senior Subordinated Notes, that: (a) the principal of, premium, if any, and
interest, including Liquidated Damages, if any, on the Senior Subordinated Notes
shall be promptly paid in full when due, whether at maturity, by acceleration,
redemption or otherwise, and (to the extent permitted by law) interest on the
overdue principal of, premium, if any, and interest, including Liquidated
Damages, if any, on the Senior Subordinated Notes, if any, and all other
obligations of the Company to the Holders or the Trustee under the Indenture or
the Senior Subordinated Notes shall be promptly paid in full or performed, all
in accordance with the terms of the Indenture and the Senior Subordinated Notes;
and (b) in case of any extension of time of payment or renewal of any Senior
Subordinated Notes or any of such other obligations, that same shall be promptly
paid in full when due or performed in accordance with the terms of the extension
or renewal, whether at stated maturity, by acceleration or otherwise. Failing
payment when due of any amount so guaranteed for whatever reason, the Guarantors
shall be obligated to pay the same immediately whether or not such failure to
pay has become an Event of Default which could cause acceleration pursuant to
Section 6.02 of the Indenture. Each Guarantor agrees that this is a guarantee of
payment and not a guarantee of collection.
Each Guarantor hereby agrees that its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Senior Subordinated Notes or the Indenture, the absence of any action to enforce
the same, any waiver or consent by any Holder of the Senior Subordinated Notes
with respect to any provisions thereof, the recovery of any judgment against the
Company, any action to
D-1
137
enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor. Each Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenants that, subject to Article 11 of the Indenture, this Senior
Subordinated Guarantee shall not be discharged except by complete performance of
the obligations contained in the Senior Subordinated Notes and the Indenture.
If any Holder of Senior Subordinated Notes or the Trustee is required by
any court or otherwise to return to the Company or Guarantors, or any Custodian,
Trustee, liquidator or other similar official acting in relation to either the
Company or Guarantors, any amount paid by either to the Trustee or such Holder,
this Senior Subordinated Guarantee, to the extent theretofore discharged, shall
be reinstated in full force and effect.
Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders of Senior Subordinated Notes in respect
of any Obligations guaranteed hereby until payment in full of all Obligations
guaranteed hereby. Each Guarantor further agrees that, as between the
Guarantors, on the one hand, and the Holders and the Trustee, on the other hand,
(x) the maturity of the Obligations guaranteed hereby may be accelerated as
provided in Article 6 of the Indenture for the purposes of this Senior
Subordinated Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Obligations
guaranteed hereby and (y) in the event of any declaration of acceleration of
such Obligations as provided in Section 6.02 of the Indenture, such Obligations
(whether or not due and payable) shall forthwith become due and payable by the
Guarantors for the purpose of this Senior Subordinated Guarantee. The Guarantors
shall have the right to seek contribution from any non-paying Guarantor so long
as the exercise of such right does not impair the rights of the Holders under
the Senior Subordinated Guarantees.
The Obligations of each Guarantor under this Senior Subordinated
Guarantee are junior and subordinated to the Senior Guarantee of such Guarantor
on the same basis as the Senior Subordinated Notes are junior and subordinated
to Senior Debt of the Company. For the purposes of the foregoing sentence, the
Trustee and the Holders shall have the right to receive and/or retain payments
by any of the Guarantors only at such times as they may receive and/or retain
payments in respect of the Senior Subordinated Notes pursuant to the Indenture,
including Article 10 thereof.
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138
Each Guarantor, and by its acceptance of Senior Subordinated Notes, each
Holder, hereby confirms that it is the intention of all such parties that this
Senior Subordinated Guarantee not constitute a fraudulent transfer or conveyance
for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar federal or state law to the
extent applicable. To effectuate the foregoing intention, the Trustee, the
Holders and the Guarantors hereby irrevocably agree that the obligations of each
Guarantor under this Senior Subordinated Guarantee shall be limited to the
maximum amount as will, after giving effect to such maximum amount and all other
contingent and fixed liabilities of such Guarantor that are relevant under such
laws, and after giving effect to any collections from, rights to receive
contribution from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under Article 11 of the
Indenture, result in the obligations of such Guarantor under this Senior
Subordinated Guarantee not constituting a fraudulent transfer or conveyance.
This is a continuing Senior Subordinated Guarantee and shall remain in
full force and effect and shall be binding upon each Guarantor and its
respective successors and assigns to the extent set forth in the Indenture until
full and final payment of all of the Company's Obligations under the Senior
Subordinated Notes and the Indenture and shall inure to the benefit of the
successors and assigns of the Trustee and the Holders of Senior Subordinated
Notes and, in the event of any transfer or assignment of rights by any Holder of
Senior Subordinated Notes or the Trustee, the rights and privileges herein
conferred upon that party shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions hereof and of
Article 11 of the Indenture.
This Senior Subordinated Guarantee shall not be valid or obligatory for
any purpose until the certificate of authentication on the Senior Subordinated
Note upon which this Senior Subordinated Guarantee is noted shall have been
executed by the Trustee under the Indenture by the manual signature of one of
its authorized officers. Notwithstanding the foregoing, in the event that this
Senior Subordinated Guarantee is executed subsequent to such manual signature of
one of the Trustee's authorized officers on such certificate of authentication,
then immediately upon the execution of this Senior Subordinated Guarantee all
obligations hereunder and under the Indenture shall be valid and obligatory with
respect to such Senior Subordinated Note(s) as if this Senior Subordinated
Guarantee were noted thereon.
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139
Capitalized terms used herein have the same meanings given in the
Indenture unless otherwise indicated.
Amscan Inc.
Attest:
By:
---------------------------------
Name:
Title:
- -----------------------------
Name:
Title:
Am-Source, Inc.
Attest:
By:
---------------------------------
Name:
Title:
- -----------------------------
Name:
Title:
Trisar, Inc.
Attest:
By:
---------------------------------
Name:
Title:
- -----------------------------
Name:
Title:
SSY Realty Corp.
Attest:
By:
---------------------------------
Name:
Title:
- -----------------------------
Name:
Title:
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140
JCS Realty Corp.
Attest:
By:
---------------------------------
Name:
Title:
- -----------------------------
Name:
Title:
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141
Exhibit E
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE dated as of ________________, _____ between
__________________ (the "Guarantor" and, together with the Persons identified on
Exhibit C to the Indenture referred to below and any other Guarantors that
execute this form of Supplemental Indenture, the "Guarantors"), a Subsidiary of
Amscan Holdings, Inc., a Delaware corporation, or its successors and assigns
(the "Company"), and IBJ Schroder Bank & Trust Company, as trustee under the
indenture referred to below (the "Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of December 19, 1997, providing
for the issuance of an aggregate principal amount of $200.0 million of 9.875%
Senior Subordinated Notes Due 2007 (the "Senior Subordinated Notes");
WHEREAS, the Indenture provides that under certain circumstances the
Guarantor shall execute and deliver to the Trustee a supplemental indenture
pursuant to which the Guarantor shall unconditionally guarantee all of the
Company's Obligations under the Senior Subordinated Notes on the terms and
conditions set forth herein (the "Senior Subordinated Guarantee"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guarantor and the Trustee mutually covenant and agree for the equal and ratable
benefit of the Holders of the Senior Subordinated Notes as follows:
1. Capitalized Terms. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
2. Counterpart to the Indenture. This Supplemental Indenture
specifically incorporates, restates and reaffirms all of the warranties,
representations, covenants and
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142
other provisions of the Indenture, notwithstanding the fact that such provisions
are not restated herein. By executing this Supplemental Indenture, the Guarantor
subscribes to all of the covenants and other provisions in the Indenture as
applicable to the Guarantors, and the Guarantor hereby agrees that it shall be
bound by all of the provisions of the Indenture. Upon execution, this
Supplemental Indenture shall become part of the Indenture and the rights and
obligations of the Guarantor hereunder shall be construed to be identical to the
rights and obligations of the Guarantors under the Indenture. Reference is
hereby made to the Indenture for the precise terms of this Supplemental
Indenture. In the event of any conflict between the provisions herein and the
provisions of the Indenture, the Indenture shall control.
3. Agreement to Guarantee. The Guarantor hereby agrees as follows:
(a) Subject to Article 11 of the Indenture, the Guarantor, jointly and
severally with the other Guarantors, hereby unconditionally guarantees to each
Holder of a Senior Subordinated Note authenticated and delivered by the
Trustee and to the Trustee and its successors and assigns, irrespective of the
validity and enforceability of the Indenture, the Senior Subordinated Notes or
the Obligations of the Company under the Indenture or the Senior Subordinated
Notes, that: (a) the principal of, premium, if any, and interest, including
Liquidated Damages, if any, on the Senior Subordinated Notes shall be promptly
paid in full when due, whether at maturity, by acceleration, redemption or
otherwise, and (to the extent permitted by law) interest on the overdue
principal of, premium and interest, including Liquidated Damages, on the
Senior Subordinated Notes, if any, and all other obligations of the Company to
the Holders or the Trustee under the Indenture or the Senior Subordinated
Notes shall be promptly paid in full or performed, all in accordance with the
terms of the Indenture and the Senior Subordinated Notes; and (b) in case of
any extension of time for payment or renewal of any Senior Subordinated Notes
or any of such other obligations, that the same shall be promptly paid in full
when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise. Failing
payment when due of any amount so guaranteed for whatever reason, the
Guarantors shall be obligated to pay the same immediately whether or not such
failure to pay has become an Event of Default which could cause acceleration
pursuant to Section 6.02 of the Indenture. The Guarantor agrees that this is a
guarantee of payment and not a guarantee of collection.
(b) The Guarantor hereby agrees that its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of
the Senior Subordinated Notes or the Indenture, the absence of any action to
enforce the same, any
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waiver or consent by any Holder of the Senior Subordinated Notes with respect
to any provisions thereof, the recovery of any judgment against the Company,
any action to enforce the same or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a guarantor. The
Guarantor hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of insolvency or bankruptcy of the Company,
any right to require a proceeding first against the Company, protest, notice
and all demands whatsoever and covenants that, subject to Article 11 of the
Indenture, this Senior Subordinated Guarantee shall not be discharged except
by complete performance of the obligations contained in the Senior
Subordinated Notes and the Indenture.
(c) If any Holder of Senior Subordinated Notes or the Trustee is
required by any court or otherwise to return to the Company or the Guarantors,
or any Custodian, Trustee, liquidator or other similar official acting in
relation to either the Company or the Guarantors, any amount paid by either to
the Trustee or such Holder, this Senior Subordinated Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect.
(d) The Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders of Senior Subordinated Notes in respect
of any Obligations guaranteed hereby until payment in full of all Obligations
guaranteed hereby. The Guarantor further agrees that, as between the
Guarantors, on the one hand, and the Holders and the Trustee, on the other
hand, (x) the maturity of the Obligations guaranteed hereby may be accelerated
as provided in Article 6 of the Indenture for the purposes of this Senior
Subordinated Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Obligations
guaranteed thereby and (y) in the event of any declaration of acceleration of
such Obligations as provided in Section 6.02 of the Indenture, such
Obligations (whether or not due and payable) shall forthwith become due and
payable by the Guarantors for the purpose of this Senior Subordinated
Guarantee. The Guarantors shall have the right to seek contribution from any
non-paying Guarantor so long as the exercise of such right does not impair the
rights of the Holders under the Senior Subordinated Guarantees.
4. Subordination of Senior Subordinated Guarantee. The Obligations of
each Guarantor under its Senior Subordinated Guarantee pursuant to Article 11 of
the Indenture shall be junior and subordinated to the Senior Guarantee of such
Guarantor on the same basis as the Senior Subordinated Notes are junior and
subordinated to Senior Debt of the Company. For the purposes of the foregoing
sentence, the Trustee and the Holders shall have the right to receive and/or
retain payments by any of the Guarantors
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only at such times as they may receive and/or retain payments in respect of the
Senior Subordinated Notes pursuant to the Indenture, including Article 10
thereof.
5. Limitation on Guarantor Liability. The Guarantor, and by its
acceptance of Senior Subordinated Notes, each Holder, hereby confirms that it is
the intention of all such parties that the Senior Subordinated Guarantee of the
Guarantor not constitute a fraudulent transfer or conveyance for purposes of
Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar federal or state law to the extent applicable to any
Senior Subordinated Guarantee. To effectuate the foregoing intention, the
Trustee, the Holders and the Guarantor hereby irrevocably agree that the
obligations of the Guarantor under its Senior Subordinated Guarantee and Article
11 of the Indenture shall be limited to the maximum amount as will, after giving
effect to such maximum amount and all other contingent and fixed liabilities of
the Guarantor that are relevant under such laws, and after giving effect to any
collections from, rights to receive contribution from or payments made by or on
behalf of any other Guarantor in respect of the obligations of such other
Guarantor under Article 11 of the Indenture, result in the obligations of the
Guarantor under its Senior Subordinated Guarantee not constituting a fraudulent
transfer or conveyance.
6. Execution and Delivery of Senior Subordinated Guarantees. (a) To
evidence its Senior Subordinated Guarantee set forth in this Supplemental
Indenture and in Section 11.01 of the Indenture, the Guarantor hereby agrees
that a notation of such Senior Subordinated Guarantee substantially in the form
of Exhibit D to the Indenture shall be endorsed by an Officer of the Guarantor
on each Senior Subordinated Note authenticated and delivered by the Trustee and
that this Supplemental Indenture, as a counterpart to the Indenture, shall be
executed on behalf of the Guarantor by its President or one of its Vice
Presidents and attested to by an Officer of the Guarantor.
(b) The Guarantor hereby agrees that its Senior Subordinated Guarantee
set forth in this Supplemental Indenture and in Section 11.01 of the Indenture
shall remain in full force and effect notwithstanding any failure to endorse
on each Senior Subordinated Note a notation of such Senior Subordinated
Guarantee.
(c) If an Officer whose signature is on this Supplemental Indenture or
on the Senior Subordinated Guarantee no longer holds that office at the time
the Trustee authenticates the Senior Subordinated Note on which a Senior
Subordinated Guarantee is endorsed, the Senior Subordinated Guarantee shall be
valid nevertheless.
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(d) The delivery of any Senior Subordinated Note by the Trustee, after
the authentication thereof under the Indenture, shall constitute due delivery
of the Senior Subordinated Guarantee set forth in the Indenture on behalf of
the Guarantor.
7. Guarantor May Consolidate, Etc., on Certain Terms. No Guarantor may
consolidate with or merge with or into (whether or not such Guarantor is the
surviving Person) another Person whether or not affiliated with such Guarantor
unless:
(a) subject to Section 11.06 of the Indenture, the Person formed by or
surviving any such consolidation or merger (if other than such Guarantor)
unconditionally assumes all the obligations of such Guarantor under the Senior
Subordinated Guarantee and the Indenture on the terms set forth in the
Indenture pursuant to a supplemental indenture in form and substance
reasonably satisfactory to the Trustee;
(b) immediately after giving effect to such transaction, no Default or
Event of Default exists; and
(c) the Company would be permitted by virtue of the Company's pro forma
Fixed Charge Coverage Ratio to incur, immediately after giving effect to such
transaction, at least $1.00 of additional Indebtedness pursuant to the Fixed
Charge Coverage Ratio test set forth in the first paragraph of Section 4.09 of
the Indenture.
In case of any such consolidation or merger and upon the assumption by the
successor Person by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the Senior Subordinated
Guarantee endorsed upon the Senior Subordinated Notes and of the due and
punctual performance of all of the covenants and conditions of the Indenture and
this Supplemental Indenture to be performed by the Guarantor, such successor
Person shall succeed to and be substituted for the Guarantor with the same
effect as if it had been named in the Indenture as a Guarantor. Such successor
Person thereupon may cause to be signed any or all of the Senior Subordinated
Guarantees to be endorsed upon all of the Senior Subordinated Notes issuable
under the Indenture which theretofore shall not have been signed by the Company
and delivered to the Trustee. All the Senior Subordinated Guarantees so issued
shall in all respects have the same legal rank and benefit under the Indenture
as the Senior Subordinated Guarantees theretofore and thereafter issued in
accordance with the terms of the Indenture as though all of such Senior
Subordinated Guarantees had been issued at the date of the execution of the
Indenture.
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Except as set forth in Articles 4 and 5 of the Indenture, and
notwithstanding clauses (a) through (c) above, nothing contained in the
Indenture, this Supplemental Indenture or in any of the Senior Subordinated
Notes shall prevent any consolidation or merger of the Guarantor with or into
the Company or another Guarantor, or shall prevent any sale or conveyance of the
property of the Guarantor as an entirety or substantially as an entirety to the
Company or another Guarantor.
8. Releases of Senior Subordinated Guarantees. In the event of a sale or
other disposition of all or substantially all of the assets of the Guarantor, by
way of merger, consolidation or otherwise, or a sale or other disposition
(including, without limitation, by foreclosure) of all of the Capital Stock of
the Guarantor, then the Guarantor (in the event of a sale or other disposition,
by way of such a merger, consolidation or otherwise (including, without
limitation, by foreclosure), of all of the Capital Stock of the Guarantor) or
the Person acquiring the property (in the event of a sale or other disposition
of all or substantially all of the assets of the Guarantor) shall be
automatically released and relieved of any obligations under its Senior
Subordinated Guarantee; provided that the Net Proceeds of such sale or other
disposition are applied, as and if required, in accordance with Section 4.10 of
the Indenture. In addition, if any Guarantor is released and relieved of all
obligations it may have as a guarantor under the Bank Credit Agreement, then
such Guarantor will also be automatically released and relieved of any
obligations under its Senior Subordinated Guarantee. Upon delivery by the
Company to the Trustee of an Officers' Certificate and an Opinion of Counsel to
the effect that such sale or other disposition was made by the Company in
accordance with the provisions of the Indenture, including without limitation
Sections 4.10 and 5.01 thereof, the Trustee shall execute any documents
reasonably required in order to evidence the release of the Guarantor from its
obligations under its Senior Subordinated Guarantee.
Any Guarantor not released from its obligations under its Senior
Subordinated Guarantee shall remain liable for the full amount of principal of
and interest on the Senior Subordinated Notes and for the other obligations of
any Guarantor under the Indenture as provided in Article 11 thereof.
9. "Trustee" to Include Paying Agent. In case at any time any Paying
Agent other than the Trustee shall have been appointed by the Company and be
then acting under the Indenture, the term "Trustee" as used in Article 11
thereto shall in such case (unless the context shall otherwise require) be
construed as extending to and including such Paying Agent within its meaning as
fully and for all intents and purposes as if such Paying Agent were named in
Article 11 of the Indenture in place of the Trustee.
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10. No Recourse Against Others. No past, present or future director,
officer, employee, incorporator or stockholder of the Guarantor, as such, shall
have any liability for any obligations of the Company or any Guarantor under the
Senior Subordinated Notes, any Senior Subordinated Guarantees, the Indenture or
this Supplemental Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of Senior
Subordinated Notes by accepting a Senior Subordinated Note waives and releases
all such liability. The waiver and release are part of the consideration for
issuance of the Senior Subordinated Notes.
11. GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL
GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE AND THE SENIOR
SUBORDINATED GUARANTEE.
12. Counterpart Originals. The parties may sign any number of copies of
this Supplemental Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
13. Effect of Headings. The Section headings herein are for convenience
only and shall not affect the construction hereof.
14. The Trustee. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guarantor and the Company.
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: ____________, ____ [Guarantor]
By:___________________________________
Attest: Name:
Title:
___________________________
Dated: ____________, ____ IBJ Schroder Bank & Trust Company
as Trustee
By:___________________________________
Attest: Name:
Title:
____________________________
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