1
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INDENTURE
Dated as of March 16, 1998
Between
TRANS-RESOURCES, INC.
and
STATE STREET BANK AND TRUST COMPANY, as Trustee
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$135,000,000 Aggregate Principal Amount at Maturity
12% Senior Discount Notes due 2008, Series A
12% Senior Discount Notes due 2008, Series B
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CROSS-REFERENCE TABLE
Trust Indenture Indenture
Act Section Section
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ss.310(a)(1)............................................. 7.10
(a)(2)............................................... 7.10
(a)(3)............................................... N.A.
(a)(4)............................................... N.A.
(a)(5)............................................... 7.08; 7.10.
(b).................................................. 7.08; 7.10; 13.02
(c).................................................. N.A.
ss.311(a).............................................. 7.11
(b).................................................. 7.11
(c).................................................. N.A.
ss.312(a)................................................ 2.05
(b).................................................. 13.03
(c).................................................. 13.03
ss.313(a)................................................ 7.06
(b)(1)............................................... 7.06
(b)(2)............................................... 7.06
(c).................................................. 7.06; 13.02
(d).................................................. 7.06
ss. 314(a)............................................... 4.11; 4.12; 13.02
(b).................................................. N.A.
(c)(1)............................................... 13.04
(c)(2)............................................... 13.04
(c)(3)............................................... N.A.
(d).................................................. N.A.
(e).................................................. 13.05
(f).................................................. N.A.
ss.315(a)................................................ 7.01(b)
(b).................................................. 7.05; 13.02
(c).................................................. 7.01(a)
(d).................................................. 7.01(c)
(e).................................................. 6.11
ss.316(a)(last sentence)................................. 2.09
(a)(1)(A)............................................ 6.05
(a)(1)(B)............................................ 6.04
(a)(2)............................................... N.A.
(b).................................................. 6.07
(c).................................................. 10.04
ss.317(a)(1)............................................. 6.08
(a)(2)............................................... 6.09
(b).................................................. 2.04
ss.318(a)................................................ 13.01
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N.A. means Not Applicable.
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of this Indenture.
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TABLE OF CONTENTS
Page
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ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions..................................................1
SECTION 1.02. Incorporation by Reference of Trust Indenture Act...........18
SECTION 1.03. Rules of Construction.......................................19
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating.............................................19
SECTION 2.02. Execution and Authentication................................20
SECTION 2.03. Registrar and Paying Agent..................................20
SECTION 2.04. Paying Agent To Hold Assets in Trust........................21
SECTION 2.05. Holder Lists................................................21
SECTION 2.06. Transfer and Exchange.......................................21
SECTION 2.07. Replacement Securities......................................22
SECTION 2.08. Outstanding Securities......................................22
SECTION 2.09. Treasury Securities.........................................23
SECTION 2.10. Temporary Securities........................................23
SECTION 2.11. Cancellation................................................23
SECTION 2.12. Defaulted Interest..........................................23
SECTION 2.13. CUSIP Number................................................24
SECTION 2.14. Deposit of Moneys...........................................24
SECTION 2.15. Book-Entry Provisions for Global Securities.................24
SECTION 2.16. Registration of Transfers and Exchanges.....................25
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee..........................................29
SECTION 3.02. Selection of Securities To Be Redeemed......................29
SECTION 3.03. Notice of Redemption........................................29
SECTION 3.04. Effect of Notice of Redemption..............................30
SECTION 3.05. Deposit of Redemption Price.................................30
SECTION 3.06. Securities Redeemed in Part.................................30
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities.......................................31
SECTION 4.02. Maintenance of Office or Agency.............................31
SECTION 4.03. Limitations on Transactions with Affiliates.................31
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SECTION 4.04. Limitation on Additional Indebtedness.......................32
SECTION 4.05. Disposition of Proceeds of Asset Sales......................33
SECTION 4.06. Limitation on Restricted Payments...........................34
SECTION 4.07. Existence...................................................36
SECTION 4.08. Payment of Taxes and Other Claims...........................36
SECTION 4.09. Notice of Defaults..........................................36
SECTION 4.10. Maintenance of Properties and Insurance.....................36
SECTION 4.11. Compliance Certificate......................................37
SECTION 4.12. Reports to Holders..........................................37
SECTION 4.13. Waiver of Stay, Extension or Usury Laws.....................37
SECTION 4.14. Change of Control...........................................38
SECTION 4.15. Limitation on the Designation of Unrestricted Subsidiaries..39
SECTION 4.16. Limitations on Dividends and Other Payment Restrictions
Affecting Restricted Subsidiaries.......................39
SECTION 4.17. Limitation on the Sale or Issuance of Preferred Equity
Interests of Restricted Subsidiaries....................40
SECTION 4.18. Limitation on Liens.........................................40
SECTION 4.19. Limitation on Status as Investment Company..................41
SECTION 4.20. Calculation of Original Issue Discount......................41
ARTICLE FIVE
MERGERS; SUCCESSORS
SECTION 5.01. Mergers, Sale of Assets, etc................................41
SECTION 5.02. Successor Substituted.......................................42
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default...........................................42
SECTION 6.02. Acceleration................................................43
SECTION 6.03. Other Remedies..............................................44
SECTION 6.04. Waiver of Past Default......................................44
SECTION 6.05. Control by Majority.........................................44
SECTION 6.06. Limitation on Suits.........................................45
SECTION 6.07. Rights of Holders To Receive Payment........................45
SECTION 6.08. Collection Suit by Trustee..................................45
SECTION 6.09. Trustee May File Proofs of Claim............................45
SECTION 6.10. Priorities..................................................46
SECTION 6.11. Undertaking for Costs.......................................46
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee...........................................47
SECTION 7.02. Rights of Trustee...........................................48
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SECTION 7.03. Individual Rights of Trustee................................49
SECTION 7.04. Trustee's Disclaimer........................................49
SECTION 7.05. Notice of Defaults..........................................49
SECTION 7.06. Reports by Trustee to Holders...............................49
SECTION 7.07. Compensation and Indemnity..................................49
SECTION 7.08. Replacement of Trustee......................................50
SECTION 7.09. Successor Trustee by Merger, etc............................51
SECTION 7.10. Eligibility; Disqualification...............................51
SECTION 7.11. Preferential Collection of Claims Against the Company.......51
ARTICLE EIGHT
[INTENTIONALLY OMITTED]
ARTICLE NINE
DISCHARGE OF INDENTURE
SECTION 9.01. Termination of the Company's Obligations....................52
SECTION 9.02. Application of Trust Money..................................53
SECTION 9.03. Repayment to the Company....................................53
SECTION 9.04. Reinstatement...............................................53
ARTICLE TEN
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.01. Without Consent of Holders.................................54
SECTION 10.02. With Consent of Holders....................................54
SECTION 10.03. Compliance with Trust Indenture Act........................56
SECTION 10.04. Revocation and Effect of Consents..........................56
SECTION 10.05. Notation on or Exchange of Securities......................56
SECTION 10.06. Trustee To Sign Amendments, etc............................56
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ARTICLE ELEVEN
[INTENTIONALLY OMITTED]
ARTICLE TWELVE
[INTENTIONALLY OMITTED]
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls...............................57
SECTION 13.02. Notices....................................................57
SECTION 13.03. Communications by Holders with Other Holders...............58
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.........58
SECTION 13.05. Statements Required in Certificate or Opinion..............59
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar..................59
SECTION 13.07. Governing Law..............................................59
SECTION 13.08. No Recourse Against Others.................................59
SECTION 13.09. Successors.................................................59
SECTION 13.10. Counterpart Originals......................................60
SECTION 13.11. Severability...............................................60
SECTION 13.12. No Adverse Interpretation of Other Agreements..............60
SECTION 13.13. Legal Holidays.............................................60
SIGNATURES...............................................................S-1
EXHIBIT A Form of Series A Security....................................A-1
EXHIBIT B Form of Series B Security....................................B-1
EXHIBIT C Form of Legend for Global Securities.........................C-1
EXHIBIT D Form of Transfer Certificate.................................D-1
EXHIBIT E Form of Transfer Certificate for Institutional Accredited
Investors................................................E-1
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NOTE: This Table of Contents shall not, for any purpose, be deemed to be a part
of this Indenture.
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INDENTURE, dated as of March 16, 1998, between TRANS-RESOURCES,
INC., a Delaware corporation (the "Company"), and STATE STREET BANK AND TRUST
COMPANY, a Massachusetts state chartered commercial bank, as trustee (the
"Trustee").
Each party hereto agrees as follows for the benefit of each other
party and for the equal and ratable benefit of the Holders of the Securities:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Accreted Value" means as of any date (the "Specified Date"), with
respect to each $1,000 principal face amount at maturity of the Securities:
(i) if the Specified Date is one of the following dates (each a
"Semi-Annual Accrual Date"), the amount set forth opposite such date
below:
Semi-Annual Accreted
Accrual Date Value
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March 16, 1998................................................ $558.58
September 15, 1998............................................ 59l.90
March 15, 1999................................................ 627.42
September 15, 1999............................................ 665.06
March 15, 2000................................................ 704.96
September 15, 2000............................................ 747.26
March 15, 2001................................................ 792.10
September 15, 2001............................................ 839.62
March 15, 2002................................................ 890.00
September 15, 2002............................................ 943.40
March 15, 2003................................................ 1,000.00
(ii) if the Specified Date occurs between two Semi-Annual Accrual
Dates, the sum of (a) the Accreted Value for the Semi-Annual Accrual Date
immediately preceding the Specified Date and (b) an amount equal to the
product of (x) the Accreted Value for the Semi-Annual Accrual Date
immediately following the Specified Date less the Accreted Value for the
Semi-Annual Accrual Date immediately preceding the Specified Date and (y)
a fraction, the numerator of which is the number of days actually elapsed
from the immediately preceding Semi-Annual Accrual Date to the Specified
Date, using a 360-day year of twelve 30-day months, and the denominator of
which is 180; and
(iii) if the Specified Date is on or after March 15, 2003, $1,000.
"Acquired Indebtedness" means Indebtedness of a Person (a) assumed
in connection with an Acquisition from such Person or (b) existing at the time
such Person becomes a Restricted Subsidiary or is merged or consolidated with or
into the Company or any Restricted Subsidiary.
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"Acquired Person" means, with respect to any specified Person, any
other Person which merges with or into or becomes a Subsidiary of such specified
Person.
"Acquisition" means (i) any capital contribution (by means of
transfers of cash or other property to others or payments for property or
services for the account or use of others, or otherwise) by the Company or any
Restricted Subsidiary to any other Person, or any acquisition or purchase of
Equity Interests of any other Person by the Company or any Restricted
Subsidiary, in either case pursuant to which such Person shall become a
Restricted Subsidiary or shall be consolidated with or merged into the Company
or any Restricted Subsidiary or (ii) any acquisition by the Company or any
Restricted Subsidiary of the assets of any Person which constitutes
substantially all of an operating unit or line of business of such Person or
which is otherwise outside of the ordinary course of business.
"Additional Interest" has the meaning provided in the Exchange and
Registration Rights Agreement.
"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, however,
that (i) beneficial ownership of 15.0% or more of the then outstanding Equity
Interests of a Person shall be deemed to be control for purposes of compliance
with Section 4.03; and (ii) no individual, other than a director of the Company
or an officer of the Company with a policy making function, shall be deemed an
Affiliate of the Company or any of its Subsidiaries, solely by reason of such
individual's employment, position or responsibilities by or with respect to the
Company or any of its Subsidiaries.
"Affiliate Transaction" has the meaning set forth in Section 4.03.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Asset Sale" means any direct or indirect sale, conveyance,
transfer, lease (that has the effect of a disposition) or other disposition
(including, without limitation, any merger, consolidation or sale-leaseback
transaction) to any Person other than the Company or a Restricted Subsidiary, in
one transaction or a series of related transactions, of (i) any Equity Interest
of any Restricted Subsidiary; (ii) any material license, franchise or other
authorization of the Company or any Restricted Subsidiary; (iii) any assets of
the Company or any Restricted Subsidiary which constitute substantially all of
an operating unit or line of business of the Company or any Restricted
Subsidiary; or (iv) any other property or asset of the Company or any Restricted
Subsidiary outside of the ordinary course of business (including the receipt of
proceeds paid on account of the loss of or damage to any property or asset and
awards of compensation for any asset taken by condemnation, eminent domain or
similar proceedings). For the purposes of this definition, the term "Asset Sale"
shall not include (a) any transaction consummated in compliance with Section
5.01 and the creation of any Lien not prohibited by Section 4.18; provided,
however, that any transaction consummated in compliance with Section 5.01
involving a sale, conveyance, assignment, transfer, lease or other disposal of
less than all of the properties or assets of the Company shall be deemed to be
an Asset Sale with respect to the properties or assets of the Company and the
Restricted Subsidiaries that are not so sold, conveyed, assigned, transferred,
leased or otherwise disposed of in such transaction; (b) sales of property or
equipment that have become worn out, obsolete or damaged or otherwise unsuitable
for use in connection with the business of the Company or any Restricted
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Subsidiary; (c) any transaction consummated in compliance with Section 4.06; and
(d) sales of accounts receivable for cash at fair market value.
"Bankruptcy Law" has the meaning set forth in Section 6.01.
"Board of Directors" means, as to any Person, the board of directors
of such Person (or, if such Person is a partnership, the board of directors or
other governing body of the general partner (or, if there is more than one
general partner of such Person, the general partner or general partners which
may take the applicable action pursuant to the partnership agreement of such
Person) of such Person) or any duly authorized committee thereof.
"Board Resolution" means, with respect to any Person, a duly adopted
resolution of the Board of Directors of such Person.
"Business Day" means a day that is not a Saturday, a Sunday or a day
on which banking institutions in New York, New York are not required to be open.
"Capitalized Lease Obligation" means any obligation under a lease of
(or other agreement conveying the right to use) any property (whether real,
personal or mixed) that is required to be classified and accounted for as a
capital lease obligation under GAAP, and, for the purpose of this Indenture, the
amount of such obligation at any date shall be the capitalized amount thereof at
such date, determined in accordance with GAAP.
"Cash Equivalents" means (a) U.S. dollars and any other currency
that is convertible into U.S. dollars without legal restrictions and which is
utilized by the Company or any of the Restricted Subsidiaries in the ordinary
course of its business; (b) securities issued or directly and fully guaranteed
or insured by the U.S. government or any agency or instrumentality thereof
having maturities of not more than six months from the date of acquisition; (c)
certificates of deposit and time deposits with maturities of six months or less
from the date of acquisition, bankers' acceptances with maturities not exceeding
six months and overnight bank deposits, in each case with any commercial bank
having capital and surplus in excess of $500.0 million (or the foreign currency
equivalent thereof); (d) repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clauses (b) and
(c) above entered into with any financial institution meeting the qualifications
specified in clause (c) above; and (e) commercial paper rated P-1, A-1 or the
equivalent thereof by Moody's Investors Service, Inc. or Standard & Poor's
Corporation, respectively, and in each case maturing within six months after the
date of acquisition.
"Change of Control" means the occurrence of any of the following
events (whether or not approved by the Board of Directors of the Company): (i)
any Person (as such term is used in Sections 13(d) and 14(d) of the Exchange
Act, 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 one or more Permitted Holders, is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a Person shall be deemed to have "beneficial ownership" of all
shares that any such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time, upon the happening of
an event or otherwise), directly or indirectly, of at least 40% of the total
voting power of the then outstanding Voting Equity Interests of the Company and
the Permitted Holders, as a group, do not own a greater percentage of the total
voting power of such Voting Equity Interests; (ii) the Company consolidates
with, or merges with or into, another Person or the Company or the Restricted
Subsidiaries sell, assign, convey, transfer, lease or otherwise dispose of all
or substantially all of the assets of the Company and the Re-
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stricted Subsidiaries (determined on a consolidated basis) to any Person (other
than the Company), other than any such transaction where immediately after such
transaction the Person or Persons that "beneficially owned" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that a Person shall be deemed to
have "beneficial ownership" of all securities that such Person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time) immediately prior to such transaction, directly or indirectly, the then
outstanding Voting Equity Interests of the Company "beneficially own" (as so
determined), directly or indirectly, a majority of the total voting power of the
then outstanding Voting Equity Interests of the surviving or transferee Person;
or (iii) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of the Company
(together with any new directors whose election by such Board of Directors or
whose nomination for election by the shareholders of the Company was approved by
a vote of a majority of the directors of the Company then still in office who
were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors of the Company then in office.
"Change of Control Offer" has the meaning set forth in Section 4.14.
"Change of Control Offer Date" has the meaning set forth in Section
4.14.
"Commodity Agreements" means agreements relating to commodity hedges
designed to protect against fluctuation in commodity prices.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor.
"Consolidated EBITDA" of any Person means, for any period, the
Consolidated Net Income of such Person for such period, minus any non-cash item
increasing such Consolidated Net Income during such period, plus the following
to the extent deducted in calculating such Consolidated Net Income: (i)
Consolidated Income Tax Expense of such Person for such period; (ii)
Consolidated Interest Expense of such Person for such period; (iii) depreciation
expense of such Person for such period; (iv) amortization expense of such Person
for such period; and (v) all other non-cash items reducing Consolidated Net
Income of such Person for such period (other than any non-cash item requiring an
accrual or a reserve for cash disbursements in any future period).
"Consolidated Income Tax Expense" means, with respect to any Person
for any period, the provision for Federal, state, local and foreign income taxes
payable by such Person and the Restricted Subsidiaries of such Person for such
period as determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to any Person
for any period, without duplication, the sum of (i) the interest expense of such
Person and the Restricted Subsidiaries of such Person for such period as
determined on a consolidated basis in accordance with GAAP, including, without
limitation, (a) any amortization of debt discount, (b) the net cost under
Interest Rate Agreements (including any amortization of discounts), (c) the
interest portion of any deferred payment obligation, (d) all commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing and (e) all capitalized interest and all accrued
interest, (ii) the interest component of Capital Lease Obligations paid, accrued
and/or scheduled to be paid or accrued by such Person and the Restricted
Subsidiaries of such Person during such period as determined on a consolidated
basis in accordance with GAAP and (iii) dividends and distributions in respect
of Disqualified Equity Interests of such Person and the Disqualified Equity
Interests and
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Preferred Equity Interests of the Restricted Subsidiaries of such Person during
such period as determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" of any Person means, for any period, the
consolidated net income (loss) of such Person and the Restricted Subsidiaries of
such Person; provided, however, that there shall not be included in such
Consolidated Net Income: (i) any net income (loss) of any other Person if such
person is not a Restricted Subsidiary of such Person, except that (A) subject to
the limitations contained in clause (iv) below, such Person's equity in the net
income of any such other Person for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash actually distributed
by such other Person during such period to such Person or a Restricted
Subsidiary of such Person as a dividend or other distribution (subject, in the
case of a dividend or other distribution to a Restricted Subsidiary of such
Person, to the limitations contained in clause (iii) below) and (B) such
Person's equity in a net loss of any such other Person (other than an
Unrestricted Subsidiary of such Person) for such period shall be included in
determining such Consolidated Net Income; (ii) any net income (loss) of any such
other person acquired by such Person or a Restricted Subsidiary of such Person
in a pooling of interests transaction for any period prior to the date of such
acquisition; (iii) any net income (loss) of any Restricted Subsidiary of such
Person if such Restricted Subsidiary is subject to restrictions, directly or
indirectly, on the payment of dividends or the making of distributions by such
Restricted Subsidiary, directly or indirectly, to such Person (other than any
restriction permitted by Section 4.16) except that (A) subject to the
limitations contained in (iv) below, such Person's equity in the net income of
any such Restricted Subsidiary of such Person for such period shall be included
in such Consolidated Net Income up to the aggregate amount of cash that could
have been distributed by such Restricted Subsidiary during such period to such
Person or another Restricted Subsidiary of such Person as a dividend (subject,
in the case of a dividend that could have been made to another Restricted
Subsidiary of such Person, to the limitation contained in this clause) and (B)
such Person's equity in a net loss of any such Restricted Subsidiary of such
Person for such period shall be included in determining such Consolidated Net
Income; (iv) any gain or loss realized upon the sale or other disposition of any
asset of such Person or the Restricted Subsidiaries (including pursuant to any
sale leaseback transaction) of such Person that is not sold or otherwise
disposed of in the ordinary course of business and any gain or loss realized
upon the sale or other disposition of any Equity Interests of any other Person;
(v) any extraordinary gain or loss; and (vi) the cumulative effect of a change
in accounting principles.
"Consolidated Operating Cash Flow Ratio" of any Person as of any
date of determination means the ratio of (i) the aggregate amount of
Consolidated EBITDA of such Person for the four quarter period of the most
recent four consecutive fiscal quarters ending prior to the date of such
determination for which consolidated financial statements of such Person are
available (or which would be required to be filed by such Person with the
Commission, if such Person were subject to the reporting requirements of the
Exchange Act) (the "Four Quarter Period") to (ii) Consolidated Interest Expense
of such Person for such Four Quarter Period; provided, however, that (1) if such
Person or any Restricted Subsidiary of such Person has incurred any Indebtedness
since the beginning of such Four Quarter Period that remains outstanding on such
date of determination or if the transaction giving rise to the need to calculate
the Consolidated Operating Cash Flow Ratio is an Incurrence of Indebtedness,
Consolidated EBITDA and Consolidated Interest Expense for such Four Quarter
Period shall be calculated after giving effect on a pro forma basis to such
Indebtedness as if such Indebtedness had been Incurred on the first day of such
Four Quarter Period, and the discharge of any other Indebtedness repaid,
repurchased or otherwise discharged during the Four Quarter Period (or
thereafter but prior to the date of determination) or to be repaid, repurchased
or otherwise discharged with the proceeds of such new Indebtedness (or otherwise
in connection with the transaction giving rise to the need to calculate the
Consolidated Operating Cash Flow Ratio) shall be given pro forma effect as if
such repayment, repurchase or discharge had occurred on the first day of such
Four Quarter Period, (2) if since the beginning of such Four
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Quarter Period such Person or any Restricted Subsidiary of such Person shall
have made any Asset Sale, the Consolidated EBITDA for such Four Quarter Period
shall be reduced by an amount equal to the Consolidated EBITDA (if positive)
directly attributable to the assets that are the subject of such Asset Sale for
such Four Quarter Period or increased by an amount equal to the Consolidated
EBITDA (if negative) directly attributable thereto for such Four Quarter Period
and Consolidated Interest Expense for such Four Quarter Period shall be reduced
by an amount equal to the Consolidated Interest Expense directly attributable to
any Indebtedness of such Person or any Restricted Subsidiary of such Person
repaid, repurchased or otherwise discharged with respect to such Person and its
continuing Restricted Subsidiaries in connection with such Asset Sale for such
Four Quarter Period (or, if the Equity Interests of any Restricted Subsidiary of
such Person are sold, the Consolidated Interest Expense for such Four Quarter
Period directly attributable to the Indebtedness of such Restricted Subsidiary
to the extent such Person and its continuing Restricted Subsidiaries are no
longer liable for such Indebtedness after such sale), (3) if since the beginning
of such Four Quarter Period such Person or any Restricted Subsidiary (by merger
or otherwise) of such Person shall have made an Investment in any Restricted
Subsidiary (or any Person that becomes a Restricted Subsidiary) of such Person
or an acquisition of assets, including any acquisition of assets occurring in
connection with a transaction causing a calculation to be made hereunder, which
constitutes all or substantially all of an operating unit of a business, or made
a Revocation, Consolidated EBITDA and Consolidated Interest Expense for such
Four Quarter Period shall be calculated after giving pro forma effect thereto
(including the Incurrence of any Indebtedness) as if such Investment or
acquisition occurred on the first day of such Four Quarter Period and (4) if
since the beginning of such Four Quarter Period any other Person (that
subsequently became a Restricted Subsidiary of such Person or was merged with or
into such Person or any Restricted Subsidiary of such Person since the beginning
of such Four Quarter Period) shall have made any Asset Sale or any Investment or
acquisition of assets that would have required an adjustment pursuant to clause
(2) or (3) above if made by such Person or a Restricted Subsidiary of such
Person during such Four Quarter Period, Consolidated EBITDA and Consolidated
Interest Expense for such Four Quarter Period shall be calculated after giving
pro forma effect thereto as if such Asset Sale, Investment or acquisition of
assets occurred on, with respect to any Investment or acquisition, the first day
of such Four Quarter Period and, with respect to any Asset Sale, the day prior
to the first day of such Four Quarter Period (the adjustments referred to in
clauses (1) through (4) are referred to as the "Pro Forma Adjustments"). For
purposes of the Pro Forma Adjustments, whenever pro forma effect is to be given
to an acquisition of assets, the amount of income or earnings and any cost
savings relating thereto and the amount of Consolidated Interest Expense,
associated with any Indebtedness Incurred in connection therewith, the pro forma
calculations shall be determined in good faith by a responsible financial or
accounting officer of the Company. If any Indebtedness bears a floating rate of
interest and is being given pro forma effect, the interest expense on such
Indebtedness shall be calculated as if the rate in effect on the date of
determination had been the applicable rate for the entire period (taking into
account any agreement under which Currency and Interest Rate Agreements relating
to interest are outstanding applicable to such Indebtedness if such agreement
under which such Currency and Interest Rate Agreements are outstanding has a
remaining term as at the date of determination in excess of 12 months).
"Consolidated Tangible Assets" means, as of any date of
determination, the total assets, less goodwill and other intangibles (determined
in accordance with Accounting Principles Board Opinion No. 17), shown on the
balance sheet of the Company and its Restricted Subsidiaries as of the most
recent date for which such a balance sheet is available, determined on a
consolidated basis in accordance with GAAP.
"Corporate Trust Office of the Trustee" shall be at the address of
the Trustee specified in Section 13.02 or such other address as the Trustee may
give notice to the Company.
13
-7-
"Currency Agreements" means the obligations of any Person pursuant
to any foreign exchange contract, currency swap agreement or other similar
agreement or arrangement designed to protect such person or any of its
subsidiaries against fluctuations in currency values.
"Custodian" has the meaning set forth in Section 6.01.
"Default" means any event that is or would be, with the passage of
time or the giving of notice or both, an Event of Default.
"Default Amount" means the Accreted Value of the Securities, plus
accrued and unpaid interest, if any.
"Depositary" means, with respect to the Securities issued in the
form of one or more Global Securities, The Depository Trust Company or another
Person designated as Depositary by the Company, which must be a clearing agency
registered under the Exchange Act.
"Designation" has the meaning set forth in Section 4.15.
"Designation Amount" has the meaning set forth in Section 4.15.
"Disposition" means, with respect to any Person, any merger,
consolidation or other business combination involving such Person (whether or
not such Person is the Surviving Person) or the sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of such
Person's assets.
"Disqualified Equity Interest" means any Equity Interest which, by
its terms (or by the terms of any security into which it is convertible or for
which it is exchangeable at the option of the holder thereof), 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, or exchangeable into Indebtedness on or prior to
the maturity date of the Securities.
"Equity Interest" in any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) corporate stock or other equity
participations, including partnership interests, whether general or limited, in
such Person, including any Preferred Equity Interests.
"Event of Default" has the meaning set forth in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"Exchange Act Report" has the meaning set forth in Section 4.12.
"Exchange and Registration Rights Agreement" means the Exchange and
Registration Rights Agreement, dated as of March 16, 1998, between the Company
and the Initial Purchasers, relating to the Securities.
"Exchange Securities" means the 12% Senior Discount Notes due 2008,
Series B, to be issued in exchange for the Initial Securities pursuant to the
Exchange and Registration Rights Agreement.
14
-8-
"Existing Securities" means the Company's 11-7/8% Senior
Subordinated Notes due 2002.
"Expiration Date" has the meaning set forth in the definition of
"Offer to Purchase" below.
"Fair Market Value" means, with respect to any asset, the price
(after taking into account any liabilities relating to such assets) which could
be negotiated in an arm's-length free market transaction, for cash, between a
willing seller and a willing and able buyer, neither of which is under any
compulsion to complete the transaction; provided, however, that the Fair Market
Value of any such asset or assets shall be determined conclusively by the Board
of Directors of the Company acting in good faith, and shall be evidenced by
resolutions of the Board of Directors of the Company delivered to the Trustee.
"Final Maturity Date" means March 15, 2008.
"Foreign Subsidiary" means any Restricted Subsidiary of the Company
that is not organized under the laws of the United States of America or any
State thereof or the District of Columbia.
"Four Quarter Period" has the meaning set forth in the definition of
"Consolidated Operating Cash Flow Ratio" above.
"Fully Traded Common Stock" means Equity Interests issued by any
corporation which are listed on either the New York Stock Exchange or the
American Stock Exchange or included for trading privileges in the National
Market System of the National Association of Securities Dealers Automated
Quotation System; provided, however, that (a) either such Equity Interests are
freely tradable under the Securities Act (including pursuant to Rule 145(d)(1)
thereunder) upon issuance or the holder thereof has contractual registration
rights that will permit the sale of such Equity Interests pursuant to an
effective registration statement not later than nine months after issuance to
the Company or one of its Subsidiaries and (b) such Equity Interests are also so
listed or included for trading privileges.
"GAAP" means, at any date of determination, generally accepted
accounting principles in effect in the United States of America which are
applicable at the date of determination and which are consistently applied for
all applicable periods.
"Global Securities" means one or more IAI Global Securities,
Regulation S Global Securities and 144A Global Securities.
"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
Securities or a specific payment of principal of or interest on any such
Government Securities held by such custodian for the account of the holder of
such depository receipt; provided, however, 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 Securities or the specific payment of
principal of or interest on the Government Securities evidenced by such
depository receipt.
15
-9-
"HCL" has the meaning set forth in the definition of "Permitted
Liens" below.
"Holder" means the registered holder of any Security.
"IAI Global Security" means a permanent global security in
registered form representing the aggregate principal amount at maturity of
Securities sold to Institutional Accredited Investors.
"Incur" means, with respect to any Indebtedness or other obligation
of any Person, to create, issue, incur (including by conversion, exchange or
otherwise), assume, guaranty or otherwise become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to GAAP
or otherwise, of any such Indebtedness or other obligation on the balance sheet
of such Person (and "Incurrence," "Incurred" and "Incurring" shall have meanings
correlative to the foregoing). Indebtedness of any Acquired Person or any of its
Subsidiaries existing at the time such Acquired Person becomes a Restricted
Subsidiary (or is merged into or consolidated with the Company or any Restricted
Subsidiary), whether or not such Indebtedness was Incurred in connection with,
as a result of, or in contemplation of, such Acquired Person becoming a
Restricted Subsidiary (or being merged into or consolidated with the Company or
any Restricted Subsidiary), shall be deemed Incurred at the time any such
Acquired Person becomes a Restricted Subsidiary or merges into or consolidates
with the Company or any Restricted Subsidiary.
"Indebtedness" means (without duplication), with respect to any
Person, whether recourse is to all or a portion of the assets of such Person and
whether or not contingent, (a) every obligation of such Person for money
borrowed; (b) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, including obligations incurred in connection
with the acquisition of property, assets or businesses; (c) every reimbursement
obligation of such Person with respect to letters of credit, bankers'
acceptances or similar facilities issued, for the account of such Person; (d)
every obligation of such Person issued or assumed as the deferred purchase price
of property or services (but excluding (x) earnout or other similar obligations
until such time as the amount of such obligation is capable of being determined,
(y) trade accounts payable incurred in the ordinary course of business and
payable in accordance with industry practices, or (z) other accrued liabilities
arising in the ordinary course of business which are not overdue or which are
being contested in good faith); (e) every Capitalized Lease Obligation of such
Person; (f) every net obligation under Currency Agreements, Commodity Agreements
and Interest Rate Agreements of such Person; (g) every obligation of the type
referred to in clauses (a) through (f) of another Person and all dividends of
another Person the payment of which, in either case, such Person has guaranteed
or is responsible or liable for, directly or indirectly, as obligor, guarantor
or otherwise; and (h) any and all deferrals, renewals, extensions and refundings
of, or amendments, modifications or supplements to, any liability of the kind
described in any of the preceding clauses (a) through (g) above. Indebtedness
(a) shall never be calculated taking into account any cash and cash equivalents
held by such Person; (b) shall not include obligations of any Person (x) arising
from the honoring by a bank or other financial institution of a check, draft or
similar instrument inadvertently drawn against insufficient funds in the
ordinary course of business, provided that such obligations are extinguished
within two Business Days of their incurrence, (y) resulting from the endorsement
of negotiable instruments for collection in the ordinary course of business and
consistent with past business practices and (z) under standby letters of credit
to the extent collateralized by cash or Cash Equivalents; (c) which provides
that an amount less than the principal amount thereof shall be due upon any
declaration of acceleration thereof shall be deemed to be incurred or
outstanding in an amount equal to the accreted value thereof at the date of
determination; and (d) shall include the liquidation preference and any
mandatory redemption payment obligations in respect of any Disqualified Equity
Interests of the Company or any Restricted Subsidiary. For purposes of
determining compliance with any U.S. dollar-denominated restriction on the
Incurrence of Indebtedness denominated in a foreign currency, the U.S.
dollar-equivalent principal amount of such Indebtedness Incurred pursuant
thereto
16
-10-
shall be calculated based on the relevant currency exchange rate in effect on
the date that such Indebtedness was Incurred if such Indebtedness is Incurred to
refinance other Indebtedness denominated in a foreign currency, and if such
refinancing would cause the applicable U.S. dollar-denominated restriction to be
exceeded if calculated at the relevant currency exchange rate in effect on the
date of such refinancing, such U.S. dollar-denominated restriction shall be
deemed not to have been exceeded so long as the principal amount of such
refinancing Indebtedness does not exceed the principal amount of such
Indebtedness being refinanced. The principal amount of any Indebtedness Incurred
to refinance other Indebtedness, if Incurred in a different currency from the
Indebtedness being refinanced, shall be calculated based on the currency
exchange rate applicable to the currencies in which such respective Indebtedness
is denominated that is in effect on the date of such refinancing.
"Indenture" means this Indenture, as amended or supplemented from
time to time.
"Independent Financial Advisor" means a nationally recognized
accounting, appraisal, investment banking firm or consultant that is, in the
judgment of the Company's Board of Directors, qualified to perform the task for
which it has been engaged (i) which does not, and whose directors, officers and
employees or Affiliates do not, have a direct or indirect financial interest in
the Company and (ii) which, in the judgment of the Directors of the Company, is
otherwise independent and qualified to perform the task for which it is to be
engaged.
"Initial Securities" means the 12% Senior Discount Notes due 2008,
Series A, of the Company.
"Initial Purchasers" means Chase Securities Inc. and Donaldson,
Lufkin & Jenrette Securities Corporation.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"interest" means, with respect to the Securities, the sum of any
cash interest and any Additional Interest on the Securities.
"Interest Payment Date" means each semiannual interest payment date
on March 15 and September 15 of each year, commencing September 15, 2003.
"Interest Rate Agreements" means the obligations of any Person
pursuant to any interest rate swap agreement, interest rate collar agreement or
other similar agreement or arrangement designed to protect such person or any of
its Subsidiaries against fluctuations in interest rates.
"Interest Record Date" for the interest payable on any Interest
Payment Date (except a date for payment of defaulted interest) means the March 1
or September 1 (whether or not a Business Day), as the case may be, immediately
preceding such Interest Payment Date.
"Investment" means, with respect to any Person, any direct or
indirect loan, advance, guaranty or other extension of credit or capital
contribution to (by means of transfers of cash or other property or assets to
others or payments for property or services for the account or use of others, or
otherwise), or purchase or acquisition of capital stock, bonds, notes,
debentures or other securities or evidences of Indebtedness issued by, any other
Person. Investment also means, in any event, the obligations of any Person
pursuant to
17
-11-
any foreign exchange contract, currency swap agreement or other similar
agreement or arrangement the value of which is based on fluctuations in currency
values, as well as the obligations of any Person pursuant to any interest rate
swap agreement, interest rate collar agreement or other similar agreement or
arrangement the value of which is based on fluctuations in interest rates. In
determining the amount of any Investment involving a transfer of any property or
asset other than cash, such property shall be valued at its fair market value at
the time of such transfer, as determined in good faith by the Board of Directors
(or comparable body) of the Person making such transfer.
"Investment Company Act" means the Investment Company Act of 1940,
as amended.
"Issue Date" means the closing date for the sale and original
issuance of Securities under this Indenture.
"Lien" means any lien, mortgage, charge, security interest,
hypothecation, assignment for security or encumbrance of any kind (including any
conditional sale or capital lease or other title retention agreement, any lease
in the nature thereof, and any agreement to give any security interest).
"Net Cash Proceeds" means the aggregate proceeds in the form of cash
or Cash Equivalents received by the Company or any Restricted Subsidiary in
respect of any Asset Sale, including all cash or Cash Equivalents received upon
any sale, liquidation or other exchange of proceeds of Asset Sales received in a
form other than cash or Cash Equivalents, net of (a) the direct costs relating
to such Asset Sale (including, without limitation, legal, accounting and
investment banking fees and sales commissions) and any relocation expenses
incurred as a result thereof; (b) taxes paid or payable as a result thereof
(after taking into account any available tax credits or deductions and any tax
sharing arrangements); (c) amounts required to be applied to the repayment of
Indebtedness secured by a Lien on the asset or assets that were the subject of
such Asset Sale; (d) amounts deemed, in good faith, appropriate by the Board of
Directors of the Company to be provided as a reserve, in accordance with GAAP,
against any liabilities associated with such assets which are the subject of
such Asset Sale (provided that the amount of any such reserves shall be deemed
to constitute Net Cash Proceeds at the time such reserves shall have been
released or are not otherwise required to be retained as a reserve); and (e)
with respect to Asset Sales by Restricted Subsidiaries, the portion of such cash
payments attributable to Persons holding a minority interest in such Restricted
Subsidiary.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursement obligations, damages and other liabilities
payable under the documentation governing any Indebtedness.
"Offer" has the meaning set forth in the definition of "Offer to
Purchase" below.
"Offer to Purchase" means a written offer (the "Offer") sent by or
on behalf of the Company by first-class mail, postage prepaid, to each Holder at
his address appearing in the register for the Securities on the date of the
Offer offering to purchase up to the principal amount of Securities specified in
such Offer at the purchase price specified in such Offer (as determined pursuant
to this Indenture). Unless otherwise required by applicable law, the Offer shall
specify an expiration date (the "Expiration Date") of the Offer to Purchase,
which shall be not less than 20 Business Days nor more than 60 days after the
date of such Offer, and a settlement date (the "Purchase Date") for purchase of
Securities to occur no later than five Business Days after the Expiration Date.
The Company shall notify the Trustee at least five Business Days (or such
shorter period as is acceptable to the Trustee) prior to the mailing of the
Offer of the Company's obligation to make an Offer to Purchase, and the Offer
shall be mailed by the Company or, at the Company's request, by the Trustee in
the name and at the expense of the Company. The Offer shall contain all the
information re-
18
-12-
quired by applicable law to be included therein. The Offer shall also contain
(or incorporate by reference) information concerning the business of the Company
and its Subsidiaries which the Company in good faith believes will enable such
Holders to make an informed decision with respect to the Offer to Purchase
(which at a minimum will include (i) the most recent annual and quarterly
financial statements and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" contained in the documents required to be
filed with the Trustee pursuant to this Indenture (which requirements may be
satisfied by delivery of such documents together with the Offer), (ii) a
description of material developments in the Company's business subsequent to the
date of the latest of such financial statements referred to in clause (i)
(including a description of the events requiring the Company to make the Offer
to Purchase), (iii) if applicable, appropriate pro forma financial information
concerning the Offer to Purchase and the events requiring the Company to make
the Offer to Purchase and (iv) any other information required by applicable law
to be included therein). The Offer shall contain all instructions and materials
necessary to enable such Holders to tender Securities pursuant to the Offer to
Purchase. The Offer shall also state: (1) the Section of this Indenture pursuant
to which the Offer to Purchase is being made; (2) the Expiration Date and the
Purchase Date; (3) the aggregate principal amount at maturity of the outstanding
Securities offered to be purchased by the Company pursuant to the Offer to
Purchase (including, if less than 100%, the manner by which such amount has been
determined pursuant to the Section of this Indenture requiring the Offer to
Purchase) (the "Purchase Amount"); (4) the purchase price to be paid by the
Company for each $1,000 aggregate principal amount at maturity of Securities
accepted for payment (as specified pursuant to this Indenture) (the "Purchase
Price"); (5) that the Holder may tender all or any portion of the Securities
registered in the name of such Holder and that any portion of a Security
tendered must be tendered in an integral multiple of $1,000 principal amount at
maturity; (6) the place or places where Securities are to be surrendered for
tender pursuant to the Offer to Purchase; (7) that Accreted Value and interest
on any Security not tendered or tendered but not purchased by the Company
pursuant to the Offer to Purchase will continue to accrete and accrue, as the
case may be; (8) that on the Purchase Date the Purchase Price will become due
and payable upon each Security being accepted for payment pursuant to the Offer
to Purchase and that Accreted Value thereon shall cease to accrete and interest
thereon shall cease to accrue, as the case may be, on and after the Purchase
Date; (9) that each Holder electing to tender all or any portion of a Security
pursuant to the Offer to Purchase will be required to surrender such Security at
the place or places specified in the Offer prior to the close of business on the
Expiration Date (such Security being, if the Company or the Trustee so requires,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by the Holder thereof
or his attorney duly authorized in writing); (10) that Holders will be entitled
to withdraw all or any portion of Securities tendered if the Company (or the
Paying Agent) receives, not later than the close of business on the fifth
Business Day next preceding the Expiration Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount at maturity of the Security the Holder tendered, the certificate number
of the Security the Holder tendered and a statement that such Holder is
withdrawing all or a portion of his tender; (11) that (a) if Securities in an
aggregate Accreted Value less than or equal to the Purchase Amount are duly
tendered and not withdrawn pursuant to the Offer to Purchase, the Company shall
purchase all such Securities and (b) if Securities in an aggregate Accreted
Value in excess of the Purchase Amount are tendered and not withdrawn pursuant
to the Offer to Purchase, the Company shall purchase Securities having an
aggregate principal amount at maturity equal to the Purchase Amount on a pro
rata basis (with such adjustments as may be deemed appropriate so that only
Securities in denominations of $1,000 principal amount at maturity or integral
multiples thereof shall be purchased); and (12) that in the case of any Holder
whose Security is purchased only in part, the Company shall execute and the
Trustee shall authenticate and deliver to the Holder of such Security without
service charge, a new Security or Securities, of any authorized denominations as
requested by such Holder, in an aggregate principal amount at maturity equal to
and in exchange for the unpurchased portion of the Security so tendered.
19
-13-
An Offer to Purchase shall be governed by and effected in accordance
with the provisions above pertaining to any Offer.
"Officer" of any Person means the Chairman of the Board, the
President, any Executive Vice President, Senior Vice President or Vice
President, the Treasurer or the Secretary or Assistant Secretary of such Person.
"Officers' Certificate" of any Person means a certificate signed on
behalf of such Person by two Officers of such Person, one of whom must be the
principal executive officer, the principal financial officer, the treasurer or
the principal accounting officer of such Person, that meets the requirements set
forth in Sections 13.04 and 13.05 of this Indenture.
"144A Global Security" means a permanent global security in
registered form representing the aggregate principal amount at maturity of
Securities sold in reliance on Rule 144A.
"Opinion of Counsel" means a written opinion from legal counsel who
is reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel for the Company or the Trustee.
"Pari Passu Debt" means Indebtedness of the Company (other than the
Securities) that does not constitute Subordinated Indebtedness.
"Pari Passu Debt Pro Rata Share" means the amount of the applicable
Net Cash Proceeds obtained by multiplying the amount of such Net Cash Proceeds
by a fraction, (i) the numerator of which is the aggregate accreted value and/or
principal amount, as the case may be, of all Pari Passu Debt outstanding at the
time of the applicable Asset Sale with respect to which the Company is required
to use Net Cash Proceeds to repay or make an offer to purchase or repay and (ii)
the denominator of which is the sum of (a) the aggregate Accreted Value of all
Securities outstanding at the time of the applicable Asset Sale and (b) the
aggregate principal amount or the aggregate accreted value, as the case may be,
of all Pari Passu Debt outstanding at the time of the applicable Asset Sale with
respect to which the Company is required to use the applicable Net Cash Proceeds
to offer to repay or make an offer to purchase or repay.
"Participants" has the meaning set forth in Section 2.15.
"Paying Agent" has the meaning set forth in Section 2.03.
"Permitted Holder" means (i) each of Arie Genger, his estate, his
spouse and his children, (ii) each trust, a majority of whose
beneficiaries-in-interest include one or more persons named in clause (i) of
this definition and (iii) any Person controlled by one or more persons named in
clause (i) of this definition.
"Permitted Indebtedness" has the meaning set forth in Section 4.04.
"Permitted Investments" means (a) Cash Equivalents; (b) Investments
in prepaid expenses, negotiable instruments held for collection and lease,
utility and workers' compensation, performance and other similar deposits; (c)
loans and advances to employees made in the ordinary course of business not to
exceed $2.0 million in the aggregate at any one time outstanding; (d) Currency
Agreements, Commodity Agreements and Interest Rate Agreements; (e) so long as no
Default has occurred and is continuing, investments in non-cash consideration
made pursuant to and in compliance with Section 4.05; (f) so long as no Default
has occurred and is continuing, any Investment (including minority interests and
Investments in Unrestricted Subsidi-
20
-14-
aries) such that, after giving effect to such Investment, the aggregate amount
(at cost) of all outstanding Investments made pursuant to this clause would not
exceed 5% of the Company's Consolidated Tangible Assets as of the date of the
most recent consolidated balance sheet of the Company; (g) Investments existing
as of the Issue Date and any amendment, extension, renewal or modification
thereof to the extent that any such amendment, extension, renewal or
modification does not require the Company or any Restricted Subsidiary to make
any additional cash or non-cash payments or provide additional services in
connection therewith; (h) any Investment made with the proceeds from an
Investment of the type set forth in clauses (f) and (g) above, and any
Investment made with the proceeds from an Investment made pursuant to this
clause (h); (i) any Investment to the extent that the consideration therefor
consists of Qualified Equity Interests of the Company; and (j) any Investment in
non-U.S. currencies received or utilized by the Company or a Restricted
Subsidiary in the ordinary course of business.
"Permitted Liens" means (a) Liens imposed by law such as carriers',
warehousemen's and mechanics' Liens and other similar Liens arising in the
ordinary course of business which secure payment of obligations not more than 60
days past due or which are being contested in good faith and by appropriate
proceedings; (b) Liens existing on the Issue Date; (c) Liens securing only the
Securities and or the Senior Notes pursuant to the terms of this Indenture
and/or the Senior Notes Indenture as in effect on the Issue Date; (d) Liens in
favor of the Company; (e) Liens for taxes, assessments or governmental charges
or claims that are not yet delinquent or that are being contested in good faith
by appropriate proceedings promptly instituted and diligently concluded;
provided, however, that any reserve or other appropriate provision as shall be
required in conformity with GAAP shall have been made therefor; (f) easements,
reservation of rights of way, restrictions and other similar easements,
licenses, restrictions on the use of properties, or minor imperfections of title
that in the aggregate are not material in amount and do not in any case
materially detract from the properties subject thereto or interfere with the
ordinary conduct of the business of the Company and the Restricted Subsidiaries;
(g) Liens resulting from the deposit of cash or notes in connection with
contracts, tenders or expropriation proceedings, or to secure workers'
compensation, surety or appeal bonds, costs of litigation when required by law
and public and statutory obligations or obligations under franchise arrangements
entered into in the ordinary course of business; (h) Liens securing Indebtedness
consisting of Capitalized Lease Obligations, Purchase Money Indebtedness,
mortgage financings, industrial revenue bonds or other monetary obligations, in
each case incurred solely for the purpose of financing all or any part of the
purchase price or cost of construction or installation of assets used in the
business of the Company or the Restricted Subsidiaries, or repairs, additions or
improvements to such assets; provided, however, that (i) such Liens secure
Indebtedness in an amount not in excess of the original purchase price or the
original cost of any such assets or repair, addition or improvement thereto
(plus an amount equal to the reasonable fees and expenses in connection with the
incurrence of such Indebtedness), (ii) such Liens do not extend to any other
assets of the Company or the Restricted Subsidiaries (and, in the case of
repair, addition or improvements to any such assets, such Lien extends only to
the assets (and improvements thereto or thereon) repaired, added to or
improved), (iii) the Incurrence of such Indebtedness is permitted by Section
4.04 and (iv) such Liens attach within 90 days of such purchase, construction,
installation, repair, addition or improvement; (i) Liens to secure any
refinancings, renewals, extensions, modifications or replacements (collectively,
"refinancing") (or successive refinancings), in whole or in part, of any
Indebtedness (or commitments to lend) secured by Liens referred to in the
clauses above so long as such Lien does not extend to any other property (other
than improvements thereto); (j) Liens securing letters of credit entered into in
the ordinary course of business and consistent with past business practice; (k)
Liens on and pledges of the Equity Interests of any Unrestricted Subsidiary; and
(l) Liens on the Equity Interests of Haifa Chemicals Ltd., an Israeli
corporation ("HCL"); provided that at the time of the incurrence of any such
Lien, the aggregate amount of Indebtedness secured by such Equity Interests
shall not exceed the amount equal to (x) if prior to December 31, 2001, $40.0
million or (y) if on or after December 31, 2001, the greater of (i) $40.0
million or (ii) the Consolidated EBITDA of HCL for the four quarter period of
21
-15-
the most recent four fiscal quarters ending prior to the date of determination
for which financial statements are available (or which would be required to be
filed by HCL with the Commission if HCL were subject to the reporting
requirements of the Exchange Act), giving effect to the adjustments to
Consolidated EBITDA, referred to in clauses (2) through (4) of the Pro Forma
Adjustments.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, limited
liability limited partnership, trust, unincorporated organization or government
or any agency or political subdivision thereof.
"Physical Securities" means one or more certificated Securities in
registered form.
"Preferred Equity Interest" in any Person, means an Equity Interest
of any class or classes (however designated) which is preferred as to the
payment of dividends or distributions, or as to the distribution of assets upon
any voluntary or involuntary liquidation or dissolution of such Person, over
Equity Interests of any other class in such Person.
"principal" of a debt security means the principal of the security,
plus, when appropriate, the premium, if any, on the security.
"Private Placement Legend" means the legend initially set forth on
the Initial Securities in the form set forth on Exhibit A hereto.
"Private Senior Discount Exchange Notes" has the meaning provided in
the Exchange and Registration Rights Agreement.
"Pro Forma Adjustments" has the meaning set forth in the definition
of "Consolidated Operating Cash Flow Ratio".
"Public Equity Offering" means, with respect to the Company, an
underwritten primary public offering of Qualified Equity Interests of the
Company pursuant to an effective registration statement filed under the
Securities Act (excluding registration statements filed on Form S-8).
"Public Market" means any time after (x) a Public Equity Offering
has been consummated and (y) at least 15% of the total issued and outstanding
Qualified Equity Interests of the Company has been distributed by means of an
effective registration statement under the Securities Act.
"Purchase Agreement" means the Purchase Agreement, dated as of March
11, 1998, between the Company and the Initial Purchasers.
"Purchase Amount" has the meaning set forth in the definition of
"Offer to Purchase" above.
"Purchase Date" has the meaning set forth in the definition of
"Offer to Purchase" above.
"Purchase Money Indebtedness" means Indebtedness of the Company or
any Restricted Subsidiary Incurred for the purpose of financing all or any part
of the purchase price or the cost of construction or improvement of any
property, provided that the aggregate principal amount of such Indebtedness does
not exceed the lesser of the Fair Market Value of such property or such purchase
price or cost, including any refi-
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nancing of such Indebtedness that does not increase the aggregate principal
amount (or accreted amount, if less) thereof as of the date of refinancing.
"Purchase Price" has the meaning set forth in the definition of
"Offer to Purchase" above.
"Qualified Equity Interest" in any Person means any Equity Interest
in such Person other than any Disqualified Equity Interest.
"Qualified Institutional Buyer" or "QIB" means a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act.
"Redemption Date" means the date fixed for redemption of the
applicable Security.
"redemption price" when used with respect to any Security to be
redeemed, means the price fixed for such redemption pursuant to this Indenture
as set forth in the applicable form of Security annexed hereto.
"refinancing" has the meaning set forth in Section 4.04.
"Registered Exchange Offer" has the meaning provided in the Exchange
and Registration Rights Agreement.
"Registrar" has the meaning set forth in Section 2.03.
"Registration" means a registered exchange offer for the Securities
by the Company or other registration of the Securities under the Securities Act
pursuant to and in accordance with the terms of the Exchange and Registration
Rights Agreement.
"Regulation S Global Security" means a global security in registered
form representing the aggregate principal amount at maturity of Securities sold
pursuant to Regulation S under the Securities Act.
"Required Filing Dates" has the meaning set forth in Section 4.12.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Payment" has the meaning set forth in Section 4.06.
"Restricted Security" has the meaning set forth in Rule 144(a)(3)
under the Securities Act; provided, however, that the Trustee shall be entitled
to request and conclusively rely upon an Opinion of Counsel with respect to
whether any Security is a Restricted Security.
"Restricted Subsidiary" means any Subsidiary of the Company that has
not been designated by the Board of Directors of the Company, by a resolution of
the Board of Directors of the Company delivered to the Trustee, as an
Unrestricted Subsidiary pursuant to Section 4.15. Any such designation may be
revoked by a resolution of the Board of Directors of the Company delivered to
the Trustee, subject to the provisions of such covenant.
"Revocation" has the meaning set forth in Section 4.15.
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"Rule 144A" means Rule 144A under the Securities Act.
"SEC" or "Commission" means the Securities and Exchange Commission.
"Securities" means, collectively, the Initial Securities, the
Private Senior Discount Exchange Notes and the Unrestricted Securities treated
as a single class of securities, as amended or supplemented from time to time in
accordance with the terms of this Indenture.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Senior Notes" means the $100,000,000 10 3/4% Senior Notes due 2008
issued under the Senior Notes Indenture.
"Senior Notes Indenture" means the Indenture, dated as of March 16,
1998, between the Company and State Street Bank and Trust Company, as trustee,
relating to the Senior Notes.
"Significant Restricted Subsidiary" means a Restricted Subsidiary
that is a "significant subsidiary" within the meaning of Article 1, Rule 1-02 of
Regulation S-X under the Securities Act.
"Stated Maturity," when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security as
the fixed date on which the principal of such Security or such installment of
interest is due and payable.
"Subordinated Indebtedness" means any Indebtedness of the Company
which is expressly subordinated in right of payment to the Securities.
"Subsidiary" means, with respect to any Person, (a) any corporation
of which the outstanding Voting Equity Interests having at least a majority of
the votes entitled to be cast in the election of directors shall at the time be
owned, directly or indirectly, by such Person, or (b) any other Person of which
at least a majority of Voting Equity Interests are at the time, directly or
indirectly, owned by such first named Person.
"Surviving Person" means, with respect to any Person involved in or
that makes any Disposition, the Person formed by or surviving such Disposition
or the Person to which such Disposition is made.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code ss.ss.
77aaa-77bbbb), as amended, as in effect on the date of this Indenture (except as
provided in Section 10.03) until such time as the Indenture is qualified under
the TIA, and thereafter as in effect on the date on which this Indenture is
qualified under the TIA.
"Trustee" means the party named as such in the first paragraph of
this Indenture until a successor replaces it in accordance with the provisions
of this Indenture and thereafter means such successor.
"Trust Officer" means any officer within the corporate trust
division (or any successor group of the Trustee) including any vice president,
assistant vice president, assistant secretary, assistant treasurer or any other
officer or assistant officer of the Trustee customarily performing functions
similar to those performed by the persons who at that time shall be such
officers, and also means, with respect to a particular cor-
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porate trust matter, any other officer to whom such trust matter is referred
because of his knowledge of and familiarity with the particular subject.
"United States Government Obligations" means direct non-callable
obligations of the United States for the payment of which the full faith and
credit of the United States is pledged.
"Unrestricted Securities" means one or more Securities that do not
and are not required to bear the Private Placement Legend in the form set forth
in Exhibit A hereto, including, without limitation, the Exchange Securities and
any Securities registered under the Securities Act pursuant to and in accordance
with the Exchange and Registration Rights Agreement.
"Unrestricted Subsidiary" means any Subsidiary of the Company
designated as such pursuant to Section 4.15. Any such designation may be revoked
by a resolution of the Board of Directors of the Company delivered to the
Trustee, subject to the provisions of such covenant.
"Unutilized Net Proceeds" has the meaning set forth in Section 4.05.
"Voting Equity Interests" means Equity Interests in a corporation or
other Person with voting power under ordinary circumstances entitling the
Holders thereof to elect the Board of Directors or other governing body of such
corporation or Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the sum
of the products obtained by multiplying the (i) amount of each then remaining
installment, sinking fund, serial maturity or other required scheduled payment
of principal, including payment of final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (b) the then outstanding
aggregate principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" means any Restricted Subsidiary
all of the outstanding Voting Equity Interests (other than directors' qualifying
shares) of which are owned, directly or indirectly, by the Company.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
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"obligor" on the indenture securities means the Company or any other
obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them therein.
SECTION 1.03. 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 generally accepted accounting principles
in effect from time to time, and any other reference in this Indenture to
"generally accepted accounting principles" refers to GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the
plural include the singular;
(5) provisions apply to successive events and transactions; and
(6) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision.
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating.
The Initial Securities and the Trustee's certificate of
authentication thereof shall be substantially in the form of Exhibit A hereto,
which is hereby incorporated in and expressly made a part of this Indenture. The
Exchange Securities and the Trustee's certificate of authentication thereof
shall be substantially in the form of Exhibit B hereto, which is hereby
incorporated in and expressly made a part of this Indenture. The Securities may
have notations, legends or endorsements required by law, stock exchange rule or
usage. The Company and the Trustee shall approve the form of the Securities and
any notation, legend or endorsement on them. Each Security shall be dated the
date of its issuance and shall show the date of its authentication. Global
Securities shall bear the legend set forth in Exhibit C hereto. The aggregate
principal amount at maturity of the Global Securities may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depositary, as hereinafter provided.
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SECTION 2.02. Execution and Authentication.
Two Officers, including no more than one signing solely as Assistant
Secretary, shall sign, or one Officer (other than as an Assistant Secretary)
shall sign and the Secretary or an Assistant Secretary (each of whom shall, in
each case, have been duly authorized by all requisite corporate actions) shall
attest to such Officer's signature, the Securities for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Security was an Officer at the
time of such execution but no longer holds that office at the time the Trustee
authenticates the Security, the Security shall be valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate (i) Initial Securities for original
issue in an aggregate principal amount at maturity not to exceed $135,000,000,
(ii) Private Senior Discount Exchange Notes from time to time only in exchange
for a like principal amount at maturity of Initial Securities and (iii)
Unrestricted Securities from time to time in exchange for (A) a like principal
amount at maturity of Initial Securities or (B) a like principal amount at
maturity of Private Senior Discount Exchange Notes, in each case upon a written
order of the Company in the form of an Officers' Certificate. Each such written
order shall specify the amount of Securities to be authenticated and the date on
which the Securities are to be authenticated, whether the Securities are to be
Initial Securities, Private Senior Discount Exchange Notes or Unrestricted
Securities and whether the Securities are to be issued as Physical Securities or
Global Securities and such other information as the Trustee may reasonably
request. The aggregate principal amount at maturity of Securities outstanding at
any time may not exceed $135,000,000, except as provided in Sections 2.07 and
2.08.
Notwithstanding the foregoing, all Securities issued under this
Indenture shall vote and consent together on all matters (as to which any of
such Securities may vote or consent) as one class and no series of Securities
will have the right to vote or consent as a separate class on any matter.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate Securities. Unless otherwise provided
in the appointment, an authenticating agent may authenticate Securities whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent shall
have the same rights as an Agent to deal with the Company and Affiliates of the
Company.
The Securities shall be issuable only in registered form without
coupons in denominations of $1,000 principal amount at maturity and any integral
multiple thereof.
SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency in the Borough of
Manhattan, The City of New York, where (a) Securities may be presented or
surrendered for registration of transfer or for exchange (the "Registrar"), (b)
Securities may be presented or surrendered for payment (the "Paying Agent") and
(c) notices and demands in respect of the Securities and this Indenture may be
served. The Registrar shall keep a register of the Securities and of their
transfer and exchange. The Company, upon notice to the Trustee, may appoint one
or more co-Registrars and one or more additional Paying Agents. The term "Paying
Agent"
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includes any additional Paying Agent. Except as provided herein, the Company may
act as Paying Agent, Registrar or co-Registrar.
The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture, which shall incorporate the provisions
of the TIA. The agreement shall implement the provisions of this Indenture that
relate to such Agent. The Company shall notify the Trustee of the name and
address of any such Agent. If the Company fails to maintain a Registrar or
Paying Agent, or fail to give the foregoing notice, the Trustee shall act as
such and shall be entitled to appropriate compensation in accordance with
Section 7.07.
The Company initially appoints the Trustee as Registrar and Paying
Agent until such time as the Trustee has resigned or a successor has been
appointed.
SECTION 2.04. Paying Agent To Hold Assets in Trust.
The Company shall require each Paying Agent other than the Trustee
to agree in writing that each Paying Agent shall hold in trust for the benefit
of Holders or the Trustee all assets held by the Paying Agent for the payment of
Accreted Value or principal of or interest on the Securities, and shall notify
the Trustee of any Default by the Company in making any such payment. The
Company at any time may require a Paying Agent to distribute all assets held by
it to the Trustee and account for any assets disbursed and the Trustee may at
any time during the continuance of any payment Default, upon written request to
a Paying Agent, require such Paying Agent to distribute all assets held by it to
the Trustee and to account for any assets distributed. Upon distribution to the
Trustee of all assets that shall have been delivered by the Company to the
Paying Agent (if other than the Company), the Paying Agent shall have no further
liability for such assets. If the Company or any of its Affiliates acts as
Paying Agent, it shall, on or before each due date of the Accreted Value or
principal of or interest on the Securities, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay the Accreted
Value or principal or interest so becoming due until such sums shall be paid to
such Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of its action or failure so to act.
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
Holders. If the Trustee is not the Registrar, the Company shall furnish to the
Trustee at least five days before each Interest Record Date and at such other
times as the Trustee may request in writing a list as of such date and in such
form as the Trustee may reasonably require of the names and addresses of
Holders, which list may be conclusively relied upon by the Trustee.
SECTION 2.06. Transfer and Exchange.
Subject to the provisions of Sections 2.15 and 2.16, when Securities
are presented to the Registrar or a co-Registrar with a request to register the
transfer of such Securities or to exchange such Securities for an equal
principal amount at maturity of Securities of other authorized denominations of
the same series, the Registrar or co-Registrar shall register the transfer or
make the exchange as requested if its requirements for such transaction are met;
provided, however, that the Securities surrendered for transfer or exchange
shall be duly endorsed or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Registrar or co-Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing. To
permit registrations of transfers and exchanges, the Company shall execute and
the Trus-
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tee shall authenticate Securities at the Registrar's or co-Registrar's written
request. No service charge shall be made for any registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
payable by the transferor or transferee of such Securities (other than any such
transfer taxes or other governmental charge payable upon exchanges or transfers
pursuant to the fourth paragraph of Section 2.02 and Sections 2.10, 3.06, 4.05,
4.14, or 10.05). The Registrar or co-Registrar shall not be required to register
the transfer or exchange of any Security (i) during a period beginning at the
opening of business 15 days before the mailing of a notice of redemption of
Securities and ending at the close of business on the day of such mailing and
(ii) selected for redemption in whole or in part pursuant to Article Three
hereof, except the unredeemed portion of any Security being redeemed in part.
Prior to the registration of any transfer by a Holder as provided
herein, the Company, the Trustee and any Agent shall treat the person in whose
name the Security is registered as the owner thereof for all purposes whether or
not the Security shall be overdue, and neither the Company, the Trustee nor any
Agent shall be affected by notice to the contrary. Any Holder of a beneficial
interest in a Global Security shall, by acceptance of such beneficial interest
in a Global Security, agree that transfers of beneficial interests in such
Global Security may be effected only through a book-entry system maintained by
the Depositary (or its agent), and that ownership of a beneficial interest in a
Global Security shall be required to be reflected in a book entry.
SECTION 2.07. Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if the
Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, the Company shall issue and the Trustee shall authenticate a
replacement Security if the Trustee's requirements for replacement of Securities
are met. If required by the Company or the Trustee, such Holder must provide an
indemnity bond or other indemnity, sufficient in the judgment of both the
Company and the Trustee, to protect the Company, the Trustee and any Agent from
any loss which any of them may suffer if a Security is replaced. The Company may
charge such Holder for its reasonable out-of-pocket expenses in replacing a
Security, including reasonable fees and expenses of counsel.
Every replacement Security is an additional obligation of the
Company.
SECTION 2.08. Outstanding Securities.
Securities outstanding at any time are all the Securities that have
been authenticated by the Trustee except those cancelled by it, those delivered
to it for cancellation and those described in this Section 2.08 as not
outstanding. Subject to Section 2.09, a Security does not cease to be
outstanding because the Company or any of its Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.07 (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser. A mutilated Security ceases to be outstanding
upon surrender of such Security and replacement thereof pursuant to Section
2.07.
If on a Redemption Date, Purchase Date or the Final Maturity Date
the Paying Agent holds money sufficient to pay all of the Accreted Value or
principal and interest due on the Securities payable on that
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date, and is not prohibited from paying such money to the Holders pursuant to
the terms of this Indenture, then on and after that date such Securities cease
to be outstanding and interest on them ceases to accrue.
SECTION 2.09. Treasury Securities.
In determining whether the Holders of the required principal amount
at maturity of Securities have concurred in any direction, waiver or consent,
Securities owned by the Company or any of its Affiliates shall be disregarded,
except that, for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, waiver or consent, only Securities
that a Trust Officer of the Trustee actually knows are so owned shall be
disregarded.
The Company shall notify the Trustee, in writing, when the Company
or any of its Affiliates repurchases or otherwise acquires Securities and of the
aggregate principal amount at maturity of such Securities so repurchased or
otherwise acquired.
SECTION 2.10. Temporary Securities.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities upon receipt of
a written order of the Company in the form of an Officers' Certificate. The
Officers' Certificate shall specify the amount of temporary Securities to be
authenticated and the date on which the temporary Securities are to be
authenticated.
Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate upon receipt of a written order
of the Company pursuant to Section 2.02 definitive Securities in exchange for
temporary Securities.
SECTION 2.11. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for transfer, exchange or payment. The
Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent,
and no one else, shall cancel, and at the written direction of the Company,
dispose of and deliver evidence of such disposal of all Securities surrendered
for transfer, exchange, payment or cancellation. Subject to Section 2.07, the
Company may not issue new Securities to replace Securities that it has paid or
delivered to the Trustee for cancellation. If the Company shall acquire any of
the Securities, such acquisition shall not operate as a redemption or
satisfaction of the Indebtedness represented by such Securities unless and until
the same are surrendered to the Trustee for cancellation pursuant to this
Section 2.11.
SECTION 2.12. Defaulted Interest.
The Company shall pay interest on overdue principal from time to
time on demand at the rate of interest then borne by the Securities. The Company
shall, to the extent lawful, pay interest on overdue installments of interest
(without regard to any applicable grace periods) at the rate of interest then
borne by the Securities.
If the Company defaults in a payment of interest on the Securities,
it shall pay the defaulted interest, plus (to the extent lawful) any interest
payable on the defaulted interest to the Persons who are Hold-
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ers on a subsequent special record date, which date shall be the fifteenth day
preceding the date fixed by the Company for the payment of defaulted interest or
the next succeeding Business Day if such date is not a Business Day. At least 15
days before the subsequent special record date, the Company shall mail to each
Holder, with a copy to the Trustee, a notice that states the subsequent special
record date, the payment date and the amount of defaulted interest, and interest
payable on such defaulted interest, if any, to be paid.
Notwithstanding the foregoing, any interest which is paid prior to
the expiration of the 30-day period set forth in Section 6.01(ii) shall be paid
to Holders as of the Interest Record Date for the Interest Payment Date for
which interest has not been paid.
SECTION 2.13. CUSIP Number.
The Company in issuing the Securities will use a "CUSIP" number and
the Trustee shall use the CUSIP number in notices of redemption or exchange as a
convenience to Holders; provided, however, that any such notice may state that
no representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Securities, and that reliance may be placed only
on the other identification numbers printed on the Securities. The Company shall
promptly notify the Trustee of any changes in CUSIP numbers.
SECTION 2.14. Deposit of Moneys.
Prior to 10:00 a.m. New York City time on each Interest Payment
Date, Redemption Date, Purchase Date and the Final Maturity Date, the Company
shall deposit with the Paying Agent in immediately available funds money
sufficient to make cash payments, if any, due on such Interest Payment Date,
Redemption Date, Purchase Date or Final Maturity Date, as the case may be, in a
timely manner which permits the Paying Agent to remit payment to the Holders on
such Interest Payment Date, Redemption Date, Purchase Date or Final Maturity
Date, as the case may be.
SECTION 2.15. Book-Entry Provisions for Global Securities.
(a) The Global Securities initially shall (i) be registered in the
name of the Depositary or the nominee of such Depositary, (ii) be delivered to
the Trustee as custodian for such Depositary and (iii) bear legends as set forth
in Exhibit C hereto.
Members of, or participants in, the Depositary ("Participants")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depositary, or the Trustee as its custodian, or
under the Global Security, 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 the
Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depositary or impair, as between the
Depositary and Participants, the operation of customary practices governing the
exercise of the rights of a Holder of any Security.
(b) Transfers of Global Securities shall be limited to transfers in
whole, but not in part, to the Depositary, its successors or their respective
nominees. Interests of beneficial owners in the Global Securities may be
transferred or exchanged for Physical Securities in accordance with the rules
and procedures of the Depositary and the provisions of Section 2.16; provided,
however, that Physical Securities shall be transferred to all beneficial owners
in exchange for their beneficial interests in Global Securities if (i) the
Deposi-
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tary notifies the Company that it is unwilling or unable to continue as
Depositary for any Global Security and a successor Depositary is not appointed
by the Company within 90 days of such notice or (ii) an Event of Default has
occurred and is continuing and the Registrar has received a request from the
Depositary to issue Physical Securities.
(c) In connection with the transfer of Global Securities as an
entirety to beneficial owners pursuant to paragraph (b) of this Section 2.15,
the Global Securities shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, and the Trustee shall upon written
instructions from the Company authenticate and deliver, to each beneficial owner
identified by the Depositary in exchange for its beneficial interest in the
Global Securities, an equal aggregate principal amount at maturity of Physical
Securities of authorized denominations.
(d) Any Physical Security constituting a Restricted Security
delivered in exchange for an interest in a Global Security pursuant to paragraph
(b) of this Section 2.15 shall, except as otherwise provided by Section 2.16,
bear the Private Placement Legend.
(e) The Holder of any Global Security may grant proxies and
otherwise authorize any Person, including Participants and Persons that may hold
interests through Participants, to take any action which a Holder is entitled to
take under this Indenture or the Securities.
SECTION 2.16. Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Physical Securities. When Physical
Securities are presented to the Registrar or co-Registrar with a request:
(i) to register the transfer of the Physical Securities; or
(ii) to exchange such Physical Securities for an equal principal
amount at maturity of Physical Securities of other authorized
denominations,
the Registrar or co-Registrar shall register the transfer or make the exchange
as requested if the requirements under this Indenture as set forth in this
Section 2.16 for such transactions are met; provided, however, that the Physical
Securities presented or surrendered for Registration of transfer or exchange:
(I) shall be duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Registrar or co-Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing;
and
(II) in the case of Physical Securities the offer and sale of which
have not been registered under the Securities Act, such Physical
Securities shall be accompanied, in the sole discretion of the Company, by
the following additional information and documents, as applicable:
(A) if such Physical Security is being delivered to the Registrar
or co-Registrar by a Holder for Registration in the name of
such Holder, without transfer, a certification from such
Holder to that effect (substantially in the form of Exhibit D
hereto); or
(B) if such Physical Security is being transferred to a QIB in
accordance with Rule 144A, a certification to that effect
(substantially in the form of Exhibit D hereto); or
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(C) if such Physical Security is being transferred to an
Institutional Accredited Investor, delivery of a certification
to that effect (substantially in the form of Exhibit D hereto)
and a transferee letter of representation (substantially in
the form of Exhibit E hereto) and, at the option of the
Company, an Opinion of Counsel reasonably satisfactory to the
Company to the effect that such transfer is in compliance with
the Securities Act; or
(D) if such Physical Security is being transferred in reliance on
Rule 144 under the Securities Act, delivery of a certification
to that effect (substantially in the form of Exhibit D hereto)
and, at the option of the Company, an Opinion of Counsel
reasonably satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act; or
(E) if such Physical Security is being transferred in reliance on
another exemption from the registration requirements of the
Securities Act, a certification to that effect (substantially
in the form of Exhibit D hereto) and, at the option of the
Company, an Opinion of Counsel reasonably acceptable to the
Company to the effect that such transfer is in compliance with
the Securities Act.
(b) Restrictions on Transfer of a Physical Security for a Beneficial
Interest in a Global Security. A Physical Security the offer and sale of which
has not been registered under the Securities Act may not be exchanged for a
beneficial interest in a Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Registrar or co-Registrar of a
Physical Security, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Registrar or co-Registrar, together with:
(A) certification (substantially in the form of Exhibit D hereto)
that such Physical Security is being transferred (I) to a QIB
or (II) to an Accredited Investor and, with respect to (II),
at the option of the Company, an Opinion of Counsel reasonably
acceptable to the Company to the effect that such transfer is
in compliance with the Securities Act; and
(B) written instructions directing the Registrar or co-Registrar
to make, or to direct the Depositary to make, an endorsement
on the applicable Global Security to reflect an increase in
the aggregate amount of the Securities represented by the
Global Security,
then the Registrar or co-Registrar shall cancel such Physical Security and
cause, or direct the Depositary to cause, in accordance with the standing
instructions and procedures existing between the Depositary and the Registrar or
co-Registrar, the principal amount at maturity of Securities represented by the
applicable Global Security to be increased accordingly. If no Global Security is
then outstanding, the Company shall, unless either of the events in the proviso
to Section 2.15(b) have occurred and are continuing, issue and the Trustee
shall, upon written instructions from the Company in accordance with Section
2.02, authenticate such a Global Security in the appropriate principal amount at
maturity.
(c) Transfer and Exchange of Global Securities. The transfer and
exchange of Global Securities or beneficial interests therein shall be effected
through the Depositary in accordance with this Indenture (including the
restrictions on transfer set forth herein) and the procedures of the Depositary
therefor. Upon
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receipt by the Registrar or Co-Registrar of written instructions, or such other
instruction as is customary for the Depositary, from the Depositary or its
nominee, requesting the Registration of transfer of an interest in a Global
Security to another type of Global Security, together with the applicable Global
Securities (or, if the applicable type of Global Security required to represent
the interest as requested to be transferred is not then outstanding, only the
Global Security representing the interest being transferred), the Registrar or
Co-Registrar shall cancel such Global Securities (or Global Security) and the
Company shall issue and the Trustee shall, upon written instructions from the
Company in accordance with Section 2.02, authenticate new Global Securities of
the types so cancelled (or the type so cancelled and applicable type required to
represent the interest as requested to be transferred) reflecting the applicable
increase and decrease of the principal amount at maturity of Securities
represented by such types of Global Securities, giving effect to such transfer.
If the applicable type of Global Security required to represent the interest as
requested to be transferred is not outstanding at the time of such request, the
Company shall issue and the Trustee shall, upon written instructions from the
Company in accordance with Section 2.02, authenticate a new Global Security of
such type in principal amount at maturity equal to the principal amount at
maturity of the interest requested to be transferred.
(d) Transfer of a Beneficial Interest in a Global Security for a
Physical Security.
(i) Any Person having a beneficial interest in a Global Security may
upon request exchange such beneficial interest for a Physical Security;
provided, however, that prior to the Registration, a transferee that is a
QIB or Institutional Accredited Investor may not exchange a beneficial
interest in Global Security for a Physical Security. Upon receipt by the
Registrar or co-Registrar of written instructions, or such other form of
instructions as is customary for the Depositary, from the Depositary or
its nominee on behalf of any Person (subject to the previous sentence)
having a beneficial interest in a Global Security and upon receipt by the
Trustee of a written order or such other form of instructions as is
customary for the Depositary or the Person designated by the Depositary as
having such a beneficial interest containing registration instructions
and, in the case of any such transfer or exchange of a beneficial interest
in Securities the offer and sale of which have not been registered under
the Securities Act, the following additional information and documents:
(A) if such beneficial interest is being transferred in reliance
on Rule 144 under the Securities Act, delivery of a
certification to that effect (substantially in the form of
Exhibit D hereto) and, at the option of the Company, an
Opinion of Counsel reasonably satisfactory to the Company to
the effect that such transfer is in compliance with the
Securities Act; or
(B) if such beneficial interest is being transferred in reliance
on another exemption from the registration requirements of the
Securities Act, a certification to that effect (substantially
in the form of Exhibit D hereto) and, at the option of the
Company, an Opinion of Counsel reasonably satisfactory to the
Company to the effect that such transfer is in compliance with
the Securities Act,
then the Registrar or co-Registrar will cause, in accordance with the
standing instructions and procedures existing between the Depositary and
the Registrar or co-Registrar, the aggregate principal amount at maturity
of the applicable Global Security to be reduced and, following such
reduction, the Company will execute and, upon receipt of an authentication
order in the form of an Officers' Certificate in accordance with Section
2.02, the Trustee will authenticate and deliver to the transferee a
Physical Security in the appropriate principal amount at maturity.
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(ii) Securities issued in exchange for a beneficial interest in a
Global Security pursuant to this Section 2.16(d) shall be registered in
such names and in such authorized denominations as the Depositary,
pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Registrar or co-Registrar in writing. The
Registrar or co-Registrar shall deliver such Physical Securities to the
Persons in whose names such Physical Securities are so registered.
(e) Restrictions on Transfer and Exchange of Global Securities.
Notwithstanding any other provisions of this Indenture, a Global Security 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.
(f) Private Placement Legend. Upon the transfer, exchange or
replacement of Securities not bearing the Private Placement Legend, the
Registrar or co-Registrar shall deliver Securities that do not bear the Private
Placement Legend. Upon the transfer, exchange or replacement of Securities
bearing the Private Placement Legend, the Registrar or co-Registrar shall
deliver only Securities that bear the Private Placement Legend unless, and the
Trustee is hereby authorized to deliver Securities without the Private Placement
Legend if, (i) there is delivered to the Trustee an Opinion of Counsel
reasonably satisfactory to the Company and the Trustee to the effect that
neither such legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act; (ii)
such Security has been sold pursuant to an effective registration statement
under the Securities Act (including pursuant to a Registration); or (iii) the
date of such transfer, exchange or replacement is two years after the later of
(x) the Issue Date and (y) the last date that the Company or any affiliate (as
defined in Rule 144 under the Securities Act) of the Company was the owner of
such Securities (or any predecessor thereto).
(g) General. By its acceptance of any Security bearing the Private
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture.
Each Holder of a Security agrees to indemnify the Company and the
Trustee against any liability that may result from the transfer, exchange or
assignment of such Holder's Security in violation of any provision of this
Indenture and/or applicable United States federal or state securities law.
The Trustee shall have no obligation or duty to monitor, determine
or inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Security (including any transfers between or among Participants or
beneficial owners of interest in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by the terms
of, this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.15 or this Section 2.16.
The Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.
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ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
If the Company wants to redeem Securities pursuant to paragraph 5 or
6 of the Securities at the applicable redemption price set forth thereon, they
shall notify the Trustee in writing of the Redemption Date and the principal
amount at maturity of Securities to be redeemed. The Company shall give such
notice to the Trustee at least 60 days before the Redemption Date (unless a
shorter notice shall be agreed to by the Trustee in writing), together with an
Officers' Certificate stating that such redemption will comply with the
conditions contained herein.
SECTION 3.02. Selection of Securities To Be Redeemed.
If less than all of the Securities are to be redeemed, the Trustee
shall select the Securities to be redeemed in compliance with the requirements
of the principal national securities exchange, if any, on which the Securities
are listed or, if the Securities are not so listed, on a pro rata basis, by lot
or in such other manner as the Trustee shall deem fair and appropriate.
The Trustee may select for redemption portions of the principal
amount at maturity of Securities that have denominations equal to or larger than
$1,000 principal amount at maturity. Securities and portions of them the Trustee
so selects shall be in amounts of $1,000 principal amount at maturity or
integral multiples thereof. Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called for
redemption.
If a partial redemption is made with the net cash proceeds of a
Public Equity Offering by the Company, selection of the Securities or portions
thereof for redemption will be made by the Trustee only on a pro rata basis or
as nearly a pro rata basis as is practicable (subject to the procedures of the
Depository Trust Company), unless such method is otherwise prohibited.
SECTION 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption Date,
the Company shall mail a notice of redemption by first-class mail to each Holder
whose Securities are to be redeemed at such Holder's registered address.
Each notice of redemption shall identify the Securities to be
redeemed (including the CUSIP number thereon) and shall state:
(1) the Redemption Date;
(2) the redemption price;
(3) the name and address of the Paying Agent to which the Securities
are to be surrendered for redemption;
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(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(5) that, unless the Company defaults in making the redemption
payment, Accreted Value or interest on Securities called for redemption
ceases to accrete or accrue, as the case may be, on and after the
Redemption Date and the only remaining right of the Holders is to receive
payment of the redemption price upon surrender to the Paying Agent; and
(6) if any Security is being redeemed in part only, the portion of
the principal amount at maturity of such Security to be redeemed and that,
after the Redemption Date, upon surrender of such Security, a new Security
or Securities in principal amount at maturity equal to the unredeemed
portion thereof will be issued.
At the Company's request, the Trustee shall give the notice of
redemption on behalf of the Company, in the Company's name and at the Company's
expense.
SECTION 3.04. Effect of Notice of Redemption.
Once a notice of redemption is mailed, Securities called for
redemption become due and payable on the Redemption Date and at the redemption
price. Upon surrender to the Paying Agent, such Securities shall be paid at the
redemption price, plus accrued interest thereon, if any, to the Redemption Date,
but interest installments whose maturity is on or prior to such Redemption Date
shall be payable to the Holders of record at the close of business on the
relevant Interest Record Date.
SECTION 3.05. Deposit of Redemption Price.
Prior to 10:00 a.m. New York City time on the Redemption Date, the
Company shall deposit with the Paying Agent (or if the Company is Paying Agent,
shall, on or before the Redemption Date, segregate and hold in trust) money
sufficient to pay the redemption price of and accrued interest, if any, on all
Securities to be redeemed on that date other than Securities or portions thereof
called for redemption on that date which have been delivered by the Company to
the Trustee for cancellation.
If any Security surrendered for redemption in the manner provided in
the Securities shall not be so paid on the Redemption Date due to the failure of
the Company to deposit with the Paying Agent money sufficient to pay the
redemption price thereof, the principal and accrued and unpaid interest, if any,
thereon shall, until paid or duly provided for, bear interest as provided in
Sections 2.12 and 4.01 with respect to any payment default.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the Trustee
shall authenticate and deliver at the expense of the Company to the Holder a new
Security equal in principal amount at maturity to the unredeemed portion of the
Security surrendered.
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ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities.
The Company shall pay the Accreted Value or principal of and
interest on the Securities in the manner provided in the Securities and the
Exchange and Registration Rights Agreement. An installment of Accreted Value or
principal or interest shall be considered paid on the date due if the Trustee or
Paying Agent (other than the Company or any of its Affiliates) holds on that
date money designated for and sufficient to pay the installment in full and is
not prohibited from paying such money to the Holders of the Securities pursuant
to the terms of this Indenture.
The Company shall pay cash interest on overdue principal at the same
rate per annum borne by the Securities. The Company shall pay cash interest on
overdue installments of interest at the same rate per annum borne by the
Securities, to the extent lawful, as provided in Section 2.12.
SECTION 4.02. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, The City of
New York, the office or agency required under Section 2.03. 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 address of the Trustee set forth in Section 13. The
Company hereby initially designates the Trustee at its address set forth in
Section 13.02 as their office or agency in The Borough of Manhattan, The City of
New York, for such purposes.
SECTION 4.03. Limitations on Transactions with Affiliates.
The Company shall not, and shall not permit, cause or suffer any
Restricted Subsidiary to, conduct any business or enter into any transaction or
series of related transactions with or for the benefit of any of its Affiliates
or any beneficial holder of 10% or more of any class of Equity Interests of the
Company or any officer or director of the Company or any Restricted Subsidiary
(each, an "Affiliate Transaction"), except on terms that are fair and reasonable
to the Company or such Restricted Subsidiary, as the case may be. Each Affiliate
Transaction involving aggregate payments or other property having a Fair Market
Value in excess of $2.5 million shall be approved by the Board of Directors of
the Company, such approval to be evidenced by a resolution of such Board of
Directors stating that such Board of Directors (including a majority of the
disinterested directors) has determined that such transaction complies with the
foregoing provisions. In addition to the foregoing, with respect to any
Affiliate Transaction involving aggregate consideration in excess of $5.0
million or more, the Company must obtain a written opinion from an Independent
Financial Advisor stating that the terms of such Affiliate Transaction to the
Company or the Restricted Subsidiary, as the case may be, are fair from a
financial point of view.
Notwithstanding the foregoing, the restrictions set forth in this
covenant shall not apply to (i) transactions with or among the Company and/or
any of the Restricted Subsidiaries; provided, however, in any such case, no
officer, director or beneficial holder of 10% or more of any class of Equity
Interests of the Company shall beneficially own any Voting Stock of any such
Restricted Subsidiary (other than by reason of
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its ownership of Equity Interests of the Company), (ii) transactions between or
among Restricted Subsidiaries, (iii) any Restricted Payment permitted under
Section 4.06, (iv) directors' fees, indemnification and similar arrangements,
officers' indemnification, employee stock option or employee benefit plans,
employee salaries and bonuses, employment agreements or legal fees paid or
created in the ordinary course of business and (v) payments pursuant to
arrangements as in effect on the Issue Date.
SECTION 4.04. Limitation on Additional Indebtedness.
The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create, Incur, assume, issue, guarantee
or in any manner become directly or indirectly liable for or with respect to,
contingently or otherwise, the payment of any Indebtedness or issue any
Disqualified Equity Interests, except for Permitted Indebtedness, unless, after
giving pro forma effect to such Incurrence of Indebtedness or issuance of
Disqualified Equity Interests and the application of the proceeds therefrom, the
Company's Consolidated Operating Cash Flow Ratio would be greater than or equal
to 2.0 to 1.0.
The foregoing limitations will not apply to the Incurrence of any of
the following (collectively, "Permitted Indebtedness"), each of which will be
given independent effect: (a) Indebtedness under (x) the Securities and this
Indenture and (y) the Senior Notes and the Senior Notes Indenture; (b)
outstanding Indebtedness on the Issue Date (other than Existing Securities
purchased with the net proceeds of the Securities), and Indebtedness which may
be incurred pursuant to commitments in effect on the Issue Date; provided,
however, that Indebtedness incurred pursuant to this clause (b) shall not exceed
$280 million (plus the amount of Existing Securities which remain unpurchased
after the Issue Date) in the aggregate at any one time outstanding (which amount
shall be reduced to the extent any such Indebtedness is refinanced pursuant to
clause (f) below (it being understood that the replacement of a lending
commitment (or portion thereof) to the Company or a Restricted Subsidiary under
which (or as to the portion of which) no Indebtedness is outstanding at the time
of such replacement with another lending commitment to the Company or such
Restricted Subsidiary, respectively, shall not be considered a "refinancing"
reducing such amount of Indebtedness which may be incurred pursuant to this
clause (b)); (c) (x) Indebtedness of any Restricted Subsidiary owed to and held
by the Company or any Restricted Subsidiary and (y) Indebtedness of the Company
owed to and held by any Restricted Subsidiary; provided, however, that the
Indebtedness Incurred pursuant to this subclause (y) is unsecured and
subordinated in right of payment to the payment and performance of the Company's
obligations under this Indenture and the Securities; provided, further, however,
that an Incurrence of Indebtedness that is not permitted by this clause (c)
shall be deemed to have occurred upon (i) any sale or other disposition of any
Indebtedness of the Company or any Restricted Subsidiary referred to in this
clause (c) to a Person (other than the Company or any Restricted Subsidiary) and
(ii) the designation of a Restricted Subsidiary which holds Indebtedness of the
Company or any other Restricted Subsidiary as an Unrestricted Subsidiary; (d)
Interest Rate Agreements, Commodity Agreements and Currency Agreements of the
Company and the Restricted Subsidiaries; (e) Purchase Money Indebtedness and
Capitalized Lease Obligations of the Company or any Restricted Subsidiary in an
amount not to exceed $10.0 million outstanding at any time (which amount shall
be reduced to the extent any such Purchase Money Indebtedness or Capitalized
Lease Obligation is refinanced pursuant to clause (f) below); (f) Indebtedness
of the Company or a Restricted Subsidiary to the extent representing a
replacement, renewal, refinancing or extension (collectively, a "refinancing")
of outstanding Indebtedness Incurred in compliance with the Consolidated
Operating Cash Flow Ratio of the first paragraph of this covenant or clause (a),
(b), (e), (f) or (g) of this paragraph of this covenant; provided, however, that
(i) any such refinancing shall not exceed the sum of the principal amount (or
accreted amount (determined in accordance with GAAP), if less) of the
Indebtedness or Disqualified Equity Interests being refinanced, plus the amount
of accrued interest or dividends thereon, plus the amount of any reasonably
determined prepayment premium necessary to accomplish such refinancing and such
reasonable fees and expenses incurred in connection therewith,
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(ii) Indebtedness representing a refinancing of Indebtedness of the Company
shall have a Weighted Average Life to Maturity equal to or greater than the
Weighted Average Life to Maturity of the Indebtedness being refinanced and (iii)
(A) Indebtedness of the Company may only be refinanced with other Indebtedness
or Disqualified Equity Interests of the Company and (B) Disqualified Equity
Interests of the Company may only be refinanced with other Disqualified Equity
Interests of the Company; (g) Indebtedness not to exceed $80 million outstanding
at any time (which amount shall be reduced to the extent any such Indebtedness
is refinanced pursuant to clause (f) above) to the extent the proceeds thereof
are used to fund capital expenditures at HCL and its Subsidiaries, of which not
more than $50 million will be incurred in any calendar year; and (h) in addition
to the items referred to in clauses (a) through (g) above, Indebtedness of the
Company or any Restricted Subsidiary having an aggregate principal amount not to
exceed $15.0 million outstanding at any time.
SECTION 4.05. Disposition of Proceeds of Asset Sales.
The Company shall not, and shall not permit any Restricted
Subsidiary to, make any Asset Sale, unless (a) the Company or such Restricted
Subsidiary, as the case may be, receives consideration at the time of such Asset
Sale at least equal to the Fair Market Value of the shares or assets sold or
otherwise disposed of and (b) 75% of such consideration consists of cash, Cash
Equivalents or Fully Traded Common Stock; provided, however, that to the extent
that any Fully Traded Common Stock is received pursuant to such Asset Sale and
required to satisfy the 75% requirement of this clause (b), the Fair Market
Value of such Fully Traded Common Stock as of the date of disposition shall be
treated as Net Cash Proceeds for all purposes of this covenant. The amount of
any (i) Indebtedness of the Company or any Restricted Subsidiary that is
actually assumed by the transferee in such Asset Sale and from which the Company
and the Restricted Subsidiaries are fully released shall be deemed to be cash
for purposes of determining the percentage of cash consideration received by the
Company or the Restricted Subsidiaries (but shall not be deemed Net Cash
Proceeds for purposes of this covenant) and (ii) notes or other similar
obligations received by the Company or the Restricted Subsidiaries from such
transferee that are immediately converted, sold or exchanged by the Company or
the Restricted Subsidiaries into cash shall be deemed to be cash, in an amount
equal to the net cash proceeds realized upon such conversion, sale or exchange
for purposes of determining the percentage of cash consideration received by the
Company or the Restricted Subsidiaries.
The Company or such Restricted Subsidiary, as the case may be, may
(i) apply an amount of cash equal to the Net Cash Proceeds of any Asset Sale
within 365 days (or 180 days in the case of any amount represented by any Fully
Traded Common Stock that has not been converted into cash by such 180th day) of
receipt thereof to repay Indebtedness of a Restricted Subsidiary, (ii) commit in
writing to acquire, construct or improve operating properties and capital assets
to be used by the Company or a Restricted Subsidiary and so apply an amount of
cash equal to such Net Cash Proceeds within 365 days (or 180 days in the case of
any amount represented by any Fully Traded Common Stock that has not been
converted into cash by such 180th day) after the receipt thereof or (iii) apply
an amount of cash equal to the Net Cash Proceeds of such Asset Sale within 365
days (or 180 days in the case of any amount represented by any Fully Traded
Common Stock that has not been converted into cash by such 180th day) of receipt
thereof to repay either (x) the Securities or (y) Pari Passu Debt not exceeding
the Pari Passu Debt Pro Rata Share; provided, that the application of such
proceeds pursuant to this clause (iii) may be delayed such that the application
is contemporaneous with the closing of an Asset Sale Offer.
The amount of cash equal to all or part of the Net Cash Proceeds of
any Asset Sale that are not applied within 365 days (or 180 days) of such Asset
Sale (or, in the case of clause (iii) of the immediately preceding paragraph, to
be applied contemporaneously with the closing of an Asset Sale Offer) as
described in clause (i), (ii) or (iii) of the immediately preceding paragraph
shall constitute "Unutilized Net Proceeds."
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When the aggregate amount of Unutilized Net Proceeds exceeds $5.0 million, the
Company shall make an Offer to Purchase outstanding Securities up to a maximum
principal amount or Accreted Value, as the case may be, of Securities equal to
such Unutilized Net Proceeds, at a purchase price in cash equal to 100% of the
principal amount or Accreted Value, as the case may be, thereof, plus accrued
and unpaid interest thereon, if any, to the Purchase Date.
To the extent that the aggregate amount of Securities tendered for
repayment pursuant to the Asset Sale Offer is less than the Net Cash Proceeds
available for such offer, such deficiency may be used for general corporate
purposes. If the aggregate amount of Securities validly tendered exceeds the Net
Cash Proceeds available for such offer, Securities to be purchased will be
selected on a pro rata basis or as nearly pro rata as practicable.
In the event that the Company makes an Offer to Purchase the
Securities, the Company shall comply with any applicable securities laws and
regulations, including any applicable requirements of Section 14(e) of, and Rule
14e-1 under, the Exchange Act, and any violation of the provisions of this
Indenture relating to such Offer to Purchase occurring as a result of such
compliance shall not be deemed an Event of Default or an event that with the
passing of time or giving of notice, or both, would constitute an Event of
Default.
Each Holder shall be entitled to tender all or any portion of the
Securities owned by such Holder pursuant to the Offer to Purchase, subject to
the requirement that any portion of a Security tendered must be tendered in an
integral multiple of $1,000 principal amount at maturity and subject to any
proration among tendering Holders as described above.
SECTION 4.06. Limitation on Restricted Payments.
The Company shall not, and shall not permit any of the Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or any
other distribution on any Equity Interests of the Company or make any payment or
distribution to the direct or indirect holders (in their capacities as such) of
Equity Interests of the Company (other than any (x) dividend or distribution
consisting of Equity Interests of an Unrestricted Subsidiary or consisting of
property or assets of an Unrestricted Subsidiary which are dividended or
otherwise transferred to the Company contemporaneously with such property or
assets being dividended or distributed by the Company or (y) dividends,
distributions and payments made to any Restricted Subsidiary and dividends or
distributions payable to any person solely in Qualified Equity Interests of the
Company or in options, warrants or other rights to purchase Qualified Equity
Interests of the Company); (ii) purchase, redeem or otherwise acquire or retire
for value any Equity Interests of the Company (other than any such Equity
Interests owned by any Restricted Subsidiary); or (iii) make any Investment
(other than Permitted Investments) in any person (other than in the Company, any
Restricted Subsidiary or a person that becomes a Restricted Subsidiary, or is
merged with or into or consolidated with the Company or a Restricted Subsidiary
(provided the Company or a Restricted Subsidiary is the survivor), as a result
of or in connection with such Investment) (any such payment or any other action
(other than any exception thereto) described in (i) through (iii), a "Restricted
Payment"), unless (a) no Default has occurred and is continuing at the time of
or immediately after giving effect to such Restricted Payment; (b) immediately
after giving effect to such Restricted Payment, the Company would be able to
incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) under
the Consolidated Operating Cash Flow Ratio described under Section 4.04; and (c)
immediately after giving effect to such Restricted Payment, the aggregate amount
of all Restricted Payments declared or made on or after the Issue Date does not
exceed an amount equal to the sum, without duplication, of (1) 50% of cumulative
Consolidated Net Income of the Company determined for the period (taken as one
period) from the beginning of the fiscal quarter which includes the Issue Date
and ending on the last day of the most recent fiscal quarter immediately
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preceding the date of such Restricted Payment for which consolidated financial
information of the Company is available (or if such cumulative Consolidated Net
Income shall be a loss, minus 100% of such loss), plus (2) the aggregate net
cash proceeds received by the Company from contributions to its common equity
capital and from the issue and sale (other than to a Restricted Subsidiary) of
its Qualified Equity Interests after the Issue Date (excluding the net proceeds
from any issuance and sale of Qualified Equity Interests financed, directly or
indirectly, using funds borrowed from the Company or any Restricted Subsidiary
until and to the extent such borrowing is repaid), plus (3) the principal amount
(or accreted amount (determined in accordance with GAAP), if less) of any
Indebtedness of the Company or any Restricted Subsidiary incurred after the
Issue Date which has been converted into or exchanged for Qualified Equity
Interests of the Company, plus (4) in the case of the disposition or repayment
of any Investment constituting a Restricted Payment made after the Issue Date,
an amount (to the extent not included in the computation of Consolidated Net
Income) equal to the lesser of (x) the return of capital with respect to such
Investment and (y) the amount of such Investment which was treated as a
Restricted Payment, in either case, less the cost of the disposition of such
Investment and net of taxes, plus (5) so long as the Designation thereof was
treated as a Restricted Payment made after the Issue Date, with respect to any
Unrestricted Subsidiary that has been redesignated as a Restricted Subsidiary
after the Issue Date in accordance with Section 4.15, the Company's
proportionate interest in an amount equal to the excess of (x) the total assets
of such Subsidiary, valued on an aggregate basis at Fair Market Value, over (y)
the total liabilities of such Subsidiary, determined in accordance with GAAP
(and provided that such amount shall not in any case exceed the Designation
Amount with respect to such Restricted Subsidiary upon its Designation), minus
(6) the greater of (x) $0 and (y) the Designation Amount (measured as of the
date of Designation) with respect to any Subsidiary of the Company which has
been designated as an Unrestricted Subsidiary after the Issue Date in accordance
with Section 4.15.
The provisions of this covenant shall not prohibit (i) the payment of any
dividend or other distribution (x) within 60 days after the date of declaration
thereof, if at such date of declaration such payment would comply with the
provisions of this Indenture or (y) consisting of the net proceeds to the
Company or a Restricted Subsidiary from the disposition of the Equity Interests
of an Unrestricted Subsidiary; (ii) so long as no Default has occurred and is
continuing, the purchase, redemption, retirement or other acquisition of any
shares of Equity Interests of the Company (A) in exchange for or conversion into
or (B) out of the net cash proceeds of the substantially concurrent issue and
sale (other than to a Restricted Subsidiary of the Company) of shares of
Qualified Equity Interests of the Company or contributions to the common equity
capital of the Company; provided, however, that any such net cash proceeds and
the value of any Qualified Equity Interests issued in exchange for such retired
Equity Interests are excluded from clause (c)(2) of the preceding paragraph (and
were not included therein at any time); (iii) so long as no Default has occurred
and is continuing, the making of a direct or indirect Investment constituting a
Restricted Payment out of the proceeds from the issue or sale (other than to a
Subsidiary) of Qualified Equity Interests of the Company or contributions to the
common equity capital of the Company; (iv) the purchase; redemption or other
acquisition, cancellation or retirement for value of Equity Interests held by
officers or employees or former officers or employees of the Company or any
Restricted Subsidiary (or their estates or beneficiaries under their estates),
upon death, disability, retirement or termination of employment not to exceed
$1.0 million in any fiscal year; (v) so long as no Default has occurred and is
continuing, dividends to TPR Investment Associates, Inc. (or its successors(s))
in an amount not to exceed $5.0 million in any year; provided, however, that to
the extent such dividends in any year are less than $5.0 million, the amount
less than $5.0 million may be paid in any subsequent year, but no such dividends
paid in any year pursuant to this clause (v) shall exceed $10.0 million in any
year; provided, further, however, that the aggregate amount of dividends
incurred pursuant to this clause (v) shall not exceed $20.0 million in the
aggregate; and (vi) other Restricted Payments not to exceed $5.0 million in the
aggregate. In determining the amount of Restricted Payments permissible under
this covenant, amounts expended under clauses (i)(x), (iv), (v) and (vi) of this
paragraph after the Issue Date shall (without duplication) be included as
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Restricted Payments. The amount of any non-cash Restricted Payment shall be
deemed to be equal to the Fair Market Value thereof at the date of the making of
such Restricted Payment.
SECTION 4.07. Existence.
Subject to Article Five, the Company shall do or shall cause to be
done all things necessary to preserve and keep in full force and effect its
existence as a corporation, partnership or other entity.
SECTION 4.08. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) all material taxes,
assessments and governmental charges levied or imposed upon the Company or any
Restricted Subsidiary or upon the income, profits or property of the Company or
any Restricted Subsidiary and (2) all lawful claims for labor, materials and
supplies which, in each case, if unpaid, might by law become a material
liability, or Lien upon the property, of the Company or any Restricted
Subsidiary; provided, however, that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings and for which appropriate provision has been made.
SECTION 4.09. Notice of Defaults.
(a) In the event that any Indebtedness of the Company or any of its
Subsidiaries is declared due and payable before its maturity because of the
occurrence of any default (or any event which, with notice or lapse of time, or
both, would constitute such a default) under such Indebtedness, the Company
shall promptly give written notice to the Trustee of such declaration, the
status of such default or event and what action the Company is taking or
proposes to take with respect thereto.
(b) Upon becoming aware of any Default or Event of Default, the
Company shall promptly deliver an Officers' Certificate to the Trustee
specifying the Default or Event of Default.
SECTION 4.10. Maintenance of Properties and Insurance.
(a) The Company shall cause all material properties owned by or
leased to it or any Restricted Subsidiary and used or useful in the conduct of
its business or the business of any Restricted Subsidiary to be maintained and
kept in normal condition, repair and working order and supplied with all
necessary equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary, so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section 4.10 shall prevent the Company or any
Restricted Subsidiary from discontinuing the use, operation or maintenance of
any of such properties, or disposing of any of them, if such discontinuance or
disposal is, in the judgment of the Board of Directors of the Company or the
Restricted Subsidiary concerned, or of an Officer (or other agent employed by
the Company or of any Restricted Subsidiary) of the Company or such Restricted
Subsidiary having managerial responsibility for any such property, desirable in
the conduct of the business of the Company or any Restricted Subsidiary.
(b) The Company shall maintain, and shall cause the Restricted
Subsidiaries to maintain, insurance with responsible carriers against such risks
and in such amounts, and with such deductibles, retentions,
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self-insured amounts and co-insurance provisions, as are customarily carried by
similar businesses of similar size, including property and casualty loss and
workers' compensation insurance.
SECTION 4.11. Compliance Certificate.
The Company shall deliver to the Trustee within 90 days after the
close of each fiscal year a certificate signed by the principal executive
officer, principal financial officer or principal accounting officer stating
that a review of the activities of the Company has been made under the
supervision of the signing officers with a view to determining whether a Default
or Event of Default has occurred and whether or not the signers know of any
Default or Event of Default by the Company that occurred during such fiscal
year. If they do know of such a Default or Event of Default, the certificate
shall describe all such Defaults or Events of Default, their status and the
action the Company is taking or proposes to take with respect thereto. The first
certificate to be delivered by the Company pursuant to this Section 4.11 shall
be for the fiscal year ending December 31, 1998.
SECTION 4.12. Reports to Holders.
Whether or not the Company is subject to Section 13(a) or 15(d) of
the Exchange Act, or any successor provisions thereto, the Company will file
with the SEC (if permitted by SEC practice and applicable law and regulations)
the annual reports, quarterly reports and other documents which the Company
would be required to file with the SEC pursuant to such Section 13(a) or 15(d)
(each, an "Exchange Act Report"), or any successor provision thereto, if the
Company were so subject, such documents to be filed with the SEC on or prior to
the respective dates (the "Required Filing Dates") by which the Company would be
required to file such documents if the Company were so subject. If, at any time
prior to the consummation of the Registered Exchange Offer when the Company is
not subject to such Section 13(a) or 15(d), the information which would be
required in an Exchange Act Report is included in a public filing of the Company
under the Securities Act at the applicable Required Filing Date, such public
filing will fulfill the filing requirement with the SEC with respect to the
applicable Exchange Act Report. The Company will also in any event (a) within 15
days after each Required Filing Date (whether or not permitted or required to be
filed with the SEC) (i) transmit (or cause to be transmitted) by mail to all
Holders, as their names and addresses appear in the register of the Securities,
without cost to such Holders, and (ii) file with the Trustee, copies of the
annual reports, quarterly reports and other documents which the Company is
required to file with the SEC pursuant to the preceding sentence, or, if such
filing is not so permitted (or, prior to the consummation of the Registered
Exchange Offer, when the Company is not subject to Section 13(a) or 15(d) of the
Exchange Act), information and data of a similar nature, and (b) if,
notwithstanding the preceding sentence, filing such documents by the Company
with the SEC is not permitted by SEC practice or applicable law or regulations,
promptly upon written request supply copies of such documents to any Holder. In
addition, for so long as any Securities remain outstanding, the Company will
furnish to the Holders 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, and, to any beneficial holder of
Securities, if not obtainable from the SEC, information of the type that would
be filed with the SEC pursuant to the foregoing provisions, upon the request of
any such Holder.
SECTION 4.13. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so)
that it shall not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law, which would prohibit or forgive the Company from paying
all or any portion of the Accreted Value or principal of and/or interest, if
any, on the Securities as contemplated herein,
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wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) the Company hereby expressly waives all benefit or advantage of
any such law, and covenants that it shall not 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 had been enacted.
SECTION 4.14. Change of Control.
(a) Following the occurrence of a Change of Control, the Company
shall notify Holders of the Securities of such occurrence in the manner
prescribed by this Indenture and shall make an offer to purchase (the "Change of
Control Offer"), on a business day (the "Change of Control Offer Date") not
later than 60 days following the Change of Control Date, all Securities then
outstanding at a purchase price equal to 101% of the Accreted Value thereof,
plus accrued and unpaid interest, if any, to the date of purchase. Each Holder
shall be entitled to tender all or any portion of the securities owned by such
Holder pursuant to the Offer to Purchase, subject to the requirement that any
portion of a Security tendered must be tendered in an integral multiple of
$1,000 principal amount at maturity.
(b) Notice of a Change of Control Offer shall be given to Holders of
the Securities, not less than 25 days nor more than 45 days before the date of
purchase. The Company's obligations may be satisfied if a third party makes the
Change of Control Offer in the manner, at the times and otherwise in compliance
with the requirements applicable to a Change of Control Offer made by the
Company and purchases all Securities validly tendered and not withdrawn under
such Change of Control Offer.
(c) On or prior to the Purchase Date specified in the Offer to
Purchase, the Company shall (i) accept for payment all Securities or portions
thereof validly tendered pursuant to the Offer, (ii) deposit with the Paying
Agent or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 2.04, money sufficient to pay the Purchase Price
of all Securities or portions thereof so accepted and (iii) deliver or cause to
be delivered to the Trustee for cancellation all Securities so accepted together
with an Officers' Certificate stating the Securities or portions thereof
accepted for payment by the Company. The Paying Agent (or the Company, if so
acting) shall promptly mail or deliver to Holders of Securities so accepted,
payment in an amount equal to the Purchase Price for such Securities, and the
Trustee shall promptly authenticate and mail or deliver to each Holder of
Securities a new Security or Securities equal in principal amount at maturity to
any unpurchased portion of the Security surrendered as requested by the Holder.
Any Security not accepted for payment shall be promptly mailed or delivered by
the Company to the Holder thereof. The Company shall publicly announce the
results of the Offer on or as soon as practicable after the Purchase Date.
(d) If the Company makes a Change of Control Offer, the Company
shall comply with all applicable tender offer laws and regulations, including,
to the extent applicable, Section 14(e) and Rule 14e-1 under the Exchange Act,
and any other applicable federal or state securities laws and regulations and
any applicable requirements of any securities exchange on which the Securities
are listed, and any violation of the provisions of this Indenture relating to
such Change of Control Offer occurring as a result of such compliance shall not
be deemed an Event of Default or an event that, with the passing of time or
giving of notice, or both, would constitute an Event of Default.
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SECTION 4.15. Limitation on the Designation of Unrestricted Subsidiaries.
The Company may designate after the Issue Date any Subsidiary of the
Company as an "Unrestricted Subsidiary" under this Indenture (a "Designation")
only if:
(i) no Default has occurred and is continuing at the time of or
after giving effect to such Designation;
(ii) at the time of and after giving effect to such Designation, the
Company could incur $1.00 of additional Indebtedness under the
Consolidated Operating Cash Flow Ratio described under Section 4.04;
(iii) the Company would be permitted to make an Investment (other
than a Permitted Investment) at the time of such Designation (assuming the
effectiveness of such Designation) pursuant to the first paragraph of
Section 4.06 in an amount (the "Designation Amount") equal to the Fair
Market Value of the Company's aggregate Investment in such Subsidiary on
such date; and
(iv) such Designation would not relate to all or substantially all
of the assets of the Company and the Restricted Subsidiaries (determined
on a consolidated basis).
Notwithstanding the foregoing provisions of this covenant, the
Company shall be permitted to designate any Subsidiary which owns only Equity
Interests of Laser Industries Limited (or the securities of ESC Medical Systems
Ltd. receivable upon exchange thereof) to be an Unrestricted Subsidiary and the
Designation Amount with respect thereto shall be zero. Neither the Company nor
any Restricted Subsidiary shall at any time (x) provide credit support for,
subject any of its property or assets (other than the Equity Interests of any
Unrestricted Subsidiary) to the satisfaction of, or guaranty, any Indebtedness
of any Unrestricted Subsidiary (including any undertaking, agreement or
instrument evidencing such Indebtedness), (y) be directly or indirectly liable
for any Indebtedness of any Unrestricted Subsidiary or (z) be directly or
indirectly liable for any Indebtedness which provides that the Holder thereof
may (upon notice, lapse of time or both) declare a default thereon or cause the
payment thereof to be accelerated or payable prior to its final scheduled
maturity upon the occurrence of a default with respect to any Indebtedness of
any Unrestricted Subsidiary, except for any non-recourse guaranty given solely
to support the pledge by the Company or any Restricted Subsidiary of the capital
stock of any Unrestricted Subsidiary.
The Company may revoke any Designation of a Subsidiary as an
Unrestricted Subsidiary (a "Revocation") if: (i) no Default has occurred and is
continuing at the time of and after giving effect to such Revocation; (ii) all
Liens and Indebtedness of such Unrestricted Subsidiary outstanding immediately
following such Revocation would, if incurred at such time, have been permitted
to be incurred; and (iii) any transaction (or series of related transactions)
between such Subsidiary and any of its Affiliates that occurred while such
Subsidiary was an Unrestricted Subsidiary would be permitted under Section 4.03
as if such transaction (or series of related transactions) had occurred at the
time of such Revocation.
SECTION 4.16. Limitations on Dividends and Other Payment Restrictions Affecting
Restricted Subsidiaries.
The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise enter into or cause
to become effective any consensual encumbrance or consensual restriction of any
kind on the ability of any Restricted Subsidiary to (a) pay dividends, in cash
or otherwise, or make any other distributions on its Equity Interests or any
other interest or participation in, or measured by, its profits owned by the
Company or any Restricted Subsidiary, (b) pay any Indebtedness owed to the
Company
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or a Restricted Subsidiary, (c) make any Investment in the Company or any
Restricted Subsidiary or (d) transfer any of its property or assets to the
Company or to any Restricted Subsidiary, except for such encumbrances or
restrictions existing under or by reason of (i) any agreement of the Company or
a Restricted Subsidiary existing on the Issue Date, in each case as in effect on
the Issue Date, and any amendments, restatements, renewals, replacements or
refinancings thereof (including with respect to any Indebtedness outstanding on
the Issue Date and any commitment to provide Indebtedness outstanding on the
Issue Date); provided, however, that any such amendment, restatement, renewal,
replacement or refinancing is no more restrictive in the aggregate with respect
to such encumbrances or restrictions than those contained in the agreement being
amended, restated, renewed, replaced or refinanced; (ii) applicable law; (iii)
any agreement of a Person acquired by the Company or any Restricted Subsidiary
as in effect at the time of such acquisition (except to the extent Indebtedness
was incurred by such Person in connection with, as a result of or in
contemplation of such acquisition) and any amendments, extensions, renewals,
replacements or refinancings thereof which are no more restrictive than those in
effect at the time of acquisition; provided, further, however, that such
encumbrances and restrictions are not applicable to any Restricted Subsidiary,
or the properties or assets of any Restricted Subsidiary, other than the
acquired Person; (iv) customary non-assignment provisions in leases, licenses or
similar agreements entered into in the ordinary course of business; (v) Purchase
Money Indebtedness that only imposes encumbrances and restrictions on the
property or Person acquired or on the stock or assets of a Restricted Subsidiary
which owns only the property or Person acquired; (vi) any agreement for the sale
or disposition of the Equity Interests or assets of any Restricted Subsidiary;
provided, further, however, that such encumbrances and restrictions described in
this clause (vi) are only applicable to such Restricted Subsidiary or assets, as
applicable, and any such sale or disposition is made in compliance with Section
4.05 to the extent applicable thereto; (vii) refinancing Indebtedness permitted
under clause (f) of the second paragraph of Section 4.04; provided, further,
however, that such encumbrances and restrictions contained in the agreements
governing such Indebtedness are no more restrictive in the aggregate than those
contained in the agreements governing the Indebtedness being refinanced
immediately prior to such refinancing; (viii) this Indenture; (ix) any agreement
governing Indebtedness of a Restricted Subsidiary incurred by such Restricted
Subsidiary in connection with an Acquisition or the transaction pursuant to
which it became a Restricted Subsidiary; provided, further, however, that in
calculating Consolidated Net Income for any purpose under this Indenture
(including for the purpose of determining whether such Indebtedness of such
Restricted Subsidiary can be incurred), the net income of such Restricted
Subsidiary shall be excluded from Consolidated Net Income except to the extent
such net income would be permitted to be distributed to the Company or another
Restricted Subsidiary pursuant to the terms of the agreement governing such
Indebtedness; or (x) contained in any other indenture governing debt securities
that are no more restrictive than those contained in this Indenture.
SECTION 4.17. Limitation on the Sale or Issuance of Preferred Equity Interests
of Restricted Subsidiaries.
The Company shall not sell any Preferred Equity Interest of a
Restricted Subsidiary, and shall not cause or permit any Restricted Subsidiary
to issue any of its Preferred Equity Interests or sell any Preferred Equity
Interests of another Restricted Subsidiary (other than to the Company or to a
Wholly Owned Restricted Subsidiary), unless the Company would be permitted to
incur $1.00 of Indebtedness (other than Permitted Indebtedness) under Section
4.04.
SECTION 4.18. Limitation on Liens.
The Company shall not, directly or indirectly, Incur or suffer to
exist any Liens of any kind against or upon any of its properties or assets now
owned or hereafter acquired, or any proceeds therefrom or any income or profits
therefrom, to secure any Indebtedness unless effective provision is made
contemporane-
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ously therewith to secure the Securities and all other amounts due under this
Indenture, equally and ratably with such Indebtedness (or, in the event that
such Indebtedness is subordinated in right of payment to the Securities, prior
to such Indebtedness) with a Lien on the same properties and assets securing
such Indebtedness for so long as such Indebtedness is secured by such Lien,
except for Permitted Liens.
SECTION 4.19. Limitation on Status as Investment Company.
The Company shall not, and shall not permit any of the Restricted
Subsidiaries or controlled Affiliates to, conduct its business in a fashion that
would cause the Company to be required to register as an "investment company"
(as that term is defined in the Investment Company Act), or otherwise become
subject to regulation under the Investment Company Act. For purposes of
establishing the Company's compliance with this provision, any exemption which
is or would become available under Section 3(c)(1) or Section 3(c)(7) of the
Investment Company Act will be disregarded.
SECTION 4.20. Calculation of Original Issue Discount.
The Company shall file with the Trustee promptly at the end of each
calendar year (i) a written notice specifying the amount of original issue
discount (including daily rates and accrual periods) accrued on outstanding
Securities as of the end of such year and (ii) such other specific information
relating to such original issue discount as may then be relevant under the
Internal Revenue Code of 1986, as amended from time to time.
ARTICLE FIVE
MERGERS; SUCCESSORS
SECTION 5.01. Mergers, Sale of Assets, etc.
The Company shall not consolidate with or merge with or into
(whether or not the Company is the Surviving Person) any other entity and the
Company shall not and shall not cause or permit any Restricted Subsidiary to,
sell, convey, assign, transfer, lease or otherwise dispose of all or
substantially all of the Company's and the Restricted Subsidiaries' properties
and assets (determined on a consolidated basis for the Company and the
Restricted Subsidiaries) to any entity in a single transaction or series of
related transactions, unless: (i) either (x) the Company shall be the Surviving
Person or (y) the Surviving Person (if other than the Company) shall be a
corporation organized and validly existing under the laws of the United States
of America or any State thereof or the District of Columbia, and shall, in any
such case, expressly assume by a supplemental indenture, the due and punctual
payment of the principal of, premium, if any, and interest on the Securities and
the performance and observance of every covenant of this Indenture and the
Exchange and Registration Rights Agreement to be performed or observed on the
part of the Company; (ii) immediately thereafter, no Default has occurred and is
continuing; and (iii) immediately after giving effect to any such transaction
including the Incurrence by the Company or any Restricted Subsidiary, directly
or indirectly, of additional Indebtedness (and treating any Indebtedness not
previously an obligation of the Company or any Restricted Subsidiary in
connection with or as a result of such transaction as having been Incurred at
the time of such transaction), the Surviving Person could Incur, on a pro forma
basis after giving effect to such transaction as if it had occurred at the
beginning of the four quarter period immediately preceding such transaction for
which consolidated financial statements of the Company are available, at least
$1.00 of additional Indebtedness (other
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than Permitted Indebtedness) under the Consolidated Operating Cash Flow Ratio of
the first paragraph of Section 4.04.
Notwithstanding the foregoing clause (iii) of the immediately
preceding paragraph, any Restricted Subsidiary may consolidate with, merge into
or transfer all or part of its properties and assets to the Company or to a
Restricted Subsidiary.
For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise, in a single transaction or series of transactions) of all or
substantially all the properties and assets of one or more Restricted
Subsidiaries the Equity Interests of which constitute all or substantially all
the properties and assets of the Company shall be deemed to be the transfer of
all or substantially all the properties and assets of the Company.
In connection with any consolidation, merger, transfer, lease,
assignment or other disposition contemplated hereby, the Company shall deliver,
or cause to be delivered, to the Trustee, in form and substance reasonably
satisfactory to the Trustee, an Officers' Certificate and an Opinion of Counsel,
each stating that such consolidation, merger, transfer, lease, assignment or
other disposition and the supplemental indentures in respect thereof comply with
the requirements under this Indenture.
SECTION 5.02. Successor Substituted.
In the event of any transaction (other than a lease) described in
and complying with the conditions listed in Section 5.01 in which the Company is
not the Successor Company and the Successor Company is to assume all the
Obligations of the Company under the Securities, this Indenture and the Exchange
and Registration Rights Agreement pursuant to a supplemental indenture, such
Successor Company shall succeed to, and be substituted for, and may exercise
every right and power of, the Company and the Company shall be discharged and
released from its Obligations under this Indenture and the Securities.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
Each of the following shall be an "Event of Default" for purposes of
this Indenture:
(i) a default in the payment of the Accreted Value or principal, as
the case may be, of or premium, if any, on the Securities when due, at
maturity, upon redemption or otherwise (including pursuant to a Change of
Control Offer or an Asset Sale Offer);
(ii) a default in the payment of interest on the Securities when it
becomes due and payable and the continuance of such a default for a period
of 30 days or more;
(iii) (A) the failure to comply with the covenant described under
Section 5.01 or (B) the failure to comply with any other covenant or other
term in this Indenture (other than those specified in clause (i) or (ii))
immediately above and such default, in the case of this clause (iii),
continues for a period of 45 days after notice to the Company thereof by
the Trustee or to the Company and the
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Trustee by Holders of at least 25% of the aggregate principal amount at
maturity of the Securities then outstanding;
(iv) (A) the failure to pay, following any applicable grace period,
any installment of principal due (whether at maturity or otherwise) under
one or more classes or issues of Indebtedness of the Company or any
Restricted Subsidiary in an aggregate principal amount of $5.0 million or
more or (B) the failure by the Company or any Restricted Subsidiary to
perform any other term, covenant, condition or provision of one or more
classes or issues of Indebtedness in an aggregate principal amount of the
equivalent of $5.0 million or more and, in the case of this clause (B),
such failure results in an acceleration of the maturity thereof;
(v) one or more final non-appealable judgments, orders or decrees
for the payment of money shall be entered in an amount or amounts of $5.0
million or more, either individually or in the aggregate, against the
Company or any Restricted Subsidiary or any of their respective properties
and shall not be discharged or satisfied within 45 days;
(vi) the Company or any Significant Restricted Subsidiary pursuant
to or within the meaning of any Bankruptcy Law: (a) admits in writing its
inability to pay its debts generally as they become due; (b) commences a
voluntary case or proceeding; (c) consents to the entry of an order for
relief against it in an involuntary case or proceeding; (d) consents or
acquiesces in the institution of a bankruptcy or insolvency proceeding
against it; (e) consents to the appointment of a Custodian of it or for
all or substantially all of its property; or (f) makes a general
assignment for the benefit of its creditors, or any of them takes any
action to authorize or effect any of the foregoing; or
(vii) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that: (a) is for relief against the Company or
any Significant Restricted Subsidiary in an involuntary case or
proceeding; (b) appoints a Custodian of the Company or any Significant
Restricted Subsidiary for all or substantially all of its property; or (c)
orders the liquidation of the Company or any Significant Restricted
Subsidiary; and in each case the order or decree remains unstayed and in
effect for 60 days; provided, however, that if the entry of such order or
decree is appealed and dismissed on appeal, then the Event of Default
hereunder by reason of the entry of such order or decree shall be deemed
to have been cured.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
federal, state or foreign law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, sequestrator or similar
official under any Bankruptcy Law.
SECTION 6.02. Acceleration.
If an Event of Default with respect to the Securities (other than an
Event of Default specified in clause (vi) or (vii) of Section 6.01 with respect
to the Company) occurs and is continuing, the Trustee or the Holders of at least
25% in aggregate principal amount at maturity of the outstanding Securities by
notice in writing to the Company (and to the Trustee if given by the Holders)
may declare the Default Amount on all outstanding Securities to be due and
payable immediately and, upon any such declaration, such Accreted Value or
principal (and premium, if any) and accrued interest, if any, notwithstanding
anything contained in this Indenture or the Securities to the contrary, shall
become immediately due and payable.
If an Event of Default specified in clause (vi) and (vii) of Section
6.01 with respect to the Company occurs and is continuing, then the Default
Amount on all outstanding Securities shall ipso facto become and be immediately
due and payable without any declaration or other act on the part of the Trustee
or any Holder.
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After a declaration of acceleration, but before a judgment or decree
of the money due in respect of the Securities has been obtained, the Holders of
not less than a majority in aggregate principal amount at maturity of the
Securities then outstanding by written notice to the Trustee may annul an
acceleration and its consequences if all existing Events of Default (other than
the nonpayment of Accreted Value or principal of and interest, if any, on the
Securities which has become due solely by virtue of such acceleration) have been
cured or waived and if the annulment would not conflict with any judgment or
decree. No such annulment shall affect any subsequent Default or impair any
right consequent thereto.
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of Accreted Value or principal of or interest on the Securities or to
enforce the performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Holder in exercising any right or remedy
maturing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
SECTION 6.04. Waiver of Past Default.
Subject to Sections 2.09, 6.07 and 10.02, prior to the declaration
of acceleration of the Securities, the Holders of not less than a majority in
aggregate principal amount at maturity of the outstanding Securities by written
notice to the Trustee may waive an existing Default or Event of Default and its
consequences, except a Default in the payment of Accreted Value or principal of
or interest on any Security as specified in clauses (i) and (ii) of Section 6.01
or a Default in respect of any term or provision of this Indenture that may not
be amended or modified without the consent of each Holder affected as provided
in Section 10.02. The Company shall deliver to the Trustee an Officers'
Certificate stating that the requisite percentage of Holders have consented to
such waiver and attaching copies of such consents. In case of any such waiver,
the Company, the Trustee and the Holders shall be restored to their former
positions and rights hereunder and under the Securities, respectively. This
paragraph of this Section 6.04 shall be in lieu of ss. 316(a)(1)(B) of the TIA
and such ss. 316(a)(1)(B) of the TIA is hereby expressly excluded from this
Indenture and the Securities, as permitted by the TIA.
Upon any such waiver, such Default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured and not to have occurred
for every purpose of this Indenture and the Securities, but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereon.
SECTION 6.05. Control by Majority.
Subject to Section 2.09, the Holders of a majority in principal
amount at maturity of the outstanding Securities may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on it. However, the Trustee may refuse
to follow any direction that conflicts with law or this Indenture that the
Trustee determines may be unduly prejudicial to the rights of another Holder, or
that may involve the Trustee in personal liability; provided, however, that the
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such
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direction. In the event the Trustee takes any action or follows any direction
pursuant to this Indenture, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against any loss or expense caused by
taking such action or following such direction. This Section 6.05 shall be in
lieu of ss. 316(a)(1)(A) of the TIA, and such ss. 316(a)(1)(A) of the TIA is
hereby expressly excluded from this Indenture and the Securities, as permitted
by the TIA.
SECTION 6.06. Limitation on Suits.
A Holder may not pursue any remedy with respect to this Indenture or
the Securities unless:
(i) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(ii) the Holders of at least 25% in aggregate principal amount at
maturity of the outstanding Securities make a written request to the
Trustee to pursue a remedy as Trustee;
(iii) such Holder or Holders offer and, if requested, provide to the
Trustee reasonable indemnity satisfactory to the Trustee against any loss,
liability or expense;
(iv) 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 reasonable indemnity; and
(v) during such 60-day period, the Holders of a majority in
principal amount at maturity of the outstanding Securities do not give the
Trustee a direction which, in the opinion of the Trustee, is inconsistent
with the request.
A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over such other Holder.
SECTION 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of Accreted Value or principal of and premium, if
any, or interest on a Security, on or after the respective due dates expressed
in the Security, or to bring suit for the enforcement of any such payment on or
after such respective dates, shall not be impaired or affected without the
consent of the Holder.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default in payment of Accreted Value or principal or
interest specified in Section 6.01(i) or (ii) occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company or any other obligor on the Securities for the whole amount
of Accreted Value or principal and accrued interest remaining unpaid, together
with interest overdue on Accreted Value or principal and to the extent that
payment of such interest is lawful, interest on overdue installments of
interest, in each case at the rate per annum borne by the Securities 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 may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in
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any judicial proceedings relative to the Company (or any other obligor upon the
Securities), their respective creditors or their respective property and shall
be entitled and empowered to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same, and any
Custodian in any such judicial proceedings 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 agent and counsel, and any other
amounts due the Trustee under Section 7.07. 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 Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 6.10. Priorities.
If the Trustee collects any money or property pursuant to this
Article Six, it shall pay out the money or property in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Holders for amounts due and unpaid on the Securities for
Accreted Value or principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for Accreted Value or principal and interest, respectively; and
Third: to the Company.
The Trustee, upon prior written notice to the Company, may fix a
record date and payment date for any payment to the Holders pursuant to this
Section 6.10.
SECTION 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as 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 and expenses, 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 6.11 shall not apply to a suit by the Trustee, a suit by
a Holder or group of Holders of more than 10% in aggregate principal amount at
maturity of the outstanding Securities, or to any suit instituted by any Holder
for the enforcement or the payment of the Accreted Value or principal or
interest on any Securities on or after the respective due dates expressed in the
Security.
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ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If a 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 their exercise as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of a Default:
(1) The Trustee shall not be liable except for the performance of
such duties as are specifically set forth herein; and
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions
conforming to the requirements of this Indenture; provided, however, that
in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall examine such certificates and opinions to determine whether
or not they conform to the requirements of this Indenture.
(c) The Trustee shall not be relieved from liability for its own
grossly negligent action, its own grossly negligent failure to act, or its own
grossly willful misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section 7.01;
(2) The Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer, unless it is proved that the Trustee was
grossly negligent in ascertaining the pertinent facts; and
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or to take or omit to take any action
under this Indenture or take any action at the request or direction of Holders
if it shall have reasonable grounds for believing that repayment of such funds
is not assured to it or it does not receive from such Holders an indemnity
satisfactory to it in its sole discretion against such risk, liability, loss,
fee or expense which might be incurred by it in compliance with such request or
direction.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.01.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
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SECTION 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may rely conclusively on 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 and/or an Opinion of Counsel, which shall conform to
the provisions of Section 13.05. The Trustee shall not be liable for any action
it takes or omits to take in good faith in reliance on such certificate or
opinion.
(c) The Trustee may act through attorneys and agents of its
selection and shall not be responsible for the misconduct or negligence of any
agent or attorney (other than an agent who is an employee of the Trustee)
appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it reasonably believes to be authorized or within
its rights or powers.
(e) The Trustee may consult with counsel of its selection and the
advice or opinion of such counsel as to matters of law shall be full and
complete authorization and protection from liability in respect of any action
taken, omitted or suffered by it hereunder in good faith and in accordance with
the advice or opinion of such counsel.
(f) Any request or direction of the Company mentioned herein shall
be sufficiently evidenced by an Officers' Certificate and any resolution of the
Board of Directors may be sufficiently evidenced by a Board Resolution.
(g) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction.
(h) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document, but
the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company, personally or by agent
or attorney.
(i) The Trustee shall not be deemed to have notice of any Event of
Default unless a Trust Officer of the Trustee has actual knowledge thereof or
unless the Trustee shall have received written notice thereof at the Corporate
Trust Office of the Trustee, and such notice references the Securities and this
Indenture.
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SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee, subject to
Section 7.10 hereof. Any Agent may do the same with like rights. However, the
Trustee is subject to Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Securities, it shall not
be accountable for the Company's use of the proceeds from the Securities, and it
shall not be responsible for any statement of the Company in this Indenture or
any document issued in connection with the sale of Securities or any statement
in the Securities other than the Trustee's certificate of authentication.
SECTION 7.05. Notice of Defaults.
If a Default or an Event of Default occurs and is continuing and the
Trustee knows of such Defaults or Events of Default, the Trustee shall mail to
each Holder notice of the Default or Event of Default within 30 days after the
occurrence thereof. Except in the case of a Default or an Event of Default in
payment of Accreted Value or principal of or interest on any Security or a
Default or Event of Default in complying with Section 5.01, the Trustee may
withhold the notice if and so long as a committee of its Trust Officers in good
faith determines that withholding the notice is in the interest of the Holders.
This Section 7.05 shall be in lieu of the proviso to ss. 315(b) of the TIA and
such proviso to ss. 315(b) of the TIA is hereby expressly excluded from this
Indenture and the Securities, as permitted by the TIA.
SECTION 7.06. Reports by Trustee to Holders.
If required by TIA ss. 313(a), within 60 days after each May 15
beginning with the May 15 following the date of this Indenture, the Trustee
shall mail to each Holder a report dated as of such May 15 that complies with
TIA ss. 313(a). The Trustee also shall comply with TIA ss. 313(b), (c) and (d).
A copy of each such report at the time of its mailing to the Holders
shall be filed with the SEC and each stock exchange, if any, on which the
Securities are listed.
The Company shall promptly notify the Trustee in writing if the
Securities become listed on any stock exchange or of any delisting thereof.
SECTION 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time such
compensation as the Company and the Trustee shall from time to time agree in
writing for its services. The Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable disbursements, expenses
and advances (including fees, disbursements and expenses of its agents and
counsel) incurred or made by it in addition to the compensation for its services
except any such disbursements, expenses and advances as may be attributable to
the Trustee's gross negligence or bad faith. Such expenses shall include the
reasonable compensation, disbursements and expenses of the
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Trustee's agents, accountants, experts and counsel and any taxes or other
expenses incurred by a trust created pursuant to Section 9.01 hereof.
The Company shall indemnify the Trustee for, and hold it harmless
against any and all loss, damage, claims, liability or expense, including taxes
(other than franchise taxes imposed on the Trustee and taxes based upon,
measured by or determined by the income of the Trustee), arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of its
powers or duties hereunder, except to the extent that such loss, damage, claim,
liability or expense is due to its own gross negligence or bad faith. The
Trustee shall notify the Company promptly of any claim asserted against the
Trustee for which it may seek indemnity. However, the failure by the Trustee to
so notify the Company shall not relieve the Company of its obligations
hereunder. The Company shall defend the claim and the Trustee shall cooperate in
the defense (and may employ its own counsel) at the Company's expense; provided,
however, that the Company's reimbursement obligation with respect to counsel
employed by the Trustee will be limited to the reasonable fees and expenses of
such counsel.
The Company need not pay for any settlement made without its written
consent, which consent shall not be unreasonably withheld. The Company need not
reimburse any expense or indemnify against any loss or liability incurred by the
Trustee as a result of the violation of this Indenture by the Trustee.
To secure the Company's payment obligations in this Section 7.07,
the Trustee shall have a Lien prior to the Securities against all money or
property held or collected by the Trustee, in its capacity as Trustee, except
money or property held in trust to pay principal of or interest on particular
Securities or the Purchase Price or redemption price of any Securities to be
purchased pursuant to an Offer to Purchase or redeemed.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(vi) or (vii) occurs, the expenses
(including the reasonable fees and expenses of its agents and counsel) and the
compensation for the services shall be preferred over the status of the Holders
in a proceeding under any Bankruptcy Law and are intended to constitute expenses
of administration under any Bankruptcy Law. The Company's obligations under this
Section 7.07 and any claim arising hereunder shall survive the resignation or
removal of any Trustee, the discharge of the Company's obligations pursuant to
Article Nine and any rejection or termination under any Bankruptcy Law.
SECTION 7.08. Replacement of Trustee.
The Trustee may resign at any time by so notifying the Company in
writing. The Holders of a majority in principal amount of the outstanding
Securities may remove the Trustee by so notifying the Trustee and the Company in
writing and may appoint a successor Trustee with the Company's consent. The
Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent under any
Bankruptcy Law;
(c) a custodian or other public officer takes charge of the Trustee
or its property; or
(d) the Trustee becomes incapable of acting.
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If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount at maturity of the Securities may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. As promptly as
practicable after that, the retiring Trustee shall transfer, after payment of
all sums then owing to the Trustee pursuant to Section 7.07, all property held
by it as Trustee to the successor Trustee, subject to the Lien provided in
Section 7.07, the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have the rights, powers and duties of
the Trustee under this Indenture. A successor Trustee shall mail notice of its
succession to each Holder.
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 at least 10% in principal amount at maturity of the outstanding
Securities may petition, at the expense of the Company, any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation or banking corporation, the resulting, surviving or transferee
corporation or banking corporation without any further act shall be the
successor Trustee.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee which shall be eligible
to act as Trustee under TIA ss.ss. 310(a)(1) and 310(a)(2). The Trustee shall
have a combined capital and surplus of at least $50,000,000 as set forth in its
most recent published annual report of condition. If the Trustee has or shall
acquire any "conflicting interest" within the meaning of TIA ss. 310(b), the
Trustee and the Company shall comply with the provisions of TIA ss. 310(b);
provided, however, that there shall be excluded from the operation of TIA ss.
310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA ss.
310(b)(1) are met. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 7.10, the Trustee shall resign
immediately in the manner and with the effect hereinbefore specified in this
Article Seven.
SECTION 7.11. Preferential Collection of Claims Against the Company.
The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
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ARTICLE EIGHT
[INTENTIONALLY OMITTED]
ARTICLE NINE
DISCHARGE OF INDENTURE
SECTION 9.01. Termination of the Company's Obligations.
The Company may terminate its substantive obligations in respect of
the Securities by delivering all outstanding Securities to the Trustee for
cancellation and paying all sums payable by it on account of principal of and
interest on all Securities or otherwise. In addition to the foregoing, the
Company may, provided that no Default or Event of Default has occurred and is
continuing or would arise therefrom (or, with respect to a Default or Event of
Default specified in Section 6.01(vi) or (vii), occurs at any time on or prior
to the 91st calendar day after the date of such deposit (it being understood
that this condition shall not be deemed satisfied until after such 91st day)
under this Indenture), terminate its substantive obligations in respect of
Article Four (other than Sections 4.01, 4.02, 4.07, 4.09 and 4.11) and Article
Five hereof and any Event of Default specified in Section 6.01 (iii), (iv) or
(v) by (i) depositing with the Trustee, under the terms of an irrevocable trust
agreement, money or United States Government Obligations sufficient (without
reinvestment) to pay all remaining Indebtedness on the Securities, (ii)
delivering to the Trustee either an Opinion of Counsel or a ruling directed to
the Trustee from the Internal Revenue Service to the effect that the Holders
will not recognize income, gain or loss for federal income tax purposes as a
result of such deposit and termination of obligations, (iii) delivering to the
Trustee an Opinion of Counsel to the effect that the Company's exercise of the
option under this Section 9.01 will not result in any of the Company, the
Trustee or the trust created by the Company's deposit of funds pursuant to this
provision becoming or being deemed to be an "investment company" under the
Investment Company Act, and (iv) delivering to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating compliance with all
conditions precedent provided for herein. In addition, the Company may, provided
that no Default or Event of Default has occurred and is continuing or would
arise therefrom (or, with respect to a Default or Event of Default specified in
Section 6.01(vi) or (vii), occurs at any time on or prior to the 91st calendar
day after the date of such deposit (it being understood that this condition
shall not be deemed satisfied until after such 91st day) under this Indenture),
terminate its substantive obligations in respect of the Securities (including
its obligations to pay the principal of and interest on the Securities) by (i)
depositing with the Trustee, under the terms of an irrevocable trust agreement,
money or United States Government Obligations sufficient (without reinvestment)
to pay all remaining Indebtedness on the Securities, (ii) delivering to the
Trustee either a ruling directed to the Trustee from the Internal Revenue
Service to the effect that the Holders of the Securities will not recognize
income, gain or loss for federal income tax purposes as a result of such deposit
and termination of obligations or an Opinion of Counsel addressed to the Trustee
based upon such a ruling or based on a change in the applicable Federal tax law
since the date of this Indenture to such effect, (iii) delivering to the Trustee
an Opinion of Counsel to the effect that the exercise of the option under this
Section 9.01 will not result in any of the Company, the Trustee or the trust
created by the deposit of funds pursuant to this provision becoming or being
deemed to be an "investment company" under the Investment Company Act and (iv)
delivering to the Trustee an Officers' Certificate and an Opinion of Counsel
each stating compliance with all conditions precedent provided for herein.
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Notwithstanding the foregoing paragraph, the Company's obligations
in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.10, 2.12, 2.13 and 4.01 (but
not with respect to termination of substantive obligations pursuant to the third
sentence of the foregoing paragraph), 4.02, 7.07, 7.08, 9.03 and 9.04 shall
survive until the Securities are no longer outstanding. Thereafter the Company's
obligations in Sections 7.07, 9.03 and 9.04 shall survive.
After such delivery or irrevocable deposit and delivery of an
Officers' Certificate and Opinion of Counsel, the Trustee upon request shall
acknowledge in writing the discharge of the Company's obligations under the
Securities and this Indenture except for those surviving obligations specified
above.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the United States Government
Obligations deposited pursuant to this Section 9.01 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 outstanding Securities.
SECTION 9.02. Application of Trust Money.
The Trustee shall hold in trust money or United States Government
Obligations deposited with it pursuant to Section 9.01, and shall apply the
deposited money and the money from United States Government Obligations in
accordance with this Indenture solely to the payment of principal of and
interest on the Securities.
SECTION 9.03. Repayment to the Company.
Subject to Sections 7.07 and 9.01, the Trustee shall promptly pay to
the Company upon written request any money held by it which exceeds the amount
required to make payments under this Indenture. The Trustee shall pay to the
Company upon written request any money held by it for the payment of principal
or interest that remains unclaimed for two years; provided, however, that the
Trustee before being required to make any payment may at the expense of the
Company cause to be published once in a newspaper of general circulation in The
City of New York or mail to each Holder entitled to such money notice that such
money remains unclaimed and that, after a date specified therein which shall be
at least 30 days from the date of such publication or mailing, any unclaimed
balance of such money then remaining shall be repaid to the Company. After
payment to the Company, Holders entitled to money must look to the Company for
payment as general creditors unless an applicable abandoned property law
designates another person and all liability of the Trustee or Paying Agent with
respect to such money shall thereupon cease.
SECTION 9.04. Reinstatement.
If the Trustee is unable to apply any money or United States
Government Obligations in accordance with Section 9.01 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture and the Securities shall be revived
and reinstated as though no deposit had occurred pursuant to Section 9.01 until
such time as the Trustee is permitted to apply all such money or United States
Government Obligations in accordance with Section 9.01; provided, however, that
if the Company has made any payment of interest on or principal of any
Securities because of the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Securities to receive such
payment from the money or United States Government Obligations held by the
Trustee.
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ARTICLE TEN
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.01. Without Consent of Holders.
The Company, when authorized by a resolution of their respective
Boards of Directors, and the Trustee may amend or supplement this Indenture or
the Securities without notice to or consent of any Holder:
(a) to cure any ambiguity, defect or inconsistency; provided,
however, that such amendment or supplement does not adversely affect the
rights of any Holder;
(b) to effect the assumption by a successor Person of all
obligations of the Company under the Securities and this Indenture in
connection with any transaction complying with Article Five of this
Indenture;
(c) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(d) to comply with any requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(e) to make any change that would provide any additional benefit or
rights to the Holders;
(f) to make any other change that does not adversely affect the
rights of any Holder under this Indenture;
(g) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company; or
(h) to secure the Securities pursuant to the requirements of Section
4.18 or otherwise; or
provided, however, that the Company has delivered to the Trustee an Opinion of
Counsel stating that such amendment or supplement complies with the provisions
of this Section 10.01.
SECTION 10.02. With Consent of Holders.
Subject to Section 6.07, the Company, when authorized by a
resolution of its Boards of Directors, and the Trustee may amend or supplement
this Indenture or the Securities with the written consent of the Holders of at
least a majority in principal amount at maturity of the outstanding Securities.
Subject to Section 6.07, the Holders of a majority in principal amount at
maturity of the outstanding Securities may waive compliance by the Company with
any provision of this Indenture or the Securities. However, without the consent
of each Holder affected, an amendment, supplement or waiver, including a waiver
pursuant to Section 6.04, may not:
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(a) change the maturity of the principal of or any installment of
interest on any such Security or alter the optional redemption or
repurchase provisions of any such Security or this Indenture in a manner
adverse to the Holders of the Securities;
(b) reduce the principal amount at maturity or Accreted Value of (or
premium) of any such Security;
(c) reduce the rate of or extend the time for payment of interest on
any such Security;
(d) change the place or currency of payment of principal of (or
premium) or interest on any such Security;
(e) modify any provisions of this Indenture relating to the waiver
of past defaults (other than to add sections to this Indenture or the
Securities subject thereto) or the right of the Holders of the Securities
to institute suit for the enforcement of any payment on or with respect to
any such Security in respect thereof or the modification and amendment
provisions of this Indenture and the Securities (other than to add
sections to this Indenture or the Securities which may not be amended,
supplemented or waived without the consent of each Holder affected);
(f) reduce the percentage of the principal amount at maturity of
outstanding Securities necessary for amendment to or waiver of compliance
with any provision of this Indenture or the Securities or for waiver of
any Default in respect thereof;
(g) waive a Default in the payment of the principal or Accreted
Value of, interest on, or redemption payment with respect to, the
Securities (except a rescission of acceleration of the Securities by the
Holders as provided in this Indenture and a waiver of the payment default
that resulted from such acceleration);
(h) modify the ranking of any Security in any manner adverse to the
Holders of the Securities; or
(i) modify the provisions of any covenant (or the related
definitions) in this Indenture requiring the Company to make an Offer to
Purchase following an event or circumstance which may give rise to the
requirement to make an Offer to Purchase in a manner materially adverse to
the Holders of the Securities affected thereby otherwise than in
accordance with this Indenture.
It shall not be necessary for the consent of the Holders under this
Section 10.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 10.02
becomes effective, the Company shall mail to the Holders 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 amendment, supplement or
waiver.
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SECTION 10.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the Securities
shall comply with the TIA as then in effect.
SECTION 10.04. Revocation and Effect of Consents.
Until an amendment or waiver becomes effective, a consent to it by a
Holder is a continuing consent by the Holder and every subsequent Holder of that
Security or portion of that Security that evidences the same debt as the
consenting Holder's Security, even if notation of the consent is not made on any
Security. Subject to the following paragraph, any such Holder or subsequent
Holder may revoke the consent as to such Holder's Security or portion of such
Security by notice to the Trustee or the Company received before the date on
which the Trustee receives an Officers' Certificate certifying that the Holders
of the requisite principal amount of Securities have consented (and not
theretofore revoked such consent) to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders of Securities entitled to consent to
any amendment, supplement or waiver. If a record date is fixed, then,
notwithstanding the last sentence of the immediately preceding paragraph, those
persons who were Holders of Securities at such record date (or their duly
designated proxies), and only those persons, shall be entitled to consent to
such amendment, supplement or waiver or to revoke any consent previously given,
whether or not such persons continue to be Holders of such Securities after such
record date. No such consent shall be valid or effective for more than 90 days
after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it makes a change described in any of clauses (a)
through (i) of Section 10.02. In that case the amendment, supplement or waiver
shall bind each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security.
SECTION 10.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation on the Security about
the changed terms and return it to the Holder. Alternatively, if the Company or
the Trustee so determine, the Company in exchange for the Security shall issue
and the Trustee shall authenticate a new Security that reflects the changed
terms. Failure to make the appropriate notation or issue a new Security shall
not affect the validity and effect of such amendment, supplement or waiver.
SECTION 10.06. Trustee To Sign Amendments, etc.
The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
any amendment, supplement or waiver authorized pursuant to this Article Ten is
authorized or permitted by this Indenture and that such amendment, supplement or
waiver constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms (subject to customary exceptions). The
Trustee may, but shall not be obligated to, execute any such amendment,
supplement or waiver which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise. In signing any amendment,
supplement or waiver, the Trustee shall be entitled to receive an indemnity
reasonably satisfactory to it.
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ARTICLE ELEVEN
[INTENTIONALLY OMITTED]
ARTICLE TWELVE
[INTENTIONALLY OMITTED]
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls.
This Indenture is subject to the provisions of the TIA that are
required to be a part of this Indenture, and shall, to the extent applicable, be
governed by such provisions. If any provision of this Indenture modifies any TIA
provision that may be so modified, such TIA provision shall be deemed to apply
to this Indenture as so modified. If any provision of this Indenture excludes
any TIA provision that may be so excluded, such TIA provision shall be excluded
from this Indenture.
The provisions of TIA ss.ss. 310 through 317 that impose duties on
any Person (including the provisions automatically deemed included unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
SECTION 13.02. Notices.
Any notice or communication shall be sufficiently given if in
writing and delivered in person, by facsimile and confirmed by overnight
courier, or mailed by first-class mail addressed as follows:
if to Trans-Resources, Inc.:
Nine West 57th Street, 39th Floor
New York, New York 10019
Attention: Chief Financial Officer
Facsimile: (212) 888-3708
Telephone: (212) 888-3044
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with a copy to:
Rubin Baum Levin Constant & Friedman
30 Rockefeller Plaza
New York, New York 10112
Attention: Edward Klimerman, Esq.
Facsimile: (212) 698-7825
Telephone: (212) 698-7700
if to the Trustee:
State Street Bank and Trust Company
61 Broadway, 15th Floor
New York, New York 10006
Attention: Corporate Trust Division
Facsimile: (212) 612-3202
Telephone: (212) 612-3447
Each party by notice to the others may designate additional or
different addresses for subsequent notices or communications.
Any notice or communication mailed, first-class, postage prepaid, to
a Holder including any notice delivered in connection with TIA ss. 310(b), TIA
ss. 313(c), TIA ss. 314(a) and TIA ss. 315(b), shall be mailed to him at his
address as set forth on the Security Register and shall be sufficiently given to
him if so mailed within the time prescribed. To the extent required by the TIA,
any notice or communication shall also be mailed to any Person described in TIA
ss. 313(c).
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. Except for
a notice to the Trustee, which is deemed given only when received, if a notice
or communication is mailed in the manner provided above, it is duly given,
whether or not the addressee receives it.
SECTION 13.03. Communications by Holders with Other Holders.
Holders may communicate pursuant to TIA ss. 312(b) with other
Holders with respect to their rights under this Indenture or the Securities. The
Company, the Trustee, the Registrar and any other person shall have the
protection of TIA ss. 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to
take or refrain from taking any action under this Indenture after the date
hereof, the Company shall furnish to the Trustee at the request of the Trustee:
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(1) an Officers' Certificate in form and substance satisfactory to
the Trustee stating that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with; and
(2) an Opinion of Counsel in form and substance satisfactory to the
Trustee stating that, in the opinion of such counsel, all such conditions
precedent have been complied with.
SECTION 13.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with; provided, however, that
with respect to matters of fact an Opinion of Counsel may rely on an
Officers' Certificate or certificates of public officials.
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules for action by or at a meeting
of Holders. The Paying Agent or Registrar may make reasonable rules for its
functions.
SECTION 13.07. Governing Law.
The laws of the State of New York shall govern this Indenture and
the Securities without regard to principles of conflicts of laws.
SECTION 13.08. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. Each Holder by accepting a
Security waives and releases all such liability.
SECTION 13.09. Successors.
All agreements of a party to this Indenture contained in this
Indenture shall bind such party's successors.
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SECTION 13.10. 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 13.11. Severability.
In case any provision in this Indenture or in the Securities shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby, and a Holder shall have no claim therefor against any party hereto.
SECTION 13.12. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan
or debt agreement. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
SECTION 13.13. Legal Holidays.
If a payment date is a not a Business Day at a place of payment,
payment may be made at that place on the next succeeding Business Day, and no
interest shall accrue for the intervening period.
[Signature Pages Follow]
67
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the date first written above.
TRANS-RESOURCES, INC.
By: /s/ Lester W. Youner
---------------------------------
Name: Lester W. Youner
Title: Vice President and
Chief Financial Officer
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By: /s/ Angelita L. Pena
---------------------------------
Name: Angelita L. Pena
Title: Assistant Vice President
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EXHIBIT A
[FORM OF SERIES A SECURITY]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY
AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY), ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT
THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS
THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL
INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH
AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT
OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR
FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER AND THE
TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES
(D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE
REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION
DATE.
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THIS SECURITY IS ISSUED WITH ORIGINAL ISSUE DISCOUNT
FOR PURPOSES OF SECTION 1271 et seq. OF THE INTERNAL
REVENUE CODE. FOR EACH $1,000 PRINCIPAL AMOUNT AT
MATURITY OF THIS SECURITY, THE ISSUE PRICE IS $558.58
THE ISSUE DATE OF THIS SECURITY IS MARCH 16, 1998
AND THE YIELD TO MATURITY IS 12%.
TRANS-RESOURCES, INC.
12% Senior Discount Note
due March 15, 2008, Series A
CUSIP No.:[ ]
No. [ ] $[ ]
TRANS-RESOURCES, INC., a Delaware corporation (the "Company", which
term includes any successor), for value received promises to pay to [ ] or
registered assigns, the principal sum of [ ] Dollars, on March 15, 2008.
Interest Payment Dates: March 15 and September 15, commencing on
September 15, 2003.
Interest Record Dates: March 1 and September 1.
Reference is made to the further provisions of this Security
contained herein, which will for all purposes have the same effect as if set
forth at this place.
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IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officers.
TRANS-RESOURCES, INC.
By:
---------------------------------
Name:
Title:
By:
---------------------------------
Name:
Title:
Dated: March 16, 1998
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[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 12% Senior Discount Notes due March 15, 2008,
Series A, described in the within-mentioned Indenture.
Dated: March 16, 1998
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
---------------------------------
Authorized Signatory
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(REVERSE OF SECURITY)
TRANS-RESOURCES, INC.
12% Senior Discount Note
due March 15, 2008, Series A
1. Interest.
TRANS-RESOURCES, INC., a Delaware corporation (the "Company"),
promises to pay cash interest on each Interest Payment Date on the principal
amount at maturity of this Security at the rate per annum shown above. Cash
interest on this Security will accrete and compound semi-annually until March
15, 2003. Thereafter, cash interest will accrue at a rate of 12% per annum and
will be payable semi-annually in arrears on each Interest Payment Date. Interest
will be computed on the basis of a 360-day year of twelve 30-day months.
In addition, the Company shall pay interest on overdue Accreted
Value or principal and on overdue installments of interest (without regard to
any applicable grace periods) to the extent lawful from time to time on demand,
in each case at the rate borne by this Security.
2. Method of Payment.
The Company shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of business
on the Interest Record Date immediately preceding the Interest Payment Date even
if the Securities are cancelled on registration of transfer or registration of
exchange after such Interest Record Date. Holders must surrender Securities to a
Paying Agent to collect Accreted Value or principal payments. The Company shall
pay Accreted Value or principal and interest in money of the United States that
at the time of payment is legal tender for payment of public and private debts
("U.S. Legal Tender"). However, the Company may pay Accreted Value or principal
and interest by wire transfer of Federal funds (provided that the Paying Agent
shall have received wire instructions on or prior to the relevant Interest
Record Date), or interest by check payable in such U.S. Legal Tender. The
Company may deliver any such interest payment to the Paying Agent or to a Holder
at the Holder's registered address.
3. Paying Agent and Registrar.
Initially, State Street Bank and Trust Company (the "Trustee") will
act as Paying Agent and Registrar. The Company may change any Paying Agent or
Registrar without notice to the Holders. The Company may, subject to certain
exceptions, act as paying Agent or Registrar.
4. Indenture.
The Company issued the Securities under an Indenture, dated as of
March 16, 1998 (the "Indenture"), between the Company and the Trustee.
Capitalized terms herein are used as defined in the Indenture unless otherwise
defined herein. This Security is one of a duly authorized issue of Securities of
the Company designated as its 12% Senior Discount Notes due 2008, Series A,
issued under the Indenture. The aggregate principal amount at maturity of
Securities which may be issued under the Indenture is limited (except as
otherwise provided in the Indenture) to $135,000,000. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939,
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as amended (15 U.S.C. ss.ss. 77aaa-77bbbb) (the "TIA"), as in effect on the date
of the Indenture (except as otherwise indicated in the Indenture) until such
time as the Indenture is qualified under the TIA, and thereafter as in effect on
the date on which the Indenture is qualified under the TIA. Notwithstanding
anything to the contrary herein, the Securities are subject to all such terms,
and holders of Securities are referred to the Indenture and the TIA for a
statement of them. The Securities are general unsecured obligations of the
Company.
5. Optional Redemption.
The Securities will be redeemable at the option of the Company, in
whole or in part, at any time on or after March 15, 2003, at the redemption
prices (expressed as a percentage of principal amount at maturity) set forth
below, plus accrued and unpaid interest thereon, if any, to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date), if redeemed during
the twelve-month period beginning on March 15 of the years indicated below:
Redemption
Year Price
------------------- ----------
2003 106.000%
2004 104.000%
2005 102.000%
2006 and thereafter 100.000%
6. Optional Redemption upon Public Equity Offerings.
In addition, at any time and from time to time on or prior to March
15, 2001, the Company may, at its option, redeem up to 33-1/3% of the aggregate
principal amount at maturity of the Securities originally issued with the net
cash proceeds of one or more Public Equity Offerings by the Company after which
there is a Public Market, at a redemption price in cash equal to 112% of the
Accreted Value thereof on the date of redemption; provided, however, that at
least 66-2/3% of the aggregate principal amount at maturity of the Securities
originally issued must remain outstanding immediately after giving effect to
each such redemption (excluding any Securities held by the Company or any of its
Affiliates). Notice of any such redemption must be given within 60 days after
the date of the closing of the relevant Public Equity Offering of the Company.
7. Notice of Redemption.
Notice of redemption will be mailed by first-class mail at least 30
days but not more than 60 days before the Redemption Date to each Holder of
Securities to be redeemed at its registered address. The Trustee may select for
redemption portions of the principal amount of Securities that have
denominations equal to or larger than $1,000 principal amount at maturity.
Securities and portions of them the Trustee so selects shall be in amounts of
$1,000 principal amount at maturity or integral multiples thereof.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount at maturity thereof to be redeemed. A new Security in a
principal amount at maturity equal to the unredeemed portion thereof will be
issued in the name of the Holder thereof upon cancellation of the original
Security. On and after the Redemption Date, Accreted Value or interest will
cease to accrete or accrue, as the case may be, on Securities or portions
thereof called for redemption so long as the Company has deposited with the
Paying Agent for the Securities funds in satisfaction of the redemption price
pursuant to the Indenture and the Paying Agent is not prohibited from paying
such funds to the Holders pursuant to the terms of the Indenture.
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8. Change of Control Offer.
Following the occurrence of a Change of Control (the date of such
occurrence being the "Change of Control Date"), the Company shall, within 60
days after the Change of Control Date, make an Offer to Purchase all Securities
then outstanding at a purchase price in cash equal to 101% of the Accreted Value
thereof, plus accrued and unpaid interest thereon, if any, to the Purchase Date
(subject to the right of Holders of record on the relevant Interest Record Date
to receive interest due on the relevant Interest Payment Date).
9. Limitation on Disposition of Assets.
The Company is, subject to certain conditions, obligated to make an
Offer to Purchase Securities at a purchase price equal to 100% of the Accreted
Value thereof, plus accrued and unpaid interest thereon, if any, to the Purchase
Date (subject to the right of Holders of record on the relevant Interest Record
Date to receive interest due on the relevant Interest Payment Date) with the
excess proceeds of certain asset dispositions.
10. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 principal amount at maturity and integral multiples of
$1,000 principal amount at maturity. A Holder shall register the transfer of or
exchange of Securities in accordance with the Indenture. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay certain transfer taxes or similar governmental
charges payable in connection therewith as permitted by the Indenture. The
Registrar need not register the transfer of or exchange of any Securities or
portions thereof selected for redemption, except the unredeemed portion of any
security being redeemed in part.
11. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the owner of
it for all purposes.
12. Unclaimed Funds.
If funds for the payment of Accreted Value or principal or interest
remain unclaimed for two years, the Trustee and the Paying Agent will repay the
funds to the Company at its written request. After that, all liability of the
Trustee and such Paying Agent with respect to such funds shall cease.
13. Legal Defeasance and Covenant Defeasance.
The Company may be discharged from its obligations under the
Indenture and the Securities, except for certain provisions thereof, and may be
discharged from obligations to comply with certain covenants contained in the
Indenture and the Securities, in each case upon satisfaction of certain
conditions specified in the Indenture.
14. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture and the Securities may
be amended or supplemented with the written consent of the Holders of at least a
majority in aggregate principal amount at maturity of the Securities then
outstanding, and any existing Default or Event of Default or compliance with any
provision may be waived with the consent of the Holders of a majority in
aggregate principal amount at maturity of the Securities then outstanding.
Without notice to or consent of any Holder, the parties thereto may amend or
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supplement the Indenture and the Securities to, among other things, cure any
ambiguity, defect or inconsistency, provide for uncertificated Securities in
addition to or in place of certificated Securities or comply with any
requirements of the SEC in connection with the qualification of the Indenture
under the TIA, or make any other change that does not materially adversely
affect the rights of any Holder of a Security.
15. Restrictive Covenants.
The Indenture contains certain covenants that, among other things,
limit the ability of the Company and the Restricted Subsidiaries to make
restricted payments, to incur indebtedness, to create liens, to sell assets, to
permit restrictions on dividends and other payments by Restricted Subsidiaries
to the Company, to consolidate, merge or sell all or substantially all of its
assets or to engage in transactions with affiliates or certain other related
persons. The limitations are subject to a number of important qualifications and
exceptions. The Company must report quarterly to the Trustee on compliance with
such limitations.
16. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount at maturity of Securities
then outstanding may declare all the Securities to be due and payable
immediately in the manner and with the effect provided in the Indenture. Holders
of Securities may not enforce the Indenture or the Securities except as provided
in the Indenture. The Trustee is not obligated to enforce the Indenture or the
Securities unless it has received reasonable indemnity satisfactory to it. The
Indenture permits, subject to certain limitations therein provided, Holders of a
majority in aggregate principal amount at maturity of the Securities then
outstanding to direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders of Securities notice of certain continuing
Defaults or Events of Default if it determines that withholding notice is in
their interest.
17. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company or its Affiliates as if it were not the Trustee.
18. No Recourse Against Others.
No stockholder, director, officer, employee or incorporator, as
such, of the Company shall have any liability for any obligation of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of, such obligations or their creation. Each Holder of a Security
by accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities.
19. Authentication.
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on this Security.
20. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint ten-
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ants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
21. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
22. Registration Rights.
Pursuant to the Exchange and Registration Rights Agreement, the
Company will be obligated upon the occurrence of certain events to consummate an
exchange offer pursuant to which the Holder of this Security shall have the
right to exchange this Security for a 12% Senior Discount Note due 2008, Series
B, of the Company which has been registered under the Securities Act, in like
principal amount at maturity and having terms identical in all material respects
to the Initial Securities. The Holders shall be entitled to receive certain
additional interest payments in the event such exchange offer is not consummated
and upon certain other conditions, all pursuant to and in accordance with the
terms of the Exchange and Registration Rights Agreement.
23. Governing Law.
The laws of the State of New York shall govern the Indenture and
this Security without regard to principles of conflicts of laws.
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ASSIGNMENT FORM
I or we assign and transfer this Security to
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code of assignee or transferee)
________________________________________________________________________________
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint_________________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Dated:________________ Signed:________________________________
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee: ___________________________________________________________
Participant in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
78
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.05 or Section 4.14 of the Indenture, check the appropriate
box:
Section 4.05 [ ]
Section 4.14 [ ]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.05 or Section 4.14 of the Indenture, state the
amount: $_____________
Dated: Your Signature:
---------------- --------------------------------
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee:
-----------------------------------------------------
SIGNATURE GUARANTEE
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
79
EXHIBIT B
[FORM OF SERIES B SECURITY]
THIS SECURITY IS ISSUED WITH ORIGINAL ISSUE DISCOUNT
FOR PURPOSES OF SECTION 1271 et seq. OF THE INTERNAL
REVENUE CODE. FOR EACH $1,000 PRINCIPAL AMOUNT AT
MATURITY OF THIS SECURITY, THE ISSUE PRICE IS $558.58
THE ISSUE DATE OF THIS SECURITY IS MARCH 16, 1998
AND THE YIELD TO MATURITY IS 12%.
TRANS-RESOURCES, INC.
12% Senior Discount Note
due March 15, 2008, Series B
CUSIP No.:[ ]
No. [ ] $[ ]
TRANS-RESOURCES, INC., a Delaware corporation (the "Company", which
term includes any successor), for value received promises to pay to [ ] or
registered assigns, the principal sum of [ ] Dollars, on March 15, 2008.
Interest Payment Dates: March 15 and September 15, commencing on
September 15, 2003.
Interest Record Dates: March 1 and September 1.
Reference is made to the further provisions of this Security
contained herein, which will for all purposes have the same effect as if set
forth at this place.
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IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officers.
TRANS-RESOURCES, INC.
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
Dated: March 16, 1998
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[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 12% Senior Discount Notes due March 15, 2008,
Series B, described in the within-mentioned Indenture.
Dated: March 16, 1998
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
------------------------------
Authorized Signatory
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(REVERSE OF SECURITY)
TRANS-RESOURCES, INC.
12% Senior Discount Note
due March 15, 2008, Series B
1. Interest.
TRANS-RESOURCES, INC., a Delaware corporation (the "Company"),
promises to pay cash interest on each Interest Payment Date on the principal
amount at maturity of this Security at the rate per annum shown above. Cash
interest on this Security will accrete and compound semi-annually until March
15, 2003. Thereafter, cash interest will accrue at a rate of 12% per annum and
will be payable semi-annually in arrears on each Interest Payment Date. Interest
will be computed on the basis of a 360-day year of twelve 30-day months.
In addition, the Company shall pay interest on overdue Accreted
Value or principal and on overdue installments of interest (without regard to
any applicable grace periods) to the extent lawful from time to time on demand,
in each case at the rate borne by this Security.
2. Method of Payment.
The Company shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of business
on the Interest Record Date immediately preceding the Interest Payment Date even
if the Securities are cancelled on registration of transfer or registration of
exchange after such Interest Record Date. Holders must surrender Securities to a
Paying Agent to collect Accreted Value or principal payments. The Company shall
pay Accreted Value or principal and interest in money of the United States that
at the time of payment is legal tender for payment of public and private debts
("U.S. Legal Tender"). However, the Company may pay Accreted Value or principal
and interest by wire transfer of Federal funds (provided that the Paying Agent
shall have received wire instructions on or prior to the relevant Interest
Record Date), or interest by check payable in such U.S. Legal Tender. The
Company may deliver any such interest payment to the Paying Agent or to a Holder
at the Holder's registered address.
3. Paying Agent and Registrar.
Initially, State Street Bank and Trust Company (the "Trustee") will
act as Paying Agent and Registrar. The Company may change any Paying Agent or
Registrar without notice to the Holders. The Company may, subject to certain
exceptions, act as Paying Agent or Registrar.
4. Indenture.
The Company issued the Securities under an Indenture, dated as of
March 16, 1998 (the "Indenture"), between the Company and the Trustee.
Capitalized terms herein are used as defined in the Indenture unless otherwise
defined herein. This Security is one of a duly authorized issue of Securities of
the Company designated as its 12% Senior Discount Notes due 2008, Series B,
issued under the Indenture. The aggregate principal amount at maturity of
Securities which may be issued under the Indenture is limited (except as
otherwise provided in the Indenture) to $135,000,000. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939,
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83
as amended (15 U.S.C. ss.ss. 77aaa-77bbbb) (the "TIA"), as in effect on the date
of the Indenture (except as otherwise indicated in the Indenture) until such
time as the Indenture is qualified under the TIA, and thereafter as in effect on
the date on which the Indenture is qualified under the TIA. Notwithstanding
anything to the contrary herein, the Securities are subject to all such terms,
and holders of Securities are referred to the Indenture and the TIA for a
statement of them. The Securities are general unsecured obligations of the
Company.
5. Optional Redemption.
The Securities will be redeemable at the option of the Company, in
whole or in part, at any time on or after March 15, 2003, at the redemption
prices (expressed as a percentage of principal amount at maturity) set forth
below, plus accrued and unpaid interest thereon, if any, to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date), if redeemed during
the twelve-month period beginning on March 15 of the years indicated below:
Redemption
Year Price
------------------- ----------
2003 106.000%
2004 104.000%
2005 102.000%
2006 and thereafter 100.000%
6. Optional Redemption upon Public Equity Offerings.
In addition, at any time and from time to time on or prior to March
15, 2001, the Company may, at its option, redeem up to 33-1/3% of the aggregate
principal amount at maturity of the Securities originally issued with the net
cash proceeds of one or more Public Equity Offerings by the Company after which
there is a Public Market, at a redemption price in cash equal to 112% of the
Accreted Value thereof on the date of redemption; provided, however, that at
least 66-2/3% of the aggregate principal amount at maturity of the Securities
originally issued must remain outstanding immediately after giving effect to
each such redemption (excluding any Securities held by the Company or any of its
Affiliates). Notice of any such redemption must be given within 60 days after
the date of the closing of the relevant Public Equity Offering of the Company.
7. Notice of Redemption.
Notice of redemption will be mailed by first-class mail at least 30
days but not more than 60 days before the Redemption Date to each Holder of
Securities to be redeemed at its registered address. The Trustee may select for
redemption portions of the principal amount of Securities that have
denominations equal to or larger than $1,000 principal amount at maturity.
Securities and portions of them the Trustee so selects shall be in amounts of
$1,000 principal amount at maturity or integral multiples thereof.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount at maturity thereof to be redeemed. A new Security in a
principal amount at maturity equal to the unredeemed portion thereof will be
issued in the name of the Holder thereof upon cancellation of the original
Security. On and after the Redemption Date, Accreted Value or interest will
cease to accrete or accrue, as the case may be, on Securities or portions
thereof called for redemption so long as the Company has deposited with the
Paying Agent for the Securities funds in satisfaction of the redemption price
pursuant to the Indenture and the Paying Agent is not prohibited from paying
such funds to the Holders pursuant to the terms of the Indenture.
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8. Change of Control Offer.
Following the occurrence of a Change of Control (the date of such
occurrence being the "Change of Control Date"), the Company shall, within 60
days after the Change of Control Date, make an Offer to Purchase all Securities
then outstanding at a purchase price in cash equal to 101% of the Accreted Value
thereof, plus accrued and unpaid interest thereon, if any, to the Purchase Date
(subject to the right of Holders of record on the relevant Interest Record Date
to receive interest due on the relevant Interest Payment Date).
9. Limitation on Disposition of Assets.
The Company is, subject to certain conditions, obligated to make an
Offer to Purchase Securities at a purchase price equal to 100% of the Accreted
Value thereof, plus accrued and unpaid interest thereon, if any, to the Purchase
Date (subject to the right of Holders of record on the relevant Interest Record
Date to receive interest due on the relevant Interest Payment Date) with the
excess proceeds of certain asset dispositions.
10. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 principal amount at maturity and integral multiples of
$1,000 principal amount at maturity. A Holder shall register the transfer of or
exchange of Securities in accordance with the Indenture. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay certain transfer taxes or similar governmental
charges payable in connection therewith as permitted by the Indenture. The
Registrar need not register the transfer of or exchange of any Securities or
portions thereof selected for redemption, except the unredeemed portion of any
security being redeemed in part.
11. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the owner of
it for all purposes.
12. Unclaimed Funds.
If funds for the payment of Accreted Value or principal or interest
remain unclaimed for two years, the Trustee and the Paying Agent will repay the
funds to the Company at its written request. After that, all liability of the
Trustee and such Paying Agent with respect to such funds shall cease.
13. Legal Defeasance and Covenant Defeasance.
The Company may be discharged from its obligations under the
Indenture and the Securities, except for certain provisions thereof, and may be
discharged from obligations to comply with certain covenants contained in the
Indenture and the Securities, in each case upon satisfaction of certain
conditions specified in the Indenture.
14. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture and the Securities may
be amended or supplemented with the written consent of the Holders of at least a
majority in aggregate principal amount at maturity of the Securities then
outstanding, and any existing Default or Event of Default or compliance with any
provision may be waived with the consent of the Holders of a majority in
aggregate principal amount at maturity of
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85
the Securities then outstanding. Without notice to or consent of any Holder, the
parties thereto may amend or supplement the Indenture and the Securities to,
among other things, cure any ambiguity, defect or inconsistency, provide for
uncertificated Securities in addition to or in place of certificated Securities
or comply with any requirements of the SEC in connection with the qualification
of the Indenture under the TIA, or make any other change that does not
materially adversely affect the rights of any Holder of a Security.
15. Restrictive Covenants.
The Indenture contains certain covenants that, among other things,
limit the ability of the Company and the Restricted Subsidiaries to make
restricted payments, to incur indebtedness, to create liens, to sell assets, to
permit restrictions on dividends and other payments by Restricted Subsidiaries
to the Company, to consolidate, merge or sell all or substantially all of its
assets or to engage in transactions with affiliates or certain other related
persons. The limitations are subject to a number of important qualifications and
exceptions. The Company must report quarterly to the Trustee on compliance with
such limitations.
16. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount at maturity of Securities
then outstanding may declare all the Securities to be due and payable
immediately in the manner and with the effect provided in the Indenture. Holders
of Securities may not enforce the Indenture or the Securities except as provided
in the Indenture. The Trustee is not obligated to enforce the Indenture or the
Securities unless it has received reasonable indemnity satisfactory to it. The
Indenture permits, subject to certain limitations therein provided, Holders of a
majority in aggregate principal amount at maturity of the Securities then
outstanding to direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders of Securities notice of certain continuing
Defaults or Events of Default if it determines that withholding notice is in
their interest.
17. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company or its Affiliates as if it were not the Trustee.
18. No Recourse Against Others.
No stockholder, director, officer, employee or incorporator, as
such, of the Company shall have any liability for any obligation of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of, such obligations or their creation. Each Holder of a Security
by accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities.
19. Authentication.
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on this Security.
20. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint ten-
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ants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
21. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
22. Governing Law.
The laws of the State of New York shall govern the Indenture and
this Security without regard to principles of conflicts of laws.
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ASSIGNMENT FORM
I or we assign and transfer this Security to
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code of assignee or transferee)
________________________________________________________________________________
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint_________________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Dated:________________ Signed:________________________________
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee: ___________________________________________________________
Participant in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
88
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.05 or Section 4.14 of the Indenture, check the appropriate
box:
Section 4.05 [ ]
Section 4.14 [ ]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.05 or Section 4.14 of the Indenture, state the
amount: $_____________
Dated: Your Signature:
--------------- --------------------------------
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee:
--------------------------------------------------------
SIGNATURE GUARANTEE
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
89
EXHIBIT C
FORM OF LEGEND FOR GLOBAL SECURITIES
Any Global Security authenticated and delivered hereunder shall bear
a legend (which would be in addition to any other legends required in the case
of a Restricted Security) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITARY OR A NOMINEE OF A DEPOSITARY OR A SUCCESSOR DEPOSITARY. THIS
SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY
(OTHER THAN A TRANSFER OF THIS SECURITY 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) MAY BE REGISTERED EXCEPT
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("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 IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.16 OF THE INDENTURE.
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EXHIBIT D
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: 12% Senior Discount Notes due 2008
(the "Securities") of Trans-Resources, Inc.
This Certificate relates to $_______ principal amount at maturity of
Securities held in the form of* ___ a beneficial interest in a Global Security
or* _______ Physical Securities by ______ (the "Transferor").
The Transferor:*
|_| has requested by written order that the Registrar deliver in
exchange for its beneficial interest in the Global Security held by the
Depositary a Physical Security or Physical Securities in definitive, registered
form of authorized denominations and an aggregate number equal to its beneficial
interest in such Global Security (or the portion thereof indicated above); or
|_| has requested by written order that the Registrar exchange or
register the transfer of a Physical Security or Physical Securities.
|_| In connection with such request and in respect of each such
Security, the Transferor does hereby certify that the Transferor is familiar
with the Indenture relating to the above captioned Securities and the
restrictions on transfers thereof as provided in Section 2.16 of such Indenture,
and that the transfer of the Securities does not require Registration under the
Securities Act of 1933, as amended (the "Act"), because*:
|_| Such Security is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 2.16 of the Indenture).
|_| Such Security is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Act), in reliance on Rule 144A.
|_| Such Security is being transferred to an institutional "accredited
investor" (within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule
501 under the Act) which delivers a certificate to the Trustee in the form of
Exhibit E to the Indenture.
|_| Such Security is being transferred in reliance on Rule 144 under the
Act.
|_| Such Security is being transferred in reliance on and in compliance
with an exemption from the Registration requirements of the Act other than Rule
144A or Rule 144 under the Act to a person other than an institutional
"accredited investor." An Opinion of Counsel to the effect that such transfer
does not require Registration under the Securities Act accompanies this
certification.
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--------------------------------
[INSERT NAME OF TRANSFEROR]
By:
------------------------
[Authorized Signatory]
Date:
----------------------------
*Check applicable box.
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EXHIBIT E
Form of Transferee Letter of Representation
State Street Bank and Trust Company
61 Broadway, 15th Floor
New York, New York 10006
Attention: Corporate Trust Division
Dear Sirs:
This certificate is delivered to request a transfer of $________
principal amount at maturity of the 12% Senior Discount Notes due 2008 (the
"Securities") of Trans-Resources, Inc. (the "Company"). Upon transfer, the
Securities would be registered in the name of the new beneficial owner as
follows:
Name:
----------------------------------------
Address:
-------------------------------------
Taxpayer ID Number:
--------------------------
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933 (the "Securities
Act")) purchasing for our own account or for the account of such an
institutional "accredited investor" at least $250,000 principal amount at
maturity of the Securities, and we are acquiring the Securities not with a view
to, or for offer or sale in connection with, any distribution in violation of
the Securities Act. We have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risk of our
investment in the Securities and we invest in or purchase securities similar to
the Notes in the normal course of our business. We and any accounts for which we
are acting are each able to bear the economic risk of our or its investment.
2. We understand that the Securities have not been registered under
the Securities Act and, unless so registered, may not be sold except as
permitted in the following sentence. We agree on our own behalf and on behalf of
any investor account for which we are purchasing Securities to offer, sell or
otherwise transfer such Securities prior to the date which is two years after
the later of the date of original issue and the last date on which the Company
or any affiliate of the Company was the owner of such Securities (or any
predecessor thereto) (the "Resale Restriction Termination Date") only (a) to the
Company, (b) pursuant to a registration statement which has been declared
effective under the Securities Act, (c) in a transaction complying with the
requirements of Rule 144A under the Securities Act, to a person we reasonably
believe is a qualified institutional buyer under Rule 144A (a "QIB") that
purchases for its own account or for the account of a QIB and to whom notice is
given that the transfer is being made in reliance on Rule 144A, (d) pursuant to
offers and sales that occur outside of the United States within the meaning of
Regulation S under the Securities Act, (e) to an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act that is purchasing for its own account or for the account of such
an institutional "accredited investor," in each case in a minimum principal
amount of the Securities of $250,000 or (f) pursuant to any other available
exemption from the registration requirements of the Securities Act, subject in
each of the foregoing cases to any requirement of law that the disposition of
our property or the property of such investor account or
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accounts be at all times within our or their control and in compliance with any
applicable state securities laws. The foregoing restrictions on resale will not
apply subsequent to the Resale Restriction Termination Date. If any resale or
other transfer of the Securities is proposed to be made pursuant to clause (e)
above prior to the Resale Restriction Termination Date, the transferor shall
deliver a letter from the transferee substantially in the form of this letter to
the Company and the Trustee, which shall provide, among other things, that the
transferee is an institutional "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act and that it is acquiring
such Securities for investment purposes and not for distribution in violation of
the Securities Act. Each purchaser acknowledges that the Company and the Trustee
reserve the right prior to any offer, sale or other transfer prior to the Resale
Restriction Termination Date of the Notes pursuant to clause (d), (e) or (f)
above to require the delivery of an opinion of counsel, certificates and/or
other information satisfactory to the Company and the Trustee.
Dated: TRANSFEREE:
---------------------- -------------------------
By:
-------------------------
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